How do we create 5 to 7- figure paydays? See below for common questions and our answers about this blue ocean real estate strategy.
Regarding the availability of land deals: Why hasn't every available holder of developable land already been contacted and made a market offer, and why haven't developers already made these underlying market offers?
Luckily that is not the case! If every piece of dirt in the US had already been spoken for, and there was no more room to grow that would be bad news for the housing market. Why hasn't this taken place? One reason is when we say that what we do is a niche market and that there are very few people out there doing it. It’s true. I have a handful of buddies that work for national publicly-traded businesses. They have job titles, like Head of Land Acquisition, or Director of Land Acquisition. What happens with these guys is they don't have to go out and look for off-market deals and do the things that we teach in our course. They're so big and recognized that their form of acquisition is that their phone rings and they answer it.
Total respect to them. That's great, but my point is, at the end of the day if anybody was just going to go and gobble up all the land in their market or their state, which would be almost impossible, it would be those big public companies, but that's not their business model. Those guys love what we do! If we take a deal through the simultaneous close process and then bring them in, they love it because we just brought them a deal that they otherwise wouldn't have – because it was an off-market deal. I don't see this ever being an issue in my lifetime or my children's lifetime. There's too much land out there for this to even be possible.
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As a newbie, how can we find these pieces on our own? How come these big developers aren't able to find these pieces of land and don't they have a whole team looking for this land?
There are developers out there, especially the big nationals, waiting for their phone to ring. The guys like Cody and me are out there who know what we're doing, know how to put these deals together, know how to structure them correctly for a development company. When their caller ID goes off and they see us calling, they're quick to answer the phone because they know that we've got a deal that they're going to want to look at.
What we do is a niche for the small guy. The big guys have a very large network because they've been doing it so long. I can count on one hand, the guys that I know that go out and search out the off-market deals. Talk to developers or other home builders that also develop, very few are going to say that they do anything but on-market deals – meaning properties that went up for sale and are listed for sale to the public. That's what 99% do. This is what’s so exciting about what we teach! There's a big black hole out there in the informational space. There's no information out there because hardly anybody, no exaggeration, knows how to go out and hunt these deals down. Those that potentially would know how to do it, they are the “big boys” and they don't need to do it because they just wait for their phone to ring.
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I've done both types of wholesaling - assignments and a double-close. The main benefit of double-close is that both parties don't see your fee. Is that the primary benefit or is there something I'm missing? I'm assigning a two-acre parcel now and not planning a double closing. Is there an advantage that I'm not thinking of?
One of the biggest advantages of a simultaneous close (aka a double close) is keeping yourself in the middle of the deal. Protecting your position. The reality is if you keep some sense of control in the deal, you have a better chance of securing your payday.
Let's say you're going in and just assigning the contract. Well, you're not going to receive near as big of a fee at assigning a deal as you are if you wait until closing to get paid through a simultaneous close . So if you just assign it, you lose that control.
And you may say, “Ok Cody, I'm going to assign it, but I'm going to go ahead and not take my payday till closing so that I get more money.”
Ok, well that's great. The problem is what control do you have over making sure you get paid at closing because you've been bumped out of the deal? You assigned it. You don't have a seat at the table. The simultaneous close protects that higher payday, receiving that bigger check. That’s a huge reason why simultaneous close is so much more valuable than assigning a contract.
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There are plenty of cheap parcels of land for sale out there. I would like to learn how to find and structure a good deal. How do you pick a geographical area to start?
That's always a big question and I do think it's good to underline one important thing here. There are other land strategies out there that are teaching you how to make money in land. And apart from us, the bulk of them revolve around the idea of going after just about any type of land and your goal is to buy it at 30 cents on the dollar. Then hopefully you can get turned around and sell it for 70 cents on the dollar and you make a few grand in the middle. So that's where those strategies come in. Going to auctions and going to people that are delinquent in their property taxes and trying to find this dirt for cheap. You might not be able to do anything with it. But you can maybe find a neighbor who will pay you a bit more than what you paid for it.
What we do is based solely in the development world. That is where you'll see the numbers start to grow exponentially.
That's how we're able to put together deals that yield for us, on average, these mid-six-figure returns and every once in a while, dipping into the seven figures as you guys have seen. It's focused on the development side of things. And so when we look at markets, it’s based on where we're seeing urban growth and where we're seeing new homes being built. Where we're seeing national builders moving in and building subdivisions and seeing commuters moving to major metropolitan areas. All of those areas are the types of areas that we go after. Because we are going after land with development potential. Not just “land”. Not land out in the middle of nowhere but land with residential development potential. And that is the reason why we can make a $500k, $600k, $700,000 return on a wholesale deal. And why someone else will make $3k to $5k on a land deal that they've put together.
