Interview with Long Time Member Matt Bailey (LA 1476)
| Interview with Long Time Member Matt Bailey (LA 1476) |
Transcript:
Steve:
Steve Butala here for Land Academy. Jill’s not with us today. Lucky for her. She’s actually out having some fun. So I wanted to take this opportunity, this kind of vacant opportunity to introduce, I think, a long time member, Matt Bailey, a member of Land Academy. Matt came to us from another member, Lori Phillips, who said, “Look, you got to, I just talked to this guy. He’s been a member for a long time, a lot longer than I have. He’s really got his stuff together. And he’d be a great guy to have on the show because I think a lot of new people specifically would get a lot out of this.” We are Steve and Jill.
Jill:
Together we’ve been buying and reselling land since the 90s.
Steve:
Our data centric approach leaves our buyers asking, “How can you sell it so cheap?”
Jill:
Here on the Land Academy show-
Steve:
We answer that and more. Welcome, Matt. Thanks so much for being on the show. I’ll start off right away and just ask you, how’d you find us? How long have you been with us? What are you working on? If you can just introduce yourself and give us a little flavor, that’d be great.
Matt:
Yeah, sure. So I’ve been at this for about four years now. I got into it, like I think a lot of people did, listening to BiggerPockets and then Seth had a podcast early on in there and I got started on his course shortly after I jumped in. And did your course. I think that both have a lot to offer. I’m glad that I had done both. And so, yeah, I mean, I’ve been with you guys for four years, working and lately really this year kind of scaling the company up. So now we have four full-time employees. Lori was the person who introduced us and suggested we jump on the podcast and I’d kind of come to her because I was working on trying to build the processes out, scaling the company, training. And I didn’t really have a ton of time to price a mailer. And she had a bunch of mailers priced, but not a lot of bandwidth to do the overhead and the actual execution on it and that’s exactly what my business is kind of designed to do.
Matt:
I’ve kind of built it from the beginning to be designed for scaling, so I focused a lot on business processes and developing a CRM with automations and stuff to kind of like help streamline everything. And that’s how I started working with her. And I think we did like five or six deals off of that mailer. And, most of them have kind of come full circle now and yeah, I mean, it’s just land’s been pretty good. I’m really enjoying it and it’s nice to be able to be on the podcast with you.
Steve:
That’s great, man. So what’s a typical deal look like for you right now with Lori or without Lori or what’s a typical deal look like?
Matt:
Yeah. So, I started on some of the smaller deals and as I’ve done more deals, even though I built this for volume, I think that if you build your business from the beginning to be able to handle volume, you can do fewer deals and not have to work so hard on each one because all of your stuff is streamlined. Right? So, I started doing smaller deals and right now, my minimum threshold is $5,000 profit is what we’re looking to do. So I’d say most of them are probably in that five to $20,000 range and we’re starting to work on larger ones. So like I mentioned, I’ve got now four full-time employees that work with me and I know exactly what we’re going to convert in the markets that we’ve done before if we mailed a certain percentage of offer price to these five to $20,000 deals, right?
Matt:
So I’m keeping those as the bread and butter, but I’m looking to scale up to larger deals, but I don’t want to jump into those larger deals and find out that, okay, it turns out you convert one in 7,000 if you’re trying to get more than a $50,000 profit or something. Right? And I assume that it’s going to be closer to one in 1000 or 2000 or whatever it might be. So now that I’ve got all these people underneath me, it’s like, “Okay, let’s keep the stuff that we know what we’re going to get if we mail it and start looking to the bigger numbers.” And then if I find out it is one in 7,000, okay, great. I’ve got a guy doing data and mailers for me now, let’s just tell him, “All right, now you got to hit 50,000 letters a month or whatever it is so that we can do 10 deals that are really large versus 20 or 30 deals that are $5,000 a month or whatever.”
