Joe:  Welcome. Joe McCall here. Real Estate Investing Mastery Podcast. Today we're going to be talking about land investing. My favorite subject right now. And we're going to be talking about how to not just make a lot of money, make more profit, which is awesome, but you can't forget the risk part, right? So how can you make a lot of money without taking on a lot of risk? How about more profit? Less risk? That sounds pretty good. So we're going to be talking about how to improve your numbers and how to lower your risk so you can make more profit with a lot less risk. And we're going to be doing that today with a friend of mine, Brad DeGraw, from a company called All Terrain Capital, and he has a great guide to get to know because he's looking to do more land deals and the inside of our community. He's been gracious enough to give us to offer his services where him and his team are always looking for deals to lend money on. And so if you go to his website, you can get free comps on your deals, pre analysis on your deals. And it's just a good guy to know because if you have a good deal and if you need the money for your deal either to buy and hold it or hopefully to flip it, you know, that's what he does. But you just need some short term capital for your deals. It's not the cost of capital that's important. It's the speed and the availability of capital that's important in your real estate investing business, especially for land. And so Brad's going to tell you like, this is what as an investor, as somebody who lends a lot of money in deals, who's seen a lot of deals, and he's probably seen a lot of deals go bad, this is what investors are looking for. And if you want to borrow money from somebody like Brad for your deals, this is what they're looking for. These are the deals to stay away from. Should we just bring them on? All right. Finally, enough. Brad, how are you doing?

Brad:  Great. So always great to be with you, Joe.

Joe:  Awesome. You know, we've talked about this. You've seen a lot of bad deals in the past. Well, first of all, let's rewind a little bit even more. Tell us about your experience. How did you get started in land investing?

Brad:  Yeah, for us, our story is somewhat unique. I read a $10 e-book that put out the idea that you could buy property for $50 a piece and make a ton of money, said, This can't be true. I'm going to disprove it by doing it. So I tested the theory with real money. I started writing $50 checks and they started getting cashed. You know, my wife looks at our accounts and what are these $50 checks? I don't know. And I put the parcel number on the memo. So like, I guess we just bought some land, so we had to go and look up the properties. But I bought two dozen lots in a lake community for $50 a piece.

Joe:  Were these tax deeds?

Brad:  Yes, they were. Post auction tax sale. So every property owes taxes. If you don't pay it, sooner or later, local government does an option. And if they don't get sold in auction, then you can kind of write your own bid. And that's the case. And then I picked up properties.

Joe:  So you're buying these because everybody's wondering now where are the properties with $50? Were these deals for you?

Brad:  Yeah, Let's take that side journey here, little side quest. So there's a website. This was all in Arkansas, Arkansas. It kind of makes it unique in that the whole state is on one website, other places, every county has their own way of doing it. For whatever reason. In Arkansas, it's COSL or cosl. And you could just go to that website and it's Tommy Land, ironically, is the state commissioner of Lands. And you just scroll through there on the website and you'll find the ones that are highlighted. Those are the ones that are available and you can just write your own bid. And at the time, $50 was kind of the minimum offer they would accept. And we had to do paper checks and print out a form folded up and set it in the mail. Now everything's online.

Joe:  How long ago was this?

Brad:  Maybe 4 or 5 years ago. So technology's kind of made it easier because now there's a link. Every listing on there spreadsheet links all the way to like a Google Street view, and so you can actually find it on the map. You're not just guessing where is this property? And now the minimum may not be 50, it may be $100, you know, because they kind of got flooded with offers. So I think their minimum is a little higher. So you might start not at $50, but like a $100 minimal offer. Sure enough, I bought these properties and every single one of them had a neighbor with a structure. Somy idea worst case scenario, if I bought it for 50, I could sell it to the neighbor for $100 and at least get out of it clean. And sure enough, I marketed them on eBay ironically, like $1 starting bid with a $499 fee. So I knew I'd get $500 worst case and get my money out of it or Facebook marketplace as another place. So this works for cheaper properties. I don't know if you're going to sell 50,000 or $100,000 property on eBay for a $500 property that works.

Joe:  Now, when you buy, do you get it free and clear, free of all encumbrances and yeah, all that.

