Land Academy Member Question

This is Episode 2077, and the topic is we are talking about myths. This is our fourth myth, “Real estate investment is risky.” I don’t think so. We are going to explain to you why real estate agents think that they are smarter than you and they are not. 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. Let’s take a question.

I have to admit. Here’s what happened. I had a little bit of a rant about a particular topic. There are some very good, smart, “experienced” real estate agents that I know, and I appreciate that whole place. I happened to be ranting. This one, it’s like a dog with a bone. He’s funny. I was going off a little bit. I will share it next time. I have a lot to say. Here’s the question that we have from Discord. Michael wrote,
“Hi, Land Academy Community. I need help. In the four years I have been at Land Academy, I haven’t done great, but I have always made money. This calendar year, however, I am completely stuck. I have sent nearly 40,000 mailers, but I haven’t landed a single deal, and I’m down to less than $10,000 of working capital. I have some personal financial commitments coming due, and I need some profits. Have you ever been in a similar situation? What did you do to find success? Do you have hints on how to break my losing streak and close on some deals? Thanks in advance for any suggestions and encouragement.” 

I put this in because we have all been in this situation. If you have ever owned a company or participated in life, you know there are ups and downs financially. Especially, and I chose this question because our topic if you take any type of risk. Getting into this business to buy and sell land and make money is slightly risky. Buying and selling land, in my opinion, has a very small amount of risk, which we’ll talk about. Michael, we have all been in this situation. Jill, what was your response?

You’ve got to change some things. I see this happening a lot. Who’s answering the phone? Is the best person taking those calls? You sent out enough mailers you should have some deals. My first thought was whoever’s taking those calls may not be the best person at creating a deal. Number one. Number two, have they created several deals, and you kicked them all to the curb because your due diligence checker or picker is off? I have seen all of these things happen.

You’ve got to shake it up, and something’s got to change. Some of these have good ideas, and it ties to my talk that I did for the Land Academy Community for advanced training. One of them said, “Go back to your pipeline.” It ties in with those deals that maybe kicked him to the curb. Why did you kick him to the curb? Maybe there’s something there.

Maybe whatever was going on then with you, or the seller, has changed. Someone said, “Go back to your stupid pipeline and see what’s there, and give them a callback.” TWhichI would like to add, give them a callback. See what’s going on with them, understand the deal, and see if you can’t put something together but you are at the end of the year. Start dropping things like, “I have got this much money to spend by the end of the year. I love it. Give it to you.” That’s a powerful thing. “Wouldn’t you love to have an extra $40,000 right now between now and the end of the year?” The holidays are coming. There are all kinds of things that you can do to bring those deals back. I’m guessing the price is a lot of it. A lot of people kick things to the curb a little too quickly for price instead of trying to find a happy medium.

A lot of people kick things to the curb a little too quickly for price instead of trying to find a happy medium. Share on X

I’m reading between the lines here, and whatever you did you always made money. Whatever, you didn’t change it. You have to roll with changes. Whatever happened is no longer working. I will tell you, in my case, many years ago, I bought and sold a couple of pieces of property. We sold it very successfully right at the beginning of my career and very quickly realized that that was not sustainable.

The source of the properties where I was buying was very inconsistent. I needed to establish a different pipeline, and I chose to physically go to tax-defaulted property auctions in the southwestern part of the country. I moved there. I moved here from the Midwest to do that specifically. That worked for many years. I made a ton of money until it stopped working, and I was sitting in the same situation as you, like any of us. That’s when out of necessity devised this mailing scenario and utilized data to send off land offers. We had to make a lot of changes. When it stops working, you have to make changes.

There are lots of things that we don’t know too. Michael, have you always had success in this one layer, and now it’s not working because people are moving over here? You can pivot and move to where the people are buying the land too. We don’t even know if that’s the situation. It could be something as simple as that.

Jill and I have been doing this together for many years. The company looked absolutely nothing when we started together. It is entirely and completely changed, and I can tell you, we have never made more money than we do right now. Hopefully, with these changes, it’s a new opportunity. The basics are the same. We are trying to find property that’s undervalued and resell it as fast as possible. That’s the constant. Everything else that surrounds that is different.

You have to be ready for changes, Michael. It’s not going to be like that, and I’m ready for the next change. I’m over it now. I’m ready. I’m like, “Something is going to happen. Someone is going to do this. There’s going to be something over here.” Fine. I know how to pivot. I’m good at this.

Diversify Your Product Type Place

If you are in the group or if you even follow us or simply read these episodes, you know what’s changing with AI and what’s changing with the internet, the tools and resources that are available, and all kinds of stuff that’s happening. I am here to tell you, the businesses that we have now will not look very similar several months from now.

