Joe:  Hey everybody, welcome to REI in your car podcast.

Joe:  On this little episode here, I'm gonna be talking about kind of the big picture what I'm seeing that's going on in the land investing market, you know, wholesaling maybe in general, but specifically land investing. I'm gonna be talking about why most people have failed in this business and why few people succeed. So if you're interested, hang on. It's gonna be fun. You know, we've seen one of the hardest markets in the last 10, 12 years. I would say, you know, in 2012, things really kind of bottomed out, started picking back up again in the housing market, in my opinion. 2012, you started seeing a lot of money coming back into the market, a lot of people buying properties. It became really easy to wholesale deals. And you know, there's a lot of different real estate strategies. There's buy and hold, there's fix and flip, there's wholesaling, there's lease options and subject to and owner financing and notes and commercial, residential, single family, all of this stuff, right? There's a lot of different ways to make money in real estate. My favorite has been for the last 15 years wholesaling, simple, plain up, plain, straight up, boring wholesaling. Awesome thing about wholesaling is you can make quick nickels instead of slow dimes. And there are a lot of advantages for quick nickels because you know, you just you can make money fast. And I used to look down on wholesaling when I first got started in real estate because I thought it was for beginners, I thought it was late night infomercial scam, you don't get rich quick thing. You know, really think about it.

There's one or two most important skills in real estate is number one, finding deals. You know, you need to learn how to find deals. Number two, you need to know how to raise private money, a capital. But anyway, so I digress. I was seeing this though. The market has gotten really hard in the last year, six to twelve months. It's gotten really hard for wholesalers for people that used to have a whole an easy time wholesaling deals. Now it's getting a little harder. But stay with me because it's not gotten harder for everybody. It's gotten harder for some people, right? I was listening to a good podcast the other day from a friend of mine, Seth Williams, the RE Tipster podcast, and he was interviewing a CPA slash accountant slash bookkeeper that he does a lot of business for land investors. And he said 40% of his land investing clients have quit in the last 12 months, which is crazy. 40% have quit. And I've seen that across the board and land and with houses. A lot of people that were having success in wholesaling deals, maybe not full time success, but or doing some deals occasionally have quit. They're doing something else. And if you've heard of this software, it's called Batch Leads, batch dialer, batch leads. It's a software that was really big a few years ago getting people's lists and outbound dialing and texting and cold calling and all of that. They did a study back in 2021. There were about 90,000 active wholesalers. And this is when you know YouTube university really took off, and there were a lot of people that were doing and teaching wholesaling on YouTube andand whatever, right? So a lot of people came in and flooded the market because there was a lot of opportunity, a lot of wholesalers out there. And today it's up down to about 10 or 12,000. I've heard this on different episodes, different people talking about it, but it's gone from 90,000 people that were kind of actively wholesaling to down to 10 or 12,000. So that's I don't know what that is. 90% have dropped out and have left. Now I'm excited about this. I think this is a great opportunity, and I'll tell you why here. But why, you know, why did most people fail?

