This is episode number 2212. Jill and I are talking about building a land business that survives any market.

How many downturns have you been while you’ve been a full-time investor?

There have been micro downturns, but two major ones. The last one was severe.

How many times have you, Jack, does it feel like you started and rebuilt?

Twice.

You are qualified to talk about this?

Yes.

That’s really what I’m getting at. Tell me, what gray hair do we attribute to? Like, is it this patch?

It’s mostly the right hair.

All this hair?

Yeah.

That hair there is all the one that we attribute. Wait, I didn’t finish the question. What is business, and what is me, and what is children? Can you point to the patches and tell me?

No. When you put it that way, it’s amazing we have any life left.

I like to think that this facial hair is business. These little things on the temples on the side are children. This little piece back here behind your ear is me.

That one’s growing back really dark.

That’s it. As we go into retirement, Jill’s grey hair goes dark again.

My hair is getting darker, not lighter. I don’t think so.

Awesome. Good.

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 by popular request.

When you put NM like that.

I didn’t put it there. That’s how they put it in. That’s their name.

NM is Neiman Marcus.

I looked at it as New Mexico. That’s the difference between you and I. I’d like to buy some land in New Mexico, and you would like to go to Neiman Marcus.

That’s what NM is. You make your choice.

My sister used to call Neiman Marcus’s needless markup.

She’s not the only one.

That’s a thing?

That’s a thing. She didn’t create that. That’s good. That’s so funny. We should play that game one day. What sayings did you think you originated? It won’t debunk that theory.

That would be fun.

Whoever you are, NM wrote, “I’m planning to buy lots for $30,000. Should I start trolling for properties that are listed at $120,000/” Meaning for sale for $120,000. “This is my first trolling/fishing exercise, and I’m wondering if I’m keeping a high benchmark, any input appreciated.” I love this.

The Rule Of Quarters

What this person is asking is, what’s the rule of quarters? I will answer it now. The answer is, in general is yes. The rule of quarters is this. At the top, the retail value of a land-related asset is $120,000, and then you’re going to break it down into quarters. At the top is $120,000, at the bottom is $30,000, which should be your acquisition price. You’ll buy for $30,000. You will attempt to wholesale the property to somebody who could resell it theoretically at $60,000.

That person at $60,000 would sell it for $90,000. They would sell it for $90,000 to somebody who’s going to develop it, or so you’re still way under retail. This is what everybody asks, “Who in the right mind is going to sell a $120,000 asset for $30,000?” My very simple answer is, because I know this person is new and they’re active in Discord, somebody who doesn’t want it anymore.

Needs the dough.

I have a $120,000 classic car in my garage. If somebody offered me $80,000 for it, I would take it. I don’t have to go through all the hoopla of the pictures and the consignment and talking to people on the phone, six months to a year, and all of it. That’s why people make decisions to sell things under their retail value. We all know people that cannot do that. There’s something in their soul that won’t allow them to do that. Those people are usually not married very long.

They’re poor, and they’re going to die with all this stuff.

They have so much stuff in their house or in their backyard because they cannot let things go, or they see some of the fictitious value. Jill’s the opposite. Jill’s a deal maker. She’ll sell a $30,000 piece of property that’s worth $120,000 for $40,000 just to get a deal done, and stick a needle in her arm. That’s it. I respect that because I’m more like you than I am. Neither one of us is are retail people.

I know.

I just want to keep going down the road.

Get it done.

I hope that explains the rule of quarters because it blows when new people join Land Academy, it blows their mind. They believe that if they send a mailer out for properties that are worth between $90,000 and $120,000, if they send it out for $60,000, they’re going to do more deals. That’s just not the case. I can tell you of all the transaction experience we have, the reason people sell property to us, and anybody is because they’re having a life event.

They just don’t want the property anymore. They inherited it. They don’t care. Life changed. Their spouse died. They got a new job. Stuff’s going on. They have a whole checklist of crap that they have to go through to get through this life change and the silly little piece of property that you’re going to buy for $30,000 and sell for $90,000 they’re elated that no they don’t have to wait six months earlier.

It’s like, I was thinking of it like houses. This works with when we do houses too. You mean I don’t have to remodel the kitchen, I don’t have to clean out the garage, and I don’t have to be having it open house ready for every single weekend for the next six months, and plan on leaving every time my agent calls. That’s right. You don’t have to do any of that. They’re like, “Done. Where do I sign?”

Before we move on, if you are in the market for a 1963 Stingray Convertible, it’s in picture-perfect condition, numbers matching, and there’s a bunch of other special stuff about it.

Are you really going to sell that?

No. I mean, for $80,000 or $85,000, I would probably, and then just buy something else.

Great.

Surviving Market Downturns By Adapting & Diversifying

Our topic is Building A Land Investing Business That Survives Any Market. Guess what this week? Guess what the key factor is to surviving any market? It’s you. If you send out mail, and you don’t get the response that you want, this is the only reaction that you should have is digging down into why. What did I do wrong? How can I improve this next mailer so that I’m moving forward in my career? The reaction that you should not have is that this business doesn’t work. “I suck at this. I don’t understand how to do it.”

