Episode Summary
Listen on iTunes
Listen on Spotify
Watch on YouTube
Ever wondered if there are different ways—beyond rentals—to generate passive income in real estate, and ultimately achieve financial independence? If so, then this episode is for you! In this episode, Jeff interviews Brent Bowers of The Land Sharks, who explains the land investing business model and explains the beautiful, powerful synergies between the cash flow from land investing and the wealth-building power of building a rental portfolio. You’ll learn how Brent and other land investors buy land (sometimes with Seller Financing) and sell land (often with Seller Financing) to create a cash flow machine!
Episode Transcript
Here’s what’s really cool. There are plenty of people out there that have houses, and commercial and multifamily and office building that will seller finance. So you take 10, 20, 30 or 100 grand of the money we make just on a couple of months of land payments and put that in, it’s almost like Monopoly. What is it like 4 houses, you can buy a hotel; you know, you just keep doing that and doing that.
Welcome to Racking Up Rentals, a show about how regular people, those of us without huge war chest of capital or insider connections, can build lasting wealth acquiring a portfolio of buy and hold real estate. But we don’t just go mainstream looking at what’s on the market and asking banks for loans, nor are we posting We Buy Houses signs are just looking for “motivated sellers” to make lowball offers to. You see, we are people-oriented deal makers, we sit down directly with sellers to work out win-win deals without agents or any other obstacles, and buy properties nobody else even knows are for sale. I’m Jeff from the Thoughtful Real Estate Entrepreneur. If you’re the kind of real estate investor who wants long term wealth, not get rich quick gimmicks or pictures of yourself holding fat checks on social media, this show is for you. Join me and quietly become the wealthiest person on your block. Now let’s go rack up a rental portfolio.
Hey, thank you for joining me for another episode of Racking Up Rentals. Show notes for this episode can be found at thoughtfulre.com/e184. Please do us a big old favor, and yourself a big favor, by hitting that subscribe or follow button in your podcast app. It really, really, really helps fellow thoughtful real estate entrepreneurs to find this show, and of course, make sure that you don’t miss anything coming up either. Onward with today’s episode.
In today’s episode, I’m really pleased to bring to you an interview that I recently conducted with Brent Bowers of The Land Sharks. Now, I’ve heard people talk about land investing. And I’ve even met a few people who have done it. But I’ve never heard before a real clear breakdown of how it works. And I would have thought to myself like Well, gosh, it’s sort of just like what we normally do anyway, but with unimproved properties that are just vacant land. But no, there’s more to it. And what I was really, really struck by was this really cool and interesting synergy between the business model of land investing in land flipping and buying and selling land and Brent will explain that clearly. And having physical rental properties as well. So I’m really excited to share this episode with you in this interview. So let’s cue up that episode right now. And I’ll catch you at the end.
Jeff Stephens
Okay, Brent, thanks so much for joining me. Welcome to racking up rentals.
Brent Bowers
Hey, Racking Up Rentals. I love it. I love the name of the show. Good to meet you, Jeff.
Jeff Stephens
Yeah, absolutely. I was glad to be connected with you too. And I didn’t have to think too hard about the idea of talking to you about land has asked like wow, that in the whole landscape, no pun intended of real estate investing, which is pretty vast. Like, this is an area I hear people talk about sometimes. But I don’t frankly, personally know much of anything about it. I’m guessing a lot of our listeners here don’t as well, I do think it fits in, in a slightly different way to some of the things that drive and motivate the listeners here. So I’m really excited to jump into that. I guess maybe kind of by way of introduction, could you tell us a little bit about how did you end up with being a land focus investor and what was the, you know, I’m guessing you didn’t just go straight there. Maybe you took some detours on your own path. Tell us about that.