Steve:
I mean, I can tell you with confidence that the larger the deals, the easier they are. And I think, this is just my opinion and other people in the group I don’t think share this opinion, when you send mail out in the $50,000 range because you know it’s worth 150, you get a darn good response. I used to, a lot of years ago I had the exact same concern, the bigger deals that we do, that it’s going to be harder. They’re harder to find and all of that. But I think as crazy as it sounds, it’s easier to sign your name and get 50,000 than it is 5,000. And land owners seem to be more excited and more motivated to sign stuff for 50 grand versus five.
Matt:
Yeah, definitely. It’s a bigger chunk of change. Right? They just see that number. So yeah, I agree. I just, like I said, I just know what my overhead’s going to be and I know that if I do all these bread and butter deals for now, I know I’ll be able to hit that confidently. Right? So it’s like, let’s keep that, let’s learn the new markets and then we can shift a little bit, you can kind of dip your toe in the water there. So it’s like half of our mailers are now that smaller stuff, half of them are the bigger stuff. And we’re mailing pretty good volume right now. So I think it’s all going to take care of itself if you get enough mail out the door and our data guy that we just hired, he started a week ago, he can do this full time. Right? I do mailers specifically and data probably 20% of the time, right?
Steve:
Great.
Matt:
So it’s like just on hours alone, he should be able to easily double our output. And then what I plan on is probably only needing one more acquisition manager to handle that doubled output. And we have a transaction coordinator who also kind of does due diligence for us. There’s a chance she might get filled up on having to do due diligence for so many properties that maybe we split that off into two roles. But for now I think that that role specifically, I think, is a good fit. I think the same characteristics that make you a good transaction coordinator, that attention to detail, following process, procedures, filling things out correctly, I think loan themselves nicely to doing the due diligence for the property. So we’re kind of combining that for now.
Steve:
That’s great. So you mentioned you have four people working with you. What are their roles? I think you have transaction coordinator, data person. Do you have a full-time sales person?
Matt:
So right now my dad’s filling in doing the sales just because I find that sales in this business is more like customer service than it is sales. It’s like the property’s price to sell. It’s the best one on the market. I just got to pick up the phone and tell that person, “Here’s the number for zoning. Go double-check your question.” ? Or I keep a video on my website that basically just gives them directions to the property. So when everybody says, “Hey, how do I get to the property?” It’s watch the video. It’s a two minute video. Here’s the address nearby to the property. Here’s how you can kind of ID the parcel boundaries and that’s it. So he does that for me. And it’s pretty straightforward. Sales is not the hard part of the business. It’s like, we’re good at finding the deals and I make them sell quickly by pricing them at a great price. So he does that.
Matt:
The other two people that we have, one’s a long time acquisition manager for us. She’s pretty much done everything in the business. She’s been with us for three years. She came on kind of as a part-time thing at when I was like one year into it. So now we’re trying to get her back to that part-time. She has some, what’s the word called? I’m blanking on it. But she does some agricultural stuff on her family farm and it’s all give back to the community type stuff. So she wants to get back and do half and half again. So we’re scaling her back. Our acquisition manager, the other one that we hired was back in November. He’s full time, just kicking butt and that’s really the whole squad. So it’s these two acquisition managers, data analysts who’s scrubbing mail and picking mailers and stuff like that. He’s getting trained right now. And then transaction coordinator, who’s just a rock star. She has been doing it for 10 years and, she knows her stuff, so I’m really happy that we got her onboard.
Steve:
Do you use real estate agents on the south side at all?
Matt:
I’m starting to now. I’m thinking that it’s becoming more, it makes a lot more sense to start doing that. It’s that or I have to hire somebody to do all of that. It’s like my dad helps out, but he’s just kind of doing it in the interim right now. So it’s like, am I going to hire somebody for that? Or I can kind of outsource it to agents. And it seems to make some sense. They can kind of gut check some of your properties on the buy side, and even at six to 10% commission, it’s like, well, if they did a million dollars worth of properties for us, that’s a hundred grand. That’s like basically a salary. Right? But I get a little bit more insight on the buy side potentially to learn a little bit more about the area and kind of gut check those acquisitions too, because I’m super busy too.
