In this episode, we are talking in depth about why sellers choose to sell their land for less than it’s actually worth, less than market value, and also how to build a lifelong fortune by consistently investing in land. I hope you’re enjoying our new 2023 weekly show. Each episode, we answer questions here from our Land Academy Discord Forum like we always have, but we’ve added a land review, a situation where we review land acquisitions from our weekly Thursday member webinar. We take a deep dive into two land-related topics by popular requests that I mentioned.

By the way, I’m enjoying the new format. I feel like the old format, there’s times when I’m like, “I have so much more to say,” but we’re moving on.

I think the old format is old.

That’s very true. Thank you, Jack, for catching up to 2023.

There are about three people who made negative comments about it, “I wanted to listen to it every day.” You can. There are 1,939 episodes that you can go back to every day.

That’s very true. When you run out of those, let me know if you’re still with us.

Let’s take a question posted by one of our members on the Land Academy Discord online community. If you want to sneak peek at our Discord channel please go to LandInvestors.com or LandAcademy.com. Go ahead.

Thank you.

It’s free and it’s read-only and it will give you a feel for what our community is talking about with each other.

Brent wrote, “Here’s a newbie question for you all. I have some land in blank county, about 20 acres, and I bought it cheap, but it has about $7,000 in back taxes. The tax lien holder is foreclosing. Beyond comps, how much should I determine if it’s worth me paying the taxes and keeping the asset?” Have I been in this situation? You’re in it right now.

I was in this situation. We’re constantly in this situation. That’s why I included this. Here’s the deal, why I included this topic. Here’s the back story on how and why this happens. If you buy and sell a lot of land, especially at the rates where we do $3,000 here, $5,000 there, $30,000, it’s all for sale. You’re selling and buying properties consistently. You accumulate land. That’s the truth of it. Jill’s going to explain what our taxpaying policy is on property taxes.

It takes a lot.

We don’t pay taxes on property.

The Strategy Of Not Paying Property Taxes

Here’s the truth time. Sometimes you get distracted, and sometimes you’re like, “I don’t know if I want to sell that now. I think if I wait a little bit, it’s going to be better.” We’re doing so much volume. It’s totally fine. I remember, too, that part of it was that we paid cash for all these things. I don’t care. It’s my money. I can let it sit there for a while. I’m not making payments on it. I don’t owe anybody any whatever. There is no mortgage or loan on it. When do we worry about taxes? Usually never.

This is property taxes.

I’m going to talk at two levels. I’m going to talk about the low-dollar properties and the high-dollar properties. First I’m going to cover the easy ones, which are the high dollar amount properties. I’m buying those and selling those via escrow. Escrow is already catching up on the taxes.

You got to slow down here. Can we give the back situation? I’m going to say the word in social tax and lien all the real negative words.

Not to scare you but to inform you. Don’t worry.

Believe it or not, this is a very serious sign of success from Brent here. Brent’s got a property. He probably had it for sale. Maybe it didn’t sell for whatever reason or maybe he bought it with a bunch of taxes on it or he inherited it. He inherited some taxes. The way taxes work with real estate is not what we’re all used to when you hear the word tax. When you hear the word tax, you think of April 15th.

I’m going to get either a refund back or in a lot of cases, the Land Academy members, I’m going to have to write a bunch of checks. This is expensive and we’re making a lot of money. That’s income tax. That’s not what this is. These are property taxes and property taxes stick with the land. It has nothing to do with me as the owner or Jill or the companies that we own that own these properties. Nothing.

There’s no real reason that we would ever pay our property taxes until we sell the property. That’s our policy. If you’re into this business, I encourage you to do the same. Every year around property tax time, we get tax bills in the mail enough to fill a banker’s box. It’s not so bad anymore because we’ve liquidated a lot of our property, which is good, but if that property, for whatever reason that we have, goes on to the next year and we get another tax bill, it keeps accumulating.

After a certain amount of time, the taxing authority, which is almost always the county, has a statutory process that they follow to get that property back on the tax rolls in the state that Brent’s talking about, which I’m very familiar with, they make the lien to the property available to purchase for the public. Somebody can go buy it. Now, I’ve got $7,000 worth of back taxes on a piece of property.

Somebody else, anybody else can go buy that lien. They pay for the taxes, so the county gets their money. I, as the property owner, now have two choices. I can go pay the guy who bought my lien and get my property back or I can forget about it. The property goes back, it doesn’t affect my credit score, and no one gives me a phone call. Nothing. It’s a non-event. This happens hundreds of thousands of times a year.

It’s like, “Fine. Now we’re giving it to him.”

He’s now faced with this choice. Somebody bought his lien. Should I write this guy a check to get my property back or forget about it?

There you go. The bottom line is, is it worth it? That’s it. $7,000 in back taxes. I’m guessing, Brent, you paid 1 or 2 for this because you said he bought it cheap. Is it worth $20,000? If it is, I’d do it. If I could sell it for $20,000, say I bought it for $1,000 or $2,000, I’ve got $7,000 in back taxes, like you do it all wrong, it’s worth $20,000, then I would do it.

By the way, to accumulate $7,000 in back taxes in a state that’s out West here, that’s got to take maybe ten years. This doesn’t happen overnight. I’ll tell you a true story. I was forced to make this decision. I bought some property. This was before Jill and I joined forces. That’s how old these tax things are, or this back tax scenario. I let two of them go back. There’s one that’s got an old mobile home on it that is adjacent to the farmland that we are going to write. Thank you, Jill, for supporting my silliness. Jill and I are together going to write about it.

