Debunking The Myth Of Passive Income In Land Investing

This is episode number 1943. We are talking in depth about the myth of passive income as it applies to buying and selling land. In the beginning, we’re going to talk about that, and then ultimately later in the episode, we’re going to talk about how it only takes 10 or 15 deals a year to make $1 million.

That’s fun when you think about it, and you work it backwards. You’re like, “That’s all it takes. I could do a deal a month and make $1 million.”

We have a bunch of people who signed up largely because of some promotions that Jill and our staff did at the end of the year. It’s March. They’re getting mail out. There’s a lot of chatter in very positive way in Discord. I sent a mailer out. I got 12 or 13 responses back, but there are no deals.

That’s different. That’s a whole other thing.

There’s a deal in there, I’m sure.

That’s another conversation.

That’s what we’re going to talk about later, but there are deals in all this stuff. You don’t need to do 22 deals in 1 month. You need to do one great deal every month.

Let’s talk about that when we get to the passive income part in a minute here, and then I have some stuff to say about the 22 deals in 1 month.

I hope you’re enjoying this new 2023 weekly show version. Each week, we answer questions from our Land Academy Discord forum. We review land acquisitions from our weekly Thursday member webinar and then ultimately take a deep dive into the two land-related topics I mentioned here. Those are all requested on Discord. Let’s look at a question posted by one of our members on the Land Academy Discord online community. If you want a sneak peek of our Discord channel, please go to LandAcademy.com. It’s free and a read-only format.

Not all the areas, too. I was clicking around it. It’s cool. What you see on the Discord from our website, there are some hidden areas where there are even more deep dive deal discussions.

That’s why it’s a sneak peek.

David wrote, “Hi, all. A random question. I’m curious if anyone has experienced creating mailers for commercial office space. Specifically, I’m looking for 5,000 to 10,000 square feet in the King County area in Washington and 15,000 to 20,000 square feet in fill-in-the-blank parts of Florida. I am trying to figure out if that criterion is too specific for this type of model before I spend a lot of time on it. These would be owner-occupied offices for call centers, so I could probably expand the criteria to some types of industrial spaces as well. Any insight would be greatly appreciated. Thanks.”

“Jack, why would you put a question like this? We’re supposed to be buying and selling land. That’s what this show is about.” This show is about a lot more things than buying and selling land. This person’s an established commercial real estate agent or broker. He’s sitting down, thinking, “Wait a minute.” We have a database of 99.9% of the people who own real estate. We have access to a database for those owners, and so do our Land Academy members. There are other databases. I’ve long threatened myself, not anyone else, to do a program on the value of sending offers and direct mail for all kinds of stuff. You’re only as great as that database.

Jill and I have done this for apartment buildings. We’ve done it for specific urban areas and specifically zoned property for future high-rise apartment buildings on behalf of one customer or client. Jill and I had a guy in Land Academy early on who took our database after a hailstorm, sent everybody a letter because he is a roofing contractor, and said, “If you have these issues with your roof, please give me a call,” with great success.

This concept of sending direct mail with a serious call to action, like, “I don’t want to buy a property. I’m going to buy your land for $5,234.22,” it’s very hard not to respond to that as a recipient. If you have the owner of an office space in a receptive database that’s workable, I would highly encourage you to do this.

I’m working on a data set where Jill and I are thinking about expanding what we have to buy some commercial buildings to collect the depreciation for tax reasons for 2023 taxes. We’re going to do the exact same thing. I will send out a mail. Jill will answer the phones on some very specific tenant-driven triple tenant buildings.

It works for everything. There’s a healthy number of people in our community who have used the Land Academy model, like, “This is how we’re going to find our next cabin. I know where I want my cabin to be. I know the area. I know the ZIP code. I know exactly how big I want to be. I know exactly how old I want it to be.” They can use it for any kind of thing.

When you think about it, it’s a little scary what we have at our fingertips. It’s not just land. It’s any real estate property and every zoning. It’s the whole doggone assessor database nationwide dream-it-up with mortgage information. If you want to get granular about this, you could. Everything you put in here, you could add in, “I want a loan that’s been in place this long.” Even loan-to-value. They could be like, “I want to know that they have 20% equity in this building.” You could even dig in and find the LLC-owned ones or privately-owned ones. Maybe you want to dig into the mom-and-pop ones. Dream it up.

Harnessing Data And Direct Mail Strategies For Land Investing

This is a finite data set. The database is between 150 million and 155 million contact records for every single piece of real estate. Not just every piece of land, house, or condo, but all of it. It is every commercial property. Is it incredibly simple to go in there and say, “I only want these properties that are owned by this person in this area,” no. Honestly, you have to be into it. The first time I opened a data set, which was RealQuest back in the day, I had to take a day off. I was so elated with the possibility of what was going to happen in my life.

What did you do with your good day off?

I can tell you. You know what I did.

You were bored with the day. You spent a week in Mexico partying like a rockstar and then came back. That’s what I think you did. Let’s be honest.

I was very single when this happened. I didn’t go to Mexico, but Old Town Scottsdale was in for a treat. That’s true. It was probably two days because I knew right then and there, after looking at it for an hour, what was possible. Here we are. That was the late ‘90s. That database that you have access to as a Land Academy member, which is the DataTree national database, the one that’s got all of it and they continue to improve it, is something else.

The one that you get when you’re in Land Academy automatically.

Why Passive Income Doesn’t Work In Land Investing

It’s worth the price of admission. I’m not selling anything here, but if you had to go get it on your own, it’d be a lot more expensive.

That’s why we do this.

The first topic is the myth of passive income as it applies to buying and selling land. In Discored, we have a section called Noob for new people. In our program, the first thing is to go to Discord and introduce yourself. You tell us a little bit about yourself, what’s going on, and why. In there is a very lengthy, well-written entry about how a person who has a lot of commercial real estate experience joined another group on the internet and wasn’t satisfied with the quality of the group or “how in-depth it was about this topic”, and then he finally found us.