Matt:
So now it’s like maybe it would be nice to have those people, but that’s all kind of what the plan might be. I haven’t really put it into practice. I have some agents that we list with and it’s been generally okay. But I think if it was full-time listing with agents and trying to work them into the business somehow, I think there’d be a lot of learning to do there on how to pick good agents and things of that nature. But it is nice to just kind of DocuSign a purchase agreement and just give it back to them and be done with it.
Steve:
We use agents on all of our new deals now, and I’ll tell you at 150 plus thousand dollars sale price, I had the exact same logic that you had when we kind of made that decision to go a little bit bigger. And what ends up happening is with the right real estate agents, they’re going to come back and say, “Yeah, I don’t think I’d list this for 70,000. I think I can probably get 110 for it in about a week or a week and a half.” So that 70, that we would have, if we sold it ourselves, generated now 110 way easily pays for the 10% commission, so it just ends up being, you do 10 deals like that. You’ve made a million bucks. So, and it’s not hard to do 10 deals one a month. It’s not hard to do 10 deals in a couple of months actually. So yeah. I mean, I understand your point. So what’s missing? it sounds like you’ve got this all figured out. Is there anything missing?
Matt:
Yeah, so when I was talking to Lori and she’s a member of the advanced group and talking about that, I was just kind of telling her and trying to pick her brain because she’s got a lot of business acumen herself and sort of the next thing for me is like building this company, right? I have the roles filled. I have a good sense of process and a good sense of what you’re supposed to do, but really, I think the next thing for me is building this team. So I’ve read a lot of books, like Five Dysfunctions of a Team’s a really good one. Traction by Gino Wickman I’m currently reading again, that one’s good. So all those books to kind of like get these people pointed and rowing in the same direction and getting to understand and know one another and especially communication. So we’re all over the place. We got a person in Houston, Austin, St. Louis and Arkansas, right?
Matt:
So nobody’s in person. Everybody’s communicating electronically. So when we hire all these people, we do this personality profile tests and that kind of helps us know, “All right, this person’s going to be a good fit for the job.” For instance, like a sales or acquisition manager role, you want them to be a high DI. They need to be out there pulling the trigger, but they love talking to people. And if you’re trying to hire for that role, and somebody has a really low I, that interpersonal, want to talk to people, type personality characteristic, they’re going to burn out just real fast, especially in this role. So, but what’s nice about that is it also kind of gives you a hint as to how people like to receive information and give information.
Matt:
So when we bring people on, we look at those personality assessments and we say, “Okay, I’m a high DC and you’re a DI, and that means that you’re probably going to want to be like moving and making deals happen, but you might not fill out all of the information on our CRM, which then gets used later in the due diligence process or something, for instance.” Right? So we’re kind of trying to meet some of these off, head them off at the pass and try to figure out where might we butt heads or things like that so that we know when we’re communicating just by text, me giving a real quick short answer is me thinking I’m saving time and moving on to the next thing, because that’s how I think. And somebody else who’s maybe more touchy-feely, “He’s being short and rude.” Right?
Steve:
Yep.
Matt:
So it’s good to kind of talk about those things ahead of time and figure out where are we going to have points of friction and things like that. So I’m looking to kind of, the next step is as I’m looking more at like house wholesalers, who’ve really scaled businesses and they do multiple markets and they’re wholesaling 20 houses a month. And what kind of systems do they have in place? What kind of hiring methods do they use? How are they doing retention and compensation and things like that? How do I take it to the next level and not have to be the person kind of pioneering that in our, because I’m in a couple of different mastermind groups, but I think I’m probably, when I say mastermind, I’ve got two land focused groups that we meet biweekly and I think I’m probably the person pioneering, at least the hiring and the building of the company part of that.
Matt:
And it would be nice to maybe find people who’ve been there before had done that before. So that’s kind of what I’m looking at next is what are these house wholesalers doing? Or where can I find another real estate investor who’s scaled the company that does 10 flips a month and what does that look like? And where are some pitfalls that I can avoid by getting and networking with these kinds of people?