The key factor to surviving any market is you. When you don’t get the response you want, don’t doubt the business or yourself. Instead, ask: What did I do wrong? How can I improve? Assess, reassess, and keep moving forward—doubt has no place here. Share on X

None of those things should answer your mind. You need to assess and reassess and reassess what you did. The next mailer that you send out as quickly as possible, as long as it’s correct, is that you’re improving on it. You can get back in there and continue to try to find undervalued property. It’s not time for doubt. The only reason I’ve ever gotten through that, and I’m not tooting my own horn again, I’ll say that a million times, “I’m doing it to help was because I was deathly afraid of being poor.” That’s what has driven my whole entrepreneurial career.

I have a whole, I have like three steps here to this. To explain it, I don’t want to throw you under the bus.

No, I want you to. I think it’s good.

I want to explain a time that, look, we’re very loud about this in Land Academy. One of the reasons Land Academy is so successful and our people do well is because we’ve made a lot of mistakes. We continue to make mistakes, and that’s why we’re doing the show is to save you from making the same mistakes. I’ll do bigger deals and better deals together going forward. One of the mistakes that Jack made many years ago, pre-Jill, was putting all his eggs in one basket, and the basket was called eBay.

Single point of failure.

What happened was market stuff happened, and things all of a sudden dried up on eBay. It’s just that people weren’t bidding, like overnight. Jack, not to pick on you.

No, if everyone can learn from this, that I don’t, I don’t take this as a one percent criticism. You don’t have to say it anymore.

Jack thought, “That’s it. It’s over. The business is done. I’m looking around, what else can I do? I know how to buy land, but I clearly cannot sell it now.” That’s it. We failed whatever. You didn’t fail. You made well you did well at that time, but you just thought that business was over. That market was done. There’s still some stuff I’m sure that goes on eBay, but not like it used to, and not like at the level you were doing it. My three points to make to solve for what Jack did, and how I know that this is what Jack did. Jack had to do three things to get out of it, and now he knows those three things, and they’ll never happen again. What?

I don’t know. I’m learning about myself.

You did three things in life very well. One of them is me. Just kidding. One is me.

It’s like doing a show with my mom. “Did I do right? Please tell me what I did right. What did I do wrong?”

To build a land investing business that survives any market. You have to number one, roll with the punches. You got to be ready for them. EBay shut down for him. We’ve had things over the years like, “We now cannot use PayPal. What are we going to do? We got to figure that out.” It took us a year to figure out another credit card payment system to get off of PayPal because not everyone wanted to do Bankwire or do that stuff. We were doing cashier’s checks. I did all kinds of funny things. Got to roll with the punches.

I had to figure out how to get paid for selling things. Number two, you got to adjust. As I said, you got to adjust as needed. Now it’s a social media environment. That’s another thing that we did differently back then. We weren’t really loud about using social media for selling land. Boy, look, we all know that’s a huge thing. If you’re an investor and been in our business for more than a year, you have seen and watched and know how you could sell things on TikTok.

You can sell land on Instagram. These are all been things for a long time. You could sell a house on Facebook Marketplace. If you don’t learn to adjust and roll with it, you’re not going to make it. This goes with all kinds of businesses, but this is our world in particular that I’m talking about. The number three thing, and Jack figured out a way to solve it, it wasn’t him, because it wasn’t his thing, talking more, bringing back real customer service.

That was something that changed. Maybe it’s going to pivot again someday, I don’t know, but when you were really heavy on eBay, there was no talking. The auction closed, here’s an email, here’s the instructions, we do your deed, have a nice day, thing. There was no phone number. That’s where he solved it by bringing me in. I got on the phone and made everybody feel good and increased sales because there was a huge buyer’s pool and seller’s pool that wants that personal attention.

Any business you have to make changes constantly.

People don’t think that, and people don’t know. “I know this is how it works. I’m going to be over here on the back of my boat, and I’m going to do the same thing every day, and it’s not going to change for 50 years until I want to retire.”

It’s because things used to be like that. In our parents’ time and specifically in our grandparents’ time, things were like that or a lot more like that than they are now. The bad side to that is that the startup costs to do anything back then were atrociously high compared to revenue. Anybody can start. You’re $150 away and about 30 minutes away from owning your own business.

If you said that in 1950, they would laugh at you. It takes years to build a business. Years and a ton of money. I mean, you have to constantly change and change. Sometimes, just retool, go back to the basis, and retool everything. When I met Jill, that’s what we did. She looked at the whole thing and said, “There are all kinds of people that want to buy property on Facebook. You have all these properties sitting here. Why don’t we put them together?”

That never occurred to me. I was only interested in auctioning property off for $1, no reserve, that I could buy for next to nothing all over the country, which is what our business model was. The reason that I didn’t pivot to something new was largely because I was burned out with tens of thousands of deals, and I wasn’t interested in talking to anybody. We didn’t have anybody working for us who I could pivot to at the time. That’s the case. That’s what it takes to have a land investment business and really any business that survives in the market.

Thank you.

Join us next time, where Jill and I discuss scaling your land business without burning out. You are not alone in your real estate ambition. We are Jack and Jill, information and inspiration to buy undervalued property.