We’re going to talk later about the mistakes we made. Don’t think I won’t bring this up.

We’re going to write a $3,500 check to get that property back, which I feel is pretty valuable, so that we can relist it for approximately $15,000 to $20,000.

I thought you wanted to keep it.

I do. It’s got a mobile home on it and the electricity and water.

If this doesn’t work out, this is his fallback plan.

Evaluating Whether To Pay Back Taxes

Believe me. We’ve got a lot of mobile homes in the desert. Jill’s 100% right to directly answer the question. It all comes down to economics. Are you going to write a $7,000? You already bought the property, so let’s say you paid a couple of grand for it. You might be into the whole deal for $10,000. It better be worth $20,000 to make this worth your while and forget it.

That’s what I think. Exactly. My question, too, a side note, based on this experience, this is why you’re here too because nobody gets more experience than this one. I’m going to make an educated guess that if the back taxes have racked up to $7,000, it’s probably worth it. It’s a pretty good property. If the back taxes over ten years are $700, that means they’re paying $100 a year, big whoop. These have some serious taxes on them, so I’m thinking it might be a good property.

What Jill means is that, in general, the higher your tax rate, the more valuable the asset is.

Not always, but it’s a good indication.

That’s not apples to oranges because the biggest pile of junk property in Trenton, New Jersey, has like $12,000 of taxes a year. We pay less than that in our primary residence in Scottsdale. Jill doesn’t want to live in no junk.

I’m sorry. I’m still laughing at it. That’s not apples and oranges. Do you mean apples to apples?

Yeah. Is that right? What did I say?

You said oranges. Actually, it is apples and oranges. You’re right.

You can always count on your spouse to correct you. When you compare tax value, you want to look at it within the same county and hopefully within the same area of the same county. The same way we price mailers.

I think it’s very sweet that you turned that around. It’s usually me. You’re like, “What did you say?”

What is the topic we’re going to talk about?

Why Sellers Actually Choose to Sell Their Land for Less Than Market Value.

Thank you, Jill.

You’re very welcome.

Save me again. That’s time number two.

You got it. That’s why I’m here.

Why Sellers Accept Below-Market Offers

Why would somebody ever sell a property that’s worth $100,000 for $30,000, Jill? Would you ever go on the internet and buy a share of stock that’s trading at $100 and say, “I’m going to offer you $22,000 for this.” You would be laughed off the trading floor. It would be laughed off the internet. It’s ridiculous. This is a market. Why do people do this all the time? Why are we making millions of dollars every year and people in our group are making more than that? Buying property under its value and shaking hands when it’s over. Thanking us.

Isn’t that amazing? Why is that, Jack?

Convenience. I haven’t said my gallon of milk theory in a long time, so I’ll say it here at the risk of sounding like an old man. It’s not the risk. I am sounding like an old man because I am an old man. You have three choices if you want to go buy a gallon of milk. You can get in your car and make an afternoon out of it, or you can go to Walmart or Costco. You get an amazing price on a gallon of milk. I don’t know what milk goes for now, but it’s probably $2 or $3 a gallon, maybe more.

It’s probably $8. You’re way off.

You pat yourself on the back and you say, “I got the best price on a gallon of milk there ever was.” You can go to the grocery store that’s right down the street and pay a couple of dollars more a gallon or $1 more a gallon, whatever the prices are, because you don’t care. Maybe you had some other stuff to pick up. When I go to the grocery store at this age, honestly, I don’t look at the price tags as much as I used to. It’s down the street and that’s my grocery store.

The grocery store a mile down the road might’ve been cheaper, but I don’t care. If I need a milk badly, I’m going to go to the gas station and get it or a convenience store, which is close and extremely convenient. It only takes a few seconds out of my day. Now, there’s probably even a fourth option, which is to call somebody to bring it to your house, Instacart. In that third case, I don’t smack that gallon of milk when I’m checking out at the counter in front of the guy and say, “This is an absolute outrage. How much do you charge for this milk?”

The Role Of Convenience In Land Sales

I’m going to buy it, but if I ever did that, I would hope the clerk looks at me square in the eye and says, “It’s pretty convenient, isn’t it? Go to Walmart if you need to.” If you want to save some money, go to Walmart. Why? It’s because it’s convenient. I wanted the milk. It’s quick. I was doing it anyway. People sell land and houses by the ton because they don’t want to deal with real estate agents. They don’t think that their property, for whatever reason, is worth what it’s worth. They cannot do math like Jill in her head or like you as a Land Academy member.

You don’t want to do any work.

They got a letter. It’s immediate gratification. They got an offer for $32,000 for a piece of property that they never cared about anyway. They looked around and said, “$32,000 sounds great.” They don’t have the conversation with themselves most of the time and say, “This property is probably worth more than $32,000. Maybe I should call my friend and check my real estate agent friend.”

They do say those words, but they don’t do the second part. I’ve had them talk to me on the phone saying, “I know I could go through the motions and get more for this, but I don’t want to. Jill, how fast can we close?”