Steve:
That is my single most difficult thing that I’ve had to and the highest learning curve that I’ve had, and Jill and I’ve had tons of companies in the past, and it’s that is hiring and keeping staff happy is the most challenging thing that I’ve ever gone through. So I’m fascinated with this personality test thing. Where do you get the tests? And I mean, share as much as you’re comfortable with.
Matt:
Yeah. So, I mean, you can have people take free ones with, like Tony Robbins has a free profile. You’ll end up on his email list and you’ll get invited to his events and stuff, but it’ll give you a free DiSC test. Right? And if you, I mean, just anything you can Google about, if you just start Google searching for like, what is a good DiSC profile for a sales person? There’s like articles who are like, “I think it should be an I and then a D or a D and then an I,” but then you can just tell people as part of the hiring process, “Hey, take this free personality assessment. It’s going to take you 30 minutes and it’ll kind of give us an idea of if you’re going to be a good fit for the job.” So for instance, like for transaction coordinator, you probably want somebody who’s like a C and an S and that kind of combination gives you somebody who’s like thoughtful, moderate pace, like calm, methodical, careful, that’s what a CS is going to bring to the table.
Matt:
So when we were looking for transaction coordinators, we had two who both had 10 years of experience who were our final two candidates and both of their profiles were almost identical and almost exactly what I would have expected from somebody who would succeed at that role and it was that high C and the high S. So if you find somebody who doesn’t fit those, that S and the C is that structured and steady type profile, they’re probably just not really hardwired to be successful in that kind of transaction coordinator, label all the files correctly, file them in the right place. Tell me where to sign, dot your I’s cross your T’s, and you can kind of weed those people out early. Same thing, like I said, with acquisitions people, that DI, if somebody’s got a low I, they can’t be on the phone all day. It’s just going to burn them out.
Matt:
I know I’m not, I got a low I, and talking to sellers and talking to buyers, it’s like, I’ll do it. I’ll put on a face and I’ll , whatever, but I get off that call and I’m shot. And if you try to make me do that 40 hours a week, I’m just not going to succeed.
Steve:
Same here.
Matt:
So you’re saving the person you’re hiring trouble, you’re saving yourself trouble. And it just puts them in a place for success. So I would say if somebody is trying to look how to get into that stuff, lots of Google, lots of YouTube, just figure out what the profiles mean. And then there’s other more complicated tests that can get into like driving forces and, and things like that. But just as a starter, think about the DiSC profile, right? Acquisition’s going to be DI, transaction’s is going to be SC. Data analyst will also be SC. That’s attention to detail type stuff. And it’s just a good starting thing. And then if you can look at each other, so what’s interesting is when you find those combinations of personality profile tests, there’s whole write-ups about this is what they’ll succeed at, this might be their pitfalls, things like that. That’s what I’m talking about. That’s what we compare is, after that assessment is done, you just look at that, like, where are your blind spots going to be? And where are mine going to be? And where might they overlap when it comes to the land business?
Steve:
So these four people. You know what’s really interesting? Anytime I’ve ever interviewed anyone, I don’t do it anymore, I just kind of do the last phase of the interview process when we hire, I never talk about real estate ever. It just doesn’t come up because I just don’t think it’s important. It’s all personality stuff.
Matt:
Yeah. It’s all attitude.
Steve:
Attitude and how long they’ve been with the previous positions that they’ve had. And I constantly ask questions like, “Did you get along well with your supervisor in your last position?” and the speed at which they answer the questions and the enthusiasm it says a lot. So these four people that you have, have they been replaced, were the original people that you hired for the positions?
Matt:
So these are all original people, but three of them haven’t been here for more than four months.
Steve:
Okay.
Matt:
So, our original acquisition manager has been with me for three years. And I think that’s probably more remarkable than I give it credit for, just the fact that she’s still here and she hasn’t burned out on me. I’ve burned out on her. It’s like, all right, that’s a good sign. But what’s interesting is as we’ve gone and hired people, we do, the last phase of our interview is what we call a motivational interview. And it’s basically just asking people like, what is important to you, where do you want to be in five years in four different quadrants of their life. And basically if I can’t get them where they want to be in five years, we’re not going to hire them because they’re not going to stay with us, but that involves the whole team. And the second to last and the last person I hired kind of caught me off guard because even the people who’d only been with me for like a couple of months at that time, the logical question for the candidate was like, “So how’s it like working with Matt?”