Brent Bowers
I did. And honestly I’d never it never occurred to me to get into land. My first property was a rental property in 2007, I got my real estate license. And then I was an Exit Realty and the realtor training me she got this listing. So I made an offer on it and became a landlord like really quickly and made all the mistakes I ever could have thought about making, you know, I got the tenant that paid the highest rent, which they usually don’t have the best credit when they do that because people that have good credit don’t have to pay high rent. So that was a huge mistake ended up having Victor and then 2008 and 2009 happened for me. And I just threw in the towel. I was like there’s no way I went from a business owner to a real estate agent to a landlord to homeless basically because I couldn’t afford my rent and had to move in with my in laws. So I’m like, Man, I gotta reset here somehow or another. So I was like, I’m gonna join the military and go to school tried to join the Air Force and they wouldn’t they didn’t want me. But luckily the recruiter was kind enough to say, hey, go to the army. They’ll take anybody. So I did. And couple combat deployments to Afghanistan later, the army pulls me out of out of Afghanistan on my second deployment and sends me to school to be an officer and I bought that House right next to the college and I was like walking to college and renting out the rooms and making money to live there. And then I just took the equity from that house and a couple months and bought another one. And it just kept just compounding and multiplying racking up rentals and I had a triplex and then we moved across the country met a beautiful woman who got married and just we started having babies. And then history was repeating itself. I was preparing for combat deployment, number three in the military. And like I had a ton of debt from all these rentals and they weren’t cash flowing, because things kept breaking. And I just started looking for answers, like, how can I get out of the military? Like because my first, my first marriage didn’t work out, like I was gone all the time. You know, she left me. And I didn’t want that happening again. So I started searching for answers kind of like this podcast and listening to podcasts like this. And I stumbled on land. And here we are today. Yeah.
Jeff Stephens
Well, that’s, that’s cool. It seems like most of us wherever we end up in that big landscape of real estate, you know, it takes a little navigation, some stumbling around like trying this and be like, oh, boy, there’s parts that feel good parts of it feel like a little bit like a brick wall, and then making some moves and sounds like you found the sweet spot for yourself. So I’d love to I guess now that we have some of this context, if you wouldn’t mind treating this as kind of a, you know, land investing 101 kind of a conversation because I would love I’m like a big picture guy. I’d love to start at the 60,000 foot level. What exactly is land investing with? Like the main premise of it, I guess? Why does the model seem to work? Well, I know, you know, you’re a fan of cashflow. And being able to buy properties without a lot of money down. I think that’s going to be very relatable for everybody listening to. So let’s start big picture, if you wouldn’t mind, like what exactly are we talking about? And how does what are the basic the basic mechanics?
Brent Bowers
Yeah, here’s the mechanics of it. You know, we the reason why I got into land was for the financial freedom, and ultimately, the time freedom. I did not want another job. I was running from a job. And has it turned into a job from time to time. Yes, because I’ve, I’ve sometimes forget why I got into this. And I just keep adding more to my plate. I scale; people like love that word, scale is dangerous. It’s dangerous, and sometimes not very fun. It can scale too fast. But what has turned into you know, we got $22,000 in payments last month from our land notes. How many phone calls that I get from tenants and you know, trash and termites and problems? None of them called like that. It’s an easy, scalable company. And I roughly have 69 Well, there are 69 nodes we I’m looking at my board over here, we have 69 Land payments coming in. So sometimes I’m paid three times a day. And this is how we built it and each land deal I do, I try keyword try nine out of 10 of them, I try to sell on seller financing, because that gets me paid sometimes for 30 years. You know a lot of these guys that are flipping houses and Wholesaling Houses, they claim like you don’t need any money or any credit to do this or any time. Well, that’s a job like they’re just consistently doing it, rentals, rentals, you know, we’re paid forever until we sell that property. You know, this is very similar to rentals, except for I’m just not having to deal with property managers and repairs and tenants and I love buying rentals because they really helped me with my taxes because land let me tell you a negative thing about land is I have nothing to depreciate, I can’t do cost segregations the government is not giving me like incentive to provide housing. So I actually take my land profits and I buy houses or sometimes multifamily and office building and commercial to put that money into another cash flowing asset. So that’s kind of like the 30,000 feet level. And really, I just, I just have I’m trying to build those monthly payments up consistently. And do I always get 30 years financing for when I sell my land? No. Sometimes I have to wholesale the land. Sometimes I have to flip the land. It just really depends on my bank account looks like at the time when the land deal comes through. Yeah.
