Most people think that owning rental properties is the only way to generate passive income from real estate. However, there are many other ways to create passive income within the world of real estate. You can even create passive income without ever buying a property (writing a book about or creating a website for real estate). Mark Podolsky (also know as the Land Geek) is the guest on today’s episode of the InvestFourMore Real Estate Podcast. Mark earns passive income from land ownership. In this episode, we talk about how he got started investing in land, how he finds awesome deals on land, and how he creates a steady income from selling land.
Listen now by clicking the Green button below
How did Mark get started in real estate?
When he first learned about investing in land, Mark was an investment banker. He had a great job in the corporate world, but he hated it. One day, one of his friends introduced him to tax-deed auctions. This friend took Mark to an auction where he showed him how to buy land for pennies on the dollar. At his very first auction, Mark bought ten pieces of land in New Mexico. He was immediately hooked and ended up earning a 300 percent return on his investment. Yet Mark was not quite ready to leave the corporate world. Over the next 18 months, he learned more about land ownership and continued investing more time and money into it.
How did Mark make the full-time jump to real estate?
Mark was making more money investing in land than he was at his corporate job. He decided it was time to quit and focus on investing in land, where he did very well from 2001 to 2006. However, Mark admits it was easy to do well during that period—a period when it seemed like anyone who bought property was making a lot of money. Mark actually continued to do well until 2010, as land tends to take longer to reflect changes in the market. But sure enough, between 2010 and 2013, those market changes caught up. He suffered a huge drop in his income due to low demand for land. But, he survived and continues to thrive.
How does Mark invest in land and create passive income with it?
Mark tends to buy very cheap pieces of property. Some of the parcels he buys are less than $1,000, but these deals are not widely advertised. He must work hard to find them. Mark buys some properties from auctions but admits that, thanks to increased competition, deals are not as good as they used to be. Now, Mark focuses on finding his own off-market deals. He looks for property owners who are behind on their taxes and who live out of state. He seeks property owners who are often very willing to sell cheap. Often, Mark is able to buy properties at 25 percent below their market or initial value.
Mark then sells the property with owner financing by advertising it online. Usually, the down payment he earns from owner financing covers what he paid for the land. All the payments he receives become profit. Since he deals with raw land, he does not have to worry about Dodd Frank seller financing rules.
Is it hard for Mark to find buyers for his properties?
No! Plus, I assumed that most buyers of Mark’s land would be looking to build on the land. However, they are mostly people who want to use their land for recreation, a place to get away, or to be able to say they own land. Mark is buying land in the most-desirable states, like Colorado, California, Texas, and Florida. I asked Mark if he sells swamp land in Florida, and he does! Apparently you can grow some pretty awesome Shiitake Mushrooms on swamp land.
Mark sets a variety of terms to sell his land. On some deals he uses 5, 10, 15, or even 30 year notes. His interest rates can vary from 0 to 13 percent, depending on the land and the deal. If a property owner happens to default, it is very easy for Mark to take possession using the terms set in his land contracts.
How can you learn more about Mark’s land-investment strategies?
Mark created many programs and resources for people looking to learn how to invest in land. He loves land, and it’s the only thing he invests in. Mark has a very popular podcast and awesome website, and you can find any land-investment resource you could want here: http://www.thelandgeek.com/
Update on new books coming out
My new book on buying and selling houses is complete, but I have to go through the publishing process. I hope to have it ready within the next month. I am also writing a new book with J Scott which will be ready at just about the same time (I love it when things like that happen). You can get updates on the Book on Negotiating Real Estate by liking this Facebook page. The release date for the book is April 25th, and we have a few contests running where you can get a free copy by heading to our Facebook page!
[0:00:58.9] MF: Hey everyone, it’s Mark Ferguson with Invest Four More. Welcome to another episode of the Invest Four More Real estate podcast. I have a really great guest on for today’s show, Mark Podolsky, who is commonly known as the Land Geek.
He’s called that because he’s done over 5,000 unique land transaction since 2001, one of the top land investors in the country. So I’m really interested to talk to Mark about why he loves land so much, how he invest in it, and he also is able to create passive income from land, which might be something that most people aren’t familiar with.
