Episode Transcript
[00:00:00] Speaker A: If you are transitioning from houses to land, I would say the biggest shock at first is just how much slower things move because nobody is in a rush to sell it. They've typically owned it for 20 years. So what difference is telling them you can close in 10 days versus telling them you can close in 120 days, you know, and then the buyers, you know, they're not in a rush either cuz they either have other projects going or another deal can be done. So it's kind of just going from like gun slinging, wholesaling houses for, you know, a decade plus to just watching land deals move like molasses. And so you just got to get used to it, you know, you just got to get used to.
[00:00:58] Speaker B: Hey everybody and welcome back to Trust this. This is Joe Siegel, your real estate, asset protection and estate planning attorney here in Florida, working for real estate entrepreneurs across the state of Florida, helping you guys maintain your privacy, anonymity and asset protection and estate planning everywhere you go. I'm here today with David Puppo and Justin Stamper. Some of you guys may recognize them. They've been around in the world of real estate for quite a while now. Been pretty popular and famous.
Great guys. I've worked with them for years and they've moved into a new venture. And so that's what we want to talk about today. Sort of let you guys hear where they are, what they're doing and how they got into it. Maybe some pitfalls and things to watch out for if you also decide to get into what they're doing. So David, Justin, welcome to Trust this today. Thank you for being here and it's great to see you again. Yeah, you guys just give me a quick background and exactly what you're doing now.
[00:01:59] Speaker C: Cool.
[00:02:00] Speaker A: Dp, what are we doing? We're doing a lot right now, man. We.
Well, so I guess quick in a nutshell, David and I started Orange Blossom Homes just over two years ago and you know, we wanted to have an investment firm. At the time we were looking at, you know, using wholesaling as like the ATM machine to fund a private portfolio which originally our target goal was larger, multifamily that we could 1031 our way into and have a front of the house wholesale business, be able to fund the acquisitions. And we built it out, put all the pieces in place, had about 20 teammates at first because we essentially merged my real estate brokerage blueprint with his wholesale shop, Florida, Florida House Buyers. And yeah, we, we combined teams, started rocking and rolling. We were spending like sometimes 50k a month on PPC just, you know, doing everything that everybody tells you to do. And you know, David and I both been wholesaling for, I mean, I've been wholesaling for 15 years. David's been wholesaling for going on 10. So, you know, we figure two veterans in the game merging this company is going to be easy breezy, what could go wrong? And then, you know, we spent like half a million dollars on like marketing and only had like $501,000 in revenue to show for it.
And we both just kept looking at each other like, dude, there's got to be a better way that we can do this. Like, it didn't used to be this hard and it definitely wasn't lack of experience.
So we just started pivoting. You know, multifamily went crazy. You know, the syndicators were paying 110% on the dollar, so it was almost impossible for us to target large multifamily in Florida. Rates went through the roof. So it didn't make sense for like our original plan of using private investors or hard money and then refine out of larger portfolios. Yeah, man. You know, just like the, the horsemen of the apocalypse were, were just riding through the sky and we started to recognize what was going on and we decided to pivot and we, we spent a lot of time wondering where can we go that we can, that we already have the skill set for or can develop in a, in a, you know, without going back to college, essentially. Even though it does seem like we've spent a college education and kind of about the same time to get our bachelor's degree in land.
And then what, what can we pivot our teams to that they'll also be able to understand? And how do we all make this symbiotic within the community, highest and best that we run in Florida, which is our real estate community and mastermind. So ultimately I felt like, you know, everybody is trying to wholesale that's not working and it's ultra competitive and the game has just changed.
You know, new construction, we, we already were doing that, but rates were getting so expensive. Building cost was so expensive. And then, you know, we started thinking about land. You know, land just kept coming back up, you know, and we both had experience in it, whether it was just infill lots, subdividing parcels. And a few people on my team had actually gone completely through the entitlement process already on some of our development deals. And then I found out that Duke on zombie house flipping with me was actually segueing full time into land entitlement. And he's been one of my mentors for going on 20 years. So Duke does not make uneducated decisions. He is a very methodical, planned person. And he's also a mutual friend of David. Denies that he's the reason we actually know each other.
[00:06:33] Speaker C: Yeah.
[00:06:34] Speaker A: So we sat down and I was like, I think we just kind of both mutually came to the consensus that we can still operate a wholesale shop. We're just going to switch the product. We can still run a marketing division. We're just again, retargeting and adjusting our marketing and we can still use our skill sets in real estate because while land is a completely different animal, it's not foreign to us. You know, we just need to get adjusted to it. And we made the full time pivot about a year and a half ago and have just never looked back. And now we are operating in a couple different spaces from running a wholesale shop on the front end spin, still trying to have that as the ATM machine. And we actually introduced a medium term product this year that we're super excited by. But David, I'll, I'll let you dive into it, man.