Here's the reality: what we do and what we teach is in the development world. We don't deal in cheap land. The upside, and where it's great for a property owner, is when you can pay the market value. It's great for a developer because we're the experienced ones that went and found the deal, put it together with the property owner, and knew how to structure it correctly, with the correct price and terms. The developer's willing to pay more than what just raw market value was for that because you're delivering it up on a silver platter. But our land is never cheap. And the reason it's never cheap is because it’s land that can be developed in areas where people want to live. If people don’t want to live there, then, yes, the land might be cheap, but our model doesn’t work.
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Can you do this from home?
One of the beautiful things about our strategy is the fact that yes, it can be done from home. In fact, it can be done from home or a hotel room if you're traveling, it can be done from anywhere. We say this a lot and it sounds cliche, but all you need is a telephone and an internet connection. And that is true. People that come out of the fix and the flip world, they're used to needing to target areas in their backyard, in a radius around which they live, because they need to go and look at these homes and kick the tires and figure out how much they need to budget for the rehab and make sure that the foundation is structurally sound. All these things on a rehabbers checklist, they tend to need to stick to their home market.
Real estate agents tend to stick to their home markets as well because they're doing open houses. They're spending their weekends doing showings. They need to familiarize themselves with that market and they need to be available physically.
The last time I physically visited a parcel was a few years ago. It was about maybe an hour from where I live outside of Portland. It was an elderly gentleman who was kind of old school and insisted on meeting me. And insisted on “walking the land” with me. So I finally gave in and did just that. But the fact of the matter is, walking that parcel that day did me no good in terms of actually examining the parcel and determining its development potential.
For land deals, all the data that you need to be able to assess the development potential of a piece of property and to assess its value is all done from your home office.
It's done from your computer. It's done from maps. It's done from conversations you have with jurisdictional planners. It's all done from your office. And that is one of the beautiful things for a lot of people is that they don't have to live in a major metropolitan area that's seeing a ton of growth. Sure, it's great if you do, but you can live out in the middle of Montana in the mountains and as long as you have an internet connection and a phone, you can execute the strategy.
Yes, that’s how we run our business. I’m in my home office in Arizona. David is in his home office in Oregon. Our business has been virtual for years. Everybody works remotely from home. And we're not just land acquisition specialists, we're actually land developers. We develop projects and we are still a virtual remote business.
I would say we're much more advanced and efficient and we use technology to our advantage. We teach in our course how to utilize that technology. I can't sit here and say that everyone does it that way because I know they don't. We laugh at the “driving for dollars” concept. Driving around, looking for land. It's beyond inefficient. I still have a few buddies that do just that, which is just comical to me. I'm not trying to pick on them, but my point is how we do it is more efficient. Yes, you can do it from anywhere. I've been on vacation plenty of times and I'm still working. We're using technology, software and platforms that are available in today's world.
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How do you approach the seller once you find out who that is?
That's one of the easiest parts of this strategy. It's not rocket science. When we move into a new market, we spend our time identifying properties that we want to go after. Properties that we deem having good potential for the types of projects we're looking for. And then it's just a matter of figuring out who owns that property and calling them. Yes, we do monthly mailings. And I'll be the first to admit that mailings are probably the least effective marketing strategy out there. Half of our mailings probably get thrown in the garbage can.
But honestly, the bulk of our success over the years has just been identifying these pieces of property that we want to go after. Figuring out who owns them and giving them a call. The conversation is usually pretty basic. “Hey, I think your property might have some development potential, and I wanted to touch base and see if you might have any interest in selling” and then taking it from there. But here's the thing: the important thing to understand is that it's not just being able to call up these property owners. You've got to know what you're doing. You've got to know what you're talking about. You've got to know how to structure these deals. You can call property owners all day long and you might get a handful that say, “Yeah, I'm interested in selling.” And you might actually put together an offer, and maybe even put together an agreement, but you bring that agreement to me, the developer, and it's going to take me 30 seconds to look at it and realize, this guy doesn't know what he's doing. And these terms aren't right. I can't work with this with the way he's structured this deal.
That is the key. That is why, when we say a Land Acquisition Specialist, it's not a joke. We're not kidding around. Our course is put together to teach you the process of land development. So you understand it and how to work within it. So you know how to find these deals, how to structure them, how to value them, and how to take them to a developer. That way, when the developer gets it and looks at it, he says, “Yeah, this guy knows what he's doing. I can work with this deal and I want it. I'm going to pay you for it.”
Yes, we call them and it's not a difficult conversation, but you've got to know what you're doing. Otherwise, you're just going to be spinning your wheels.
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How do we do these deals when we don't have a network? I don't know anyone in the development world.
People get a little bit too caught up sometimes thinking, “I don't have connections. I don't know anyone. I wouldn't know who to call.”
Our course deals with that. We teach you how to build a network. We teach you how to find your developer buyers. It's actually one of the easiest parts of the process.