Jeff Stephens
Okay. Wow. All right. Explosion of questions and thoughts and excitement on my end. You said you have four or five hours here, right? Yeah.
Brent Bowers
4, 5 hours. Yeah, I got about 45 minutes, okay; the wife is ready to go to lunch after that.
Jeff Stephens
Okay, we can probably make that work. Okay, so first of all, just I guess connecting the dots for myself, but our listeners too. I love what you just mentioned there kind of about the synergy between In the Land business and really the land financing business, which I want to come back to that, and then physical rental properties as well, because so I’m you know what, as we talked about before I’m out on the West Coast, and cash flow is challenging here, right? There’s parts of the country where cash flow is not challenging, but maybe equity is, and then a parts where it’s exactly the opposite. So I’m always, you know, like working hard to like wring out a, you know, a buck of cash flow from a property. So we can like build wealth in that sense, but the cashflow side is harder. And so what you just described to me, makes me think of this little yin and yang symbol, you know, if we’re like, one is the is the cash flow that could come from the land business, that could then be put into the more of like, the wealth building side of the business.
Brent Bowers
Yeah, exactly. And that’s why I was buying houses for a while there with that those land profits. And then I was like, okay, but I want economy of scale. So we bought our office building, then we bought a 19 unit apartment complex, and these things like that. So you could still put those cash chunks. And here’s what’s really cool. There are plenty of people out there that have houses, and commercial and multifamily and office buildings that will seller finance. So you take 10, 20, 30 or 100 grand of the money we make just on a couple of months of land payments and put that in, it’s almost like Monopoly. What is it like 4 houses, you can buy a hotel; you know, you just keep doing that and doing that.
Jeff Stephens
Okay. So get back to a couple of big picture concepts, the land that you’re buying; where is it a giant, you know, categorically, I guess. And then what’s the profile of the seller that you’re buying it from and the profile of the person who would buy it, then from you?
Brent Bowers
Yeah, so it’s all over on the profile, but I’ll get to that. But most of the land of buying, I’m really trying to focus on Florida and Colorado right now have a ton of land in Arizona as well. And some of this, I keep, like some of this, me and Emily, just hold on to my wife. Like because we see the path of progress going there. We’ve got literally hundreds and hundreds of acres all over this country. But where I generally like to buy land is I look for the areas of demand. And I’ll just go really, like almost on the outside of that is really that’s how I started, I would go really far away from that. But it’s harder to sell that land in the middle of nowhere, where there’s not a lot of demand. So now I’ve come closer back to that demand, and sometimes right in the middle of the city to if we can get those deals, but that seller profile. And I hope that made sense. Like I’m going where the demand is that where people are buying land, because it makes it easy to figure out what is going for easy to comp it easy to find realtors that will help us sell it, what that what that seller profile looks like, as you know, they’re frustrated. They inherited the land, my sister in law just inherited five acres, and she’s pissed. Because she’s like, my mom got me one more time from the grave. Like left me this land on my think of myself what like, and I’m not allowed to buy from her because it’s my sister in law and like, you know, it’s like, I’m like, I’ll give you like 50 cents on the dollar for right now.
But, you know, she’s frustrated, and she has she’s having to go through probate. And you know, now she’s like, I gotta pay the taxes on these things because she’s behind on taxes. So sometimes they’re behind on taxes, sometimes they’re out of state, sometimes they inherited, sometimes they’ve never stepped foot on land, they just want to get rid of it. Funny story. I’m looking at my board over here too. I got boards all over the place. We just bought some acreage that can see the water can see the water in Florida. It’s a river. And two attorneys are selling it to us. And they’re giving us 15 years, they’re gonna finance it to us for 15 years, they just want 10% down. And they’re allowing us six months to buy it, aka and they know this, they know we’re going to be marketing for our buyer, they know that I’m not going to be the end buyer. They’re letting us put it on the MLS and market it for a buyer. So what are we going to do we’re going to get a down payment that’s larger than what we’re paying, and a monthly payment that’s larger than we’re going to be paying these guys. If the numbers work out like I think they are, we should make about $600,000 net profit on this land deal. I have $0 into it. Yeah, I’ll be profitable day one and forever on.