Probably very quickly, I’m not going to do it, but I can name 10 to 15 things off the top of my head that are in our house or in our office where somebody sent me a letter. I have a pile of computer equipment. A pile of computer equipment that’s probably pretty valuable. If somebody said, “ I’m going to hand you $100 bill. I’m going to clean out this closet. I’m going to come over and get all that stuff and take it out of your life. What do you say?” I would say, “How fast can you get here?” I don’t care. It’s super convenient. I love the free section and offer up in Craigslist. Just come and get all my stuff.

Are we going to talk about the situational aspect? I do think it’s part of it. Jack described the number one reason, which is true. It’s convenience. The virtual open checkbook is ready to go, and I can close these fast for people. The weight is lifted for these people to other lives and they’re happy and that’s when Jack says they shake our hands and hug us. I’ve had people hug me literally saying, “Thank you. I know you’re going to make more money on this, so thank you for getting this out of my life. Thank you. I needed that money for X.”

That’s the other piece of this, which is situational. It may be like that lady I was thinking about. It was her daughter’s Master’s degree that was going to pay for that. You had one where it was the mom. The mom had cancer and they could afford to go to Hawaii. She wanted to go to Hawaii for a month and afford to do that. Sometimes it’s a real-life event, like maybe they got laid off. Maybe something happened, somebody’s sick, or whatever it is. Their car broke down.

I’ve had everything from car breakdown to, “This couldn’t happen at a better time. I got the vet bill back and I want to save my dog.” Those are serious real stories and situations that I’ve helped people with and they’re like, “Thank you. There’s no way they could get the $10,000 right now today to pay those vet bills,” to save their dog. They’re like, “I got to wait, find an agent, do this, do that.” They’re like, “No, let’s do this. I’m ready to go.”

In most big cities, if you drive around, you’ll see check-cashing places, which I’ve never understood. I’ve had employees who take their paycheck and go cash it. I’ve asked them, this is in the way distant past. “Why are you doing this? Why don’t you just deposit it in the bank?” “I don’t believe in banks. I don’t trust banks. I like to get my paycheck and get the green cash. I want the cash and then that way, I know how much money I have to spend for the next two weeks until I get another paycheck.”

I understand that. That’s cool.

I do, too. They don’t even think about the 19% or 20% that it costs to actually do that.

I see what you’re saying.

If their paychecks were $2,000, it would have been $2,200 or that’s 10% but $2,400. It doesn’t enter their mind. They’re not doing any math at all. Am I criticizing these people? Absolutely not. They have good and valuable lifestyle reasons for these choices that they’re going to make. Are they going to get rich making these choices? Probably not. They are like us where it’s premeditated and we’re facilitating this. Are we taking advantage of these people? Absolutely not.

That’s a good point because some people say, “You’re talking to men do it and all this stuff.” No, I’m not. That’s not how I roll. I had too many people blowing up my phone when these mailers go out. I don’t have time to talk to somebody. I’m not going to do that. It’s like, “Here’s my price. If it works for you, great. If it doesn’t, I understand.” This is exactly what I say. “Please hang on to my letter. Let me know if it changes your mind.” That’s it. If you think that’s coercing and talking someone into something, we got to talk.

Believe me, I’ve seen Jill talk people into stuff that they don’t want to do.

That’s different. I put back that flowery comforter because of you. I don’t have eighteen pillows on the bed.

There are about nine here. In Jill’s mind, that’s a compromise.

More than three are yours.

Let’s do some math. Now that we all hopefully understand this is a very difficult concept for anybody who’s in real estate, who comes to Land Academy and say, “How do you guys make money?” I explain this. Many of them shake their head and say, “Why would that ever work?”

Can I talk about that for a moment before we do the math? This is the part that perplexes me. People cannot get it in their head and are like, “I don’t understand why 16,000 to 17,000 transactions as proof. It doesn’t spell it out.”

We got lucky.

I admit that’s it. I got lucky 16,500 times. There you go.

I think it’s probably over. We’re not going to do another deal.

That’s it. That’s right. We’ve pushed it. That’s one thing I talk about with people when they come to the land academy. I’ve had some good conversations with new people and they’re like, “What do I need to watch out for? I’m in. I’m doing it. Please tell me where I’m going to catch myself so I don’t make those mistakes like other people.”

I said, “Good question.” What you should do is don’t second guess this. Things are going to come up like I’m telling you. You need to offer this percentage of what you found and send the mail out like that and people go, “What? Are you telling me to put this number on this thing?” I’m like, “Yes, because watch what happens.” The smartest, best people listen and do it and they watch what happens and they go, “Never mind.”

Don't second-guess your land investment strategy. Trust the process, send out those mailers, and watch the deals come in. Share on X

It’s all because of what we’re talking about right now. You’re sending out these offers. For these people, it’s a situation. It’s timing. It’s convenience. We’re good people. They trust us. We follow through. Everybody wins. That’s it. We’re not talking in a video. We’re not cold calling. We’re not trying to tap into the elderly community or whatever you think or people have said or whatever. I’ve heard all kinds of things. I’m like, “No, that’s not this at all.”

Let’s do some math or some real simple math. Once you’ve accepted this concept and many people don’t accept it. The most difficult person to accept this is a well-seasoned real estate professional who’s been used to doing real estate deals successfully by dealing with brokers and paying people. They’re used to buying a piece of property.