Beyond that, at the end of the day, it doesn't matter if you're a no-name or if you're known in the development world that you're working in. If I get a guy that calls me and says, “Hey, I've got a piece of dirt and I think you might be interested.”
If I've never met this guy in my entire life, I don't know his name and I know anything about him, I'm still going look at that deal. And if the deal works, if the math works, if it's structured correctly, guess what? Yeah, I’m taking that deal. And I don't care who this guy is. I don't care that I don't know him or that I've never heard of him. If the deal is inked right, I'm definitely taking it. So don't get too caught up on, “Hey, I don't have any experience so how could I possibly talk to a developer?”
No, you get the experience through the training, which is what our course is all about. You put the deals together. It doesn't matter if you're a no-name. If you put a deal together that works, a developer's going to want to take that deal.
The Land Acquisition Specialist is in control. At the end of the day, that’s what matters. If you’ve got the deal, the developers will come.
But keep in mind that they’ll quickly run the other direction if you don’t have the deal structured correctly.
But you’re in control and you’re the one that’s there to feed these developers. And they want to eat.
That’s right. I often say, “If you’re cooking a meal for someone, you’ve got to know not just what they want to eat, but how they want it cooked. How they want it prepared.”
With home wholesalers, the national average is anywhere from $5k to $7k. And a big concern of theirs is deal flow and finding bonafide buyers. When I talk to a home wholesaler, he says, “Well, how do I find my buyer's list?”
They're all about their buyers' list. A big part of that is because that sector is so inundated with people trying to do the same thing. Everyone's running around, calling themselves investors, and a guy gets a deal inked and he needs someone to buy it from him. He starts going through these leads he's got, and calls them and guess what? He just ends up talking to other wholesalers who don't have the money.
So that's a big concern that weighs on their mind a lot. How do I find my buyers? That's one of the points I mentioned earlier, it's one of the easiest parts of what we do.
It is absolutely the easiest part. Any developer that does any type of volume, you can find them a million different ways.
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Do developers not have someone on their team finding deals?
They do. A lot of these development companies have land acquisition guys, but they spend their time looking for on-market deals or they spend their time answering phones, getting calls from guys like me who are out there putting these deals together and bringing it to them, served up on a silver platter with the right development structure.
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How small of a project will land developers do?
It's human nature to want to talk averages and numbers. What's the average size? What's the average return? Etc.
When you get into land it becomes a little bit difficult to cite some of those averages because every deal is so different.
One developer might specialize in doing five-lot projects. He might not have the capacity to take on bigger deals.
And then another developer will only look at something that's 50 lots or bigger.
So we can't really tell you, “Hey, this deal is too small or this deal is too big.”
I don't think I would ever tell you a deal's too big, but there's really no answer to that. It just depends on the property and where it's located. There are places here in the inner-Portland area that are infill projects and they might be just a 15,000 square foot lot. But guess what? It's highly sought after by developers because it has subdivision potential in an area where people want to live. Those infill smaller parcels can be great projects for people that are looking for that size of a deal.
There's a butt for every seat. But here again, only if the deal works. Only if it's priced and structured correctly. If that’s in place, there’s a butt for every seat – there's a developer for every project, assuming that you're in a market that people want to live in.
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Are the numbers you are getting on your returns because your location is on the West Coast? Can you get that in the Southeast?
The numbers are different everywhere. We might do a 50-lot deal, wholesale it, and make $500,000 on it. You might do that same 50 lot deal in Southern California and make 3 million on it. You might do that same 50 lot deal in Ohio and make $100k on it. So the numbers won't match up across the US. But typically, what we'll find is that the numbers will be commensurate with the local economy. A $500,000 return is a great return here in the Portland area. But maybe not for someone that's living in Southern California and has a $3 million mortgage.
I have buddies across the country. And what we do is just math. And I can go do it anywhere in the country. Because it's just math.
More what our business works on is percentages. So it's all relative to the marketplace you're in. So it's not West Coast to East Coast, North to South. It's really from jurisdiction to jurisdiction.
The numbers can change. David’s in the Portland Metro area. We'll make more or less per lot from jurisdiction to jurisdiction just within one Metro area. But it's all relative to the values in that area. What the finished home value is. And what the finished lot value is. And it trickles all the way down to what the raw land is worth. It's all relative.
So it's more on a percentage basis than which coast you're on.
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Can you work multiple deals at the same time?
You absolutely can. You're not limited to just doing one deal. You can do as many deals at a time as you want. I'm glad you brought this up because, for some people, 15 months is a long wait for a paycheck. And I would like to underline the fact that what we do and what our strategy is all about is building massive wealth. It's about legacy wealth. It's about your future. This is not about a strategy where you can go out and next month put a deal together. And in 60 or 90 days, you're going to get a check for $5k. This is not that strategy. And if you are in that situation where you're looking for a strategy where you need some quick “home runs”, you need to make some money fast – maybe you're trying to cover your rent – this is not that program. I want to be very upfront about that.
