This is episode number 2149. Jill and I are talking about why land investing is simpler than other real estate models. Talk about an easy topic.

It’s going to be good because I know you have a lot to say about this, partially because you started in real estate back in, I won’t name the year or the decade. It started with a 1 and a 9. It didn’t start with a 2. You have long reminded me and shared with me your horror stories about having the worst and the most difficult types of real estate deals. I love it when you share those stories. It makes me feel warm and fuzzy about what we do.

I have material experience in the most complicated real estate transactions and the simplest.

You sought out to do a 180, and you did it.

We’ll cover that here in a few minutes. When we’re among a company that we trust, know, and are friends with, even in professional circles, there’s always somebody over the dinner table who asks us what we do for a living. This is my answer, “This is what we do. We buy a piece of land and sell it for more. That’s the entire business model.”

Everybody laughs. They should laugh, but that’s what we do. That is our business model. There are a lot of details that surround it. There’s a lot of pain, suffering, and crying sometimes, not on our part, but on the part of other people in this industry. They have an outlet, which is called social media, so we all know how they feel about it at any given time. In the end, you buy a piece of land and sell it for more.

That’s it.

All week, Jill and I are talking about running your land business better. I have to confess. I handpicked these topics out of a big pool of topics because this is a topic I like to talk about. On Monday, we’re talking again about why land investing is simpler than other real estate models. On Tuesday, what makes a land business sustainable in the long-term? On Wednesday, the advantages of partnering versus going solo in your land business. I have serious experience in both of those. Having a partner like Jill is way better.

Discord Question: Creating An Easy Button

On Thursday, the hidden costs of land investing and how to avoid them. On Friday, what’s the catch to the Land Academy education model? How do you guys benefit? Is it painful? We’ll cover that because it was a popular question on our Thursday call. Everybody got a lot out of it, including me. 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.

Here’s our question for this episode. Wes wrote, “This is a question for Steven or Jill. I’m going through your CRM video. Airtable looks great, by the way. My question is, have you incorporated your Red, Yellow, Green spreadsheet into Airtable to help with the initial trolling slash phishing aspects? Since it’s an automation tool, it looks like if you did, you could easily connect it to third-party data sources like DataTree and streamline the process.”

Wes, I love this question. I bet I can guess your background. I have gone over this. Jill and I have toiled at times with this topic about creating an application from start to finish where you can buy and sell land. It’s a very popular thing. What’s the app? There are a lot of positives and pros to creating a single point of failure, which is an app. There are also a lot of negatives. An example is every manufacturer with cars has a button for you to parallel park, new ones or most. I’m not sure every single one does. If you get in a car, press that button, parallel park, and go about your life, you’ve learned nothing.

That’s funny. That’s an interesting parallel you’re coming up with here.

That’s unavoidable. The older I get, the older I seem. There’s a microphone and a camera in my face.

Let’s pause for a moment. I’d like to digress for a second because that’s what’s going to happen.

Digression is the middle name of this show.

If you didn’t take your driver’s test in an 80-foot-long station wagon with wood siding that had to be Armor All weekly and had to parallel park that beast, you’re missing out. There are some driving things I need to teach you.

We tapped a nerve with Mom. It’s not just me.

You took your driver’s test in a Volkswagen, didn’t you?

I’m from Michigan. I took my driver’s test with the cars that they provided.

What was it? Was it a new Buick?

It was a tiny new Buick, a mid-sized one.

I had the Country Squire, a long baby. You all know how old I am. I had to parallel-park that beast. That was not fun, but I did it.

I have a story to answer this question. A lot of years ago, I had a different business partner than Jill. He came from a serious academic and tech background. This was back in the day when the internet was becoming popular. A lot of people didn’t know what it was. If you ask ten people what the internet is, they would say, “I think my little sister uses that.” It was there, but it was unused.

This tech partner that I had, we were together for a lot of years. He got this crazy idea that we could fly into Long Beach from Phoenix and meet with several people who had freighters full of pallets of returned goods, like Home Depot pallets. It’s still a business model. Back then, you could buy these for $100. You didn’t know what was in there. You bought 50 of them. Long story short, the business model didn’t work out.

I like where you’re going with that, though.

Now, you buy the pallet for $5,000 and you might sell all the stuff off on the internet for $9,000. It’s not bad for somebody starting who enjoys eCommerce and talking to people. I don’t like either one of those things. We get in the rental car and he starts pulling all this stuff out of his backpack and putting it on the dashboard. I’m like, “What are you doing? What is this?” He said, “It’s GPS.” I said, “I know what GPS is, but what?” It takes him a half-hour. He puts the address into the GPS unit that’s sitting on top of the dashboard and plugged it into the cigarette lighter. I didn’t even know this existed. I’m driving and he’s doing all this stuff. He said, “Cool,” and started talking to us. “Take a left here. Go straight here.”