And by the way, if you're still here, guess what? You're in the you're already in the top 10%. Congratulations. You're here. You're still here. And this is I'm starting to see a huge increase and uptick in motivated sellers, in response rates to our direct mail, to offers getting accepted. Sellers are starting to get more motivated, and there's a lot of opportunity. So let's I want to talk real quickly about why I think people have failed. And it's real simple. Number one, they're not consistent with their marketing, they got lazy, they stop being consistent in the marketing. This is rule number one, numero uno, right? We're not in the real estate investing business. We're not in the wholesaling business. They're not in the land business, not in the house business. You are in the marketing business. That's it. And leads are the lifeblood of your business. If you want to stay in business a long time, you have to be consistent in your marketing. You've got to be consistently marketing. And that's every day, every week. Always be marketing. And if you're like me, you know, maybe you're not disciplined enough to do it yourself. So you've got to get somebody else to do it for you. And so I call it getting marketing done for you, in spite of you. And so whether it's sending the mail with a mail house, maybe it's cold calling or whatever your type of marketing is, text blasting or whatever, you need to be doing it consistently every day. So staying consistent. If you get anything out of this podcast, it's I think it's that. It's like you've got to be faithfully doing your marketing. And if you're not doing it every day, you get somebody else who can do it for you. Even if it's a little bit, you've got to keep that momentum building and growing. Another leads or another big reason why a lot of people failed in the last year and dropped out of this business is they're just trying it out. They're just trying out. Like I'm gonna dip my toe in the water a little bit here. I'm gonna send a hundred letters and oh, it didn't work, and they're gonna quit. Well, they hire a cold caller for a month and then they quit, right? This business requires consistency. Like if you're not committed from the start to do this for like six months or 12 months, then don't even start. If you're not considering being committed to marketing straight on nonstop for six months and tell whether you do a deal or not, then don't even get started, right? You've got to be that kind of committed commitment. And it's either consistent money or consistent time that's got to be invested. Makes sense. So those are the big things. Like why people aren't sticking around is they're just they're not getting enough leads. And I've seen this also with some people where we're doing successfully a year ago a bunch of little deals, you know, little deals making three grand, five grand, seven, maybe even ten thousand dollars. And that's awesome, right? Like they were super excited about that, but they got kind of bored with it. And they're seeing other people doing big deals, subdivides, or you know, bigger if you're a whole house wholesaler, fix and flips and rehabbing and all that, or big Airbnbs or co-living, and they're like, I want the bigger deals.

They say it's the same amount of work, so they stop doing those little base hits and they start going for the home runs. And guess what happens when you swing for home runs all the time, right? You miss a lot. You have a higher strikeout rate. And those bigger deals are few and far between. So you start getting the bigger deals, but guess what? On those bigger deals with the bigger profits, there's fewer buyers. And so you might make 20, 30 grand on a deal, but you stop doing the little three thousand, five thousand dollar deals. And it gets harder to keep the momentum and the excitement going when it's been six months in between deals and you're thinking, man, this doesn't work anymore. Well, you just need to go back to what was working and do that. So, what are the winners doing? The investors that are still in the that are still active today, still doing deals. And I see this in masterminds. I see this with people that I interview for my podcast. I listen to other podcasts. This is what I'm seeing that is the reasons why. There's plural, there's lots of reasons, but these are the top reasons why I see a lot of investors succeeding in this market when others are failing and quitting and leaving and all that, right? Well, it's it's kind of relates to the other ones. They don't quit. They don't pause, they maybe pivot, they change strategies, maybe, or markets. They might look into new markets, they might adjust price ranges, maybe different types of deals. They might try other things. Now I'm saying this kind of tongue in cheek in the certain sense of like I've seen people like, okay, let me explain it this way. The people that I seen fail, they stop doing what was work to do something else. The people that I succeed, they don't stop doing something different. They don't start doing something different until the first thing that they were doing is stopped working and is failing. Does that make sense? I hope I'm making sense here.

Soit's like critical and important that you continue doing what works. And if it stops working, then do something else. And the great thing about wholesaling is you can go back and see in the last 30, 60, 90 days where the activity is happening. And unlike the stock market or crypto or options and futures and all the stock stuff, the real estate doesn't change on a dime, right? Real estate moves very slowly in either up or down. I in and the trends move slowly. They don't happen crazy instantly fast. And so the nice thing about this means When you can go back and look to see three months ago, what was the hot markets? What were those areas? What were they buying? And the chances are really, really good, almost guaranteed that that is still going to be a good market for the next three months, six months. Makes sense. So you can feel really, really confident if you see that there's a lot of activity in this one zip code in the last three months. That is a good market to target. That's a good area you should go wholesaling in, right? So you might need to adjust and find those new markets. What might have been a hot market before? I'll talk about this in a minute. In certain parts of Florida, may not be the hot market now. And you might see, man, there's a lot more activity coming on and happening in New England or maybe California on these areas where you know where it was hot before. So that's what I'm trying to say, right? You keep marketing, double down on your marketing when things get scary, double down in your marketing when everyone else is pulling back. Successful investors keep marketing. And the other thing that's important is you need to focus more on the selling of the properties, the dispositions, right? Because before, maybe it was easy to sell deals, right? You just make a few phone calls, send a few letters, hire a realtor. You could sell your deals really quickly and almost get lazy with it. But now you need to be more aggressive with it. You need to be more intentional about it. You need to make sure you get good pictures. You need to make sure that you are getting good deals, easy deals to sell, and not, you know, I almost said half-assed deals, but you don't want bad deals. You want to make sure you've got good deals that are selling quickly. You can't be lazy anymore on the disposition side of things, right? So what else are successful investors doing?

