The Future Of Land Investing

This is episode number 2205. Jill and I are talking about what the next ten years of land investing might look like.

He was doing some manual labor for me. It was nice of you. I’m like, “Can you help me with this? It’s too heavy.” You just pop up and help me. Thank you.

It is because I want it to end.

No, it’s not.

No, I want the task done. It’s out of love.

It was a loving partner thing, and I appreciate that. Thank you. What are we talking about?

Ten years from now, what is this business that we’re in going to look like?

I have some ideas.

I do, too.

I’m going to write right now. I’m going to write what I think is going to happen and what I wish would happen. It’s going to be good.

Here’s a spoiler alert, and we’ll take a question first. There are other industries, like the stock market, where we can look back on what they looked like a lot of years ago. We’re in that situation. We’re in that cresting curve where stock prices were in the daily Wall Street Journal. Each day on the show, we answer a question from our Land Academy member Discord forum and take a deep dive into land-related topics at your request.

Title Company Privacy Concerns

Slade wrote, “I’m buying a 1-acre lot for $10,000, local to me in Pennsylvania. The seller is an older gentleman in Florida.” The lot is near Slade. The seller happens to be in Florida. “I’m using a closing company, and they call the seller asking for his Social Security number and photos of his driver’s license, but he refuses to give it. What would you do? I’m going to try to persuade him, but what if he doesn’t budge? I have about $2,000 already in the property for perk testing.” I can understand both where they’re coming from.

The closing company, aka title company, is hyperalert about fraud. I agree with that. I would not be so sure I would share my Social Security number. I hate that stuff. I can understand that, but I can see them asking for driver’s license numbers to verify he is the owner on record before they even send a notary out, because we all know the notary is going to have him show the ID at that time. They’re confirming that he owns the property. This is a tough one.

This is the world that we live in. It’s not just escrow companies. Jill and I are getting educated about how much information banks, brokerage companies, and all of that want to collect when you’re transacting with money. Some of it is mandated by the new financial center for the federal government. There is an anti-money laundering operation because the chosen escrow company is overly cautious. Maybe they’re control freaks. Maybe they just love to be in charge. I started buying properties in the ’90s. Nobody cared about any of this, but I don’t think those are the good old days. Some of it is reasonable. If I went to another escrow company, they’re not going to ask me for this stuff. That’s what everybody said in Discord, Jill.

We're at a point in the market where we're shifting from fractions to decimals. We've enjoyed strong profit margins by buying all types of real estate below market value and reselling without making improvements. Share on X

That was my thought. I hate to pivot and go somewhere else, but you could. At the end of the day, if it were me, I’d be okay with my ID. I have to show it to my notary anyway, and they always take a picture of it. They’ve got it. The title company can have that. That’s fine, but the Social Security number could be for tax purposes. Sometimes, at closing, they make us ask for our EIN. It could be my social, but it’s our business EIN.

We give it away like water.

Some require it. Some don’t. It depends on the company, and they’re just trying to protect the seller. That would be the other thing, too. I would first talk to them about, “What do you need and why? Let me see what I can do with the seller. We all know you don’t need this.” “It’s a form of verification that he’s who he says he is.” “What other form of verification can we use?”

“Can you supply this? Can you supply that? Can you just answer the questions, like you have to go? When you apply for a new bank account, it makes you click on these things. Does this address make sense to you?” Maybe there’s another verification process that we could do that the seller is okay with. If worst comes to worst, then the next option is to pivot to another company. It should work. That would solve it. I have other options, but I’m not going to go there.

It’s a $10,000 property. If it were a 75,000 square-foot warehouse, then that’s a different story where you have a lawyer and stuff. I don’t understand this. I’m going to tell a personal story. I got back from the bank. Jill and I have active LLCs and passive LLCs. Some of them have bank accounts. Some of them don’t. They’re all tied to one major bank account, and 99.999% of the time, everything is great. We got an adjustment prorated check from a closing in an old LLC. It wasn’t too old.

Personal Banking Challenges & Consent Forms

We do have an active bank account. We just don’t have debit cards and stuff. For those reasons, I went in and was sent to the manager. The manager could not have been nicer. We got along great. While we’re doing this stuff and depositing the checks, and she’s printing the receipts, she said, “Please sign this at the end.”

It was texted to me. I read through what I was signing. It was a consent to the bank to share my personal information, my bank account information, with unrelated third parties so that they could provide services that they believed I needed. I’m almost quoting. That’s how direct it was. I said, “I’ve got to tell you. I can’t consent to this.” I just read it to her, and she said, “No, that’s fine. That’s just so ADP can call you and set up payroll for a new company that you start.”

We already have ADP.

That’s what I said. I said, “We are all set on this. The money that we have in these operational accounts goes to a different place, and we have a whole system.” She wouldn’t let it go. I said, “I guess we’re going to have to undo the deposits, and I’ll figure it out.” She said, “That’s fine. It’s okay.” Everything was fine. It’s not her, and it’s not this title agent that’s telling you that you need all this stuff. It’s somebody above them, above that person, and above that person, usually lawyers, who are saying we have to sign everything.

I can’t even just deposit the money.

Here’s the real tragedy. If this is the world we live in, none of our children would even read that.

They wonder why their phones are blowing up.

We all wonder why our phone rings for two years straight from a salesperson from ADP, which is a payroll processing company. I got in the car, and I started thinking this. My parents were saying terrible stuff about the 1970s and ’80s. Their parents were saying terrible stuff about the 1950s and ’60s, so it’s not unique to our time. It’s not these people who are forced to deliver these things to us. It’s just technology, and lawyers want to make sure you’re out of compliance. I wouldn’t do it, and I wouldn’t give a Social Security number. They want information so that they can give you a 1099-S or maybe it’s a 1099-I.