That forced me or sparked the idea for this topic. Passive income, which is what this specific group teaches, does not apply to this. Throughout the next fifteen minutes, I’m going to describe to you and prove to you why passive anything doesn’t apply. Are you passive in your marriage? Are you passive with your little sister? Are you passive in your schoolwork or passive in college?

Are you passive in your marriage? Are you passive with your little sister? Are you passive in your schoolwork or college? If you are, you're going to fail at it. Share on X

Can I jump in?

Yeah. If you are, you’re going to fail at it.

Here’s the thing. That’s what we were talking about when we were thinking about this topic. I don’t want you to feel bad. I want you to know that you are not alone if you thought, “What do you mean I can’t buy a property here for $1,000, get $300,000 down and then $99 a month for 5 years, have 10 of those, sit back, and go, “Woo hoo,” and I do nothing?” That’s what some people are out there teaching, talking about, and coaching. I’m like, “What do you mean it’s not going to be any work? There’s work.”

There are always people who don’t pay and lose their jobs. Things happen. They fall off the planet or whatever it is. You don’t want to take it back. There’s so much customer service. Think about this for a second. A person who’s buying a couple of thousand dollars’ property or a person who’s buying a $100,000 property. Think about how different those people are. One’s like, “This is all I have. I’m so excited,” and one’s like, I’m a pro. We don’t need to talk about this.” That’s one aspect to think about.

Streamlining Work For Maximum Efficiency In Land Investing

A lot of years ago, early on in the Land Academy scenario, I wrote a blog called Chasing Zero. People still contact me about this concept, so I’m writing a pretty substantial eBook. I don’t know what it’s going to be at some point. It might be a regular book about chasing zero. What chasing zero is, and apparently, it sung to a lot of people, at least the type of people that join Land Academy, is this.

I wake up in the morning trying to do less stuff than I did yesterday. If I can somehow remove something that was a pain in the butt or something even that I had to do and remove that out of my life so I can go and do more meaningful things to me, then that’s what chasing zero is for me. I’m constantly chasing this concept of, “How can I get a partner to do the things I don’t want to do to make everything more efficient so I can go do the things that I want to do?” I don’t mean go fishing. I mean start a new company or something like that.

A great example is getting a housekeeper. “I don’t want to do all this housework. Jill doesn’t want to do it. It’s not expensive at all in the scheme of things. Let’s get a housekeeper.” Checked. That’s one thing I got out of my life. I have many other examples. This is why we have employees, because we can’t all do all the stuff that they do all day. We could possibly do it all. We wouldn’t. You get burned out. You’re not going to do it. We have people who are marketers.

Jill has a transaction coordinator. I believe this, and so does Jill, that she is way better at deals than Jill and I are. She’s better on the phone. She’s more meticulous. She’s part kook, and I say that with affection. She’s kooky enough to talk to these real estate agents and escrow agents. That was a huge chunk out of our lives. Our lives are better because she’s in them. We’re chasing zero. I’m constantly chasing zero.

My point in saying all this is that I wake up trying to chase some type of passive income. It doesn’t work that way. Anything that’s worthwhile is going to require some type of involvement on your part. After you’ve got all the pieces, players, and all of it in place, your involvement might be, “I’m on standby.” Jill is on standby for all the deals that we’re doing. We’ve got great people in place so they don’t need her very often, but they need her once in a while. That’s not passive income. Passive income is when you take $1,000 and you put it into a CD or Certificate of Deposit. There are all kinds of passive investment vehicles, but even then, you still get a statement every month. You open it and look at it.

Anything that’s worthwhile is going to require some type of involvement on your part. Share on X

This comes up often when I’m talking to people about joining Land Academy. They’re like, “Why wouldn’t I do this?” I say, “Let’s talk about that for a second because I’ve been there and done that, and I know a lot of people who have been there and done that. You do this model. You go along, “I’m going to buy 50 properties and I’m going to get $99 a month coming in. That’s my goal.” I’m like, “Think about this. You got 50 customers. Do you think that every single month, all 50 people at $99 a month are going to pay? Please test that and call me in a year,” and they do.

That’s number one. I have to say it from experience. Please ask the community because a lot of people in our community have been there and done that. Here’s the other thing. Do you want to get wealthy? It’s one thing to sit back and say, “I got $5,000 coming in every month, but that’s all I got. I’m not building anything right now.

When that $5,000 pays and I deed them the property, I don’t have anything. I got those months that I had all my expenses paid for versus, “Instead of buying ten $1,000 properties and setting them up like this, what if I put this $10,000 into 1 property and made that $20,000, and then put that $20,000 into something? Next month, I made $40,000, and then I made $80,000. I’ve only done not even five deals.” You’re staring at $100,000. You can start making some different decisions. Do you still want to go do that? Probably not. You could do one deal a month like that, and you’re doing so much less work.

It’s still not passive. That’s my point. None of this is passive.

Scaling Land Deals Vs. Pursuing Passive Income

I feel like I have passive income because I work maybe four hours a week on land deals.

I honestly would argue because that’s what happens. If we didn’t have Land Academy, Jill and I would probably work 4 a week.

You would work more than I do. Your trolling and mail probably takes more time. Mine’s like, “Let’s wait for the phone to ring.”

It’s still not passive. I thought this term would go away, but it stuck around. When we started Land Academy, there was such a massive trend way bigger than it is now. It’s side gig or side hustle. Those are cute little words for, “You don’t want to work that hard.” I’ll use Grant Cardone as an example, or anybody who’s standing in front of their airplane if any of it is real and most of it is not, but in his case, it’s real. He started in a college dorm with three stinky idiot kids who probably amounted to nothing. He believed in himself and had that 1st employee, 2nd employee, and 3rd employee, and maybe 1st, and then that 2nd wife.

It’s his first wife. She’s awesome. Please don’t poo on Elena.

Is that her name?

Yes.

How do you know this stuff? This is truly amazing.

It’s because I think she’s okay. I think they’re cool.

I’m using him as an example. The guy is full of fire. He doesn’t want anything passive. He’s waking up every day, smashing it. I would like to make it official that buying and selling land is not passive. There’s a lot of work. It can be 5 to 3 years from when you join, figure it out, and do your first deal, but the word’s not passive. It can be not very much work.