I remember that thing.

I had a map. I was looking at the Hertz rental car paper map about how to get where we’re going. This is Los Angeles, the worst traffic scenario I’ve ever experienced worldwide. I’m going left and then going right and we get there. I looked at him and said, “I have no idea where we are.” People from my generation and older were used to solving our problems. I’m not knocking the younger generation at all.

Older generations are used to solving their own problems. Share on X

I’m writing a book. I’m on the chapter about how I’ve always been relatively ahead of technology and it’s one of the reasons I’ve been successful financially. This is a technology that sent me backwards. Do I use GPS every single day in the car? Yes. I pop it up on the phone. It’s a part of our lives. Am I a better person for it? No, I’m probably lazier. It’s an easy button for me. Often, it takes us the wrong way. It doesn’t take the way I would have gone in 1989.

That’s the question, Wes. I’m not making fun of you in any way. I’m glad you brought it up. I chose this question out of a lot. It’s not you, it’s me. Jill and I can create an easy button about buying and selling land. There are a lot of people in our group who have gone through Career Path, which is a mastermind group that Jill and I teach 1 or 2 times a year, and who have created, because of their background, easy buttons for themselves based on the basic stuff that we teach.

You find a great place that seems like it’ll work, buying and selling land, based on what’s being bought and sold there. You send out an offer to everybody that’s there who’s a logical seller of land. They call back. You buy some properties and resell them. That’s the entire business model. We could make that a big red easy button in the center of our desk, and so can you. I would encourage you, like I do with the alumni group, to pursue that. Some people have done it very successfully. Others do it as relatively old-school, like Jill and I do, which is a combination of both.

We could make that Red, Green, and Yellow test in Airtable. From a data perspective, I could make it within two days where the raw data that’s provided by our data sources tells us what the absolute best ZIP code is, whatever the parameters that I put in. I’ve done this. What ends up happening is that it’s some obscure ZIP code in a place like North Dakota. It doesn’t pass any common sense tests.

If I went into Jill’s office before I pushed the button on a mailer, which I always do, and said, “The data says we should buy properties on the Canadian border in North Dakota,” she would say, “You are out of your mind,” which she never says. All she ever says to me is, “If you think that’s good, excellent,” but I wouldn’t do it. There’s a point to this where you need to learn how to parallel park your car.

I have one more point to make, and I know that we’re going way over in time. We’re not even on the topic yet. I instigated a small riot in our neighborhood bar by asking this question. “Have you ever changed a car tire?” Eighty percent of the people in there said, “Who hasn’t? Are you kidding me? Changing a tire is part of life.” The other 20% who are much younger said, “Why would I ever change a tire? What if I do it wrong?” They had all kinds of reasons. The more questions I asked, the angrier they got.

Isn’t that weird?

I should never have to change a tire. There are people who come to the roadside if I need them, which has never happened to me. They’re bragging that they can change my tire, and they’re good at it. They’ve done it before. “I’ve never done that. What if I do it wrong? What if I put the lug nuts on backwards?” Someone said that. The cars I drive, you can put them on either way and you’re going to be good.

How about you remember how you take them off? That’s what I do. Lay them down that way so you put them back on the same way.

I know the CRM is great. It was a combination of 35 years of us putting some stuff together. The content was me and the actual execution was Jill and her team. Thank you. The CRM Airtable that we’ve created is great. It is unattached to any of these other processes. I know from personal experience and from years of working with Jill that the magic in these real estate deals happens because Jill’s personality comes out to the seller. All I do is tee them up. When you start to mechanize everything and make it so simple, and the data has all the answers for you, in my opinion, you’re avoiding something.

That’s what I was going to add.

What you’re avoiding is Jill’s job.

Why are people trying to make this easier? I don’t know. It’s a common theme. Everything should be like those commercials where the guy is lying in the pool and he’s got his tablet in his hand. The vacuum’s running, the fridge is ordering its food, and there’s one other thing. He’s like, “Chores are done.” Why are we trying to do that? He’s going to get fat and lazy.

Improvement is part of our lives, but when it starts to, like my GPS example, make you a worse person from a humanity standpoint, then you can’t read a map, parallel park your car, or change a tire.

When zombies come, they’re going to be lost. That’s what I think.