The businesses that we have now will not look very similar several months from now. Share on X

That is why Jill and I are trying to drive this point home and diversify your product type place. Buy houses and buy mobile homes or properties with structures on them, that will never go away. Buying and selling land will never go away either, but one of the reasons that we have done so well financially buying and selling land is because there are a lot of intuition-based decisions where data is involved. The more information, data, and resources that we get for land specifically the easier this is going to be.

Busting Real Estate Myth: Risk

Where it ends, and it might not be in our lifetime, is the same way stock is traded. A share of Ford stock is probably worth around $10 or $11. I am not going to be able to buy that for $3 and sell it for $6 to anybody. No one in their right mind would sell their stock to me for $3 when it’s worth $10 because it’s a click of a button. You have to change. This topic is myth number four. Real estate investment is risky.

I got three things. I have got risky, not risky. You’ll love this. Number one for real estate investing is risky, borrowing money. Taking on debt. A personal guarantee. Scary, risky. What’s not risky? Paying cash. Paying what you have. Not risky paying cash, and that’s what you can buy. You double it, and you do better and better. If you don’t have the cash, you use somebody else’s cash. So what? You only ask it. Not risky.

Is it risky to get married, Jill?

We’ll get to that in a minute. That’s not on my chart. That was number one. Number two, risky, not risky. Risky, guessing about where to send mail or using a dartboard? Super risky. Not risky, to use data. Letting the numbers tell you the days on the market, the new list to sell. Everything we do when we troll, and everything that we do on the regular green test. You know what I’m talking about if you are in Land Academy. Not risky. What’s risky is if you don’t listen to it, and you go, “I like this area.” Hold on a moment. The math, the numbers, and the data world will tell you where people are buying. Even if you don’t know it, It tells you where they are buying. It tells you what to mail and how to price it. That’s not risky.

Number three. Risky, not risky. Risky, I got this. All I have to do is buy a property. Jack did it. He bought it off eBay. He told me the whole story about it. I can do this. I have no education. I have no experience. I don’t know what I’m doing here. I’m YouTube certified. I could even read my notes here. Risky, not risky. Get a mentor, take some time, and learn the right way. Follow along with somebody, ask all the questions about how they are doing it, and then go repeat it or do it with them. Join forces. Not risky.

There is nothing more risky than doing nothing.

There is nothing more risky than doing nothing. Share on X

That, too.

It is incredibly risky in this business to not send a mailer out. Nothing is going to happen if you don’t send a mailer out. If you do it all wrong, price it wrong. All kinds of stuff can happen in that mailer. You are still going to look at some details and you are going to learn.

Maybe you can get something out of them. Some of our best deals, we have screwed up. Offered too low, offered too high. Dreamed it up. You can add money because they love it if you have money and you could take it away. Figure it out.

Real estate. They are going to pick up the phone and call you if they are interested in selling or if they are angry. Either way, they are on the phone with you.

Make a deal out of it. Do what you have to.

I want you to picture three houses on your computer screen, on your phone, or whatever. There’s a house in the middle and 2 houses on either side, worth approximately $250,000, and you are about to buy the house in the middle for $190,000. Do you see risk in that? If the answer is, “Yes. There are all kinds of things that can go wrong.” You should read another blog. I see, categorically, no risk in that. None. Whatever we potentially were unable to discover during our due diligence period both for the physical asset and the market and the whole thing. Let’s say there’s some foundation crack or some crazy thing. Figure it out.

You do have to dig in, spend the time, get to know the markets, and understand why Jack says it’s not risky. When you have these three houses, it’s for this exact reason. Jack is a pro at getting into an area and understanding a zip code. He can tell you, down to the dollar, what is the breakpoint in a certain area, and he knows how fast every 3-bedroom, 2-bath with a garage and no pool will sell within 30 days. You just know. You know that money. You can analyze it. Jumping into something, not having that level of confidence, and not spending the time to understand the market like that is risky. Doing it this way is not risky. It will tell you what to do.

First Step In Reducing Risk

The first step in reducing risk in any type of real estate investment is to surround yourself with people however you think that’s appropriate who have already done it correctly. You are removing a massive amount of risk especially when deals come up or whatever, and you can ask your peers, us included, “Should I be doing this deal? Would you do this deal?” “No, I wouldn’t do it.” “Yes, I would do it. You should get off the phone right now and go do this deal.”

The first step in reducing risk in any type of real estate investment is to surround yourself with people who have already done it correctly. Share on X

Tell me if you need the money.

Doing nothing is incredibly risky. Doing nothing and expecting something amazing to happen is silly. Join us next time when we talk about our fifth myth. Real estate agents are smarter than you. I don’t think so. You are not alone in your real estate ambition.

You love that.

We are Jack and Jill. Information and inspiration to buy undervalued property.