Brad:  So at the time I sent in the check with the printed form and they give you no correspondence, just all of a sudden your check clears and a few weeks later you get a deal. Now things are online, so the communication moves a little faster. But yes, it's free and clear. With the exception of government links, governments have what they call a super lean position. And so when people think of government, they may think federal. Or state or city, while in Arkansas, HOA's are a quasi government entity, so it doesn't actually eliminate all the HOA fines. So you may have gotten a $50 property, but you need to triple check and make sure it's not in an HOA or if it is called the HOA, explain what you're trying to do and find out what does it take to get them happy because they may be able to wipe it out for nothing or a few grand or something that astronomical. You need to call and find out.

Joe:  So you need to find out before you buy it.

Brad:  The smart people do. Yeah, yeah, yeah. Okay. You'll make money.

Joe:  Okay. And what would you sell these for? Like, what kind of profit would you get? On average.

Brad:  Between 500 and 2000. I sold them all. Just quick nickels. You mentioned it in the intro is quick. Nickels are better than slow dimes. If you don't mind, we'll take one more tangent. I had one. It was half an acre with half of a mobile home. Now that means a couple of things, right? Add a street address, which means probably had utilities. Right? Water, septic. This is good news for someone because that's that infrastructure. But when I see affable mobile home, you might think left half or right. Half, no, like half the roof was gone. The walls windows before it was abandoned for quite some time. But still for the right person that's worth some. So I marketed it, couldn't find any cash buyers, so I sold it with $100 down and $100 a month. Because terms buyers are less picky. They're just excited to have an opportunity. I sold it three times on payments. You know, a few months later, everyone would have a sad story and to me it wasn't going to change my life. So if someone's life derailed, I just gave them all their money back and said, Just tell me that you are happy with me. Do it. Face on Cam video. Say that I treated you fairly and that you're happy with the outcome. And I gave them all their money back. And my wife always listened to the wife. My wife said enough with the terms. Just sell it for whatever you can get cash. So I sold it for $1,000 cash. And this was a weird county. This county had two courthouses. And so I called them to make sure, like you got your deed, you're happy. They said, Yeah, we're happy. But something really weird, I don't know. I'm going to have to do another refund. And then they said, You sold us the wrong property. What? And this is interesting because the county actually had a picture of the mobile home on it. So it's weird that this would be the wrong property. They said, Yeah, they're on with the guys. The county had the wrong data, so Google had it wrong. All of the info services had it wrong. We're actually one property over and we like this one better. We don't have to move the mobile home. We don't have to. But there's a kind of a drop off. We don't put a hand railing to keep the kids safe. Where how often can you sell the wrong property? Four times. And everyone's happy. Let's Land is just kind of unique in that way.

Joe:  It's interesting. And they say there's a pig for every barn. So even these cheap, small dinky properties, you could still sell them.

Brad:  Yes. Yeah.

Joe:  And so if you could make if you can make $500 on a deal and do four of those a month, that's a mortgage payment.

Brad:  Yeah. And we were selling a few a week and just simple, you know, we didn't want to flood the market with list 1 or 2 like one on eBay, one on Facebook marketplace. And one said Sell would do another pair. And then and it just worked. Now I just I really wanted action. Well, here's what I realized is starting over every single time and dealing with the retail public, every single transaction is harder to scale. So yes, it's nice. It gives you some play money. But for me, I wanted to scale and so I realized I had to underwrite every business. You have to find a way to mitigate your risk. So if I'm going to get great at underwriting, why don't I just fund deals? I'll make a smaller slice of pie, but now I can scale it. And those relationships I build with land flippers, those can scale because we're not doing onesytwosy. We're going to do several repeat opportunities to both grow each other's business.

Joe:  I love what you're doing to too. Yeah, I love what you're doing too now because you're the you're not the investor necessarily. You're the bank, right. And who has all the nice buildings in every town, Right? It's the banks. And so you've taken another tact at this because you see. All right. Well, there's a lot of people that are doing land. What do they all need? Money, Right. And so I'm not sure if it's your own money that you're investing out, but I'm assuming it's probably some of yours and some of some other investors that you've pulled together, right?

Brad:  Yep. Yep. Exactly. That you can never have too many sources of capital. So my money, my wife's money, my dad's, each one stays separate. We never mix money. It's, you know, one pile of money per deal. And then, of course, the same way people are arbitraging the land, we're arbitration cap, so we'll find someone that we can give a wholesale rate to. And then we rate the money out at a more premium rate.