Why Land Investing Is Simpler Than Other Real Estate Models

Our topic is Why Land Investing Is Simpler Than Other Real Estate Models. Let’s look at it from a non-emotional, return time investment and a return investment on other real estate models. The one that we’re all familiar with, if you were in this space, is buying houses like on HGTV, cleaning them up, and selling them.

For years, we have received people in the Land Academy group who have experienced that model and abandoned it. Here are the facts. You can buy properties, clean them up, and sell them all day long. This BRRRR method is a crack-up. If you don’t know what that is, please look at it. I don’t want to waste our time. It involves 4 or 5 loans, which is why loan officers created this business model.

In the end, you’re going to make $30,000 to $50,000 buying this house, cleaning it up, and reselling it. It’s going to take you about six months. That’s if everything goes right. If you do twenty of them, you can look at the averages. That’s what’s going to happen. If you have to borrow money, bring in partners, and things like that, it’s going to be a lot less because your carrying time is way too long on those kinds of deals. That doesn’t work for us. We’ve tried it.

Number two, you can buy a house and rent it out. Your cash outlay is $200,000 or $300,000. It’s the same thing with an apartment building, $2 million or $3 million in some cases. Rent it out and proceed to get about a 10% return for a very long time. There’s nothing wrong with that business model. It’s way more intensive from a time standpoint and money-intensive than you think. At the end of the day, you are going to make about 10% to 15% as an operational income model. If that seems simple to you, you probably haven’t been a landlord because it’s endless. I have too many stories to bring up here after many years of people hiring property managers and getting robbed.

Not only that. Think about all the COVID craziness. You couldn’t even have a simple Airbnb thing. We’ve all heard the horror stories all over the news and social media of how hard it has been to be a good landlord, too. You’re trying to help people and they won’t leave or vacate. You have to evict people, file forms, and get the sheriff out there. All those stories are things like, “I’m not doing that.”

“That’s great, Jack. Who are these people buying these Class A massive apartment buildings and flying around in jets? You must be crazy, Jack.” They make it work. Their model works great. You don’t have access to that, and neither do I. You can go back into your think area, come back out, and put yourself in that position. You’re probably going to do okay. A lot of people do.

If you’re going to put a partnership together and you have an amazing, dynamic personality like Jill, and you can stand up in front of a room of investors, put yourself there, and say, “I put this deal together. I want 5% equity,” and you guys have done this already, then you’re probably going to do great. That business model works great. It’s so large that you can put a management company in place and have an auditor that looks at everything and makes sure that it’s all okay.

When you go big on a rental like that and you never meet your tenants, you’re going to do great, but that’s not what we’re talking about. We’re talking about simpler. That’s not simple. That’s years away from the first dollar you’re ever going to bring in. There’s nothing wrong with it. If you’re young and have a super dynamic personality, I would encourage you to do that. “You can buy office buildings and sell them.” That’s ridiculous. Office buildings will be gone in years if they’re not already. Nobody works in an office anymore.

Office buildings will be gone in five to ten years, if not already. Nobody works in an office anymore. Share on X

There are all kinds of other business models but our model is crazy simple. You locate a piece of undervalued property. It might be a house or a piece of land. If you don’t have any money, that’s okay. You have us and everybody else in Land Academy that are standing up straight listening to make sure it’s a good deal that will fund you entirely. It’s simple. Why is it simple? You’re removing everyone except you and the seller. Eventually, if you’re going to utilize that, you won’t even ever be exposed to the person who buys it because you’re going to put a qualified real estate agent to go out there and sell it for you.

Also, maybe a title escrow company to close the deal for you. That’s it.

With 2 or 3 phone conversations, you get the entire deal done and a lot of signatures.

Isn’t that great? I can spend less than 2 hours of my time to make $50,000.

Plus, you have a huge choice about how big you want your company to be. Do you want to do this 50 times a month? There was a time when I was doing ten deals a day. It was way back in the day. They were much smaller deals at a high velocity, and I auctioned them off on eBay very successfully. I got to the point where I didn’t have to do anything because people were working for me. The economy solved that. It’s a simple model. It’s much simpler. We’ll deal with this.

Next Topic: What Makes A Land Business Sustainable For Long-Term

There are other things to deal with that are harder than just buying and selling a piece of land in our industry. One of them is that there are a lot of people in the industry sending mail out. There’s a way to deal with that. We’ll talk about that later. Join us again as Jill and I talk about what makes a land business sustainable for the long-term. You are not alone in your real estate ambition. We are Jack and Jill, information and inspiration to buy undervalued property.