[00:07:34] Speaker C: Yeah, yeah. I mean, Justin hits a lot of it on the head. It's, you know, at one point where we're looking at each other and we're just like, why is this becoming so crazy? You know, this was something that I, we all understood very well. And when it came to wholesale and single family residential houses, we weren't even, you know, we're all based here in Orlando. We weren't even, we weren't even in Orange county anymore with much of our marketing because it just got too crazy. You know, Justin's background being in flips, mine's being able to help out with operations and sales. I was like, okay, well, at that time when we were first, you know, being able to do the collaboration, it was like, okay, well, let's scale out the multifamily. We both had experience in that. And then him doing the flips. And then slowly but surely with some of the flips, we started seeing cost at the entry acquisition was high. Then if we're borrowing money that just got more expensive. There was a crunch on marketing and labor, I mean on materials and labor as well. Oh, and then on the back end now your days on market went from your 14, 15 days to now 45, 60 days. So now you're spending more on the back end too. So there was just a, a layer after a layer after a layer. After a layer where margins were sinking. And then like after our last one, I go, justin, dude, this, this isn't working right? Like, it took us six months to get this one done. We made a hundred thousand dollars. But it was like, if we didn't build out such a crazy margin because it just. They're not happening like that. As crazy as they were anymore, we would be up a creek without a paddle. And so we took that step back, and as Justin mentioned, it's something that hasn't been exactly foreign to us, but yet we haven't fully explored it either. And then slowly but surely, the world of, as he said, was the infills. And then suddenly we're getting into bigger parcels. And now suddenly the idea of subdividing and entitlements was like, well, it takes a lot to get to this point. That was, I think, one of the more. The more of a bigger. Of epiphany to us is that in like any other pyramid, we wanted to be closer to the top, where there's not nearly as many players. And then we thought to ourselves, well, what are the barriers to entry? And it's very simple. It's time and money. How long can you float it and how long can you delay the gratification? Right. In wholesale, you're at 30 days for most of your properties, right? So we were like, okay, well, we can delay the gratification and then the. The money aspect. I mean, you know, we also have rental properties and stuff like that of our own, and we gave ourselves the education that we needed to be able to start taking action as. As Justin was talking about. And now we're starting to see the fruits of that labor.
[00:10:22] Speaker A: Yeah.
[00:10:23] Speaker B: Okay, so you guys both come from the wholesaling and flipping houses background. What, what have you found is the biggest difference between wholesaling a house, where you find a seller, you get it under contract, and now you're going to sell that contract. And yeah, you've only got maybe 30 days tops to. To sell it, get your money out and keep moving. Or you're. You go ahead and you buy the house, you fix it up, and you want to do that as fast as possible and sell it and get to moving. How does that, how does land differ from that? When you're dealing with land, it depends.
[00:10:58] Speaker C: On the size of lot, to be honest.
As you, as you already make the transition from single family to resident to land, there's now a completely different buyer. The avatar has changed. Right. And then in saying that too, the buyer pool completely changed Too, right? Like when you have an Orlando flip, you're going to have the masses reach out to you about it, as long as it's decently priced, Right. On the other side of that, like land, you might only get like 10 people. But the thing is that those 10 people are typically people that are a always actually dealing with real cash or not hard money leveraged. They're people that typically have more experience or maybe sometimes they're the neighbors, right. In the world of single family residential, it was very rare that you sold ever to a neighbor, right? But in my world, right, like Joe, if there was a vacant lot next to you, next to your house, and I was like, hey, do you want the, the lot next to you? So now you're, your footprint is now double the size. And like, I was like, hey, it's only 10 to $15,000. A neighbor's like, yeah, I want double the land. I'm cool with that. And so now suddenly a new avatar had completely emerged in the infill world, right? As we get to like, entitlements. Like, as you work your way to the entitlements, you're now dealing with Wall street, you're dealing with people that are publicly traded companies. So it's a lot different of an avenue besides maybe your fund, your hedge funds that you deal with. So, yeah, man, it gets to a smaller pool as you go up, but the pool becomes much more serious buyers as well, Right. As you mentioned earlier, you're like, yeah, most people don't do it until they got the back end person already kind of resolved. And that's exactly. They, they have formulas. They don't, they don't necessarily work the same way as like a hard money lender does with a flipper. They work with what, how many lots can we get out of this parcel? And is that yield going to happen after we go through with the city and the county to yield that result? And if it does and we backtrack the numbers, they strike the check. Like, they're not worried about striking checks. They just want to make sure it is what they think it is.
[00:13:08] Speaker A: Yeah. And to piggyback on what David said and to circle back to the OG question of what's the difference between wholesaling land and wholesaling a house? I would say the biggest thing is timelines, because, sure, you might get lucky if you buy, you know, a tiny parcel and, you know, you're picking it up for three grand, you're selling it for seven grand, you might be able to get that done. In 15 days or less and just quick claim the deed. Easy breezy.
But when it comes to larger pieces of land and price points, pretty much over, I would say 50k is probably the threshold.
The timelines change like crazy. The quickest deal you're probably going to put together on things over 50k, unless it's in a screaming hot market, is probably going to be 90 days. So, and that's, that's a wholesale deal, you know. And so the timelines are wildly different. And that was one of our biggest rude awakenings for it was, you know, coming from the world of if you got a good deal, I should be able to have a contract by the end of day of me marketing it and we should be closing in two weeks or less to then find out that across the board, nationwide land wholesalers like average transaction time is like 90 to 120 days.
That's fine when you got your pipeline going, but before that pipeline is flowing, you know, you're just looking down that tunnel and you're like, oh, I know a payday is here, it's just next quarter, you know. So luckily when we did make the transition at first we had prior things in the pipeline coming for cash injections and paychecks. But you know, it's, it's definitely, if you are transitioning from houses to land, I would say the biggest shock at first is just how much slower things move because nobody is in a rush to sell it. They've typically owned it for 20 years. So what difference is telling them you can close in 10 days versus telling them you can close in 120 days, you know, and then the buyers, you know, they're not in a rush either because they either have other projects going or another deal can be done. So it's kind of just going from like gun slinging, wholesaling houses for, you know, a decade plus to just watching land deals move like molasses. And so you just gotta get used to it, you know, you just gotta get used to it.