This is really for someone who has identified the land development space as being the pinnacle of the real estate game in terms of the types of money that is generated. That person has identified that but doesn't know where to go. He or she sees it but doesn't know how to get started. And that's what this course is about.
There's no one here that can argue that a ton of money isn't made in the development space. But this program is getting you in the fast lane, into getting involved in this and allowing you to do it without needing to have millions of dollars in your bank account to get started.
Here's the thing, you don't have to wait 15 months. One of my favorite things I love teaching is there's exit points and there's payday points. And so we’ve shown you examples where I made mid six figures on deals that I was in for less than 60 days.
The key though is getting the funnel full. That's where a lot of the work is. Get your funnel full. And then the deals start dripping out. That's the key to success in anything in life is. You don’t have to wait for 15 months for every deal.
Now, if you want to maximize your payday, yeah, you might want to wait 15 months. But if you want to get out quicker, we have strategies as far as exit and payday points. You can get paid a whole lot quicker than that.
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Can I get questions answered along the way?
There are a few options for that. First of all, our goal in forming VestRight and forming the Land Acquisition Academy is to see people get out there and succeed. To take a strategy that's done so well for us over the years and share that with other people. You'll notice that we don't have you give us a cut of your first deal. We don't have you go out there and find deals and bring them to us. That's not what we're about. We're about teaching people to go out and duplicate a strategy that's been so great to us.
There are also options along the way of having contact with us up to personal mentoring. Not something that you have to do. We didn't want to build a course where people would be dependent on us but we do have those options.
What I'm about to say, it's really important to me that this comes across in the most humble way possible. What we're offering here is two decades of my life. A lot of blood, sweat, and tears. And what's really important to me is that we over deliver on value.
I can look at you all straight in the eyes and tell you that the goal is for us to make a difference. That's the whole thing of VestRight. Our tagline: “Transforming lives through real estate”.
I talk about how I founded VestRight as my way to give back, to make an impact and make a difference. And so I've got to be able to offer this education to the marketplace at a price point that people can get in and afford, to be frank.
Here's the reality: If I could sell this for a half a million dollars, I would still be able to sleep at night doing it, because that's how much value is in this course. It's made me millions upon millions upon millions – and I want that to come across humbly – but just know there's this so much value in this course. I am so confident in the value of this course, what this delivers.
And the proof's in the pudding. Everything we've talked about is truthful.There's no smoke and mirrors.
It's verifiable. And a point of pride for us is that we're not just some gurus that have come up with a strategy that we think might work for people and are putting it out there. We're doing this day in and day out, and we've done it day in and day out since 2002.
So we’re walking the walk.
And it's not rocket science. It's not something that's impossible for other people to do. It's just a matter of information. That's exactly what it is.
If you want to learn how to do fix and flips or wholesale homes go to Amazon and in a quick search, you'll find 20 books on how to get rich fix & flipping, or how to get rich wholesaling homes.
Get on YouTube. You'll find tons of videos with strategies on how to do this and how to do that. They're all over the place.
Do a search for how to get into the land development space as a land wholesaler, as a land acquisition specialist. You just won't find it. And we know this because we did our homework back when Cody and I thought, “You know what? It would be so cool to put this thing together.”
What's the first thing we did? Well when you're going to start something, the first thing you do is make sure that someone else isn't already doing it. So we scoured the market. And there's no other developer that we know of in the entire US that has taken the time and effort to put together their knowledge and package it up into what we've done here.
We have another private course. It's this same education, but there's mentorship involved. So if you want to go to that next level, as far as mentorship and mastermind, that's something you can apply for.
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Where do you find what the land is zoned as?
That's pretty simple. It's just a matter of contacting your jurisdiction. Most jurisdictions will have a website and they'll have their zoning code that's available to the public.
I will say though, that in terms of zoning and rezones and things like Comprehensive Growth Plans, there's a lot that goes into it. It's not just saying, “Hey, find the zoning and that's going to work.”
There's a lot that goes into it. And we can't possibly get into all of it here in this FAQ. Which is exactly why this course is several weeks long. There's a lot of information to learn
But we do talk about zoning. We talk about rezones. We talk about looking at agricultural land and is it possible to get it rezoned to residential? We look at Comprehensive Growth Plans of jurisdictions. We give you the strategies that you need to put into place to go out and find these deals.
And so yes, on the face of it, you find the zoning from your local jurisdiction, whatever the governing jurisdiction is of the property that you're looking at. But, it does go deeper than that.
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What does a Feasibility Study entail?
There's a lot that goes into a Feasibility Study. It's much different than your 10-day inspection period that a lot of people are familiar with, if you've ever bought a home.