How about on autopilot, a lot of it? That’s what I think. Here’s my final point on this. If you’re reading this, it’s because you’re trying to make a change. You’re like, “Do I go into land? Do I go get my real estate license? Do I save up and buy a Domino’s pizza franchise?” They’re all going to be work no matter what it is. They’re all going to take something, especially in the beginning.

I don’t care what it is and what it’s going to spin off. It’s going to take work. You got a lot to learn. Pick something that sings to you, number one. Number two, speaking from experience as someone who has owned a pizza operation, pick something with a better ROI than a pizza. If you think two $2 an order is going to get you wealthy this month, I’ve got to tell you it’s not. It’s a slow road to wealth.

If you think two dollars an order is gonna get you wealthy this month, I have to tell you—it’s not. Share on X

Let’s deconstruct that. You have 8 to 10 hours a day, depending on what your personal life is like. Between 8 and 18 hours a day to spend on chasing your dream, you have all kinds of decisions to make. You could be Elon Musk if that’s what you wanted. You could be a shopkeeper, a convenience store owner, or anything in between. Land Academy falls between that. You have all kinds of choices, but chasing something that’s passive is not the right path. Chasing something that pays out that you can eventually scale, which is buying and selling land, in my opinion, where you can grow it to as much as you want and is mostly variable cost, that makes a lot of sense to me.

I’m in old-school commercial real estate. This business model doesn’t work because you have to go out and churn these deals. You have to buy a deal and sell it. For whatever reason between Jill and me, it fits our skill sets well. Commercial real estate people would argue, “If I buy this regional strip center, finance it correctly, have the right partners with the right property manager in place, and it stays occupied, I don’t have to do anything.” You do.

You enjoy it. That’s why you don’t think that you’re doing anything, but you’re constantly thinking about, “We bought it at a seven capitalization rate. The rent escalations are going to get us to a 12 cap in 3 years. We have to prep for the 1099 exchange.” Property management firms don’t do that. You’re nuts if you let your accountant do it because you’re not going to do it. Those of you who are in that situation know exactly what I’m talking about. It’s not passive. It happens to be something that you like versus talking to tenants.

I understand. When you think of owning an office building and things like that, all I could think of is I’d be worrying that the roof’s not going to need something and all the plumbing’s going to work. Fill in the blank.

If there are triple net leases that you can lease to something like Bank of America, sure. You’re still thinking about the 1031 exchange, the rent escalation, and debt service.

I know I said I was ending it on that, but I’m ending it on this for me. Why has everybody gotten so lazy? Maybe this is part of the culture. That’s a whole other show.

This is the time. I love this.

Why is this planet lazy? I remember going in and punching a time clock. This was a discussion we had. You said, “What do you mean after three occurrences you were fired?” I’m like, “I’ve had a job.” There are those of you who know what I’m talking about. There was attendance. You had to be on time and punch a clock. After three, you were let go. You had three in a year. If you had 3 in a rolling 12-month period, you’re let go.

I remember getting excited when things after twelve months would fall off. I’d be like, “Twelve months have passed. Now I’m back down to zero.” If I’m sick one day, I’m late, or there was a car accident, that’s what it was. You had to get up and go to work. Honestly, I like it. I like doing stuff. I like moving forward. I like buying property. I like watching the bank balance go up. I like knowing that my daily stuff contributes to that.

Here’s a thought that I’ve had. I was a kid through the ‘70s who was fortunate enough to have computers in my life since middle school, whether they were in school, in the library, or ultimately as a Christmas present from my parents because they were tired of me talking about it. All I kept thinking during that period was, “I know where this is going. I know that this computer that’s on my desk is going to get better and cheaper.” You could see that happening every year then.

I remember my friends and I connecting our computers together for the first time when we were in junior high and then looking at each other saying, “What if all computers are connected?” We were never appreciating the time we were in. You get a little bit older and it’s like, “Times next year are going to be greater. They’re going to be better.” I was in accounting for commercial real estate. I was like, “Next year, I’m going to have a better year than this year. I’m going to get promoted and it’s going to be better.”

Then, something like COVID or 9/11 happens. When both of those things happen, it doesn’t make it better. COVID made this worse. That’s what Jill is referring to. We are socially depleted or diminished because of these events where there are more restrictions on us. Everybody staying at home for two years doesn’t help anything, certainly under the guise of being passive. Staying at home for two years is passive. It’s not active.  Land Academy and our land business thrived during those two years. We smashed it. We doubled our revenue company-wide and kept it there.

I wasn’t expecting that too when it all happened. I’m like, “Everybody, this is going to sink the ship,” and then I’m like, “This is even better for all of us.”

In summary, I get chasing zero. I get wanting to put your feet up with a cocktail in your hand in the Caribbean permanently someday I get it. I have versions of those same goals. They all involve Jill, not just me, and our family. I’m way too young for that. We do it a couple of times a year, and that’s good enough for me. We have a ton of employees who are doing this stuff. You’re not going to do this in the first 24 months of anything that you start, but it will happen if you’re not chasing something passive. Let’s take a look at one of our favorite land acquisitions from the weekly Thursday member webinar.

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Park County, Colorado. Offer price $36,000. The owner said he would sell for $40,000 as long as it’s what he walks away with. See how good this is? WK offered $36,000. The guy says, “I won’t do $36,000 but I’ll do $40,000.” You get a number out of them and it’s not that far off. He said, “Properties in the area are going for 2 to 3 times but I’m happy with $40,000.” This is awesome. WK says, “I can sell it for $80,000. It’s 40 acres. The owner bought the property in 2016 from a customer. He planned to hunt on it as it’s near Pike National Forest, but only went out there a few times. He’s getting old and it’s time to let it go.”

For Access, it’s got highway road access. Check. For Attribute, it’s in Colorado against all this beautiful stuff. Check.

Also, the national forest is nearby.

For Acreage, 40 acres is great.

Somebody’s building out there. Maybe we can see it on Google Earth.