[00:15:55] Speaker B: Well now you mentioned there Justin, a lack of a sense of urgency both on the seller side and the buyer side. When you're talking about land. Is there anything else that also just causes those deals to go slower than a house?
[00:16:10] Speaker A: Oh yeah, for sure.
For our entitlement deals, that's where we find the real big hang ups.
You know, our average entitlement deal at the moment is looking like 12 to 18 months with deals that will be done in 24 months. So I mean, you're talking two years of not Breaking ground, not doing land development. It's just paperwork. Because if you miss a meeting, which actually happened to us, not intentionally. It's just ironically enough, by the time we got to the point of the contract being finalized, we had missed the application for the next county meeting by like four days. And we had to wait four more months because the county doesn't just meet with you. Like, I don't get to call the county and be like, deal with me now. They're like, bro, get in line, dude, there are 400 other people in the exact same scenario as you. You are not special. Back of the bus. And you know, it's just things like that. The government moves at its own pace. And all of entitlement deals is just bureaucracy. Like you could literally just swap the name entitlement for just bureaucracy and it would still make sense to people that do it. Because all you're doing is pushing paper through the government and the slightest things can throw it up. If the EPA comes and finds out you got gopher tortoises, well, guess what, Everything is shut down until you find all of those cute little tortoises a brand new home at like $2,000 a piece. So certain things can really just burst your bubble and pump the brakes on these deals. But that's why, you know, the payoff is 5x verse with wholesaling houses and flipping houses. Our return was, you know, 15% here, 30% here if we got lucky, where our new returns with entitlements are literally 500%. So, you know, you weigh the good with the bad, and you just hope that those tortoises migrate next door before EPA shows up.
[00:18:24] Speaker B: You know, so when we're talking about entitlements, let me just explain that to, to the, to the viewers and listeners. It's, we're talking about, you may have gotten a piece of property that is zoned agricultural or it's zoned light industrial or something, and you're going back the government and saying, okay, well can we change the use? Can we get it entitled maybe as commercial high intensity or as residential higher intensity. Instead of the big five acre lots, it can be 70, you know, half acre lots or something like that. That's what you're talking about there with entitlements, right?
[00:19:01] Speaker A: Yeah, 100%.
[00:19:02] Speaker C: Yeah. And many, many cities, if not counties, have this thing called a comprehensive plan. And a comprehensive plan is them showing you what they are looking to do with existing land in the upcoming years. Right? Like we, as normal citizens, when we see an area of the, like the city blow up. And we're like, when did that happen? Like, if you ask the people inside the county, they would be like, oh, yeah, we saw, we saw this happening 20 years ago. Because what they do is they give favorable, you know, they get favorable density, meaning, like, how many properties can go on a certain parcel? Like, they show you, hey, developers, we're going to give you like, townhouse construction all along that road or all along this area. And like, we're going to give you, like, favorable terms to be able to make sure that we expand the population, we make sure that more people are coming here. And then, you know, then they'll start tapering it back. But it's, it's no coincidence when, like an area starts popping up. It's been planned decades before. So the comprehensive plan helps out a whole bunch with that in the beginning, right? So finding out something that's agricultural. But on the comprehensive plan, they're saying, hey, we're going to be building out there. That is where it's going to go, right? So that helps out with starting to see what are the, the next couple of moves that you want to make, right? Because then, you know, you're going to get much more favorable terms. As Justin said, it's bureaucracy. Bureaucracy, you know, that's going to end up happening. Right? But if they're telling you we are going to be favorable here, well, don't go against stream, right? Like, like when somebody sends us a deal that's in the middle of nowhere and they're like, but it's 10 acres. And I'm like, and the city and the county want to keep it 10 acres. They don't want to divide that, right? Like here they're saying, like, whatever. We'll say, like Lake Nona is like that, you know, that area now for Orlando. But like Orlando, I mean, like Nona was just farmland for so long, right? And now suddenly there's apartment buildings going everywhere. Right? Because the city and the county were like, we want more people to move there. So they gave favorable terms.
[00:21:14] Speaker B: Yeah. And I know Orange county, the mayor's been trying to get the 2050 plan through for forever, and it just keeps failing because the current board's like, we don't want any growth. No growth, no growth.
That's a whole other tell for another day.
[00:21:32] Speaker A: I can't tell you how many. Actually, I think I could. I think we have four deals right now that are waiting for the June. June. It is January. As we speak, the next Vision 2050 meeting for approvals of future use, changing is the middle of June. So that is just, like the perfect example right there, that it's slow as molasses, because you could have every single one of your ducks in a row and be ready to literally break ground, and you still have to wait another six and a half months just to have the city to be like, yeah, sounds great. You could have been done building your neighborhood by the time they are there, just ready for the meeting. And it doesn't matter how much money you could throw at them or how many politicians you know, it doesn't matter. Everything has to wait for that meeting, and it's six and a half months away.
[00:22:29] Speaker B: Wow.
[00:22:30] Speaker A: Well, it's all good, man. It's a. We pick the industry, you know, like, we're. We're not allowed to complain about it. We're the ones that picked it.
[00:22:39] Speaker B: Well, what is. What is the biggest deal you guys have done? What made it stand out?
[00:22:45] Speaker A: I mean, dp, what do you think? I think this Leesburg deal that we're doing might be the biggest deal that.
[00:22:52] Speaker C: Yeah. This one that we're getting right now in Leesburg is like, I think between 15 to 17 acres, and it has a much higher density and it's zoned agricultural. Right. We followed the comp plan in. In that area, and they told you that this area is going to be higher density. And so we've been able to start negotiating with the sellers or starting to talk to the city. And in that comprehensive plan, they show that this is going to be residential seven, which is like being able to have seven units per acre. So that means that in 15 to 17 acres, it's going to be a really, really great subdivision or community.