The Feasibility Study on residential land development deals is not in any way, shape, or form comparable to what people are used to on home inspection periods. They're night and day, and that's why they're often 90 days long.
We have a very in-depth checklist of all the things you want to accomplish in your feasibility. I want to make sure I mentioned, zoning is key. But there are so many more things that go into knowing if a piece is developable or not than just the zoning. From utilities and overlays and the topography, and the transportation system. It's a detailed process, which is all on the course.
In the Feasibility Study we hit all these points. We put together a layout for the subdivision. We do a pre-app with the jurisdiction. Then we make decisions from there. We do cost estimating. We do Phase One environmental studies. We do traffic analysis, boundary surveys. I could go on and on with all the things we get done in a Feasibility Study.
It's just part of what you need to know. And part of this course covers what happens during a Feasibility Study.
The beautiful part is that I can be in Mexico or Hawaii or wherever I want to be. I don't have to be boots on the ground, out at the project because third-party consultants do all the work. Sure, I’ve got to oversee it and ultimately make the decisions. But it's my lifestyle, my freedom. My flexibility is a priceless benefit to the lifestyle I've built for myself. And this industry has allowed me to do that. If I were a doctor or a dentist or whoever else, if I'm not working, I'm not making money. Well, if I was to add up the amount of hours I work, versus what I make, I might be somewhat flattered by how much I make per hour. But this, this industry, this model that we use as far as technology and being virtual, it's priceless. So yes, I just wanted to throw that out there because the Feasibilities Study, yes, there's a ton of things. And yes, you want to understand them. But you don't have to do most of them because one of your third-party consultants does it all. At least how we do it. How we teach to do it.
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The exits seem to be priced around 10 times your investment. No matter the stage you exit. Is this accurate? If not, how do I determine the exit price?
We don’t do anything on averages. But it is done in a calculated way. It’s math.
So at the end of the day, we take what a finished home or an attached house is worth, we do the math backwards to determine what the finished lot is worth. Then we do backward math from what the finished lot is worth to determine what the raw land is worth. And in that math is profit margin. And based upon those profit margins, you as a Land Acquisition Specialist, we give you the formulas to figure out what cut of the profit that you have a right to, for being the one that put the whole deal together.
So that's why you can still pay full market value for these properties. You're not having to like a home wholesaler and find desperate people out there to buy their houses under market value so you can turn around and flip it to an investor. That's not what this model is. What this model is, is paying market, development value to these property owners. But because you put it all together, you found it, you structured it correctly, you tied the pretty little bow and delivered it to the developer, they're going to decrease their margin as a developer and give you a portion of their profits for you presenting this pretty little present to them.
Again, because we're in this development space, that is where these numbers can grow. If you look at a home wholesaler or even a fix and flipper who might make $30k, $40k, $50k on a fix and flip on one home, that's where the numbers get interesting in our game. We're taking one raw parcel and we are exploiting its development potential. Eventually, that raw parcel will go from one raw parcel to 20 or 30 or 40 or 50 lots. And all of those combined, we talked about an example earlier where we were making $10k per lot on the deal.
Well, if it's a 60 lot deal, that's where those numbers grow so big. It's almost like you're doing a bunch of home wholesales in one fell swoop, in one deal. And that's where those numbers can grow so big because we're taking something raw and we're exposing its potential. We're negotiating with the property owner and we're structuring the deal correctly. We take it to a developer and all of the sudden, they're not looking at one deal or one parcel. They're looking at 50 lots. They're looking at six lots. They're looking at 20 lots. And when you start talking about those numbers of how much you're going to get paid per lot, that's where those paychecks can get so much higher than a lot of other real estate strategies out there.
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Do you ever rezone the property? Do you ever do redevelopment deals on underutilized properties in parts of town that are on the upswing?
We have done rezones in the past. I wouldn't say that we specialize in, for example, buying up a 10 block radius of a downtown area that is dilapidated and then bringing in some developers and building some skyscrapers. That's definitely not what we do. We don't get into that rejuvenation type thing.
We really specialize in going out and finding raw land and urban growth areas, putting those deals together that have residential development potential. We will look at smaller projects and more of an infill basis every once in a while. But in our “old age”, we tend to get more excited about the big deals these days. Whereas years ago we would look at anything and everything, and we would do small deals and large deals and medium-size deals. Which is absolutely anyone's prerogative to do.
So we don’t get into redevelopment. We don't get into rehabs. We don't get into smaller deals where you've got one parcel and you can turn it into two lots. But it is out there and it can be done. With what we teach you, it absolutely is all part of the Land Use process.
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What overhead is there in operating this business?