Let’s use a trailer park, for example, buying a trailer park that’s 70% occupied, hiring a professional person to live on-site to lease up those last 30%. There are all kinds of things you can do. Put older trailers on the park and then lease those out. Anyway, get the thing to 100% occupancy, maybe do some improvements, and then resell it for the same cap rate because it’s got a lot more revenue. You make a good spread on that.

That’s a very typical commercial real estate play. It has never entered their mind that it would have been a lot easier to negotiate if the property wasn’t for sale if the broker didn’t bring it to them. If they got there first, send a letter to the owner of the trailer park and say, “I’d like to buy a trailer park for $500,000 instead of paying $1 million through a broker.” Then you would never have to go through all those improvements. You could have listed it with a broker and sold it for $1 million and then you’re done.

Could you imagine? I wonder if it’s the same person you’re describing. Here’s your gallon of milk story. It’s like they walk up to the counter at Walmart or Costco. They’re like, “This is actually too cheap. You should be pricing at the convenience store pricing. Here, I’m going to give you an extra $10.” Do you know what I mean? You wouldn’t do that. I know it’s on sale, but I’m used to paying retail for everything. Please charge me retail.

People are not selling their land on price. You will get a lot of phone calls. If you’re in the group, you do get a lot of phone calls where people are very price-conscious. They’re very clear about what their land is worth. There are usually career salespeople like corporate sales and something, and they want to talk.

Talk about their $100,000 piece of property that they think is worth $125,000 and they got an offer from you for $23,000. They think that they’re going to talk you into paying $100,000. That person cares about price. Those are not people we do deals with. Jill will describe this in fifteen different ways. If your offer is $23,000, they might come back because they’re negotiators. You should do a show on this where different personality types call you back. $30,000 you do it, even though the property is worth $120,000.

They need to get that little extra whatever.

That’s what they want. They want some juice out of that. I don’t know if it’s an endorphin rush for them. I’m not a big fan of negotiation.

They just to feel like they got something out of it. “I know you said $28,000, but I need $30,000.” “Okay, I can do $30,000.”

We’ve done many deals where they have patted themselves on the back. Price is involved with that person, but I don’t think so. I don’t actually think they know what it’s worth at all. They don’t. They don’t care. What matters to them is getting a little bit more out of us. They’re negotiators, which is fine.

They feel like they won. I’m good with that. I’ll let them have the win. That’s good. It’s funny you bring that up at the price. One of the things that I don’t do, hate doing, not going to go down this rabbit hole is a guessing game about price. In this scenario, you said you offer $28,000. The person doesn’t have a number. They’re like, “No, it doesn’t work. Try again. I’m not going to go $29,000. No. Try again.”

That’s an auction.

“$30,000?” “No. Try again.”

Reverse auction.

I’m not going to do that. Don’t even go there. What I’ll do though, I’ll say, “You know how I roll. We know this could end.” What is your rock bottom number that if I handed you cash today, you’d say, “Fine, Jill. I’ll take it. It’s yours.” They let them give you a number and you try to make that work. What’s funny is I sincerely believe that that number has nothing to do with the property.

That’s what I think, Jill.

It’s tied to his wife came in this morning and said she wanted to remodel the kitchen. I’m not kidding. That’s what the kitchen costs or fill in the blank. It’s there’s something back there that they’re like, “This money will solve that problem. That’s my number.” You have to get that out of them.

Let’s do the math. Now you’ve accepted this, whether you’re the trailer park guy, the buyer or the seller, a potential Land Academy member, or an existing Land Academy member that’s wondering how many offers you should send out a month. Does it make more sense to try this 5,000 times or 500 times? The obvious answer is the more people you reach by sending out a mailer, the more acquisition opportunities that will physically and literally be signed purchase agreements on your desk for you to review.

You are shooting yourself in the foot if you think you’re going to send out a 500-unit mailer that price at 25% or 20% of established retail value and get a lot of response. The people who don’t care about price, the people who are negotiators, or the people that we described, the situations that we described are less prevalent than people who think that their property is worth $1 million. We didn’t talk about that. There’s a handful of people who believe their $50,000 property is worth $50 million.

Priceless. That’s what I think.

There’s gold in there.

Those are people that, when you get those situations, they don’t want to sell. That’s what’s going on.

This last Career Path, we had a person who was on Jill’s side of the world, not mine, who’s not a tech person and not into the data piece at all. That’s a lifelong salesperson. She said, “What are you guys talking about? You send all this mail out. I send about 300 or 400 mailer units out and I don’t even price it. I just say, ‘I want to buy your land.’” She proceeds to stay on the phone with each person who calls her back and filibuster them down. I don’t know. Women can do this for some reason.

That was the right term, but she would talk to them for an hour though.

That’s the exact strict definition of filibuster. Talking to you to get what you want.

I’m choosing to be very supportive here. That was her way.

There’s nothing wrong with that, but she was very surprised that we sent all this mail out.

There is one problem with that. You can only talk to 8 people a day or 10 people a day. How long am I going to do? If you do an hour-long call, I can’t do that. If I have 8 hours a day, I’m talking to 50 people or more.

It would stand a chance. I came up with this program, this methodology of sending out offers. I’m not slapping myself on the back here.

You should.

I didn’t learn this from somebody and I didn’t like to take away that somebody was doing it and do my own offshoot of it and that offshoot version of it. Go make tons and tons of money with Jill and then launch Land Academy based on this concept. I came up with this and I failed at it a lot many times until I honed into actually sending people an offer.