Heck, you can even probably almost do townhouses at that point. So, yeah, these take long, as Justin's been kind of mentioning, but they are able to be able to project outcomes pretty well. So this one is projecting well over 400,000 at this point.
[00:23:46] Speaker B: Wow. Wow. So I hear you talking about the comp plan. So I'm sure that whenever somebody comes to you and says, yeah, I'll sell you my. I've got this piece of property. I want to offer it to you. I'm sure you go look at the comp plan first of, what's the future use projected by the. By the county or the city for that, for zoning for that. What are some other things that you look at when you're evaluating whether you're going to jump into a piece of property or not?
[00:24:14] Speaker C: Hmm.
[00:24:15] Speaker A: Well, it's a lot of things. The basics, like, I Would say level one of just a quick overview, like the quick first glance. Am I actually going to spend longer than five minutes on this? Is we throw it into our software and we just start looking at overlays. You know, what is the wetlands look like? What is like, can we get visuals on the topo? Like, are we going to need multiple sump pumps on this? If so, if it's a small dev, it's not going to make sense. Like just real.
[00:24:46] Speaker C: Just break that down a little bit more. People might not know what topos are. Okay.
[00:24:51] Speaker A: Yeah. So like the, like a, the topography of the land. So when you look at it on a visual map, it'll typically using our software, at least it'll tell you like, let's say this is colonial and then this is a piece of dirt and Maybe it slopes 20ft over the course of the property towards colonial. That's great because that means your sewage naturally, hopefully is going to naturally using gravity flow towards the sewer. You might be able to get away just on gravity. A lot of places can.
If it was the reverse scenario and it was 20ft up to Colonial, you now have to put a sump pump, which is like, if I pointed it out, like, if we were taking a walk through a neighborhood, everybody would be like, oh, that's what that thing is. But it's essentially just like a mechanical sewer pusher. And all it does is just drive sewage one way and then suck clean water the other direction. So that, you know, people's plumbing works and one sump pump can only handle X amount of houses. And they also, you know, if you are building a large subdivision, you're going to need multiple because you know, you're going to have one in the east, one in the west, et cetera.
And they cost a fortune. You know, typically you're like average neighborhood one, you're looking at 400k, about minimum to get it installed. Upwards of like multiple millions to have these systems work for like major development. Think like the villages, you know, where they have like 2,000 houses, you know, so it's, it's a lot of things that, you know, make sense when, when you learn it, you're like, ah, yeah, of course. But if you didn't know those things, you, you would never even like factor it into a deal, especially when you find out how much they cost. So, you know, quickly we look at the topography of the land, we check to see if there's wetlands, we check to see zoning, we see if it's in a flood zone, we check to see if there's easements, such as, like, power lines going through the property or anything that's like, force majeure from the government or a lot of times there's easements for other property owners because you. You can't. You're not supposed to, like, create islands. You know, like, if somebody owns 10 acres behind me, I got to give them somehow to get to their property, even if it means they get to drive through my side yard. You know, you. You can't create islands. So there's just a couple quick things that we look at. Luckily, technology has become such an ally for us in this business that, you know, just in a couple systems, within five minutes, we can figure a lot of this out. And then from there, if the zoning is, you know, favorable, or we think it could be favorable for us, if there's future use or current new development going on, that's always, like, a good sign for us. If it's not completely covered in wetlands and not completely covered in easements, then it now passes filter number one and then goes into, like, the real due diligence where we hand it off to, you know, our entitlement specialist that works for us or, you know, one of our acquisitions guys, or, you know, it goes to the next teammate once it passes the smell test, then, you know, onto the taste test, and then after that, we're cooking, man.
[00:28:35] Speaker B: Well, that's a. That's. That's important to know because I did. I had a. Back when I did closings years ago, I had a guy, he had bought some property, and he'd never just looked at Google Earth pictures of it, and he's from out of state, and he'd bought 10 acres out in East Orange county and thought, oh, I've got this. I can build a neighborhood on it. You know, I got 10 acres. I can build a whole neighborhood on it. But then it goes. And the county said, yeah, you got about half an acre you can actually build on out of this 10 acres. And he said, but why? And they said, well, it's all wetlands, and if you had looked at the map, you would have noticed that all the trees, it's all cypress trees on this entire property. And. But he didn't know that because he's from out of state. And. And that's why real estate is very local. So are you guys looking in other states or you. Are you sticking in Florida where.
[00:29:26] Speaker C: You know, right now we're just sticking in Florida. We're in seven counties. As we get, like the model more consistent, and we can Compress time a little bit better then, then we'll be able to make sure that we can go out. The technology is there, though. That's the good news.