I don’t care if there’s a house going in on here that’s $2 million. It’s got Adjacent problems. There’s nothing being built. This is a good sign. I’m not here to be negative. I’m trying to find the positive.

I like it. He paid $7,500 for it, and you’re offering $40,000. You need to know that one. “My $40,000 is not good. My $36,000 went down, too.” We can look and smoke that out.

A rule for these types of properties is $100,000 to $200 acquisition price. I would buy this for about $8,000 and sell it for $30,000 or $40,000.

That’s what I was thinking as we’re digging in more. We got 40 acres in that area. WK, I’m already thinking that for $40,000, you’re going to be happy to sell it for that.

There are either 20 to 50-acre properties that have been sold in the last couple of months. This is the same area because you can see this mountain ridge or mountain line with the water here, the mountains, and then this valley. This property’s in the valley right here. I’m pretty confident these are like-kind. The seller is not wrong. There are some good comps in here.

What were the days on market?

We could look them all up.

When I’m digging, then I’m going to do that. I’m going to go look and see what sold and how long it takes to sell.

I would do that too.

Did it take a year and a half to sell?

This is what she means.

We don’t even know.

You can still get it if you dig in other places. This paints a better picture than I thought. Active 95, 150. That’s better news than I thought.

Here’s exactly what WK wants to do. Buy this thing. It looks like this. This already has six months on the market. 85 is clearly not going to work because you’re going to be no better, even though you’re going to have beautiful pictures.

With a sale price of $40,000 or $35,000, you’re going to be way cheaper in the market with great access. 180 days with 400 views and 23 saves is not good. Cheaper. The dirt’s okay.

I would call her and ask her, “Why is this not sold?” She’ll probably say, “Price.” I would have that conversation with WK, and then I would say, “What price would move this property?” and then watch her say $55,000 or $38,000. Whatever she comes back with, you’ve got to cut that down.

Hopefully, she’ll even dig deeper and say, “We had an offer for XYZ and they wouldn’t take it.” The truth is I wouldn’t bail on this deal. I’d go back and say, “Here’s what we found. Here’s the story.”

In 2021, it was sold for $42,000. This person’s trying to do exactly the same thing. There’s your answer, WK. You need to buy it for no more than $20,000. What did you say?

I said $8,000.

I like $8,000. Maybe $10,000.

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We have a full-blown, ready direct mail printing operation to help you. Check out Offers2Owners.com. It’s awesome. Let me tell you a little bit about what we can do. If you’re like, “This is great. I hear you guys talking about data. I hear you about talking about getting offers to sellers. There’s a piece in the middle. How do I get these letters to these people? Am I handwriting things?” No. Can you imagine how long that would take?

Offers by the thousands are getting out to property owners to buy their property. That’s how we got where we are. Check out Offers2Owners.com. Give them a call if you have any questions. It’s where you can go and upload a spreadsheet. They’ll put it into a beautiful letter format for you and get it in the mail with your offer price, company logo, website, name, and phone number. Everything will be on there. If you’re like, “That’s great, but I’m still not that good about the data part,” don’t worry. We have a service there. It’s our concierge service. They will go download the data for you.

It’s the same one we use.

They get it pre-scrubbed for you and ready to price with stuff for you to know how to make an accurate price, like some sales comps and price per acre from wherever you guys scrub it. You can accurately price these offers and get them out. It will keep you on track, too.

Nice work.

Thank you.

Let’s take another question posted by one of our members on the Land Academy Discord online community. If you want to sneak peek at this, go to our Discord channel and take a look at it on LandAcademy.com. It’s free and it’s read-only.

Greg wrote, ”Hi, everyone. I’m James from Salt Lake City, Utah. A brief background, I got started in commercial real estate in 2005 by raising and investing capital in a 50-unit multifamily property in the Bronx, New York City. I’ve since raised capital for more of those over the years, with the biggest raise not long ago. While in New York City, I attended NYU’s Commercial Real Estate Master’s program and was very involved. I know commercial real estate folks all over the world.

I worked in acquisitions for a couple of years and then transitioned to a brokerage where I spent most of my time in the office and in industrial sectors in Salt Lake City. I’ve spent time working in every CRE sector. I’ve gotten nice fees, but I’ve seen my clients knock the ball out of this park comparatively. Joining this group is my foray into running my own business and calling my own shots.

I am thrilled to be a part of Land Academy, although it has taken me a bit to think of that as Land academy rather than Los Angeles. LOL. Got it. I am looking to be actively involved and bring value where I can. I have access to pro versions of CoStar and LoopNet at my brokerage, which may prove useful at times. I’m a joint member of the Land Geek program as well, but the deal sizes here are ultimately more my style.

I’m committed to probably both. I’m committed to sending a large amount of mail out this year. I’m trying to get set up right now so I can pull the trigger on my first mailer ASAP. I am looking forward to learning from all of you and creating something special here.” You’re not alone. There are a lot of people who came here from other groups, and a lot of it is, “I got my feet wet. I get it. I learned the land thing, but now, I’m here to do some bigger deals or make this my career.”

This is exactly how I got started in 1993 in commercial real estate. I got tired of making other people money as a broker. I got tired of waiting on the phone for a decision after listening to somebody describe their perfect acquisition and me spending a month and a half on my own dime to go find that perfect acquisition or ten of them, only to have that person say, “I changed my mind.” Being the person on the other side of the phone has always been my dream until I was that person on the other side of the phone. Jill’s on the other side of the phone, which is even better.

If you’re thinking about joining Land Academy, these are the kinds of people that you’re going to rub shoulders with. This person has a tremendous amount to offer this group. I hope they join Career Path. I have questions for this person because raising capital for commercial real estate is not what it used to be. It was very hard in the past, but with the internet, raising capital has become a lot easier.

It’s easier for you as a potential Land Academy member because that’s what we all are. We are sources of capital for your acquisitions. I love having this type of person in our group who comes to us consciously saying, “I have a bunch of experience and I get what you guys are doing. It makes sense to me to send out a ton of offers.”