Joe:  I love it. I love it. Okay. So we'll talk more about that, how you find those little deals later, because I think that's a great little strategy for somebody who's just looking to maybe if you could just do something to start paying off your student loans. Right. Do 1 or 2 of these deals a month to make your student loan payments. What a difference that could make in somebody's life. I've never done the smaller kinds of deals. I've heard of people doing it. Now, let me back to it because I got one more question on that. You can sell them quickly. I know under financing. The problem is you the default rates are pretty high because they're not super desirable. Lots, Right. But that is one way you could get cash flow from them. Right. Well, and better to get a. Hundred bucks a month for 24 months or just to get, you know, a thousand bucks upfront.

Brad:  There's no bad deal. Whatever the market offers is probably the right deal for you. But what we realized is kind of zooming out, we always look back and say, what can we have learned? What can we do better? We grade things. A's are the best of the best. These are better than average Caesar average. These are below average. That property was in D condition, like there was animals living in the house. It wasn't going to attract an A-class buyer with A-class capital reserves and A-class credit. That property was in D condition. So the best we could hope for is a D, maybe a C minus type of buyer if we put a little money into cleaning it up. Now you can level up and maybe get a B buyer. So just kind of consider that is the neighborhood and the property type graded A to B, and that's probably going to match your buyer profile too.

Joe:  But you can still make money with the D buyers.

Brad:  It works. Yeah. Just be comfortable with it. Hey, guys, you're late. Here's some options. Pay and stay, or we'll work out a new arrangement. If you need a miss a month and we can adjust the schedule or, you know, worst case scenario, if you guys need to move on, I need you to deed it back to me. Depending on how you did your paperwork, we need to go ahead and undo the transaction. I'll take the property and you move on with life. So you just have to be careful with not every one of those acorns is going to grow up to be a mighty oak tree. Most of them, it's just going to turn into squirrel.

Joe:  Food or, you know, buy the deal for 100 bucks. Sell it for a thousand bucks.

Brad:  Right. Both work like today. Money's great. Tomorrow. Money's great.

Joe:  I love that. Okay, so you've been in the business a long time. No. And you've seen now you know, you're in the business of lending money on deals, which I really like. One of the cool things about your website, All Terrain Capital.com or dot net dot net, yes, All Terrain Capital.net.

Brad:  Yep, you got it.

Joe:  All Terrain Capital dot net. Just google it and you'll find it. One of the cool things you guys do there is you comp deals for folks. You also just spell out, hey, if you need money for your deals, this is how much it costs. So you've left a lot of money on deals. I'd encourage you all to go check that out on Brad's website right now. But let's talk about risk, because we want to avoid problem properties. We want to avoid properties that are going to come back and bite us in the butt. What do you see? Some of the big mistakes that investors are making right now in land?

Brad:  There's a few, one is overpaying. That's the first thing. If you've overcommitted financially to the property, your margins aren't going to be there because you can't sell it for a healthy margin and because that you don't have the wiggle room to maybe even take payments because you overpaid or you don't have enough room to take a discount or you don't have enough room to improve the property or invest in the proper marketing. So be careful. First off is know your values and don't overpay. The second one is when you're underwriting the property. Even if you say your underwriting is terrible, I'm just going to offer a cheap price based on county values. You still need to call the county and ask three questions. You can. Here's the script that we use. Hey, maybe you can get me going in the right direction. I think I need to talk to like planning and zoning, something like that. And they'll push you over to whichever department is equivalent that you have. Three questions. I have an APN. I need to know. What can I do with this property? What can I not do with the property? And is there anything else I should know about the property? That last one is a six figure question. If you end up with a landfill or a bog or it's landlocked or any number of oddball things, that one question they tell you, here's your problem. Here's why that's a no go. You don't do the deal.

Joe:  Can you repeat that question one more time in case somebody missed?

Brad:  Yes. The money question is, is there anything else I should know about this property? And assuming you have the right person on the phone, they had their coffee. They're going to tell you, well, you know, it's landlocked or, you know, it's in a bog or that's a drainage ditch. Now you're talking about a greenbelt, something that's just useless. Great. Thank you so much. I will I will take that into account and move forward or move the direction I need.