You just mentioned it, right? Just pop in Google Earth, right? Because, like, one of the things that we have when, like, say, like a potential JV partner wants to work with us, one of the first things we ask, hey, go on Google Earth, is the street paved or is it dirt? Right? Because very quickly, right then and there, we'll understand what's been the population shift there, right? Or as you've mentioned, if you just look on Google Earth and you can probably see very quickly, like, is it dry or is it wet? Like, you could tell very quickly there is, you know, one of the things that. And I'm going to save people, like, a lot of money if you're going to do marketing here in Florida. All right, so this is, this is a freebie for the audience. And like, after Joe, we can also give, like, the due diligence sheet that we created based off of conversations with, like, veterans and then also from our experience, but in like, the, like, the booming real estate between 2002 and, like, 2009. Right. I don't know what guru was pitching in in Florida or thought they knew Florida, but they got everybody in the Midwest and the Northeast to believe that Florida was the new haven. And they were having people buy these lots sight unseen for like 15, 20, 40, $50,000 and areas 20 years ago, nobody knew. Right? So, like, and I don't mean to say this, but if you're in Citrus Springs like that, like, I don't mean to pass at you like that, but 20 years ago, there wasn't a whole bunch of stuff going on in Citrus Springs, but there was these coaches that sold these lots. Just saying it is going to go up in time. You never have to worry about this. The taxes are 100 bucks and, like, they got part of it, right? Like, the taxes are still like 100 bucks, but, like, the problem with that is that they're still not even worth what they bought it for. So if you are going to market for land inside of Florida, exclude the years like 2002 to like 2008. You will save yourself a lot of time, a lot of grief, and honestly just not dealing with. People have the right expectations. Like now with like, our, our campaigns. If I see like three leads in a row that say, well, they bought it in 2004, I'm going like, right back to our team, like, get all that out, like, literally get it all out, like, refine that sheet. I'm not talking to these people because I feel for them and like my heart goes out to them that they were conned. Right. They bought something for $40,000. That at today it's maybe worth 15. However, to try to tell somebody that they bought something for 40 and they have to sell it now for 15 when they've held it for 20 years, that is an uphill battle. That is a waste of time. And I don't blame people for wanting to get at least what they, what they paid for it. But that doesn't mean I gotta waste my time talking to you and trying to make you a skeptic or a believer now. Like, you're not the buyer I want to work with. Let's just move on.
[00:32:40] Speaker A: Yeah, land is interesting because with houses, it's rare in Florida that you can find a house that is like actually worthless. You know, it might not be worth more than 25k but rarely is it worthless. Where in Florida there's land that's like, actually worthless. And every now and then you end up with it. And one of our, like silliest blunders was we bought and still own worthless land.
Was it necessarily our fault? That's debatable.
You know, I, I know, Joe. We, we, we actually came to you for legal guidance on it. So you already know this story, but we, we essentially bought some land that on paper, checks the boxes, like directly across the street from commercial, current zoning, commercial and you know, large enough to make something there. And the price to us seemed right. You know, we picked it up for less than 20k and we, we were very certain we could sell it for triple that. And come to find out, the surveyor did not catch an easement on the property.
So when we got the survey, we were, we thought everything was fine.
Title did not make us aware that there was dp. What do they call it, in title with the policy.
[00:34:26] Speaker C: Like, yeah, that it wasn't part like they, they weren't going to, they excluded it from their insurance policy. Essentially.
[00:34:33] Speaker A: There was like exclusions on the policy that nobody brought up.
[00:34:37] Speaker C: It's an exemption. There it is. That's an exemption on the title policy.
[00:34:41] Speaker A: Nobody brought up to us the exemptions and us just, you know, being the cowboys that we are, just wired the money and signed the docs and kept it moving. And then, you know, here we are still owning the thing. We are going through hopefully a, a variance with the county to actually it's, it's going to be lemons to Lemonade. Because we are hopefully going to put our office for our mobile home dealership, which we just started this year, which I'm excited to talk to you guys about. But man, it was just such like a silly goose situation of like being like, how did this happen? Like, what do you mean? We bought worthless actual land because the easement literally takes up like a hundred, a 100 of the use of the property and nobody caught it. And here we are owning it, you know, but it's all good.
[00:35:40] Speaker C: We're, we're. That don't happen in single family residential because there's an existing structure on it.
[00:35:45] Speaker A: Yeah.
[00:35:48] Speaker B: That'S one of the biggest things I tell people when they're buying vacant land. A lot of people go, it's vacant land. Why do I need a survey? I go, well, you need a survey, but not only that, you need an alta survey where you have given all of the exceptions from your title policy or your title commitment to the surveyor and said show these things on the survey. I want to know exactly where they're located so that I know what I'm getting myself into.
Also makes it more sellable later.
How are you guys finding your sellers on things?
[00:36:23] Speaker C: It's changed. So as Justin mentioned, we were primarily doing a lot of PPC and pay per lead. So a lot more online presence stuff. When it came to our single family residential and multi family stuff with land, those people really don't gravitate to online presence. So it's, it's kind of like, I'll call it like a, like a, a trident, right? A three, three prong approach here where it's your cold calling, your direct mail and your texting. So we do kind of a three prong approach with that primarily.
You know, one thing that we've been really, really about is understanding that. And this is just marketing 101, right? So just always understanding this, everybody whoever's listen.
Certain audience members gravitate differently to different mediums, right? Like some people listen to radio, some people watch tv, some people like to still read newspapers. And like that was very. In any world of marketing, it's understanding who your avatar or who your ideal person is, right? And our ideal person isn't really crazy online. So doing stuff where we can directly contact them is much more important to us, you know, than trying to just, you know, like I always think about it as hunting versus gathering. That's how I think of marketing. Always hunting is that you are actively seeking these exact people. Gathering is the PPC approach, right? Who just typed in Google to how do I sell my land in Florida? Right. We don't know that person at all. But we have pumped enough money into Google that if somebody types that, we're the ones that pop up right on the other side. Like, I know that I made a list and like Joe Siegel was on that list that owned this lot in Citrus Springs. Like, like I know that that is part of that list.
[00:38:15] Speaker A: Yeah.
[00:38:17] Speaker B: How are you, how are you guys financing them? How are you affording? Are you doing partnerships, cash? How are you doing this?
[00:38:23] Speaker C: Yeah.