Jeff Stephens
Okay, so I will admit one of my totally, you know, uneducated, uninformed assumptions was a we’re going to be talking about dirt in the middle of nowhere. Is there some of that as well? I got some when you say demand, I like that, you know, I’m like to me, that’s okay. We’re talking about good fundamentals of real estate. But and I was I Was wondering who owns this land in the middle of nowhere? And then who wants to buy it? And for what purpose? Is it you know, people who are buying it from you because they want a place to go camping of their own or hunting or something like that? Or like they think it’s an investment? Or what’s the buyer profile often like for you then?
Brent Bowers
I got a lot of that. And yes, that buyer profile in the middle of nowhere, we call that recreational land, I got a lot like I sell a ton of that in Arizona. And, you know, when I first bought that land, it was hard to sell it for a while there and I started building up the you figure out where these buyers are at like on Craigslist, and Facebook and signs and land.com was where we find those places. Or every once awhile, you get that get lucky and find that realtor that has a bunch of those type buyers. But when I first started selling that, like we used to call our buyers and like see how things were going because birds of a feather flock together, they have friends that want to buy. And I made a few of those calls. And I was like, hey, what do you think about that land out in Arizona and I was bracing for impact because I like the mountains. I like green. I like I like water. And you know, I’m also from Florida. So like I expect everything to be green and sunny. And so I was like, I don’t know if I can sell this land. And I honestly had never stepped foot on it. So I had a hard time selling it because I didn’t. It’s not something I wanted. And so when I call these buyers to see how things were going like, hey, how do you love your land, I was expecting them to ask for refunds. And I have never gotten a refund on all I’m sorry, I’ve never had a default on all 122 of those. And it’s just amazing. There’s no restrictions, they can do whatever they want. They can take out some bombs out there and explode it for like that’s like they don’t care. It’s in the middle of nowhere. So what does that buyer look like? They just want to ride their folders and or dirt bikes and camp and gaze at the stars and bring their campers. I have a group of college students that have bought a bunch of land for me, and they just take their RV and go from land to land.
Jeff Stephens
Yeah, very, very interesting. Okay, and then so can we talk a little bit about like, the finding of the sellers and the finding of, of the buyers? is pretty much an online thing is there’s some direct mail mixed in, I’ve heard a little bit of that before. On the buy side, tell us about I mean, you know, without giving away all your trade secrets, but the big the big picture ideas?
Brent Bowers
No, I’ll give it all away. Like it’s like land changed my life. If I can help one person do this, like it will be absolutely incredible. So how do I find the land, you know, going back to that land in the middle of nowhere, it’s really easy to buy that and get it for super cheap. I mean, like pennies on the dollar, sometimes for free. But it’s harder to sell it because there’s not as many buyers. But if you go where the demand is that like you’re gonna have a list of buyers beating down your door for the land if its price, right, and especially if you offer financing, because Americans think, you know, how much is it going to cost me each month and the banks aren’t lending on this stuff. Like that’s, that creates opportunity for me as the buyer because the seller knows that they gotta give me a cat or super good cash discount, or they gotta be the bank themselves. And what do banks do they make a ton of profit, like and what do they do with that profit, they really lend it out. And that’s why they’re the biggest, prettiest buildings in every city in every state. So it also helps me when I sell it to, I become the bank, and then I become profitable.