Why did I come up with this? I don’t want to cold call people. I don’t want to talk on the phone all day like some people do. I want to send out a bunch of offers in a perfect world, not talk to anybody, get a bunch of offers, a much smaller number back in the mail of signed offers, the numbers that I can control, and pick the ones that I want and do the deal.

I started sending mail out like this in the early 2000s and we never stopped because it works and we still don’t stop. Jill and I get thank you notes every week because we have a person in the advanced group in the Career Path alumni group that sent out 80,000 units of mail. He said he’s got maybe 25 deals. He ran out of acquisition money, which is a great thing. He’s seeking deal funding. The numbers work. The more mail you send out, the more deals you’re going to do.

That’s true. Thank you.

Let’s take a look at one of our favorite land acquisitions from the weekly Thursday member webinar.

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Georgia, 5.52 acres. We have access, affordable, alive. No. Hold on a moment. The husband passed on. The land is in an estate trust, but the wife is alive and wants to sell. We need to double-check in Georgia if it’s an automatic thing. The wife may or may not know.

If it’s in a trust. That’s what it is.

She may or may not know. That’s okay. That’s a helper with a phone call to her attorney who can help her with this. If you’re going to get the attorney involved in this, by the way, ask if the attorney can close the deal for you because that would be cool and they would like that.

If the estate has any money left in it, to pay him or her.

That’s good. There you go. Purchase price, $10,500. Thanks for the good sell for $35,500. Large piece. I’m already worried. I see there’s a power line when you do the Western side of the property. Is that a deal breaker or a bargain chip? I have three things so far at me right now. I’m telling you, I’m reaching for my FIFA cards. I’m holding both of them right now.

I pull this up so you know what goes on in the mind of an old crusty man. I pull this up and I see that this is all built around good. Built-up properties everywhere. A couple of vacant lots. That’s okay. Great access. What’s wrong with this property? Why is it still like this? It looks great and the price looks great. The question is now we’re going to dig deep and we’re going to find out what’s wrong.

At least it’s better than that one.

What I hope the answer is, is it leftover because this guy was older and his wife now has it and they want to get rid of it. If that’s the case, I’m in. I don’t think that’s the case at all.

I’m holding one FIFA card right now. I will show it in a minute.

The answer is this. The question you have to ask yourself is if a lot of this property is in this easement where you will own and pay for infinitely as the end user of this, the right to look at that.

Will you check the legal to make sure there’s nothing funky in there?

That’s the bad news. The good news is you have a bunch of usable property here. A lot of it actually. A ton of usable property here. Maybe Mrs. Widow, you can pull a Sam here and say, “I thought it was worth $10,000, but we’re buying half the property because this is all an easement. What do you say $5,000 and we call it a day?”

Ironically, they paid $4,600 for it.

When was that?

2000.

It was him. What’s the deal here? You put it from his name to his name. That was probably it. I love it. You’re like, “The mail hit.”

Trying to find what the value of these houses is to get a gauge. $179,000 in 2016. I would buy this. I would buy it.

Buy it for $10,000?

Yeah, I’d buy it for $10,000, but I’d try to get it for $5,000 because of the easement.

Hold on a moment. Don’t forget. We’re not even sure we could transfer it.

We don’t know if we can transfer it. Honestly, we don’t know if it’s usable because now you’ve got a pretty narrow piece of dirt and I’m not sure. It looks like it’s okay, just looking at it. This is usable. You need to confirm all this.

Got a hate call and a signed contract all in the same day. What a business. Isn’t that great? I swear, when the hate calls come in, I’m like, “We priced it right. All right, sit tight.”

I got a couple of validation calls where they’re like, “You offered me like a third of what it’s worth.” It’s like, “Perfect.”

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Success in land investing isn't luck. It's about consistently sending mailers, learning from each deal, and building a pipeline. Keep at it, and wealth will follow. Share on X

Creating Consistent Wealth Through Land Investing

How do you consistently create wealth for yourself in the land business? I can get all nebulous about this or I can simply say this, which Jill appreciates when it’s more simple. If you learn how to do this, you give yourself the right amount of time, let’s say 3 to 6 months, to learn Land Academy and spend time on Discord talking to other people who have been through it, who are going through it and succeeded at it.

You get yourself on a mailer schedule and you never stop that mailer schedule, regardless of what happens. In your every mailer, you’re constantly learning. You will become generally wealthy unless you’re missing huge parts of this. You will, at some point, get a consistent pipeline filled and buy and sell a lot of land.

The secret to building wealth in land investing? Consistent mailers. Never stop your mailer schedule, regardless of market conditions. Share on X

I talked about that. There was someone on the call who said, “We’re now in a system. We’re doing 1,740 units or something like that a week. We have it all plotted out.” This is what we’re doing. You cannot lose. You will not lose if you keep doing it. What’s going to happen to is, like with us, the deals keep coming from the new mailer. Your old mailer will start picking up steam. After a year of this, you’re going to be looking at yourself and go, “Did we even mail that county?” Things come back at the end of the year. They come back in the summer. We have had stuff for over ten years. Did they come back?