Joe:  This is just so simple to people. Don't do this for some reason. When you get a deal under contract, that's when you do diligence starts. For me, at least the way I do it, right? Sometimes even before, after I make the offer, then I'm going to do a deeper dive due diligence on the deal. Right? And that's what you've got to call the county. Just talk to them. Ask them, Look, can I talk to you about this vacant lot? Right? The people in the county want to help you. They want to help you. You know, maybe you can, cause I'm trying to see if there's any back taxes are owed so I can get this property cut up. Yeah. We'd love to help you with that. Right. So then they can you can kind of go in that direction. Well, who do I talk to about, you know, is the property usable and is it going to be sellable and whatever? Right. They're wanting to help you. It's really good.

Brad:  And just be folksy. Right? You're probably going to mispronounce something, the name of the county, you know, just say I'm not local. And that's why I'm calling to try to get on the same page. And it's okay, just be nice, be folksy. And it's not uncommon for the person you're trying to get to. They're either not working that day, they're in a meeting. That's fine. Leave your name and number and then call them again until you get your answers. Don't just. Assume like that, it's probably okay. It is until it's not.

Joe:  You got to call them the three or 4 or 5 times, right? Okay, cool. So overpaying a property is one big problem. All right. The other one could be not doing your due diligence enough, right? Not. Not. And there's some tie to overpaying because there may be something wrong with the property. Doesn't mean you shouldn't buy it. Maybe you just need to buy it for a lot less. Right. Because you can still we still sell properties that are landlocked. We still sell properties that are on floodplains or wetlands. Right. We're just selling them to the right buyer for a much cheaper price than maybe the neighbor and maybe somebody that wants to buy that land for recreational use and ride their four wheelers in the mud. So, you know, just throw a camper out there. There's no restrictions. And so there's no choice. That's all. They just want some land where they can get off the grid. So anyway, what are some other errors and mistakes that you see investors make?

Brad:  One more big is title insurance. I'm a big fan of if there's insurance for it. Run the numbers. You know, if it's cost prohibitive, take that into consideration. But we put title insurance on every deal. It matters. And it's just like that. Well, you might not have to call the county because it's usually okay. But what about that one time? It's not it happens. It doesn't happen often, but it happens sometimes where something's slipped through the cracks and someone has a tax lien on your property wasn't caught before closing. And then later someone comes out when you're trying to sell it. It's a new story. You have title insurance. It's not your problem.

Joe:  Even for those small little $50 hundred dollar deals, would you get type of insurance there?

Brad:  That one wouldn't make sense, right? Because my whole 24 unit portfolio was $1,200, which is probably the cost of title insurance on one. So that one I was okay with taking the risk. Really, I was just trying to disprove a claim and turned out people that made the claim were right. So yeah, we love title insurance. That's a biggie. One more is, especially depending on how you're acquiring your properties, you know, if you're doing direct mail, that's probably pretty good information. You got it. The county information said this is the buyer and here's the owner and here's their contact information. But if you're taking like Internet leads, anyone could be anyone on the Internet or wholesale. Anyone can be anyone. So whatever information you have, check it thoroughly. Every email, phone number, address, Google it once or twice a year, or catch someone who's trying to do a scam. And that's not very sophisticated.

Joe:  I forgot all about that because we were buying PPC leads at one time for land and we were only a month into it and we started getting these great deals and I was like, Wow, this is amazing. And after we dug into it, we're like, Whoa, wait a second. That guy who owns this lot is not the guy we talked to and that. So then we skip traced and found the guy who actually owned the lot. And we asked him, Do you know Jim Smith or whoever? And they're like, Who? No idea who that is. Do you own this land? Yeah. And all of a sudden we're like, my gosh, we almost bought property. That's from somebody who didn't own it. Yeah, you got to be careful with that.

Brad:  Well, here's a few ways you can mitigate that one. Research it and do it. Title companies do is they send a postcard to the address and they say, Hey, we have a contract on your property. Just confirming it's really you that's really trying to sell this. And if they say, no, I'm traveling in Europe or I'm on a mission to Africa and I can't do it. Okay, well, how about your ID? And the reality is ABS can be fake, but check their ID and make sure. Okay, that looks right front back. Check the phone number. There's a phone number matched like this. Correct. You know, area code. And then if something still feels off and then physically go into a title company and this way there's a notary, someone who actually looks at IDs all day, every day. And those are some things that can help mitigate risk.

Joe:  That's how I remember now. That's how we found out about this is the guy went to a notary where he went to the title company or something because he had to get we made him go to the title company to get his check because I think that's what it was. And they required an ID and he didn't have it. And so that all of a suddenraised up a bunch of red flags and we were able to catch it. This is a long time ago. I don't remember all the details, but like, who would have thought, write crazy things like that.