Matt:
And everybody had the most glowing things to say. And I was really taken aback. I was like, “Oh my gosh.” I’m not trying to toot my own horn or anything, but I was just like, “All right, I guess we got a good crew. Everybody’s really enjoying the process.” So I think that we’ve got a lot of hope that things, people are going to stick around and I’m pretty forward with everybody, trying to make sure I know what people’s needs are and things like that. If you’ve read that Five Dysfunctions of a Team book, the base of the pyramid that Lencioni has is the absence of trust. And it’s like without trust your team can’t challenge each other and ask questions without knowing that the reason someone’s following up with the question is because they’re doing it for the best interest of the team, not to make you look bad or anything.
Matt:
So that’s what’s next for us is trying to work on those kinds of things to remove those five dysfunctions that Lencioni talks about and the base of it is trust. So, I think we have that already sort of, which is really nice and I think that’s why things are going so well.
Steve:
Yeah, Jill and I, I’m thinking back while we’re talking about this, I’m sure Jill and I have fired each other multiple times. It’s just, even if you have the greatest trust in the world, there’s just stuff happens. So, it’s hard to keep and manage a team, way harder than I ever thought. And now we’ve got someone in place that does all of it for us. And it’s just taken maybe eight, probably more than that, probably 12 years. A couple of the people that we’ve had have been with us for more than 10 years. So, but it’s taken that long to really, really establish where I don’t worry about anything anymore or they can really, whatever problems occur, they can solve them long before it ever gets to me, if it ever gets to me at all anyway.
Steve:
So when you have that in place, people are constantly asking me like, how, how do you have enough time to start Land Academy? How do you have enough to start NeighborScoop? And it’s all because we have the right people buying and selling land for us. So really, I’m just making the decisions. And just recently I hired a person to do my mailers for the first time in my career ever and he and I are getting along great. His output is three times what mine was when I was doing it. And honestly, I think he does a better job pricing and everything else.
Matt:
Yeah, that’s kind of what I envision is if it’s somebody’s full-time job just to stare at data and mail, like they’re going to have time to do things that I don’t, because I’ll take stuff on and be like, “This is good enough.” And then a lot of times that’s good for mailers is good enough, but I think this person could maybe get back, get down in the weeds a little bit more and really kind of find niche areas and pay attention and stuff like that that I just don’t have the time for. So there’s always that question of do you get your mailer 50% of the way there and then do 20 of those or do you get them a 100% of the way, but only get to do two of them? We’ll pay attention to that with him and be a little bit more purposeful with it. But yeah, I agree you having that, that person to scrub some data for me is pretty nice so far. And it’s only been a short time.
Steve:
We just had this discussion in Discord because somebody, I don’t know if you’re on Discord with Land Academy, but somebody brand new said they just can’t seem to finish their mailer to which I said, “Art’s never finished.” And I think Leonardo da Vinci said that or something. And it’s just, if you don’t put yourself on a schedule, nothing’s ever going to get done.
Matt:
Yeah, for sure.
Steve:
I’m a huge proponent of scheduling everything out and then being on time and following through. So did you have any type of real estate background before this? What is your background? What would you like to share with us? And then what I’m going to ultimately ask you is everybody started somewhere, so what’s your advice for new people?
Matt:
Yeah, that’s a good question. So my background was not in real estate. I have a master’s degree in aerospace engineering, full-time job with the army doing aerospace research, just experimental research, structures type background guy. So, I mean, you don’t need a real estate background to do this. I think that it’s been said that even almost having a real estate background is like a hindrance, right, because you’re kind of stuck in your ways. We were considering hiring somebody who had a ton of real estate experience. And I said, “You know what? I think I just want to teach this guy what I think.” So it’s almost a hindrance. What I would say is for somebody who’s looking to get going is just dive into the material and execute on it. Right? So just set yourself timelines, like you said, “All right. I got to finish my educational course by this date. I got to finish my mailer by this date and just get it in the mail and see how it does.”