Because of the way mortgage rates have dramatically increased over the last 12 months, they’ve doubled. When this happens, commercial real estate becomes available for purchase. For people who own, let’s say, trailer parks, strip malls, or any type of commercial real estate that can be analyzed on a capitalization rate, because of that increased cost of capital, it’s very common for commercial real estate to be on funky type loans.

There are variable-rate loans that are tied to interest rates or 30-year amortization loans that only have a five-year term. At five years, you have to renegotiate the loan. Of course, you’re going to do that in prevailing rates at that time. The whole result of that is when interest rates go up like this and don’t show any signs of going down, when people have a marginally good deal, let’s say it’s a trailer park, we’ll use that as an example, that extra interest rate doubles. Their cost of capital has doubled in twelve months. Their rent didn’t double. Their operations didn’t get incredibly that much better to offset that extra expense. They panic and sell.

I ran a whole analysis on what it takes to buy a trailer park. Right next to it, I ran an analysis on what it takes to be successful at buying and selling land. Buying and selling land in 2020 is exactly the same as it is in 2023. Why? It’s because we don’t have a cost of capital. To make things even better for our own situation, for land investment in 2023, people who do have a lot of commercial real estate or anything else that is tied to an interest rate, like, let’s say, a house with a variable rate mortgage are going to run out of money.

If they have extra land lying around, that’s one of the first things they’re going to get to sell. If they have an offer stuck to their refrigerator for you to buy it, whether it’s from this year, this month, or like Jill said, three years ago, they’re going to call. We know that because we’ve been sending out mail since the early 2000s and we’re getting these calls and we’re getting these emails now way more than we were a year or two ago. That’s the result of consistently sending mail and consistently creating wealth. I don’t know if we’ve ever had a bad year buying and selling land.

No, isn’t that interesting? I was talking about that because everybody’s worried about recession and things like that. They’re like, “How’s it going to affect the land business?” I’m like, “This is not my first rodeo.” Not my second, not your third. I could say I watched our peers and other investors not make it through, especially the last one, like ‘09, ‘10, around there and I felt bad.

Thank goodness you set us up correctly. That’s another point about this, too. One of the things that we do is buy these properties. I’m not running around with contracts. I’m not assigning things. I own this property and we bought it right. We bought it, so we know we’re going to make money on it no matter what happens. Maybe I’m not going to 3X my money. Maybe I make it 90%, big deal because I’m fine with that.

We have consistently proven it. I think that’s why a lot of people here with us, for decades, kept food on the table, thanks to land. We’ve done other things. Have I thrown renovations in there? You threw renovations in there. I loved it, and you hated it. It was funny, but then my joke now is that I have never worked so hard for $35,000 in my life.

She means renovating houses.

I am not doing that again. We’ve done renovations, commercial properties, office buildings, and all kinds of other things that we’ve done. In the land space, that’s great. When you put something on it, it’s not our forte.

That’s because we’re land people. There are still people in this world who do well with office buildings.

I don’t have a stomach for it.

Just read that office buildings are at 50% occupancy. They were at 80% occupancy a year ago. This is all because of the cost of capital going up, which is the reason that the Feds are raising interest rates like this pretty consistently, and they’re actually going to raise them again about a quarter point if they haven’t already, they probably have, is because it’s a way to hedge off inflation. The fact that eggs are made more expensive than they were a year ago. What caused inflation? The feds generally print too much money. It’s this cycle that goes on with fairly uneducated politicians that I won’t go into now, but I’ll never go into it. Our job is to not judge these people.

Thank you. We all think.

Our job is to sit down, run the numbers without emotion and say, “Here we go again. Now, how am I going to change what I do? How am I going to change my mailer? What am I going to do with my business partner? Are we going to make some changes to actually capitalize on the fact that the market’s changing and forget about any emotion or politics or any of that?” “That’s great, Jack. I don’t have $300 million like you guys seem to have.” Every time an acquisition comes up, go write a check.

I realized that and so does Jill. That’s why we put together Discord and LandFunding.com. We have a massive community of people who have a lot of money because they’ve been through this, too. Some of them have gray hair, some of them don’t, and you can go to them if you have a good real estate deal and fund your deal. It’s not tied to interest rates. It’s equity funding, not debt funding. Travel forward until you don’t need their funding anymore.

These people are not your typical lender, if you will. There are people in our community like me.

They understand the land and who are educated about how to buy and sell land and how inexpensively you can do it like you.

They might be 6 months, 1 year, or 3 years ahead of you sitting on a bunch of cash going, “That is a good deal. I remember working in that area a while back or I didn’t even know this was going on over here whatever it is that’s a great deal. I will absolutely give you the money for that.” It’s awesome. I love it.

Jill, you have something inspirational to share, I think. Maybe not so inspirational.

I know. I want to talk a little bit because this is coming up. I’m noticing this shift with more and more females and more and more couples and I love it. It was sweet. Is it Melinda? I think we were talking about it, and she was saying how much we have helped her because she and her husband are in this together, like us, listening to us, and hearing us when we talk about, which I want to talk about a little bit with you right now, some of the things that we had to do to survive and work together and be supportive and move forward.

It’s hard with your spouse. You have different ideas. It’s like, whether it’s not your spouse, your partner, your best friends, or anyone that you’re close with, if you’re saying, “We should do this together. This is the greatest idea.” It all sounds romantic and great in the beginning until you realize you both want to work on the same thing or you both don’t want to work on the same thing.