Brad:  Or maybe they don't have a US bank accounts at least a minute. What? Tell me more of how you think this story makes sense because it's not making sense.

Joe:  Yeah. Okay. All right. Good, good. All right. So you have some criteria on your website All Terrain Capital on what makes a good deal for you guys. If you're going to lend money on a deal, there's certain criteria. Do you mind just walking through that criteria and we can. Yeah, absolutely. The website, if you want or you probably know it off the top of your head.

Brad:  Yeah, it's here because this is what we do all day, every day. So we, we want everyone to be successful because our success is tied to our client's success. It's literally all of our dollars are put into the deal, and usually our clients are in it for next to nothing. So we are betting on the success of our clients. So here's your highest probability of success. First, there's three property types that do very well that sell quickly. One is infill lots. Those are great because they're easier to call and it's already a proven model, right? There's people who live there and want to live there. Next up is recreational property. Joe, you mentioned it. It's just someone who wants to go out there with their yeti cooler. And play with their toys. And it's just kind of they're bragging to their buddies that, you know, I got this cool thing and the last one is anything on or near water. People love to live, have property on or near water. Sometimes they're going to do something there and sometimes they're just going to goof off there. But on or near water is always desirable. So those are the first property types we tend to stay away from like desert squares or anything too exotic. Also, be careful with wetlands. You know, if it's on or near water. Yeah, probably some of the property is going to be, you know, in a flood zone, but some of it has to be usable for the buyer to buy it. So it's okay if some of it ends up in a flood zone, but try not to get something that's completely submerged. Next up, be careful with a choice. We kind of mentioned it is each place are going to be in one of two camps and you have to call them to find out either they think you're the devil and everything wrong with the world or they don't care about you as long as their dues get paid. So you call them up and explain, Hey, this is our business model. How do you feel about that? I say one of two things. Hey, if we get our dues, you're good to go or you're terrible. And we don't like outsiders trying to flip our way. Okay, great. Thanks. Yeah. Don't do those deals. And you need to have a lot of times. Here's another pro tip for you, HOA. So are usually be like one realtor that lives in the neighborhood and by default, the listings tend to go to them because they'll get the people in and out. Other than that, it's a little bit restrictive of who can come and go and see the property. So find out who's the realtor that lives there. They're going to be the ones you're going to be best able to sell your property for you. Yeah. Be careful. Things like cemeteries. It's not it's not a huge problem. But let's say you have a 12 acre property and two acres as a cemetery. Don't count that as 12 acres, complete as ten acres, because ten acres is really what people are on after. And then the two acres, that's the cemetery. That's the zero value. Same with property that's underwater. It's two acres. One acre is submerged or there's a creek crossing. Just discount that land that's unusable. It's still a good deal potentially, but, you know, focus on that.

Joe:  Yeah, same thing, too. Would you say if, like if half of the property is on a real extreme slope, maybe don't consider it as the full size, right?

Brad:  Yep. Or maybe a road bifurcates the property, take the bigger usable side and carpet with that and just assume the other side has zero value. This way when you're selling it, that's kind of your pitch. It's like, Hey man, I'm selling you this for market price and then you get this whole other side of the property for free. And this way you have opportunity to make money and turn the deals faster.

Joe:  That's good. Okay. Anything else like loan to value or something like that?

Brad:  Yeah. Let's get into the nitty gritty. So loan to value 50% is kind of the sweet spot. You know, there's people that's willing to go higher that the problem is if you overleverage, then that will eat away your margin. So it's in everyone's best interest. Don't leverage more than 50%. Go and negotiate deeper discounts with the seller or even better, use the seller for financing. Don't use my money like it's not the cheapest the seller might be able to give you an option for six months a year, right? You're paying nothing for that. Where there's all kinds of deals, if the sellers agreeable and you're great at having those difficult conversations, you may never need to use a lender in your tire career.

Joe:  So that's really good. I'm glad you said that too, because I forgot I was going to say anyway. They'll come back.

Brad:  There's different ways to creatively finance, whether it's, you know, an option or maybe you played a distant date on your closing date.