What we're teaching you here is a business. As far as operating expenses or monthly overhead, it's at your own pace. We're a full-fledged development business today with staff. But we weren't in the beginning. You could be just starting out and just following our system, our roadmap, using the technology we suggest, and you could really do this as a one-person show. You don't have to have a full-blown staff with expensive software and platforms, subscriptions. This can be run on a shoestring budget. It doesn't have to be this big operation at all. I could easily go out and do this by myself and have no overhead.
It’s a beautiful thing. Look at the average startup cost for most businesses. They get quickly into the tens and twenties and thirties of thousands of dollars. And that's just not what is required for being a Land Acquisition Specialist. You might spend some money on some business cards if you happen to use those. You'll probably need a website. You might do some mailings every once in a while, but other than that, there's no overhead. Cody and I, we run a lean machine over here and it's not something that you have to get an office and staff it up.
Cody and I have a mutual friend who does really well and makes good money, but the guy runs a pretty big business of maybe a hundred or 200 employees. That's a whole nother ball game and for what he makes, I feel like he deserves to make more for what he goes through running a company like that. That's just not something that I would ever want to do. I don't think Cody would have the patience for it either. But that's one of the beautiful things about us is that we're able to run efficiently and keep it small, but still generate some really big returns.
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Do I have to hire surveyors, architects and other people before I pitch the project to a developer?
No. If you're going to go bring a developer into the deal, you don't need to bring on any independent third-party consultants before bringing the developer, assuming that you're looking to exit sooner rather than later in the development timeline.
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What stops a developer or a builder from going around you, directly to the seller to purchase the property?
You need to try to build relationships with people that you can trust. But also, don't be naive. Be strategic. Be careful as far as at what point you decide to expose someone to a deal. The easiest way to protect yourself is, if you don't have some strong, trustworthy relationships with some potential developers, then I think the best thing to do is to float out the area. Let's say before you get the deal executed with the property owner you want to get some feedback. Well, you can talk about a general area or a general lot size. You can be generic enough in your conversations with these developers to where there's no way they're going to identify the piece you're talking about. You don't have to get that specific.
If you're comfortable with the pricing and you’re comfortable with what the piece is worth, then just simply don't make those contacts until after you have the contract executed with the property owner. Once you have the contract executed, they can't go around you because it's your deal.
There's no one answer there, but it just depends on the inner workings of the deal and what you're trying to accomplish.
I will tell you in 20 years, I've never had someone go around me.
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Do you deal with commercial development land as well? Or just residential?
We specialize in residential. We touch on this in the course, but you'll find that developers tend to specialize in certain categories and they tend to “stay in their lanes”. They'll branch out every once in a while, but it's for that reason why you won't find a national home builder suddenly building a skyscraper in downtown Manhattan, and you won't find a big commercial developer, who builds those skyscrapers, setting up camp and building out a residential subdivision on the outskirts of a major metropolitan area. They tend to stay in their lane. And part of the reason for that is because when you become so specialized and you know what you're doing, it's easily repeatable.
It’s important to understand that, with what we'll teach you, you're going to become Land Acquisition Specialists in the residential world. Now, some of those concepts you'll be able to apply to other types of development, whether it be commercial or industrial, in terms of having an understanding of how the land use approval process works. There will be some overlap. But it will start to go in a different direction and have some pretty big differences when it comes down to things like valuing the land, how to determine what it's worth, how to determine its highest and best use. When you get into the commercial side of things, it's quite a bit different than the residential.
There is a lot of overlap, but there are differences as well based upon asset class. We specifically chose to do residential. Earlier I mentioned, I grew up in a little podunk town called Damascus, Oregon. I'm kind of a meat and potatoes guy. For me, residential just made a whole lot of sense just for the simple fact that it was one of the things people need. They need shelter. Not everyone has to have space in a strip mall. But everyone needs shelter. So just that basic 101 thought process from a simple guy like me in why we specifically chose residential to specialize in.
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How do you value land without comparables?
We have an entire portion of our course that is dedicated to determining value. Obviously, we can't get into it too deeply here because there is a lot of information but we do give you several different techniques we use to determine the value of land and land.
Valuing a home is typically much easier than valuing land because, to get comps on a home, anyone can open up Zillow and find out what recent homes around that same area have sold for, get some comparables and get a good feel for it.
Part of our training is teaching you how to do what we affectionately refer to as “magic math”. Teaching you how to take what a home is selling for and work that math backward all the way down until you get down to what the raw lot is worth. And then it just becomes a question of figuring out how many raw lots the piece of property is going to yield (which is also part of the training) and multiplying that number times the raw lot value.
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What is the best way to find developers and builders?
What’s surprising for a lot of people is that this is one of the easiest parts of what we do. In any given market, in any given jurisdiction, there is going to be a certain number of developers. They're pretty easy to find. They're not hiding. It's much different than, for example, the home wholesaling sector, where you’re looking for cash investors that can buy something that you've tied up. It's very different in our sector, and it's much easier. You can know all the developers in the world, you can have a great network of them, you can have all the comps, you can know exactly what property can sell for, but if you don't know what you're doing, you can't put a deal together and you won't be able to make the big returns. And that's what this all comes down to. You need to know how it all comes together.