Well, they low, they know how to handle bad deals. When you when the market's getting tight and is slowing down a little bit, you want to get rid of your losers as soon as possible. Sometimes, you know, youyouyou have a property that's a dud. You thought it could sell fast and it can't, couldn't. You need to dump it and Quick and quickly get out of that deal as fast as possible, even if it means selling it at a loss. Now, the cool thing about land, if you do it right, we're making offers at 40 cents on the dollar, 50 cents on the dollar. Worst case, you're selling the land deal for what you bought it for and you're not making any money. Worst case, right? But something to think about. So if the property's a dud, drop the price, sell it fast, get your cash back and redeploy it into a new deal. So important that you focus on the velocity of capital, right? You want to turn these deals fast. And so it's okay, like stop chasing the big $30,000, $50,000 deals, right? It's okay to make $3,000, $5,000 on a deal, but do them rapidly, quickly. Does that make sense? All right. Belit the this business is about velocity of capital. It's not squeezing every last dollar of profit out of every single deal. You need to be in and out fast. You need to get your money back in these deals, even if it's a private investor's money, because that will slow your momentum and it will really heart hurt you and frustrate you when you are trying to turn lemons or lemonade in from a lemon. Does that make sense? Okay.

The other thing that a lot of successful investors are doing is they are plugging into community. They're getting more involved. I see this over and over again. You're getting, if you want to succeed, you've got to know what is working for other people. And that's what masterminds are for. That's what coaching programs are for, Facebook groups, wherever there are is activity and other people doing deals, you want to hang out with them. You want to talk to them. You want to find out, hey, what's working for you, what's not. That's the power of community. And and even seven-figure investors, eight-figure investors, they need to know they have problems. They they need to know their blind spots. They need to learn whatwhat their stuck points are. And when you have masterminds and coaching and you get feedback from other people, you're going to get that feedback and you're going to be able to adjust because the cheese is moving. If it's not already moved, then you know it is moving. And being in a mastermind or surrounding yourself with other investors, you can find out faster where is the cheese moving to and where is the opportunity going to be. And your isolation, I'm looking at my notes here. Isolation will kill your momentum. Community helps you see what you can't see, and you can borrow other people's perspective and their confidence. It's funny. I started a mastermind in St. Louis probably about eight or nine years ago, just for active wholesalers in St. Louis. And we at any one time we did this once a month, we would have 12 to 15 active wholesalers in this little mastermind. And then we would just bring donuts and coffee, you know. And not every wholesaler, but you know, probably 75% of this of the biggest wholesalers in St. Louis would get together and we would collaborate, which is crazy. Like we would talk about well, what's working and what's not working. We would talk about because guys would find deals in one part of the area city and maybe not have buyers, but another wholesaler would have a buyer.

So we'd partner each with each other on deals. You know, one guy would get a lead for a mobile home park, and another guy would work those leads and they would just work out some partnership or referral agreement or something like that. So you gotta be careful with isolation. You got to make sure your networking, masterminding, partnering with other people. That mastermind we met for like a year and a half. I just stopped doing it because I honestly I got busy and tired of traveling. I didn't I don't like driving around all the time. And yeah, but it was a great group. It's kind of did fizzle out for a little bit, but like, you know, ever since then, people have asked me, like, what's going on? Why didn't you why did you stop that? Let's start it again. And but anyway, important understand. Okay, number six, point number six. You know, the economy is in a tough spot, right? We are in a recession in a lot of different states. And I've been looking at this a little bit, and you know, they say 22, 23, 25 states, if you look at it at a state level, are already in recessions.