Joe:  I remember this is important because some of you that are all doing a bunch of houses and you're thinking you've done it. You're coming from the housing world and you're thinking maximum 50% loan to value. I'm out of here. There's no way. No, no, don't check out. Land is completely different. It's more common than you realize. It's easier than you think to get deals at $0.50 on the dollar. It really legitimately is with land because there's not as much competition for it. And because land is just not worth as much as a house is. Right? You can get deals at these discounts. So sometimes students that I see that I work with make the mistake of thinking, I got a deal at $0.70 on the dollar. That's a good deal for a house. It might have been or for land it's not. So you've got to believe in your head that there are deals out there at $0.50 on the dollar. Sometimes I'll go up to 60%, 60% to loan to value. If it's like a $200,000 property or something, a higher priced property. Right. Would you agree with that, Brad? Yeah.

Brad:  And let's talk about some of those. You know, for every rule, there's an exception. So, for example, if you have it at $0.70 on the dollar, great. Now that makes sense. If they're giving you some wiggle room on time. Now you can go find a buyer and do a double close. Now, you again, you may be able to use that in buyer's money to finance the purchase, depending on where you're at in the title company or just use transactional funding, which is far less time and less cost. There are ways to do it. And if you're mitigating your risk, for example, if you have an end buyer, great. Maybe you have a relationship with builders and you already know, hey, this is a. Good to soul. I just have to, you know, get a plat for it or something like that. A quick survey. There are ways to make it work on lower margins, but you have to lower your risk and that mostly comes from having your end buyer lined up.

Joe:  Yeah. Excellent. Very good. Okay, So let's talk about the cost of this money. Right. So you're not the cheapest, but you're probably one of the easiest guys to get money from if it's a good deal. Talk about that.

Brad:  Yeah, we're very low friction. And like I said, let's go through the cheaper money realquick. So use your own money. If you have money in your operating account, that's a good place to put it, right? Pay yourself the interest. Next up, friends and family. You're somebody's favorite something. Lines of credit home equity. You might be able to use investment or tax advantage account. I'm not the expert consultant expert. And then you'd have someone like myself That's hard money. So our rates, like Joe said, it's not as cheap as traditional financing, but with low friction we can get you approved and funded quick and easy. So it's the equivalent of ten points for one month and five points each month after that. And so right on our home screen, we have a calculator. You can put in the amount start date, end date, and it gives you your payoff amount. So this way you can run different scenarios. The reason why we created the calculator, people would have multiple offers with different dates and different amounts. It's hard myself spending a lot of time counting the nickels and dime, helping our clients figure out which was the best net offer to take. So we just put a calculator. So all the transparency is there. Yeah. If you want to run a specific example, we can walk through that yet.

Joe:  You want to do that? Let's do that right now. We are here in your website All Terrain Capital. I just want to say before we jump into the cost of the money, which is right here, cost of capital, you have right here a good table. And we were just talking about this. Let's review it again. What qualifies for a good deal? What doesn't qualify for a good deal? Number one, when you're looking at a deal, it's got to be under contract, right? If it's not under contract, it's not waste your time. And not just brand, but like any investor that you're bringing a deal to, there's a couple of things I want you guys to do before you bring a deal to somebody. Number one, get it under contract. Number two, get some realtors price opinions on these deals. Maybe one, maybe two. A lot of private investors that do a lot of land deals and funding companies, you're going to need to bring 1 or 2 different opinions from different realtors. Doesn't have to be fancy or written on a like an appraisal or anything like that, but just something that says, you know what, we think we could sell this in 3 to 6 months for between this and this. And if you want to get aggressive, we think we can sell it for this in like 1 or 2 months. Right? So get some opinions from people that have actually got to look at it. Not in a flood zone, maybe in a flood zone for disqualify. No wetlands may have wetlands, preferably not in an HOA. But again, it depends. And if it's 25% flood zone or wetlands that may be okay to is are okay, too. It's got to have legal access, pretty much physical access or legal access. That's a deal killer, isn't it, Brad? Pretty much, yeah.

Brad:  Because your buyers are going to want access and deeded access because just because the previous owner had a handshake deal or an understanding with the sister in law, that does not transfer, you're not going be able to sell that to your end buyer. Yeah.

Joe:  All right. Your goal is to get it less than 50% loan to value, which, believe me, guys, that may sound for some of you like, my gosh, that's impossible. Like, no way. That's maybe one out of a thousand. No. Right. Like, you get a lot of deals sent your way. Right? About 1% of the deals that people send to you are under 50% loan to value.