How To Make A Million Dollars With Just 10-15 Deals A Year

The second topic is that it only takes between 10 and 15 deals per year to make $1 million in this environment. I’m not here to sell you something. This isn’t some sales pitch. This is the truth. We have a lot of people who joined Land Academy during December and January. It’s always like that every year. Jill runs promotions and stuff to satisfy that desire. It’s the same desire I would liken to you buying a treadmill in January. It’s the same thing because you want to make healthy changes in your life.

There are trends at the end of the year coming into the new year. Also, at the end, when people are going back to school, we all think about, “What should I be doing more too when the kids are going back to school?” I agree with all of that.

My point is there’s a trend in Discord. These newer people who have signed up and are new and sending mailers out are getting the responses and results from their mailers. They’re talking about it in Discord. There’s this somewhat of a trend, like, “I got all these deals back and my phone’s ringing off the hook, but it’s not working.”

There’s some kind of disconnection at the end of this where we’re not communicating this correctly. Maybe to certain people, Jill and I are not telling you what to expect when all these diamonds that are encrusted in the carbon are falling out of the sky into your lap. You’ve got to crack that carbon off. There’s a diamond in there.

I was going to cover that more in a few minutes in my little part. I’m happy to share that.

Let’s do some easy math then. What you’re looking for is one fantastic deal per mailer, one deal where the signed offer figuratively drops out of your hand on the desk and you say, “I have to do this deal. I don’t care where I get the money. I got to do it. This thing’s going to make $100,000, $120,000, $80,000, or maybe $60,000.” If you multiply every deal that you do by twelve, that’s how much money you’re going to make that year. One deal from one mailer a month. If it’s $60,000, you’re going to make $720,000.

If I may, here’s the whole point. This is stuff that I talk about all the time when I’m talking to people. They’re like, “What’s going on? What do you mean I don’t have to work that hard? What do you mean I could  do one deal a month and make $1 million?” When you sit back and look at it, you go, “It does make sense.”

We talked earlier about passive income and all these little deals. I mentioned you can do some much bigger deals, and you should. This is a normal and natural progression. It’s scary starting off and adding zeros, but if you can jump right in and go for these bigger deals, your life is so much easier. There’s less work to do and you have so much more time.

If you can jump right in and go for these bigger deals, your life is so much easier and there’s so much less work to do. Share on X

You can then decide if you’d like to keep it like that or if you want to do even more deals. When you learn to make $1 million a year, and I’m going to tell you how in a second, you go, “I can times 5 or 4 that in a heartbeat. If I do 1 deal a month, I make sure that I’m going to make at least $80,000 to $100,000.” That’s great. That’s easy. You are then like, “I’m going to do one deal a week like that once I figure it out.” You can see how it all adds up.

The best way is if you’re a new Land Academy member and you haven’t logged into the dashboard, scroll down to the tools, which are all new and reconfigured for you, and find the equity planner. This is what I’m talking about. Sit down and look at that equity planner, which is a spreadsheet that Jack lovingly made for us a while back and we share with everybody.

This is what we do all the time. Open up that equity planner and put in how much money you want to make. Let’s say it’s $1 million. You then fill in another box that says, “How many deals do you want to do?” You’re like, “One a month.” Great. That’s figured out. You figure out, “That means I got to make $100,000 a month on that one deal.”

Realistic or not, we don’t know.

Reverse Engineering Your Financial Goals With The Equity Planner

You start backing into it like, “How much do I need to buy? How much do I need to sell to make that money work?” You can back into, “How many mailers is that going to take? How hard am I going to have to work? How many deals am I going to be looking at every month that come back?” It’s all right there for you.

You have to sit back, look at that, and digest it all. You can see that it’s possible. It’s not nuts. I know a lot of people are like, “I’m happy making $100,000 this year.” When you think about that, that’s great, especially those numbers. If you say, “I want to do 1 deal a month and make $10,000,” in this group, that’s child’s play. That’s nothing. They’d be like, “Honestly, we have taught our kids to do that. Do they get excited about and motivated about it? Not yet, but they know how to do it.” That makes me feel good. That’s another show.

Do you know what’s neat? That’s another little byproduct of this. There are a lot of people in Land Academy who are here to not only do this for themselves and make this income to fill in the blank or fill that hole, but also teach their kids so they know that their kids always know how to make money and keep food on the table. They never have to worry, which is awesome.

That’s it. You have to sit and work it backwards. It sounds like, “It’s going to be that easy?” When you do the math, look at what work is involved in it, and then dive in and come up for air, you realize you’re doing it. That’s it. You’re going to sit back and know, “I got to send out 10,000 units of mail a month. I’m going to get 2 to 4 deals because I’m new.” When you’re better and more experienced, you’ll get more deals out of that.

As you get rolling, you’ll get more deals out of that because those 10,000 units you send out every month are going to keep yielding properties for you, potentially for your lifetime. It is for us. I got so many people calling me back from mailers that are over 5 years old, some over 10 years old. This stuff will keep spinning off property once you get going.

My point in writing this topic and spending some time talking about it is that if you look on the internet, everybody’s standing in front of a jet on a tarmac somewhere, toasting themselves about how incredibly successful they are. It gets lost in this myriad of, “I got to send out 100,000 mailers. All these offers came back. I don’t know what to do.”

It seems overwhelming.

I’m not going to use the word overwhelming. It gets lost. This topic is meant to help ground this concept. You only need to do one deal a month. If you’re at 5,000 to 10,000 a month, you’re going to make $1 a year. Am I guaranteeing that? No, because mailers have every right. You have to choose the right area. You’ve got to answer the phone.

You have to have a Jill-like personality, whether it’s you or somebody else. Even with the people who are angry, you are engaging a person on the other end of the phone to get the piece of real estate that you’re talking about at an acquisition price that’s going to make you successful financially. Forget about the jets. Forget that there are people in our group who make $6 million, $7 million, or $8 million a year. All you need to do is one deal a month.

Agreed. That’s why we’re here to help you, too. We’re spelling out this big picture concept. You’re like, “There are a lot of little pieces in there.” There are a lot of little pieces in there, but lucky for you, we’ve done them all. We’ve done them wrong and we’ve done them all right. We continue to make mistakes and fix them. We continue to test things.