There’s nothing romantic about working with your spouse. It doesn’t sound romantic in the beginning to me at all.

You’re a guy. I know some guys that think. I’ve talked to guys that said, “My dream would be to have my wife come in and do this with me,” and I think that’s good.

Do you want me to translate that for you?

Go right ahead.

My dream is to have my wife work for me.

I am not even going to comment on that right now at all because you got your dream, didn’t you?

That’s exactly the opposite of what I got. It may have been that like that for fourteen minutes but that was never my intention.

Working With Your Spouse In Land Investing

I love that we are attracting and helping couples do this. I was thinking if you could think of one thing that has made this work for us, please share it. What is your one thing?

I’m going to answer your question, but I do have something to follow.

Go ahead.

Jill and I, the reason this works is that Jill and I, way out in the future, can see what we both want and it’s the same thing. I didn’t know this when we started working with each other, honestly, where it was dumb luck. We didn’t develop this after we met or started working with each other or any of that. She wanted to be very successful. I found out way later that that whatever she was doing and wherever she worked, she showed up in the morning. She met her goals or sales goals and in most cases, smashed it, and was constantly the best person in the office selling and reselling and all of that.

I was, too. I was very successful at the stuff where I wanted to work. You have to have that long vision. The first thing I would do if you’re considering working with your spouse, or even if you’ve worked with your spouse for a while, is get out of the office and sit down somewhere and say, “Where do you see all of this in 15 or 20 or 30 years or 5 years,” and see what they say. You’re going to be shocked at how it’s not the same, I think.

Do you think you can get them on the same page?

Yeah, but see, this is a big, huge difference between you and me. I don’t want to sway anybody or beat a path for them so that they start following down a path that I want them to follow down where I think it’s better. I don’t think that’s healthy in a relationship, professional or socially. I don’t want anything to change. I want the building blocks of it to be built before I get there.

What if there’s a way to get each other’s goals separately? What if my goal is to have this? For example, “Michael, maybe your goal is to retire early and my goal is to have my beach house. Maybe we could do both.”

If you want to set goals and then work together, however, you work independently or together to hit those things, I think that’s a great idea. That’s fantastic, but to change somebody’s work habits or your mindset or hours.

That’ll never work.

People are never going to change.

Very early on, Jack taught me this phrase and I never forgot it. “Here’s the definition of compromise. Great. Now nobody’s happy.”

I’ve used that 100 times since then.

Do what my number one thing is? My number one thing is if you’re going to sit down right now and want to work with your spouse and make this successful, stay out of the other person’s lane. I talked about it in the beginning. You both want to work on the same things, but you both do not want to work on the same thing. Divide it up. Make it fair because there’s stuff like even within us, I’m like, “I hate doing this, but I hate doing that more. If you’ll take that on, I’ll take this on.” You can have those conversations like, “Great. Thank you.” We’ve done this.

We still do it.

It’s been a while, but we would take a sheet of paper and draw a line down the middle. This is true. We still do it. You’re marketing, you’re O2O, you’re this, you’re that. We divide up responsibilities in our other companies. The land part comes naturally for us. Why would I even question it, by the way? His data, his picking areas, and his pricing offers.

Let’s see, you know that now. That’s the thing. We have this luxury of hindsight.

Somebody’s going to naturally be better at it, I think. Someone’s going to be naturally better at answering the phones, getting the deals done, and doing things like that. The nice thing too is, though, because of us and our experience now, you listen to me when I say, “I know you’ve got a mailer going out. Can you please roll in this area in this size?” You’re like, “Sure. Fine. Whatever you got working on, great. Let’s roll that into it too.”

The part about staying in your lane, though, when you draw that line and you say your data on the phone, whatever, the other person cannot say, “I want to do this too. I think I can do it better.” You got to stay out of their stuff because then you’re going to fail if you don’t. If you come along and critique the person, try to get all up in their business, try to do it better, try to change their process, that’s not going to work.

What Jill is describing is a boss. If you think that you’re going to be the boss of your wife and in a workplace, you can stop right now. In fact, you can stop reading.

You think you’re going to be the boss of your wife in the home and with child raising.

The same thing is the reverse. If your wife thinks she’s going to sit you down at work and tell you what to do all day and have you deal with it, then there’s something wrong with you, not her. All kidding aside, in every single couple I’ve ever met, and usually people in business make this mistake, you can’t just let it happen.

“I’m going to work with her next week. She’s quitting her job. She’s put her in 2 weeks’ notice and 3 weeks, you’re going to be working together. We’re going to figure it out. We’re going to sit down together and she’s going to do sales and I’m going to do acquisitions and that makes sense to me.” I give you one week. You can’t just let that happen just like you cannot let a mailer happen.

You have to manipulate a mailer, and you have to seek help from Discord, all the education products that we provide, sit down with yourself in a dark room, and map all of it out. What you’re doing is building a sense of confidence. It’s the same thing that happens when working with your spouse. You need to put some rules in place.

Jill and I decided to have a meeting years ago. We call it a partners meeting. That’s what it’s called in our calendar. I think it’s at 9:30 in the morning, three days a week. She writes down all the stuff that goes on that she needs me to talk about. If something’s not on fire, she writes it down, and so do I. This partners meeting, we talk about it. Do the meetings get heated sometimes? Yeah, but what it does is it stops her and me from barreling into each other’s office to talk about something where that it’s going to end up being entirely meaningless anyway.