Wholesaling houses has just been everywhere. I mean, everybody and their mom wants to teach how to wholesale houses. It's almost comical at this point.
But the thing is, when you go and you beat up a little miss Mary Jo and tie up her house for below market value so you can flip it to a real estate investor and make a wholesale fee, it's much different then when you're putting a deal together for a developer, as far as finding them. Because Joe Blow investor, he’s sometimes harder to find. They're not as visible as developers and legitimate development companies. Development companies are legit businesses that are working to be visible and findable. In any jurisdiction, there's numerous and easy ways to find them.
Now, don’t get me wrong, if you're trying to do a piece out in the middle of nowhere, where no one wants to live then yeah, you might have a little bit of a challenge finding a developer because they want nothing to do with the area that you put the deal together in.
But that’s not an issue, right? We're all smart enough to know if an area is growing and people are wanting to live there. We've always focused mainly on the suburbs where we’re seeing residential growth.
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What are the typical terms you use when structuring these deals?
Let’s talk about real estate agents for a second. And to all the realtors out there, I love you, and we love working with you. But here’s the thing: 99% of agents simply don’t know how development land deals get done. They don’t know how to price them. They don’t know how to structure them. And so they’ll try to use their standard forms and contracts. And I’ll tell you right now: those fill-in-blank template Purchase Agreements are not structured for land deals. The residential development industry beats to its own drum and these deals don't work at all with those standard contracts.
And it’s not the fault of the agent. The reality is there's just no education out there in this space. And that’s what’s so fun about what we’re doing here.
So yes, there are all kinds of contingencies that we put in our contracts.
In this program we've put together for you we talk about all the key points you need to have in your contract on these deals. We lay it out for you. All the things you need to make sure that you have in your contract. That right there is worth more than what we’re charging for this course. And that's just a blip on the radar of what's all in the course.
But comes from some wisdom. And I still have to educate guys on this today that are in my space:
If I'm going to pay for a diamond, I have got to make sure it's a diamond. And so in this case, if I'm going to pay you that type of money for the land, I got to make sure it's developable.
And I don't know if I can develop it until it gets approved by the jurisdiction. So if you, the property owner, want development value for the land, anybody in our space that is educated, they're not going to close at that price on that land until that project is approved for subdivision.
If you want me to close on your land quickly, you want me to close right away, so for example, a 30 or 60-day close, I'll do it. But I'm going to pay as-is value. I'm going to pay what it’s worth as-is today, as farmland or whatever.
It might be that I pay 10, 20, 30 grand an acre for a piece that, once it's developable, and I get it approved, there is a huge upside for me, as long as I'm getting it at farmland value.
So yes, we’ll have development contingencies like Preliminary Plat Approval, Construction Drawing Approval, etc, all of which we teach you in our course. And those are contingencies in our contract because we won't pay the type of money we offer on these development deals, unless those approvals are in place.
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One of your strategies, the double-close, feels a bit anticlimactic.
Yes, the double-close, or simultaneous cose, is used in all kinds of real estate strategies. What we are wanting to hit home with you guys is that it's the double close or the simultaneous close combined with our strategy in the land development space that makes the deals worth it.
Yes, a double-close might not be the sexiest most exciting thing in the world. It might be “anticlimactic”, but a $600,000 check is probably the opposite of anticlimactic.
Yes, it's been around forever. Surprisingly, there are so many people who still don't know what it is or how it works. But the big “Aha” moment is not so much the simultaneous close, but rather how we do it. We show you how to exit out of the deal, as far as my time and money. Who I'm selling it to at a simultaneous close, they'll put up all the time and money needed to take that from raw land to a developable subdivision.
It's all their time and money, but yet I stay in the driver's seat through a simultaneous close. I stay in the middle. On a deal with that exact strategy that I spoke about earlier, I made just under $1.8M. So I would say that is pretty much an Aha moment. Because I don't think you can name anybody else that has pulled that off.
I'm the only one that I know of that I came up with the idea and pulled it off. It was the first time I had ever heard of it. Simultaneous close has been around forever, but not in the development world, not the way we did it, where we exit early using our buyer's money and time to get the deal approved, to get it to closing. And then we go and make $1.8 million.
Yes, that is what I would call “climactic”.
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Why don’t you give the course away for free? And then I can share profits from my first deal as a partnership.
We're here because we want to provide value. We want to transform lives through real estate.
“Well then Cody, why don't you just give the course away for free?”
Here's why: Because I want you to make a commitment. I want you to show that you're in this. If I just give it to you for free, does it just go on your shelf like a book?
No. I need you to make some type of small commitment.