That’s what they are trying to do.

Prediction: Real Estate Transactions Will Mirror Stock Market Efficiency

Our topic is, “What might the next ten years of land investing look like?” I put this in this episode intentionally because 20 or 30 years ago, when you wanted to buy a share of stock, you would open the Wall Street Journal. In the back were the stock numbers. Every single company that was on the stock market had a closing price from last night. If you wanted to buy a share of that stock, you would look at the closing price. You would call your broker, maybe before the stock markets open the next day.

They would say the share price is good. A broker would say, “I’ll see if I can get it sold,” on the floor. I’m not sure. There were no computers. It then finally went computerized, where you still had to use a broker. It’s so different now. You just put an order in. The computer does it for you, and it’s almost immediate most of the time. The kicker is this. The stock market would be traded by 1/8. It’s not that at all. It’s percentages, and that opened the door to day trading. We are at a point where we’re going from fractions to decimals in the stock market. We have gotten away with amazing profit margins, buying all types of real estate and reselling it without improving it. We are just buying it for less than it’s worth.

What do you think is going to happen?

In the next ten years, the market will become more efficient. This is my prediction. When someone wants to sell their house, they’re going to log into a database. They’re going to say, “Yes, I do want to sell my house. Here’s the price.” They will fill out a form, and it goes into something like the Nasdaq.

It is like KBB. You’re going to be able to put in the year that it was built and the square footage.

It’s already all there.

You won’t even have to put that in. You will put in your address or your APN. It’s going to know all the stats, and it hopefully will cross-reference the stats with a couple of different places, like your insurance company and the assessor. It knows the square footage is correct. It’ll probably check the county to see if you pull any permits to get an idea if you add it on to it or anything like that, then you will have the opportunity, like KBB, to put in the condition.

What’s KBB, Jill? Can you explain? It’s a different industry.

It is the Kelley Blue Book. KBB is where you go if you want to know what your car’s worth. You see the dealer pricing. You see the private party pricing. You see the trade-in pricing and the retail pricing. That’s Kelley Blue Book. I was raised on that. I still use it as a reference to see what I think cars are worth, not what people are willing to pay for sale on Autotrader.com, but I use that as a gauge, too. I’m sure there’s going to be a version of that. It’ll cross-reference a couple of things.

From there, sellers will be able to put, like in KBB for your car, “Is it excellent condition, good condition, or fair condition?” You could maybe even upload pictures. “Here’s what I did to the kitchen.” It can authenticate. “That’s beautiful. You have all Wolf appliances now and whatever. Congratulations. It’s worth that much more.” It is something like that. That will help sellers/owners try to identify a value for their asset/house. However, there are always extenuating circumstances that cause people to need the dough and want to sell fast. Some of that stuff goes out the window. “I know my house is worth $325,000. I’m letting it go for $275,000 because I need the dough right now. I don’t want to wait. I’m not going to pay a commission.”

Take advantage of these inefficient markets while they still exist—especially if you're young. You'll see massive changes in how assets like cars and real estate change hands. Share on X

There’s always a range.

I think things like that are going to happen. It’d be easier for people to assess. I hope it’s going to get easier for people to sell. Maybe that would be a thing, too. I’m dreaming it up. Someday, there probably will be a place that everyone just enters their address, just sits, waits, and it goes out, like moving companies. You call a moving company. It’s somebody sitting in the dashboard. They’re sending out messages to twenty different long-term movers to get back bids. They take a piece of it, and then they submit to you the best bid to move all your furniture and your cars across the country. It is the same thing. I feel like it could happen with a house as well.

Current Opportunity: Profit Lies In Market Inefficiencies

There were a lot of steps that happened in buying and selling a share of stock. A lot of people got in the middle of that until the market became perfectly efficient on the internet, where you put a stock order in, and it gets sold. There’s a buyer and a seller on each end of the transaction, but there were stockbrokers and all kinds of crazy stuff that happened throughout time because of technology, telephones, and all of that before it became efficient. Everything that Jill’s saying is absolutely going to happen. What we need to be concerned about is what happens between now and that market efficiency time. That’s where the money is made.

There are a lot of things we didn’t figure out. There’s a good time right now. You know what I wish would happen? I wish I had written, “Bye-bye, agents.” Talk about people getting in the way. I’m not kidding. You don’t need them. I think everybody now knows I can go and buy and sell my own fill-in-the-blank. It could be a car. It could be a house. It could be a piece of furniture. You could do it by yourself, and I love that.

It used to be that all you did was get the listing, just sit back, and wait. Now, we’ve experienced this personally, where there are listing agents that are unfortunately causing homes not to sell. I have two examples of properties that I tried to buy. The agent is like, “I don’t think that they would like that offer.” They don’t even submit the offer to the seller. Could I press charges? Probably. Am I going to? No, it’s not my problem. It’s the poor person who hired that agent. They have no idea that the agent is stopping ten people at the door for whatever reason and not selling their property. I do hope that goes away.

The moral of the story is here. Please take advantage of these inefficient markets while they exist, especially if you’re very young. You’re going to see massive changes in how assets change hands, specifically cars and real estate. Join us in the next episode where Jill and I discuss succeeding in a market everyone says is too crowded. These topics are all related. You are not alone in your real estate ambition. We are Jack and Jill, information and inspiration to buy undervalued property.