The how I’m buying it is I look for those areas where there’s demand, I figure out what size parcel lands in demand and where it’s at. And then mail those landowners a very specific letter. We’ve actually been Triple Split testing this one letter, and it’s working better than anything else right now. And I would love to offer it to the racking up rentals audience if they want to go to the land sharks.com forward slash lol as and land offer letter or laugh out loud because we just got a piece of land under contract and amazing price. That letter is exactly what we’re sending. We’re figuring out what the lands going for. And we’re just reversing it what we want to make as far as profit, we’re figuring in closing costs and we’re just offering less than what it’s worth. And we can do a couple things when they sign it and send that back. We can we can sell that contract to a cash buyer or a builder like a sign of Simon of contract. We can buy it and flip it on the MLS with a with a realtor or we can buy it and then turn around and sell or finance it and the audience your audience might be thinking like well how do I find the money for that? Well, sometimes the seller will sell or finance it to you.
Sometimes you just get it under contract and assign it so you don’t need any money to do this. You don’t need money to buy real estate by the way. I started I had no money whatsoever. And also no time was I was kind of like, you know in a rough spot to have to start that way. But now my mother in law like that board over there another deal I’m looking at we bought for 40,000 We sold it for now. 90,000 My mother in law lent me the money on that. At 9%, it’s helping her, it’s helping me, I’ll have her paid off in five years, my buyer is going to pay me off in 13 years, I should make $102,000 on that whole deal if it goes to full completion, but people were like, and I’ve told several people about this, and they’re like, well, well, did you get a prepayment penalty from your buyer? Heck, no, I don’t want to desync I don’t want to discourage this guy to pay me off. I’d rather get the $50,000 profit today and I can do something else with it.
But I think he asked how are we finding the buyers? Yeah, yeah, multiple listing service. The like, I find land specialist realtors, I find the realtors that specialize in selling land, because they’re going to know that land way better than me. And if I’m doing this virtually, they’re going to know it better. We find them on Craigslist. We posted on Facebook, my dad’s 60 years old, and he sold 50 land deals on Facebook. Like I got to interview him. I’m the host on the wholesaling Inc podcast, I got to interview my dad and kind of see how his land businesses working. It’s crazy. It’s crazy how easy it is to sell land.
Jeff Stephens
Yeah. Wow. That’s, that’s very, very cool. Would you say more of your business is based on arbitrage of purchase and sale price or arbitrage of the financing. You know, maybe you, you buy it on seller financing, and 5% resell it at 10% or something like that?
Brent Bowers
You know, I’ve recently just started building the more sellers, five financing where the sellers finance me. And it’s funny that I did that, like it took me like I’m a slow learner, like that worked for me in 2016. And I didn’t do it for several more years, I was using my own cash. I was using other people’s money, partners money, but it’s just phenomenal. How many people out there. If you educate your sellers, they are more than happy to earn more to sell you that land because sometimes I can’t pay the price they want. But I can give it to them and payments.
Jeff Stephens
Yeah. All right. Cool. So in some ways, I mean, you tell me again, I’m very new to this. But my coach, Greg Pinneo, he’s got this expression that real estate is just the clothing that finance wears. And as I listen to you describe this, I’m like, This really sounds like it’s really a financing business that manifests as land. But you tell me, does that sound right to you? Or is that something where you would say, No, no, you’re missing the point a little bit, Jeff?
Brent Bowers
1,000%, you’re dead on Jeff. And I didn’t realize it. I really didn’t realize it. Let me show you this book that has been recommended to me, by my assistant coach. His name is Bill Rafter. He’s been through five real estate crashes. He keeps recommending this book, Invest In Debt by Jimmy Napier. And this guy buys mortgages at discounts. And that’s how he makes his fortune. But I create mortgages around land that I bought for discount. You know, if I buy the land at for 30,000 And it’s worth 90, I got 30,000 into it. I am selling it for 90, but I’m also getting interest. Like it is just bonkers. Like sometimes I make more money in interest than I do on the actual sales price. Like if you look at the average $200,000 mortgage at 6%. And my friend of mine just bought a house, he just paid six, he’s paying 6% interest. But for a while they’re at 200,000 for a while it was the average there. That’s why I’m using this example 200,000 at 6%. If you pay that mortgage back for 30 years, you’re paying back $430,000 Is 1200 a month. Well, you only borrowed 200,000. You’re paying back more in interest than what you borrowed.