If you look at auto loans delinquencies, I heard, you know, that's like the delinquencies on the car loans are where they at where they were at in 2008 and nine, which is crazy. The Fed is starting to cut interest rates, which is usually tied to downturns in the economy, right? They're trying to prevent that from happening. And whatever this thing is called the inverted yield curve. I've seen it in the news. And apparently, when this yield curve is upside down, it has successfully predicted recessions, every recession for the last 50 years. And so this thing has been down, but it's been down for like a while. And so it's it's a light, it's a leading indicator, or some say a lagging indicator that we're in a recession, but that's been going down. So we, you know, wehave to understand we are in a tough time. And real estate downturns and economic recessions are different. And it's important to understand this because real estate often leads into a recession and can lead you out of a recession. And some people are arguing that we may actually be near the bottom in some real estate segments. Now it depends on what here's the thing, man, because you're gonna hear different things from different people. Depending on I just read somewhere that we're gonna see a housing depression worse than we've ever seen in the past, worse than 2006 and seven.

And then other people are saying, Oh, it doesn't matter, you know, there's still a high demand. There's still a lot of people that need housing and we need to we're actually poised to do really, really well. But okay, whatever. That's the great thing about wholesaling is because we are in and out of deals. We're not taking on debt. We're not taking a lot of risk by buying and holding deals that could potentially go south. We're not going out and giving mortgages. We're just flipping deals. And you know what? If we can't sell the deal, we don't close on the deal, we don't buy it. So we are only we're not holding on to properties. And only then the only properties we do buy to hold are the ones that we could have wholesaled. If you cannot wholesale a deal, don't ever buy it. Oh, I hope you understood that and pick that up. Write this down. If you cannot wholesale a deal, do not ever buy it. It's not a good deal. All right. So anyway, you know, the markets where you youhave to understand where it's risky and where it's strong.

You want to focus on certain areas where there is a lot of demand right now. And if you've seen any of my videos on YouTube, I talk about this. You go to Redfin, you go to Zillow and you look in the last three months, and where are all the clusters of dots of solds? Focus on those areas. You know, maybe it's infill lots near growing cities, maybe RV mobile home friendly lots, or where's the path of growth? Where is the where are the states and the regions where the population is growing? The job growth is going. And you got to be careful with the risky areas, right? Maybe more recreational land is risky right now. The the areas that are way too far rural, where there's low demand. Oh, you know, those desert squares. I've never liked desert squares out in the middle of nowhere. You want to be really, really careful in in small towns where there's no comps, there's no sales, there's no growth. Don't think like you found a secret market that nobody else knows about. There's a reason why nobody knows about it, because it's not a good market and you don't want to be the pioneer in that new because like they say the pioneers are the ones with the arrows in their backs, right? Okay, so. This is important because one of the things II teach in my program is like find funding companies, land funding companies, investors, hard money lenders that lend on deals. And because it's important if we find a good deal to be able to close on it or have the capital. And one of the things that's important about using funding companies is they'll look at your deal and tell you no, it's not a good deal. And if a funding company will not fund your deal, that's not a deal. It's not a good deal.

You shouldn't, you need to go back to the seller and renegotiate. Okay. So you want to, you want to look for. So sometimes I want you to be careful with just using funding companies as your due diligence department. You don't want to send bad deals to funding companies because they're gonna get sick and tired of working with you. And they're gonna, if you keep on submitting bad deals to them, they're not gonna, when you do get a good deal, they're not gonna take you seriously. They're gonna think, oh man, this is another stupid deal. So you want to actually do your homeworkand you will you want to make sure that you're submitting deals for funding that have value, that have high demand and have an exit strategy. Okay. All right. So let's talk real quick. I'm almost done here with my notes. You want to make sure you have a winning mindset. Most people are tempted to sit this out. They're like, okay, this is too crazy. I don't know what's going on. So I'm just gonna sit it out and see what happens.