You just need to take a step—that’s why we’re here. We’ve done it all, fixed mistakes, and continue to test things so you don’t have to start from scratch. Share on X

That’s the thing about us, too. This is our business. I’m very proud to say I love Land Academy, and this is my passion. I love Land Academy ladies and all the other things that we do in Career Path, but I’m a land investor first. That’s my thing. Lucky for you, I’m a land investor first because I need to be out there in front of you, figuring things out. He needs to be in front of us, going, “This changed, the whole ZIP code thing. So-and-so’s now not showing ZIP codes. Here’s how you have to go get it.” We’re always right there ahead of you, helping you, guiding you, and showing you the way.

I know these things change because when I go to do my mailer, I’m like, “I have to change how I’m doing this mailer because what I did last time doesn’t work this time. I better tell everybody else.”

Can you imagine? I think about Cold Stone Creamery. We’re in Arizona. Our former governor, Doug Ducey, was the Head of Cold Stone Creamery. It’s interesting because he loved Cold Stone Creamery when he became governor. He can’t effectively run the franchise when he is the governor. I don’t know if it’s as effective now. Do you even see them growing? I’m sure he did a good job starting it up. I remember watching it here in Arizona take off, grow, and get a Cold Stone.

I didn’t even know who the guy was. I remember seeing along 101 the office buildings. I knew that he’d take the owners in there and do it. He took a different role, so he had a transition. Are they as effective? What do you think? I know for us, we are as effective because we’re still in this business. I’m not going to leave it to be a governor.

First of all, Jill has this fascination with Cold Stone Creamery. Here’s why.

I like ice cream.

If you have 7,000 hours on your hands, go back and read this. Cold Stone comes up a disproportionate number of times and Cold Stone comes up in our lives too much. Here’s why.

I didn’t know that. This is the first time I brought it up, and I don’t remember when.

When Jill was a kid in Laguna Beach, she worked at Rocky Mountain Chocolate Factory as her high school or teenage job. There’s a lot of Rocky Mountain Chocolate Factory. She’s like, “We got to go in there.” Jill talks to everybody and the people who work there. I don’t even go in anymore. I don’t know if you’ve noticed that.

I noticed that.

She comes out with a grocery-sized bag of chocolate and stuff, which we should never be eating. She’s predisposed for this business model, this little shop that’s got chocolate and happy people in there. It’s a big treats thing. A bunch of years ago, her family came to her and said, “We should buy these Cold Stone locations. We should be a franchisee of Cold Stone Creamery.” It never materialized. She’s got that half fascination about what goes on.

As a business model, tiny little shops like that, you’re so capped in the amount of money that you can potentially make. If you spreadsheet it out, it’ll never work. You’re capped anyway. Then, you’re capped as a franchisee. You have all these responsibilities about where you buy supplies and how much money you pay top top-line revenue. You have to share the revenue percentage.

They help you with the leases, but your shop has to look a certain way. It can’t look like a shop if I were an independent self. As a business model, the only person who ever probably wanted that is Doug Ducey. I’m not knocking him because I think he did some great stuff for our state. I had to bring that up because we talk about Cold Stone too much.

I don’t bring it up that often, but that’s okay. Apparently, twice a year is too often.

Once a quarter talking about Cold Stone and walking into a Cold Stone. Is the ice cream better?

It has nothing to do with that. I don’t care.

What do I talk about too much?

Let me think for a few minutes and come up with something.

Money, depreciation, and single malt scotch.

We’ll come up with some other stuff. I’ll save it.

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

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Lessons From Past Land Deals And Adjusting Strategies

This is why we do this. I’m glad you asked. Would you do this deal? Love County, Oklahoma. Accepted offer price. $68,000. He thinks we could sell it for $100,000. Comps in the area are 80,000 and 219,000. There’s one pending for 99,000. 10 acres. Access, Affordable, large Acreage and homes nearby. Down the road from Murray Lake. Twenty minutes from the town of Marietta, and everyone’s Alive. It’s 100 acres.

Here’s my thought process. This looks good. Access right here. There’s a little bit of a drain-off slash desert-y stuff that’s not showing up on FEMA. That’s good. It’s partial ownership. Maybe it’s one-eighth PAN.

We got Alma, Ruth, Verda, Raymond, and Martha. We have one twenty-fourth.

Also, the trustee.

I would call an attorney.

Let’s see if it’s worth anything first. One of the six is alive. What we mean is this. That’s a good catch.

This is why I look at legals. They use the legal description to tip you off that there’s something you need to know here. Do you know what’s making me wonder? She put in a different APN. What if that ten-acre piece is a little cut off of the big piece, and we got more to undo?

It’s a great example of you got a deal in and you did what you’re supposed to do, and after 30 to 45 seconds of review, we all have way more questions than answers. Jill might be a part owner, too. There are so many owners. Let’s say $100,000. Let’s look at it as a real deal.

Assuming it’s perfect ownership-wise.

Ten acres per 90. It starts there. 113 days. Ten acres for 120. Six acres for 120. This is all good news.

I’m writing down a number.

Six results in the sold category. Here’s 10 acres for 8,000. That’s strange. Seven acres for 100. We got 6 sold results in the last couple of months and 7 active.

I have my price written down what I would pay assuming everyone’s alive. There’s one document. We need to have everybody because they’re going to get together at Thanksgiving to have the turn over so they can all sign for it.

I’m going to blurt a number out when you turn it around. $22,000.

I put $25,000. He’s $22,000. What would you guys do?

I’d almost work backwards from what I think we could sell it for. I’d like to be competitively one of the lowest-priced ones in a small market like that. Are you comfortable with listing it at $85,000 or $70,000 and working backwards from there? I’d land somewhere near where you’re at, Jill, with the $25,000. You don’t want to get too far into that with a huge expense without knowing how long you’re going to sit on that property.

The next conversation, Aaron, is what are our days on market. I only got 100 days on the market or two.

The cheap one.