Everybody wastes an hour talking about something or debating something that has nothing to do with whatever. You can’t just let it happen. You have to have a plan with some rules in place. For instance, this show. It’s always been my baby and she knows that. She didn’t in the beginning. She wanted to be all involved in sound checks, camera angles and backgrounds and all of that.

As you can tell, I lost every battle.

She’s not happy. This show is a few years old. “Why is it so dark in here? It’s dark in here.” It’s because I’m dark. If you look at Jill’s stuff, it’s all light and airy and fun because that’s who she is.

Pretty. I have colors. Yes.

You’ve got to let that stuff go. We’ve all accepted it. I’ll tell you, getting that first deal done and then maybe getting the first ten deals done. All of it goes away. Not all of it. 95% of it. All this stuff goes away because everybody’s got confidence in their spouse now, confidence in themselves, the system works, we’re consistently getting mailers out, money’s coming in. It’s going out coming in and that’s how what’s going to work, but you can’t say, “Let’s try this. We got this. I’ll see you on Monday.”

“Everybody else does it. Jack and Jill do it. We can do this too.”

“Let’s push our desks together and stare at each other all day.” We would last twenty minutes. We now can work in the same building. For years, we worked not in different buildings, but in different ZIP codes with different staff and different everything.

One of us had the home office and one of us went to the office and that was it. Remember the time we were on different floors? That kind of worked out. One of us would pop down to the other person’s floor too much, but that helps.

Here’s my final thought and this is not working with your spouse. This is living with your spouse. The concept of blame has no place in a relationship and I learned this from my parents not because I wanted to. You cannot blame somebody else. If a deal goes bad, deals go bad. We have bad deals. Probably 1 or 2 a year where stuff is still for sale. We have accumulated properties for sale that they’re either not priced right or are usually not priced right because I want to sell for too much. Stuff goes wrong. Computers die. The cashflow is not what you expected.

In real estate partnerships, blame has no place. Focus on solutions, not fault-finding, for a healthier and more productive business relationship. Share on X

We forget about it. Sometimes you forget, like, “Do I still own that?”

This is a personality type. What I’ve found over the years is there are some people who need to blame somebody. If they’re sitting next to them, the closest person is going to get blamed. Who knows where it actually comes from? It comes from some type of personal, “I can’t fail,” or you got slapped on the wrist too many times when you spilled milk when you were a kid. I don’t know. I don’t know where it comes from, but I know that blaming people for stuff is not going well doesn’t end well for anybody.

I’m still laughing at the thought of putting out two desks facing each other and how horrible that would go because invariably, when someone leaves their desk like, “How come I’m the only one working?” It would be nonstop critiquing. “You missed this on that call.”

Can you imagine if I listened to your sales calls and then you got done and hung it up and you’re like, “I don’t know about that, but thirteen minutes into that, you were talking about something that I don’t think had anything to do with land, Jill.”

“I think you should have done this. You could have been more efficient. You could have got it cheaper.” That’s hilarious. How about you? Jack, do you have something informational that you want to share with us?

The Role Of Emotion In Land Investing

Your topic rolls into mine. My Jack informational topic is as follows. What’s the role of your emotion in your land career? I would argue that the role of emotion in land is none. I think the more that you can check your emotions at the door when you’re buying and selling land, especially if you’re working with your spouse, the further and faster you’re going to get. Is it possible? Sure, it’s possible. Have I ever seen it? No. Even I get emotional about buying land because it’s awesome. I love land.

In land investing, emotion has no place. The more you can check your emotions at the door when buying and selling land, the further and faster you'll go. Share on X

I get way too emotional about the sales price. In the beginning of my career, I wanted to sell everything constantly. Now I’m like, “Maybe we should hold on to some of this property. We’re getting it for 10% of what it’s worth now. What’s this going to be worth in 25 years?” I’m starting to have those thoughts that cross over into emotion. Is it effective to make money? No. Is it effective for Jill to come to me and say, “I don’t think we got the best mailer to yield out of this last mailer that it’s not your best work?”

You need to up your game, buddy.

“I expect more of you, Jack.” Is that effective? No, it’s ridiculous. It’s emotional and silly and fireworks are going to happen after that.

“Where was your head when this went out? Thanks a lot. Every single person wants to sell. Congratulations.”

“Twenty-five years of professional sales, Jill, and you cannot sell this piece of land? This is it? This is what I’m stuck with.”

“Our college freshman could have priced this better.”

Keep your emotions in check. Tony Robbins does a whole thing on this.

Does he?

Yeah, like a huge, ten-year thing about what’s stopping you from where you want to be. He’s famous for saying this. Your emotion.

Do you listen to Tony Robbins? That’s good.

Sometimes.

I like that. That’s good.

I said this on Career Path once. I don’t know. It was a long time ago. There were two women in a business partnership, and they lost it. They didn’t lose it, but they had a lot to say. What do you mean? All the best deals I’ve ever done were because of emotion. They were being emotional. It’s not gender specific. Trust me. Men express emotion in rage, which is still emotion.

We love that. It’s great. That’s funny.

Join us next time for another interesting episode. You are not alone in your real estate ambition. We are Jack and Jill, information and inspiration to buy undervalued property.