Brad:  I'd say you have different skill sets. The people who will have those difficult conversations with the buyers and multiple times those we've seen in the 30s 30 35 Yeah, 40%. And a lot of times those have a history. You know, there was something there are multiple owners perhaps, or partial ownership interest sometimes to get the best deal. It takes a little more investment of your time having those uncomfortable conversations. But they're there. You just have to do it.

Joe:  Don't bring a deal that you have to close in seven days or less, right? Because when somebody is bringing me that deal to partner with them, I'm immediately thinking red flag, red flag, red flag, like, what's going on? Why haven't you been able to sell this deal yet? Why haven't you been able to find another investor? And now all of a sudden you're freaking out? Not my problem. And I'm also thinking like, I'm not going to let your problem become my problem. I've got enough. Enough to worry about enough going on to life. Like, I don't need your stress. Does that say the same thing to you sometimes Brad?

Brad:  Well it tells me there's a story here and I'm a sucker for hearing the story. And we do end up in these drop everything and get your deal done. But I want to hear the story. Like, what was your plan A What happened there? Who fell apart? Who died? What was the story? And if I have to drop everything and do it, I will. But I need to know everything there is to know. Don't hold out on me if there's a problem, we need to address it together because I can't work diligently on something that's undefined.

Joe:  Yeah. Experience level. You do prefer some experience level. Now you say here you've got to do at least 12 deals like this in the last six months. So if they've done ten deals in the last six, six months or if they haven't done any deals, you say no. Or what do you what's your rule with that?

Brad:  Well, every rule seems to have an. Exception. So the exception this is you need to at least know where to get help. So if you're part of the community, this is the biggest way around that. If you're part of an active community or you have a coach, great. That's the exception there because now you're using the coaches experience. Now you're using the resources of community because if you get the property and you find out, no, someone dumped a bunch of tires or Hey, we have a squatter or a gate with no key. Great. Your coach or your community will help you work through this.

Joe:  Yeah. Good. Minimum loan amount. Five. $5,000, right?

Brad:  Yep. Part of the reason why we go that low. And to me, that's pretty low, is just we have funded nine, five, $6,000 deals. But if it gets too much lower than that and the juice isn't worth the squeeze, that's probably something you can almost put on a credit card and take it out of the piggy bank.

Joe:  Yeah. Now, again, you're just a lender. You don't require you don't take title of the property. Right? You don't have a joint venture agreement. You're just like mortgage bank to the dealer.

Brad:  All we do is we do a first lien position and that says to the title company, when you sell it like there's a lender, we should maybe make sure they get their bite of the apple. And that's how we're protectedall of our clients. It's their property, their deal. They hire the realtor, fire the realtor, raise the price, lower the price, do whatever marketing you want. You're in charge.

Joe:  All right, good. Now let's figure out the cost. This is a cost calculator. Let's say you need. How much? What's a typical deal, Brad, that somebody needs for a deal?

Brad:  Let's do a small a 10,000 for easy math.

Joe:  $10,000. And you need the loan today. And you expect to sell the deal within three months. Is that good? You want to make it smaller? No, that works. All right. So three months. All right. November, December, January. Yeah. So the cost of the capital. No, no, that's not right. If you need ten grand, the total payoff amount will be $12,033.16 this year.

Brad:  So the big number kind of flashing at the top, we try to make it super simple. So that wasn't too much distraction, but also so there's enough to decode it. So you borrowed ten and now when it pays off in three months, that will be 12,000. And then we broke it out. So you can kind of mentally see the scenarios. If it's 30 days, maybe things work faster than normal. Your cost of capital would only be $1,000. If it's two months, it's 1500. If it's three months, 2000, because not every day, every month has 30 days. It kind of will even calculate a per diem rate for you. So if it go two days past three months, it's a $33 in addition to that month, one, two and three.

Joe:  Yeah. So bottom line, if you need $10,000, you're going to pay about $2,000 in interest to Brad to borrow the money. Now, remember, I said at the beginning, it's not the cost of capital that matters. It's the availability. It's the speed of capital that matters. Right. So when you're making your offer to the deal for this deal, you know it's worth 20. You're going to probably buy it for ten, and then you'll have to pay the private investor to grant that. So that leaves you eight grand. So is it a good deal to profit $8,000 if you have to pay $2,000 to make $8,000, it's not a big deal. What do you do with closing costs? Can somebody borrow closing costs as long as they're under 50%? How do you handle that?