This is not done yet. Here’s my thing. Aaron, you explain to them that there are 42 people listed on this, and all 42 have to sign. They go, “Ugh,” and then you go, “Hold on a moment. Here’s what has to happen then.” If it’s even possible, you have to help them get an attorney involved to get this done. That is how you can easily knock that price down. I’m glad we looked at that. These are all good to look at, see, and understand.

‑‑‑

You have something inspirational to share.

On Scaling And Long-Term Land Investing Success

I wanted to talk for a few minutes about how people sometimes miss deals. This came up when we did a live webinar. It was cool. I’m sure you can still get the replays out there. Someone brought up what I am calling a failed mailer. They didn’t use that term, but it’s like, “I sent all these offers. I didn’t get any juice back.” Let’s talk about that for a second.

There are usually common things when you send out a mailer and you feel like you’re not getting any juice. Let me paint the picture. The mailer goes out, and phone calls come back. You may or may not be answering the phone. I’m going to say maybe you have a day job so it all goes to your Google Voice. You listen to your Google Voice later on and everybody’s saying, “Go jump on a lake.” Two weeks have passed and you feel like, “I bombed. I did nothing.” Often, there are some things that you could do differently right out of the gate to make this a successful mailer.

I want to talk about how there’s an opportunity in every single mailer response that you get. A lot of people miss this. The first thing I want you to do is when your mailer goes out, be ready. If you don’t have a partner like I do and you’re doing it yourself, you put a lot of recon into picking the county. You did a lot of recon into properties in that area. You did a lot of recon into what’s going on, price per square foot, what the terrain is, and what you’re looking at. You have some ideas here. You know, too, what you should be asking these sellers when the calls come in. That’s number one, being ready.

Number two, here come the calls. That’s going to be the first thing that happens. The mail hits when you get these phone calls coming in. If you’re afraid of those and/or you can’t answer the phones, so you’re shoving them off to your Google voicemail, you’re going to miss stuff right out of the gate. I want you and/or a live body, whether it’s even PATLive answering the phone. That’s going to already set you up to get a better response. They know how to do it.

When you set it up through us and they know who you are or they know you are Land Academy, that team is ready for those phone calls. They’re coached and counseled by PATLive before we coach and counsel. When I say we, I mean me. It got to that. They do their own coaching and counseling, too, to be ready for these calls. They’re ready for them. They want to take in as much information.

I want you to take in as much information as you can. You need to answer the call. Think of everything as an opportunity. Think of every mad person as if they’re reaching out to me for some reason. Usually, they’re reaching out because they do want to sell. Maybe they don’t like your price or maybe they even do. They need to get it off their chest. They’re not happy about it. They need to know you’re a real person. They need to understand this process. They need to understand that it’s real and they can sell to you. There’s an opportunity there.

There are usually two things. We talked about that in the webinar. There are two things that will make you think it was not a successful mailer. Number one is you didn’t answer the phone. There’s not a live person there.  Number two, you’re not following through and asking the right questions. When the call comes to me, I automatically assume, “I’m going to get a deal here.”

This is what you need to walk away with. You need to automatically know that every time someone’s calling your phone, “There’s a deal right there. All I have to do is figure out whether it is my price or their price.” That’s it. As quickly as possible, get to that point. Be on the same page with them and turn those people into an acquisition opportunity. Who cares if it’s not your price? What is the price?

There are a few that are rare that they’re like, “I don’t want to sell ever.” You’ll get that, but that’s less than 1% or maybe 1%. Let’s say they’re like, “I’m only calling you because my husband’s buried here. My grandparents are buried here. My great-grandparents are buried here. I will be buried here.” When you think like that, there’s 1%. That’s it. For the other people, there’s a number. Maybe it’s a make me move number, but there’s a number there and you got to get that out of them. You decide what works for you. There’s always an opportunity.

This might be very helpful to bring clarity to this topic because Jill’s exactly right. Let me describe a process that I had before Jill and I joined forces and had a very successful real estate operation. It was so different from what it is now and much less successful than it is now, largely because of Jill. I was starting out back then and was finding stuff.

Here was my process. I had a person whom I hired. Her name’s Debbie. She was a very successful escrow agent. She was good on the phone. I did what I do now. We had a CRM. It’s similar and effectively the same thing as Airtable. I sent all these mailers out in the same format, same verbiage, and same way, and repriced them. It took a lot longer. It was a lot harder and more clumsy. It took me a lot more time to do it and it was way more expensive because we didn’t have Offers2Owners.

I got these mailers out in the mail, and they would call back. Debbie was not in the same office as I was in. I couldn’t see her and she couldn’t see me, but I could hear her and she could hear me. That’s how our offices were set up. These calls would come in, and I could hear if it was going to be a disaster or if it was going to be a happy person who wanted to do the deal.

She handled every single deal the same way. She was like, “I’m sorry you feel that way.” My name was on the mailer at the time. She was like, “Would you like me to have Steven re-look at the deal and see if there’s a more appropriate price based on what you’re telling me? Maybe we reprice the mailer.” She was full of one-liners.

These were the rules back then. I would encourage you to follow some version of this. Put every deal on that CRM. Unless they sign the offer or set out, “I want to do the deal at that price,” she was not authorized to negotiate anything on that one first phone call. Everything went into the CRM, and it went into acquisition opportunities because every deal is an acquisition opportunity. When I’m telling this story, my heart starts to beat. I start to have endorphin rushes in this positive thing.

Every deal is an acquisition opportunity. Share on X

When people start to call in a mailer and they’re complaining about it, all I feel is glee. They got the mail. They may or may not be happy with the price. It’s only a matter of time before I find that diamond encrusted in carbon and we smash one out of the park. We’re probably going to hit a lot of singles along the way.

She would jam these properties all day long. These properties would start to populate in the CRM. Every morning, I would come in and we would all horse around, and at about 10:00, I would dig into that. This went on for years. I would dig into that CRM and write in the comments. If it was a go-ahead deal, I would move that deal from acquisition opportunity to an acquisition approved, or I would move it to acquisition pending if I looked it up and found out it didn’t have access or I needed to adjust the price. Maybe I’m like, “Debbie, please go back and do whatever this is.”