Jeff Stephens
Yeah, yeah. All right, cool. So one of the things I’m wondering about is there’s obviously a real element of timelessness to what you’re what you’re doing, right? I’m sure to a large degree, this would have worked as well in 1955 is 2023. But I can’t help but wonder about where we are right now in this moment of time. You know, we’re what nine months as we record this nine or 10 months into what seems like a little bit of an economic shift, you know, interest rates changing? Is there anything about this business concept that you feel like is especially appropriate in some way for this sort of changing economic atmosphere that we have right now? Does that question makes sense?
Brent Bowers
Yeah, it does. And I saw it slow down for a little bit there with my infill buildable lots like the lots that I was selling to builders and developers. Yeah, that slowed down quite a bit. I have a parcel we can build 60 apartments on. I was scared to death. I was telling my partners I don’t want to build I don’t want to build and I think I want to build again. Like I was looking at the numbers yesterday and I was like, holy cow I think I think you guys were right. It was a little bit of correction but There’s still a housing shortage and you know, prices on things are coming down. So yeah, it’s flexing up and down. And I’ll tell you like, I have a lot of students with the land sharks community that were doing a bunch a bunch of flipping land. But here’s the thing, you gotten yourself on that treadmill, that that whatever they call that thing, where the rats in the because you’re looking for your next deal as soon as you leave the closing table. But if you sell, you know, six out of 10, or four out of 10, on seller financing, you get paid for a very long time, and you don’t have to go out there and recreate the will like you get out of the mousetrap. So it’s a little bit of everything, a little bit of a mixture. And again, why we buy properties that people want to live in, because there’s always going to be demand for that. So yes, things go up and down. And as there’s a building crash, like those builders, and those, those developers slow down, but what I saw, here’s what’s crazy. Is a small time guys coming back, like they still need to build that one house every six months. And they still buy them.
Jeff Stephens
All right, that’s very cool. So one of the things we talk about, I think a lot on this show. In other words, since the show is mostly me talking, one of the horses I like to beat dead is the idea of when you’re when you’re working directly with the seller, you oftentimes, if you approach it correctly in a very relational way, you usually don’t even have competition. I mean, the real competition is like the seller is just going to keep the property. And I know one of the things that is sort of one of your I guess, like talking points I’d love to hear more about is like, why is there less and little competition in land? Because I think there’s something that will really resonate with the people who like this show.
Brent Bowers
Yeah, I think it’s because HGTV has not made it sexy. I think it’s that simple. And number two is, I never thought about it. Because until I heard it on a guy on a podcast, like doubling his money overnight, and I was like, that’s really cool. I drove by land all the time, because there’s no stinky old dirty cat pee house on it that I could buy and rent out, or buy and fix up and rent out, or buy and flip, or buy and wholesale, or wholesale it. So I didn’t see a way to make money with it. And the way that make money would land is you get it at a discount and you sell it for a little bit more. Or heck, you can get it out what it’s worth as long as you can sell it for more like, I mean, at some times I’ve paid retail value for land that just had the most amazing terms.
Jeff Stephens
Yeah, absolutely. Actually, I’m really glad you point that out, too, because that is something we talk about here also on the show, with some of the more like advanced seller financing strategies. Yeah, you may guess you could buy something for 100 grand sell it for 100 grand, as long as you’re arbitraging, like, say 4% to 9% or 10%, or something like that again.
So I think people are going to be intrigued here, and in a minute we’re certainly going to get to how people can keep up with you and check out everything you have to offer. But if there’s like, you know, three takeaways, someone’s going to pull over right now or step off the treadmill for a minute, on their job to take a couple of notes, the three main things that people who are new to this should kind of keep in mind, what would you say those are?