Brad:  Yeah, If they have a great loan to value, then sure, as long as we can keep it in that 50% or better. Sure. Like, like we said, if you're getting it for $0.35 on the dollar, sure. Let us take care of the closing cost because again, it's padded in there. We've even put some money into well, you already know you need to cut down some trees or clean up a driveway or something, but you have it for such a great discount. Great. No problem. We'll put that in there. So it's just about making the numbers work. Then we can be a little bit flexible. Or if you have some sort of mitigated risk, already have a buyer lined up and it's a 90 day hold time because one reason or another, sure, we can be a little flexible.

Joe:  Yeah. Let's put this into perspective, too. If you were to do it with a typical funding company, they're going to want 30 to 50% of your profits, right? This is a lot smaller when you compare it that way. This is maybe 20% of your profits instead of 30, 40, 50%.

Brad:  Yeah. And there's a whole spectrum of opportunities and funding sources. Sokind of our niche where we fit in perfectly is 50,000 and under 1 to 6 months. Like that's kind of the sweet spot for us. If you have a deal that's going to take 18 months, that would be one where you do a JV, you know, you do like an equityfunding and they'll take roughly half ish and then you'll get roughly half that ish. And there's probably some other moving parts and pieces. But, you know, at that point, you're never going to go negative. Right. But if the meter is turning and turning and turning and turning for years at a time, then you could actually end up negative because that cost just keeps going. So just evaluate it between the opportunities that exist and your anticipated end date. You can figure out who's going to be the best match for funding.

Joe:  I love it. Cool. Anything else you want to say, Brad, in terms of like how to reduce your risk, how to make sure you're making as much profit as possible on a deal, you know, be accurate.

Brad:  I mean, think about it like when you're notarizing your paperwork. Getting it right is the fastest way to get it done. So don't rush when it comes to negotiating. Take your time when it comes to underwriting, take your time, because getting it right is the best way to get through it. Rushing your offers and rushing your underwriting sooner or later, if you can mess it up and then you're back to square one. So that's it. If we can help you on underwriting, it usually takes us a day or two. Happy to do it. Costs you guys nothing.

Joe:  Yeah. We don't even show this to either. Hold on, Brad. I forgot about this. I want to talk about this. You guys offer by, again altering capital dot net. You guys offer comping service, which is pretty cool. Talk about this. What you do?

Brad:  Yeah. This is something we figured out that our whole market needs is costs. So we only need a little bit of information. The APN, the county, the state, your name and an email to send you the report. We can usually turn that around in a day or two. And in that you have pictures, the property maps, topography, the phone numbers and relevant information to do that next level of due diligence as well as ops, you know, the nearby properties that are similar. We give a wide range of comps and we average amount will calculate a sell through rate like how many have sold in the last year versus how many are currently on the market. It's just a nice packet of information to have so that when it's time for you to get to your final price, maybe you need to renegotiate. Now you have some information to do that.

Joe:  Nice. Love it. Cool. All right. So All Terrain Capital dot net. Thank you, Brad. I appreciate you doing what you have to my community and delivering a lot of value and making good resource available to folks. This is awesome. I appreciate you. Any advice? One more question. Any advice to beginners? People just getting started. They're interested in land. What would you tell them?

Brad:  Whatever you think you need. It's probably relationships. Like if you think you need money, you need to know more capital providers. If you think you need experience, you probably need to join a community. Whatever you need and you feel like you're short on, the answer is not you get it yourself. The answer is build relationships with those who already have it.

Joe:  That's excellent. That's really good. I was just talking about the same thing this morning on a coaching call. Nice. All right. Yeah, I mean, it's true. Like, I look back on all the deals. I've done hundreds of deals and I don't know if I've ever done one deal all by myself. I've always partnered with people, Right? Partner with other investors. With buyers with. Sometimes they even partner with sellers. Partner with other wholesalers. Other people in the business. Somebody who has more boots on the ground, realtors, you know. So it's important that relationships are very, very critical.

Brad:  Yeah. That's it. That's it. Just build a team. Just figure out that this is a collaborative sport. If you want to last a long time. You can do a lot of business with a lot of people over a lot of years. So just get comfortable with that.

Joe:  Yeah. All right. Brad DeGraw, thank you so much. Again, All Terrain Capital dot net. Go check it out, guys. Appreciate you. Thank you, Brad. We'll see you guys later. Bye bye, everybody.

Brad:  Later, Joe.