[00:38:24] Speaker A: So we, we have been brute forcing and bankrolling a lot of this ourselves, but now we are officially at the point that we are offering certain partners that we trust the ability to get in on our deals. You know, entitlements can be very expensive. Um, you're looking at, in the state of Florida, 3 to $5,000 per lot. So that adds up because when you're doing an entitlement deal, you're typically doing, you know, we're talking 100 lots. So you're looking at 3 to 500k right there just on, you know, getting the engineering done, getting the surveys, paying for the attorneys to go to the meetings with the counties.
There's just, there's a ton of hard costs and they are true hard cost, cost. It's not like it's a non, it's not like it's a deposit where if we cancel, we get that back. You know, you order a topographic survey on 20 acres, well, guess what? That survey is 15 to 20k. You know, like it's a. I, you know, I've ordered thousands of surveys. Maybe I probably ordered a thousand surveys on houses. And you know, they're 250 bucks, 300 bucks. The first topographic survey I ever ordered was literally on one acre. And I was like, great, what's. How much is this? And they're like, it's $8,000. I'm like, eight? What do you. No, it's not. And they're like, yeah, yeah it is, dude. And I was like, this sucks.
Yeah, so it's, it's just a completely different animal.
We were just, you know, funding all of it ourselves, but we just launched a new medium term business in between the wholesaling of infills, which we're slowly getting away from, to focus on this new medium term because it accomplishes the same goals, but it's more in alignment with our, our vision of our company, where I became a mobile home dealer this year. And what we are doing is trying to offer an affordable housing product in secondary and tertiary markets in Florida where we can provide these beautiful manufactured houses for 250k that an FHA first time home buyer can live in and still have a mortgage that's affordable and less than market rent. And that was really important for all of us.
You know, my family grew up in trailers. Chuck, our entitlement specialist, him and I have been friends from high school and his family lived in a manufactured house until literally he was an adult. And like we all, it all means something to us, you know, affordable housing. And also, you know, it's kind of just coming full circle of where our families came from. And it's, it's really cool the product we're offering. And now that we're able to do both of these at once, we are bringing on capital partners. But that's, that's a whole nother animal in its own. Because hard money lenders typically don't lend to like land entitlement unless you're going to build new construction and do it from, you know, from seed to sale. Like you got to go full process with it. Where for us we just want to sell the paper lots once they're shovel ready or do the land dev, but preferably just paper lots if we have the ability.
So what we are offering now is the ability to JV with us on the mobile home projects or JV with us on our newer entitlement deals that have the opportunity. But typically we're just working with private investors and honestly a lot of my friends that were flipping houses that now no longer have flips, but they got a bucket full of cash on them and they're bored. You know, I know a lot of guys that were full time heavy, heavy rehabbers that are literally just bored at the moment because there's just not enough houses in central Florida to renovate to make the numbers work. So you know, but at the end of the, but at the same time they got a million bucks just sitting there losing 5% a year to inflation.
[00:43:06] Speaker C: So we literally told us that he just keeps his crews busy. Just to keep his crews busy, he takes down properties knowing that he's not going to make like think about like where, where it is in Florida, right? This is just micro versus macro. But in parts of Florida right now where he's like, yeah, I might walk away with like 10 or $20,000, but I gotta keep my crew going, right? And like that's, that's, you know, something that Joe and I, we talked about, right? Are you serving the business or is the business serving you, right? And like when I was hearing that, I'm like, okay, that's, that's, that's obviously the wrong approach, right? You are 100 serving your business. It is not serving you anymore. Right. That's how we are starting to approach the wholesale stuff. Wholesale. As we took a step back, we were serving it much more than it was serving us. And we were like, you know what? We either have to do one thing or another, right? Let's either gotta, we gotta cut off the arm to save the body. And that was being able to make sure that we weren't focused on the 2x stuff like double, double, double, more, more, more, more or what is going to give us fulfillment, what is going to be able to get us closer to the goals that we want and hopefully in the time frames that we want. Right? That's where this, that, that revelation that Justin just mentioned is like, well, the manufacturer package home thing serves both. It gets us the, the cash that we want to be able to do. We're already doing the existing marketing, so it's just kind of like a bolt on business with it. And we're already connecting a lot with these subdivision, these subcontractors because of what we're doing with the entitlements and development, right. So when they, when we get an infill lot that a mobile home can go on or a manufactured home can go on, it get has to get cleared and graded and leveled out and like, you know, they have to be able to do a whole bunch of stuff to that lot. But those are already existing connections that we've been creating now for the past year and a half. And so it helps out in the medium as, as Justin mentioned. And like it does give us a lot more satisfaction to be able to make sure that that affordability gap is happening. I don't know in what circle anybody is in in this entire United States of America where a conversation won't be brought up in 30 minutes about cost of living, right? Everybody talks about it all the time. 300 plus a million Americans talk about it all the time. And then you know, with other people that we've been able to speak with that do this kind of product, it's not a big product, obviously it's not brought up too often. It serves a lot more purpose, right. The affordability as you just mentioned, and if I blindfolded you, like these aren't like the mobile homes and manufacture homes that like, like from a movie like 8 mile, right? Like Detroit, like you know, single wides, like if I put a blindfold on you and I walked you into one and I took that blindfold off. You would have no idea that it was a double wide manufactured home. Like they come in better shape than I would say people who are doing half ass flips with 1950 style houses in like the surrounding Orange county area. Like they're, they're nice. And so being able to give a great product to what we already know is an affordability crisis, then we're solving a lot more problems.
[00:46:21] Speaker B: Yeah, well, and you can also have them, I mean when they're put on the lot, you can have them put in it Category five ready homes, you know, no matter where they are in the state.