Brent Bowers
Yeah, I mean, I’ll say starting in anything, we have to keep in mind that there’s so much knowledge out there, there’s so much education, there’s public libraries that everyone takes for granted. Like the know, the answers are out there, they’re in the books, they’re on the podcast. But what is the 80/20 rule, it is back to the 80/20 rule, like, you know, only 20% of that, like, it seems like 20% that people actually take action, and actually make things happen. But what I just say is action, it’s the action, it’s the action, you actually have to physically do things. And it doesn’t have to be a tremendous I always hear the massive take massive, imperfect action. I say, take massive, perfect violent action, but it doesn’t really had to be massive, it could be very small steps each day, you know, it’s just we call them small wins. If you get six wins this week, and you get six next week, you get six the week after six the week after you have 612 1824 wins, and they compound each other. And that’s how it turns into 22 grand a month. That’s how it turns into 350 land deals.
That’s how it turns into, you know, that big goal that you set up. And ultimately, like my goal was to travel and spend time with my family. We’re taking six weeks off at the end of June. I took almost all of March off like we just got back from a trip like I cannot believe like God has blessed me so much that I can do this. But it was from all those small wins that stacked up while I was in the military. What are small wins like okay today the small way is we’re gonna pick our playground, like, we’re gonna pick the area, we’re gonna invest in land. And tomorrow, we’re gonna price that land out, we’re gonna figure out what it’s worth. And we’re just going to do little small chunks, like how to eat an elephant. Like, okay, today, we’re going to do the streets. And then tomorrow, we’re gonna get do those streets. But don’t worry about tomorrow, let’s just worry about today.
And then after that, we’re going to get that letter, that land offer letter, I provide at http://thelandsharks.com/lol. And then the next day, Friday or whatever, we’re going to send those letters to 20 people. And then so on and so on. The action has to drive the result. The result is eventually someone’s going to call and say, Yeah, let’s do a deal. And then the result is going to just keep coming in like these those wins stack up. So that was one thing. Actually. Not three.
Jeff Stephens
Okay, let me I, just found myself as you were answering that thinking about like, so the flip side. So let’s say, there’s somebody listening to this podcast, who’s a high action taker? You know, of course, that wouldn’t be that wouldn’t be me. Just kidding. Yes, that this is the slippery slope of being a high action takers. You know, sometimes ready, fire, aim is great. And sometimes it’s not so great. So that brings me to like, I guess, like, the reverse question is, so you get somebody who’s super inspired by this episode, they’re going to do all the things, they’re going to take action on this. But what is something that’s the number one landmine or pitfall someone could accidentally step in, if they just took action, but weren’t aware of this Danger Zone.
Brent Bowers
Not tracking your numbers, not tracking key performance indicators, KPIs which are thrown around all the time: how much you send, like letters, or calls or texts, whatever it is; how much you spent, to get those deployed those letters, calls, texts, or whatever you’re doing or signs, door knocking; and how much you made from that. And you won’t know that until you actually do a deal that pays your bank or puts money in your bank account. Because so many people, you know, they’ll do a deal, or they won’t do or they’ll give up after like 300 letters or 30 letters, you won’t believe how often I hear like, Hey, I sent out 1200 letters, I didn’t get anything from it. What? When did you send them out? I just send them out like a week ago. Okay, well, like you’ve been pumping the farm pump, and the air is still coming out, you gotta wait for the water to start coming out. And then I have some people that say I sent out 300, and it took me about two and a half weeks to get deals. You just got to do it long enough and track those numbers, because eventually you’re gonna realize, Alright, I gotta send out 475 letters to get one yes. And I got to spend this much to make this much. So I spent $1 to make $7. That’s where I have the confidence now to keep doing this.