But you're gonna miss all of the opportunity that's happening of every downturn that's ever happened. Guess what happens after the downturn? There's a huge upswing. And the ones who keep going on now will be in a good position when and when it turns around. I almost said when and if it turns around, but it's when it turns around, you're gonna be in a good position. So here are some really important things you need to believe in. Number one, this business works if you do the work. And you don't need to worry about timing the bottom market perfectly. Cause again, real estate moves slowly. You just need to be in the game. You need to be in the game to win it. And your job is to stay in the game, but manage your risk. And you manage your risk by wholesaling. Does that make sense? You're not buying and holding. You are taking this seriously. And you'reyou're not buying a deal that you can't wholesale. And if a funding company won't look at it, you know, you got to go back to the seller and renegotiate. All right. So here's some action steps for the next six to 12 months. Start thinking about funding. Start thinking about okay, if and when I get a good deal, where am I going to go? If I need the funding, where am I going to go to get the funding? You need to dig your well before you're thirsty, because there are a lot of good deals out there if you're doing what we're talking about here. So you need to make sure that you've got a place to go to get money if you need to close on the deal. So start getting your funding lined up now. Maybe lines of credit, maybe private investors. And you want to get into a place before all of a sudden it's heavy in the news that we're in a recession, we're in a recession, and people start freaking out. You need to have the sources of money because that's when the deals start coming, right? And you want you don't want to be ch begging for money for these all these amazing deals that are gonna start coming. You need to just have that ready.

So you need to be digging your well before you're thirsty. Another thing that you need to think about too, that's important, a big major action step for the next six to twelve months is if you have a big a bad deal, dump your losers. You don't want to own something for one to two or three years and then finally sell it. Discount it if you need to, sell it at a loss if you need to, but get rid of your bad deals because they're only gonna get worse. You need to free up your capital so you can number three point you can boost your cash reserves. If you've got cash, you need to be cash rich, not cash poor. It's really careful, you got to be careful about being asset rich, but cash poor. In other words, cash is gonna let you survive a recession in a down market, right? You need to have the cash available to pick up the good deals when they happen. So just be aware of that. You want to be obviously reduce unnecessary risk, right? Avoid any weird properties, any areas where there's not much demand.

This is important. If you're looking into a deal, whether it's a good deal or not. And if you buy the deal, will it go, will it bankrupt you if it goes bad? Well, that's a deal you need to pass on, right? Or find somebody that has the money that's done those kinds of deals, those bigger deals before, and partner with them possibly on a deal. But you know, it's better just to pass, be other better to be in and out. It's important number five to focus on the right deals. You want to make sure you're tighter on your offers, right? You're buying properties at 30 to 40 to 50 percent of market value. It's time to get more conservative on your offers. Do not buy more than 50% ever on a vacant land deal. And you want to stay in markets where there's real demand, there's real comps. Now, back to my 50% real rule. Sometimes I'll buy 60%, but that's only when I can do a quick assignment and I'm not gonna close on the deal. So I'll offer 60 cents on the dollar if I can do an assignment and just get in and out of the deal. Okay. So you want to stay in markets where there's real demand. You gotta be consistent. Number six, send out your marketing, keep on talking to sellers, keep making offers, keep following up. Do not stop doing that. Okay. So actually, I said there was 10 action steps. No, that was point 10. Here are the action tech steps to take in the next 12 months, right?

So number one, dig your well before you're thirsty. Get funding lined up now. Dump your losers. Number two, get rid of your bad properties. Number three, make sure you have cash. Start boosting your cash reserves. Don't have a bunch of properties, but no cash. You need to have cash sitting on the sidelines and money available to pick up the good deals when they start coming. And number four, you need to reduce unnecessary risk. Stop getting into bad deals that you might have could have sold before because the market was strong. Now that it's soft, make sure you don't take those risky deals on. Number five, you want to focus on the right deals. You want to focus on the right areas where there's high demand and you want to make sure you're making smart offers. And finally, number six, you've got to be consistent if you want to succeed in this market, right? Keep on sending marketing, keep on talking to sellers, keep on making offers, keep following up, focus on the basics and get really, really good at that. And you're going to kill this year. You're gonna crush this next twenty six as we're coming up into it. Okay. That's the secret. That's it. Appreciate you guys. And that's all I get. This is a way longer podcast than I thought. I've been sitting in my driveway for 10 minutes or so. Appreciate you guys. We'll see ya. Bye bye.