But I do want to deliver value and we do want to transform lives through real estate. But I'm not just going to give it to you. Just like I don't just give things to my kids.
With my kids, you know, when they do best? It’s when they had to invest something into it. They had to contribute.
I don't want to get too hyped up or passionate, but I don't know of a student yet that has gone through this course, and that hasn't come out the other side and said, “Man, that thing was an amazing value. I learned so much. It was a phenomenal course!”
My point is that we need you to step up to the plate and make some investment in yourself. Otherwise, we're just going to be another book on your shelf. And that’s not what we're trying to do here. I've got too many years into what we're teaching here just for it to be another book on your shelf.
And you know, we get questions like, “Hey, let me in for free and then I'll share the profits of my first deal with you.
We just don't do that. It's not our model. It's not how we got in this industry. It's not how many people start building successful things.
You've got to put a foot forward. There's got to be some barrier of entry. If we just give it all away for free, like I said, it's just another book on your shelf.
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Do you keep a list of developers updated to the different stages that you're in? How does that process work? Where do you find them?
We talked a little bit about where we find developers in a previous question. That's the easiest part. They're very easy to find. They're not hiding. In any given market you'll have 10 or 15 different developers. So they're easy to find.
In terms of keeping track of the different types of developers, we'll have certain projects and we will have a shortlist of the developers that we think might be interested in that particular project.
As you build your network out you get to know what different developers in your network are looking for, where they're looking, what types of projects are looking for, what size of projects they like. And that way, when you're putting these deals together, you know, “Okay, this is going to be something interesting for a big national developer”. Or, “ I know ‘John the local developer’ and he does these smaller projects. He's going to love this one”.
These are fair questions. And a thought that comes to mind is the fear of the unknown. We’ve all dealt with it. I’ve dealt with it my whole career.
How many times do you get on the other side of this”unknown” and you look back and you realize,”That was near as challenging as I thought.”
That thought comes to my mind as I consider this question. Because, once you get in, and you start doing deals, you’re going to quickly build relationships with the players in that market. And it’ll get to a point where, depending on which deal you’re putting together, you’re going to know who you’re taking that deal to.You’ll already know the 3 or 4 developers who are going to be interested in this particular deal. It becomes free flowing and natural because you’re in tune with what they want and what they’re looking for.
It won’t be overwhelming once you acclimate, once you get your feet wet.
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How long has Land Acquisition Academy been around?
This is a brand new launch. And we're looking for some founding members. We're looking for some people that will come in and grow in this new program. So take advantage of it.
I'm just excited to have this opportunity to present this. It is a new course. It's in a niche. It's in a space where there is no information out there that I know of. It's it's a blue ocean as far as us putting information and education out there. And it's a blue ocean for you, as far as if you decide to jump into this because it's so unique. It is sort of a “secret”. Because there's very few people that know how to do what we're teaching here.
And so the course is brand new, but we're not. We're not teaching anything we haven't been doing for almost 20 years now. And you know, David, you mentioned a word earlier that’s a very important word to me, and that is “trust”.
If you don't get a good gut feel about David or me, don't buy our course. Just don't buy it. We don't want you to buy it. Here's the reality: you don't see me shooting videos, pulling up in a Lamborghini, or walking off a private jet. We're just legit land developers that truly want to make a difference and take what we put our blood, sweat and tears into and put it out into the marketplace and give other people the opportunity to learn from what we have grown to learn over 20 years. And that has changed our lives forever.
For me, that's a legacy. In the last couple of years, I’ve spent so much time on personal development, and legacy, and impact, and meaning. And that's core to my heart.
Someone asked me the other day, “Cody, what's your biggest regret?”
Well, for one, I don't live my life in regrets. I don't try to look back and have regrets. But if I was to answer that question, the answer would be that I didn't start working on personal development earlier. On self-educating, becoming the best I can be. And that's probably my biggest regret is that I didn't start doing that earlier in my life. Because here's the reality: if you're not growing, you're shrinking. And I realized for several years of my life, I was not growing. I was actually shrinking.
But honestly, again, if you don't get a good first impression, don’t buy our course. We’re not one of these cheeseball marketers that you see everywhere.
Yes. For better, for worse! We're not tech savvy. We're not big marketers. We might not be as polished as some of these guys out there. But we're the real deal. And I think for some of you that resonates and hopefully you appreciate that.
So we'll get ready to sign. I have one last question I'd like to talk about. Someone said, Hey, is this having anything to do with the Land Academy with Jack and Jill? So I don't know these guys very well. I do know that they're out there and I will say that no, nothing to do with the Land Academy. We talked about this a little bit earlier on as well. There are a couple strategies out there and they are really centered around the idea of going after land and buying it. You, you, you literally purchase it, you buy it and you buy it at, at 30 cents on the dollar and then you turn around and sell it for 70 cents on the dollar.