[00:46:31] Speaker A: Oh yeah, man.
[00:46:32] Speaker B: So the people's insurance is going to be cheaper. It's going to be built better than some, you know, 1950s flip dude.
[00:46:40] Speaker A: And you know those, those two storms last year really proved the business model on that, you know, manufactured houses were some of the lowest insurance claims made in like Pinellas and Pasco and Hillsborough County.
So they definitely passed with flying colors over some major storms. And you know, we're, we're installing them on slab. They're hurricane strapped and they are just a really nice product, man. Like DP is telling the truth now they're coming with 13 millimeter like LVP flooring. You've got Carrera marble inside the bathrooms as like a standard finish. You've got white Shaker cabinets throughout the kitchen with stainless steel appliances.
[00:47:27] Speaker C: They're beautiful.
[00:47:28] Speaker A: Like they are not like the trailers that our families lived in in the 70s and 80s. They're Mack Daddy dude. And also the, the tiny house movement kind of showed the world that there's no shame in downsizing a little bit. Not that these things are small. You can make them as big as you want if you want to. 3,000 square foot, triple wide. We can make it happen. I mean, and people do, man. There is a like 10,000 square foot manufactured home on the Gulf of Mexico right down the street from my home in Tarpon Springs. And it's like a $7 million manufactured home. It's great. So you can make them as big as you want, but they're, they're just not the tr. They're not trailers. And they damn sure aren't the trailers of the past, man. They are really nice finishes. And also what's cool is, as David was saying, we also do get to keep our guys that, you know, I've been, I've been running construction crews for 17 years now. So I've got Tradesmen that have worked for me for 15 of those 17 that I care about, you know, they, they come to my kids birthday parties, I go to theirs. Like, they mean a lot to me. So it's really nice to also be able to, you know, call my cabinet installers and bring them out to the projects and put them on because everything comes flat packed. So you still need to have the cabinets assembled, you still need to like have all the finishes done in the home. So it's really nice to still be able to keep our contractors busy, keep our plumbers and electricians busy getting everything strapped in. So. So it's nice, man. Once we found this business model, we quickly realized that we are in alignment with it. And it's like all the joys and profits of new construction with half of the headaches and I am a okay with that, man.
[00:49:24] Speaker C: Yeah, maybe even less than that.
[00:49:26] Speaker A: Yeah.
[00:49:27] Speaker B: Well, what, what advice would you give somebody who's maybe just starting out in this and they've got a small budget? They, they don't, they're not banking like you guys are. What, what, what advice would you give to them?
[00:49:41] Speaker C: But yeah, I mean, Justin kind of hit on like, you need delayed gratification with it, right? Like these, the, the barriers of entry are real. You know, being people that were, you know, veterans. What we would call in this game of real residential real estate, it's, it's definitely pushed us even to like extend out the, the tarmac that we were not expecting. Right. And these are people with backgrounds in operations, backgrounds in sales, backgrounds in marketing, backgrounds in underwriting. Right. So there's so much to be able to put into like. Well, what, what I would say is, I would guess start small and get kind of like just the same way in wholesaling. Like, like, I think it'd be a very big mistake to have like a level 5 flip as your first one because you're going to make a lot of mistakes and you're going to spend a lot of money and don't try taking the world on its first shot. Right. Like, I think that's a very quick way to fail. It's, it's thinking that you can just conquer like an entitlement deal, especially by yourself. If you are going to have something that kind of comes through the way that I, I first got my first rental, the first time I ever did my new construction, the first time I ever subdivided land, the first time I ever flipped it. I got somebody who had experience already in that and I was willing to defer a lot More than like a 50, 50 partnership to a, learn from them and then B, bring value to them because now they will be somebody in my old school Rolodex, right, that I know I have brought value to and I will continue to bring value. And they saw that from me. So I would say that would be the best way to get somebody that you think is already being able to get success within that and just be willing to, you know, surrender a little bit of your ego. Don't think you're going to come in and try doing 50, 50, you know, be okay with getting the experience because the experience is much more. And this is unfortunately, you know, just. And I do a lot of stuff for free. A lot of seminars, a lot of workshops, a lot of networking events. Like, I can't tell you how many that we've done. And unfortunately, time and time again, Joe, people put the dollar before the actual value of the networking. And I can tell you, and I know Joe can tell you and I know Jessica could tell you, audience, that when you do that, you will not be around for eight to 10 years. And if you do, and if you are that person for eight to 10 years, I can guarantee that nobody will want to work with you. Like, like it is that simple. Like, we all know, like, and somebody tried pulling that move with us a little bit earlier. And I'm like, I'm surprised somebody would try doing that after all this time. You know what I mean? Like that it's like, it's very. A faux pas, almost tabooish. Like you, you, if you've been able to go this far, why are you now willing to, to sacrifice your ethics or your standards? Right? Yeah. And I think being able to be somebody new, establish what that means to you, surrender a little bit of that ego, learn from them, and then you can start consistently doing stuff that. That's when I first, my first flip led to like the next 10 flips because of the experience that I got learning from somebody who has done over a 200 flips, no doubt.
[00:52:47] Speaker A: And to piggyback on that. So if they were just getting started and they didn't have a big budget, I would say one of the best ways to test the water and see if this is something you wanted to do would be to reverse wholesale a deal, which is actually a totally viable plan in land, in houses, you know, reverse wholesaling stopped kind of working when the hedge funds stopped buying blindly.