Little by little, we chipped away at a mailer and found the deals that were stand-up triples, slide-in doubles, and singles. Once in a while, you hit one out of the park. That is turning every mailer response into an acquisition opportunity, not a deal. Not everyone’s going to be a deal, but they all deserve to be looked at. If they don’t have access or there’s some huge flaw, they’re still worth something. People respond to this because they probably need money, or who knows why, but they want to make a deal in their souls. Jill’s been saying this for ten years.

That’s what I think. They reach out to you for a reason. Everyone who reaches out and calls you doesn’t want to sell. You have to get on the same page about the price. Sometimes, getting on the same page is letting them know who you are. You’re like, “I’m not an agent. This is not retail. We’re not here to one-up your neighbor. That’s not what this is. This is my business. I’m going to give you a good price if you want to unload this. Let’s talk about it.”

If you’re a one-person show, and most of you are if you’re new, you’re doing Debbie’s job, Jill’s job, or my job. Since then, Jill has her own process. It’s way more successful than it was back then. Debbie was on the phone for eight straight hours, and Jill and her staff are not because they’re able to cut through a lot of this stuff much more efficiently.

If you’re a one-person operation, you’re going to have to do both of these things. You’re going to have to be on the phone a ton, whether it’s returning calls, answering calls, or taking the temperature of what’s happening and seeing if there’s a deal there or not. If you’re a one-person operation, it’s easier because you know right away. You don’t have to put it in the CRM and wait for somebody to make a decision, call back, and all of that. That’s why Jill is so refined at this because she’s got it licked. She can tell right away whether we’re going to do the deal or not.

Thank you.

There are deals in all of this.

Your turn. What have you got to share with us?

I want to talk about cashflow. This goes back to my accounting days, but it goes back into my soul, too. The topic is the real problem with managing your business and life by cashflow. There’s a concept out there. It’s not new. It’s been regurgitated by people and economists talking about it. They use a tube of toothpaste as an example. When you buy a new tube of toothpaste and crack it open, how you use that toothpaste on your toothbrush is very different than how you use toothpaste at the very end of the tube. You might, in the beginning, slather it on there and enjoy yourself.

I’ve never heard this.

It’s an economic concept.

I didn’t know this.

It floats over to accounting, too. It’s very rare that accountants and economists agree on anything. When you’re at the end, you’re jamming a thing on the sink and you’re trying to get that, “I can get one more day out of this.” In college, you’d look inside the grout for toothpaste and rub your tooth there. That’s what I did.

You can’t manage your life like that tube of toothpaste. You can’t do a mailer, in my opinion. If your bank account is that full tube of toothpaste and you got $100,000 in there or you’re at the end and you’ve got $5,000, you can’t look at the same deal based on that. Over the years, I’ve heard a million people say this. “It’s the end of the month and I don’t have any money left. I can’t go to the show with you.” “I got paid.” “Sure, let’s go out.” How many times has your friend said that? All throughout your life.

That’s true. It’s like bonus check Tuesday.

If everybody’s on the same payment cycle and working for the same company, which Jill has experienced, you’re all broke at the same time of the month. You’re all splitting the same $5 bottle of vodka and eating ramen noodles until you get that paycheck. You’re like, “I can’t wait until I get my paycheck.” That’s a terrible cycle to be in.

You can break the cycle mentally by forcing yourself, especially with automatic payments and all of that, to stop living by cashflow. You’ll never get out of that cycle. What you will do to smooth it out is to find sources of credit. You’ve then got credit card debt. On a personal basis, that’s not good. You have two choices that break this cycle, both in your business and personally. Save money, which sucks. Nobody wants to talk about it. Who wants to save money? You could make more money and allocate it as you’re making more. You might allocate it toward mail. You might allocate it toward creating a retirement fund or a college fund.

What about spending less?

Spending less is up to you. That’s a personal choice. If you’re spending too much money on stuff that you don’t need, then you need a psychiatrist. You don’t need this show. I’m serious about that because nobody needs a new hairbrush.

Some people are like, “I can afford that two-bedroom awesome apartment on the top floor.” Do you need the two-bedroom apartment on the top floor by yourself?

Jill is right.

I’m asking.

There are two components, revenue and expense. Talking about managing your own personal expenses is not something I ever want to talk about. When we were younger, Jill and I have talked about this many times over the years and experienced that. We’ve experienced, “I need new shoes because everybody else has new shoes.” It’s a normal part of becoming an adult. You should grow out of that. If you’re having trouble with that, I would suggest you go figure that out. Not here, though. I’m talking about managing cashflow and the mentality with that.

We covered the toothpaste thing. In your business, especially in this business, you’re going to hit it, and you’re going to hit it pretty soon. When you get $80,000 back or you go do a deal funding or whatever you choose and get a $30,000 check or $40,000 check, do not spend that money. Allocate it. You need to allocate that money for a new mailer. If you have bills to pay, I get it. That’s fine. Continue to use the deal funding until you don’t need it anymore. Manage your money not by cashflow. It’s a downward cycle that will never end. The reason I wrote this topic is that I wrote a very interesting article. I’m going to talk about it soon. I’m quoting this article. It’s fascinating.

You read or you wrote?

I read it. Did I say wrote?

I thought so. I’m like, “Where can I read this?”

It was one of these articles where I started to read it like most articles and was like, “This is so stupid,” and then it ended up being great. It is about the mentality or the thought process of people who are very poor and people the world would call middle class. I don’t believe in these titles. I’m regurgitating this article. It also talks about the mentality of people who have wealth. I do agree with that title. The people who are poor and the people who have wealth think very similarly. It’s the people in the middle who are spending too and are living their lives through cashflow. They’re doing the right thing revenue-wise, or most of them are, but they can’t get out of it.

That’s sad. I get it.

We have such limited time on the show all the time. If this sings to you, please look it up. You can change your life within 30 days pretty quickly if you start to understand the decisions that you’re making and why. The person who wrote it did an extensive poll, or they had access to an extensive poll where they asked people to define the difference between assets and liabilities. 85% couldn’t do it.

Understood. Noted.

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