Matt:
The one thing that I would say is you probably, and the same number there, but he says, you got to get at least 2000 letters out. I think if you can afford it, get three or four or five out, don’t do them all at once. Just do them like a thousand a week for a month, and then just see what comes back. Because one of the toughest things that it took me to get was I think I had this like one in 500 number stuck in my head for too long where I was like, “I’m sending out 2000 letters a month and I’m only getting one or two deals.” Right. And then that felt like it was just kind of covering my overhead at that point. And when I eventually said, “You know what? I don’t know what’s going on with my conversion rate, but I’m just going to send twice as much mail,” and then it just takes care of itself. So if you’re starting, send more male than you think you need to send, because something will stick.
Matt:
And if you don’t send enough mail, a bad one will stick and you’ll buy it. So the more deals you can have on your desk the better. And it just makes everything else so much easier, just more mail. So just get out there and take action. I mean, it’s a numbers game to a certain extent. And I think the one thing that I dwelled on for probably a year or two too long was just thinking that I had the right amount of mail going out instead of just accepting what my conversion rate was and saying, “Well, therefore I must send twice as much, whatever it might be.”
Steve:
Yep. Boy, I could not have given better advice. I could not agree with you more. I think it’s imperative to send out a ton of mail and I’m probably the one who’s, because our conversion rates were, I’m sure you heard that from me, one in 500.
Matt:
Probably way back in the day when you were doing smaller deals. Right?
Steve:
Yep.
Matt:
I think that I had scaled up to like five to $10,000 deals and I was probably thinking of the buy for 1,000, sell for 3000 or 4,000 type conversion rates. So it’s true to a certain extent, right? It took me a while to put it together that, you know what, maybe I’m not going for the same asset class. Right? I’m looking in different areas. I wasn’t doing desert squares. And I think that’s what it was. It was like, this number makes sense, but there’s a lot of other caveats before it that have to be true for that conversion rate. I bet you that if you talk to people who do the buy for one, sell for five on terms with 99 down 99 a month, it probably is like one in 500. So I think, yeah, I would just stick by what I said, just send a bunch of mail, man. That’s going to get it done.
Steve:
Matt, it was a pleasure talking to you. Do you have any more advice for anyone starting out or any questions for me?
Matt:
No. I think for people starting out, just get on the forums, ask your questions. They were super helpful. I’m probably one of the people that you mentioned, just goes dark after a while because it’s just like, I got too much stuff to do.
Steve:
Because you’re successful.
Matt:
Yeah, exactly. You’re just like, “I got to take care of all this stuff,” but in the beginning, the forums are super helpful. That’s really helpful. I haven’t jumped on Discord yet, but I keep hearing it and I’m going to do that now because I preparing for this call, I listened to a couple of extra weekly member calls. And I usually just listen to the first 15 minutes because I love the stuff that you do in the beginning on the market and things like that. But yeah, just get on the forums, ask your questions and don’t try to be a perfectionist. Just get the mail out the door and I think you’ll be all right.
Steve:
I agree completely. Pleasure to talk to you. Thanks, man. I hope we do it again sometime soon.
Matt:
Yeah, definitely. It’s been a pleasure.
Steve:
Okay. See you soon.
Matt:
See you.
Jill:
We hope you find our content valuable and we appreciate your support. If you have not already, please check out our channel and hit the subscribe button.
Steve:
And your comments and suggestions help us to create the content you’re here for, hitting the like button helps to support our channel’s algorithm and gauge your interests for future shows.
__________________________________________________________________
If you enjoyed the podcast, please review it in Apple Podcasts . Reviews are incredibly important for rankings on Apple Podcasts. My staff and I read each and every one.
If you have any questions or comments, please feel free to email me directly at steven@BuWit.com.
The BuWit Family of Companies include:
I would like to think it’s entertaining and informative and in the end profitable.
And finally, don’t forget to subscribe to the show on Apple Podcasts.