Jeff Stephens
When you’re putting those calculations into your tracking system, let’s say you bought something for 50,000 and sold it for 75 and you had a 15 year note, you know, at 8%, or whatever. Would you say okay, there’s a $25,000 price arbitrage plus, and then would you calculate 15 years of note payments at that interest rate too? Because it’s somewhere to have those ROI calculations, you have to put an R, you know, there has to be a column that’s like, oh, the amount of made of money on this one is x. But that’s, as always feels to me like it could be a little bit of a moving target. You know, if it’s a wholesale deal, like it’s, it starts, it’s done, I made 10,000. That’s super finite and easy to understand. But longer term seller financing is a little bit more elusive. How do you go about I guess, identifying that’s the number that goes in the spreadsheet?
Brent Bowers
Yeah, I keep it so simple. And I wasn’t doing that, that that form that you said, I basically wanted to 3x my money. So I would not buy the land in the beginning. This was before I started charging interest. Like I didn’t always charge interest. And I didn’t know I could, but I just wanted to 3x my money and like Warren Buffett’s 3x rule is work really where it came from. So if I was going to spend $1, I wanted to make 3; if I was going to buy the land for $300, I needed to be able to sell it for $900; if I was going to buy it for 30,000 I need to be able to sell it for 90,000. Where the power started was when I started buying for 30,000 and selling for 90,000 at 12% interest over 30 years. That was powerful, but when it really got powerful was when I can do a couple of things. Get the seller to finance me and get the buyer to make up the difference for the down payment or sometimes my down payment was large enough to pay for the land. And then I started finding other private lenders that wanted to finance me so like my return is infinite. If I have $0 in and zero time, how do I do it with zero time? You know, it’s amazing; you can train someone to help you do this and change their life as well.
Jeff Stephens
Yeah, man, beautiful. Well, I’m fascinated myself I have a feeling a lot of my listeners are like me and will be super interested in this too. So you mentioned a great resource at thelandsharks.com/lol, for Land Offer Letter. What are other good ways people can keep track of you, follow you, connect with you and all that good stuff?
Brent Bowers
Yeah, someone wants help doing this and actually me to hold their hand and teach them the exact step by step by step of how to set up this business, just go to thelandsharks.com; that’s thelandsharks.com. And TikTok; I actually put out a video every day on making money in land: Brent L (yes, that means land), BrentLBowers1 on TikTok.
Jeff Stephens
Okay, awesome. Well, thank you so much for taking the time to educate us and tell us about this and get us fired up. I have a feeling I’m not the only one who’s really intrigued.
Brent Bowers
Thanks, Jeff. God bless, man. Thanks for having me.
Jeff Stephens
Yeah, absolutely.
Well, there you have it. My conversation with Brent Bowers, from The Land Sharks. I am hoping you found that that half as interesting as I did, I bet you took some notes and came up with some ideas and some excitement to go and learn some new things, check out some of the resources that Brent offered and really start to think about how could possibly this land business fit into your overall business model as you’re building your rental portfolio?
Well, that is it for today’s episode of Racking Up Rentals. So again, show notes can be found at thoughtfulre.com/e184. Please do us all a big ol favor by hitting that subscribe or follow button in your podcast app. And if you really want to do us a big favor, take a second to rate and review the show; that is so, so helpful. I see every single rating and review and I just feel this wave of gratitude every time I see one and it really does help us get the show out there. Thank you for doing that.
Did you know that we have a Facebook group for Thoughtful Real Estate Entrepreneurs? Yep. It’s called Rental Portfolio Wealth Builders. We’d love to have you join us there; you just need to go to group.thoughtfulre.com and we have programmed the magic of the internet to take you right to that page on Facebook, where you can hit that blue Join button. If you liked this episode, go ahead take a screenshot of it, post it to Instagram and tag us; we are @thoughtfulrealestate. Well, I’ll see you in the next episode. Until then, this is Jeff from the Thoughtful Real Estate Entrepreneur signing off.
Thanks for listening to Racking Up Rentals where we build long term wealth by being win-win dealmakers. Remember: solve the person to unlock the deal and solve the financing to unlock the profits.
Leave a Reply