But essentially, if you take the same business model and, you know, anybody listening can literally do this today, pull up, I Mean ask Chat GPT to research an area for you that has land transactions. Hire Ask ChatGPT to give you the zip code within a county that has the most like quick claim deed transfers or vacant lot sales. And then pull up, pull up the data that you get. Then take a look at the new construction that is selling. Call the Zillow listed builder of it, skip trace them and if you want to do it for free, you can go on like true people search or, or just do enough Google digging and scrolling through Sunbiz, you'll find something eventually. Call the builder who built said new construction house in that area and tell them, hey, I'm thinking about buying some land for sale in this area.
What would you pay for a lot in this area to build a similar house on?
And they'll give you a price. They'll say, okay, I would pay 50k for it and if you find it for me, I can buy it within 30 days. Well, now you know what the builder is going to pay and you already have your client. So then you just target identical lots, which there's lots of software. But you can literally, if you are on a budget and you want to do this for free, you can literally do it on Google Earth and you can do it on the GIS map for the county and just pull up the vacant land, find parcels that are similar, skip trace the owner, send them a letter, call them, do whatever, offer them 30k for their land, put it under contract, and then you can literally bring it right to the builder. And you just created $20,000, which now you're not on such a tight little budget and you can do that in literally 30 days. And that's something that every single person here that's listening can implement tonight. Because that business model works. It's not necessarily our business model, but if you are like, maybe I want to dip a toe in land, that's a good way to dip a toe in without, you know, accidentally blowing through, you know, 20, 30k on marketing just to find out you don't even like land or understand it, you know, or join in a bunch of masterminds just to give up halfway through. So you can DIY it for sure. And that is one way that you can literally create $20,000 out of just sweat equity and thin air. And that's the magic of real estate, is it can create wealth because that 20k didn't exist yesterday, but now you could literally have it on a contract.
[00:56:11] Speaker B: Yep, Just got to do your homework. Got to do your homework, do the Work behind it, and you can do it. Which brings me to.
We'll wrap up now, but I just want to. One thing that we always put out there is our mission is to help people aspire to a better life. So I always like to ask my guests before we leave, and I'm going to start with you, David, who is a person who has helped you aspire to a better life.
[00:56:36] Speaker C: Wow. Who's inspired me to do a better life, actually. I know he. I know Justin just mentioned like, like, coaches and stuff like that, but a coach that has been part of, like, dang near every part of my growth in. In real estate, in. As a man, as. As an entrepreneur. Tom Kroll, who's based out of Port St. Lucie, has been somebody I've always, always looked up to. A man that he's willing to tell you and show you how to be able to do stuff, not even being somebody that's okay with complete failure. Like his. Oh, his whole thing is. Is imperfect action. Right. He understands that this world will be completely fine if you. You. You fail, but you stumble forward on it. And I needed that kind of validation because I think when you start jumping into stuff like this, you get analysis paralysis. So sometimes you just need that person behind you to go, hey, like, put their hand on your shoulder. Hey, it's going to be okay. It's going to. Maybe it'll suck for a little bit and maybe you don't know what you're doing. You'll be fine. Right? So sometimes you just need that extra little, you know, hand on the shoulder to be able to help you out. And Tom's. Tom's been like a coach of mine on and off for seven years, so I've always appreciated his. His value, his input and just overall perspective of life.
[00:58:03] Speaker B: Justin, what about you, man?
[00:58:07] Speaker A: I wish for my Oscar speech I had more time because there's a lot of people I would want to thank, man. But I would say in the real estate space, it's probably, you know, my buddy Brandon Turner, who used to be huge in bigger pockets and run their podcast. Him and I have been buddies since, like, 2011. And he's one of those people that every time I talk, he listens and he tries to help solve the problems. And he. He just approaches everything from, like, a positive light, you know, like, how. How can we fix this? How can we make it better? Who can I introduce you to? And also, his. The way that his brain thinks is not the same way that my brain thinks. So something might be a blind spot for me that I didn't even think of. And I can't tell you how many times I've pivoted in my personal life and my business life because of conversations with him and you know, him and his Maui mastermind have. All those people have become really important to me and I'm just so happy that life has led me down the road to have such cool friends like that in the real estate space and then outside of it, man, I was actually talking about this person earlier. I don't know them personally, but they wrote a book called Just Listen. His name is Mark Gulston. He is a like crisis negotiator turned author. And I would say his book Just Listen was one of the most monumental books I've read in the last five years. I kind of feel like it's like a modern day and age how to win friends and influence people. And I thoroughly enjoy that book and practicing what it talks about. It's changed the way that I communicate with people. It's made me start understanding a lot of the bad habits I had in conversation and not making people feel truly heard. And if people don't feel heard, then they're most likely not going to talk to you about the important stuff. And when you're trying to run a multimillion dollar business with staff that rely on us every single day to feed their families, being a good communicator is probably the best skill set a leader can possess. So that book, if anybody is like I need a good book to read. It's a game changer. The book is fantastic and I'm just really happy that Mark Gulston chose to write it because it completely changed how I communicate with people and I think it's made me a better friend, a better leader, a better father and just a better community member. And all of those things are very important to me.
[01:01:01] Speaker B: That sounds great. We'll definitely put a link to it down in our show notes as we will also put links for your contact information for for David and Justin, I want to thank you too for coming on Trust this today. It's been very enlightening about land acquisition and wholesaling and mobile homes and everything else that you guys have talked about today as well as communication and leadership. I want to thank you both again for coming on today and until next time, I want to just ask everybody to Trust this.
Thanks for listening to this edition of Trust this. If you got something out of it, please press like and subscribe and give us a five star review to help us reach others who can benefit from this series. Until next time, keep aspiring to a better life.