So, Mark, thank you so much for being on the show, how are you?
[0:01:36.0] MP: Oh, I’m great Mark. I’m thrilled to be here, thanks so much.
[0:01:39.2] MF: No, thank you for being on, I appreciate it. One thing I always like to start with is where you first got your interest in real estate? Did it start out with land or was it houses? How did that come about?
[0:01:51.5] MP: So I have a kind of a weird way of getting in the real estate. I was actually a pretty miserable investment banker and I was working in Mergers and acquisitions with private equity groups. Mid-market stuff, five to $500 million in enterprise value. We hired this guy at my firm and he’s telling me that he’s going to these tax deed auctions and he’s making a 300% return on his investment on his money, right? Now, remember, I’ve got a 45 minutes commute to work and back. It’s high stress, I’m micromanaged, I’m in a cubicle, I hate it right?
This guy is telling me he’s making this, doing this kind of side hustle, making ridiculous returns. I’m Missouri, I’m from the Suomi state, right? I don’t believe him because I’m looking at companies all day long and the average company, I mean, a great company, let’s just say a great company has 15% EBITA margins or free cash flow, right? Great company.
Your average company’s a 10% and coming all day long, less than 10%, he’s telling me he’s making 300%. I go to this tax deed auction with him, I got like three grand saved up for car repairs and I just do exactly what he says to do and I buy 10 half acre parcels in like rural new Mexico for an average price of $300 each, this is in 2000 by the way.
I do exactly what he tells me to do, I put them up online and they sell for an average of $1,200 each, 300%, it worked. So I take all that money, I go to another auction in Arizona and there’s no one in the room, I’m buying up properties for like next to nothing, I buy up as much as I can, do the same thing again, I made over $90,000 on that next auction.
So I go to my wife and like, “Honey, I’m ready to quit my job and I’m going to invest in land full time,” and she’s like, “Absolutely not.” So I worked at land part time in like the nights and the mornings and the weekends for 18 months until the land investing income exceeded my investment banking income and I’ve been doing it full time ever since. So it took like about 18 months.
[0:04:00.1] MF: Wow, so nice connection to have with your friend there.
[0:04:04.9] MP: Yeah, he was kind of doing it at the same time. Like, you know, he wasn’t really a mentor, he just kind of told me what he’s doing. You know, we just kind of did it together at the same time.
[0:04:14.8] MF: How tough was it? I talk to a lot of people who are in the corporate world and kind of the same story, they just hated the commute, the management, being micromanaged without control and I’ve dealt with a corporate world where it seems like, you know, it takes 10 phone calls to make one decision on anything and it drives me crazy. But how hard was it? Kind of letting go of that steady income and moving into your own business?
[0:04:36.6] MP: How hard was it? I mean, at the time, you know, it wasn’t that tough because I was so miserable and I had made these small bets on land and so I was so comfortable in the sense that financially, because it was working, right?
It wasn’t like a typical startup where I was like ramen noodle poor and having the kind of, you know, make a lot of sacrifice, work 80 hour weeks. If anything, I kind of had, I think, a very skewed view of the world and it actually ended up hurting me, it was actually a little too easy, to be honest in the beginning.
I rode an amazing wave in real estate, it wasn’t me, it wasn’t like I was smart or anything. It was just form 2001 to 2006, anyone in real estate were just making tons of money, right? It wasn’t until 2008 I really had to treat it like a business and it was more of like a blessing in that sense.
[0:05:40.3] MF: So what happened when you got to that point of 2006, 2007 and the market started to collapse, did it completely change your business?
[0:05:50.0] MP: Well, you know, land is weird because it’s sort of the last to get hit and the last to recover. So my business was very profitable in 2008 and 2009. I didn’t get hit until 2010, right? Really, I really felt it in 2010 and then we really didn’t recover till like maybe 2013 in the sense of I had like a 50% drop in my income ,right?
Now, I was still profitable and it wasn’t that bad but personally, I had to make some tough choices like, you know, just lowering my personal overhead.
[0:06:29.0] MF: Right. That makes sense. I think there’s a misconception that every real estate investor got wiped out and went bankrupt during the housing crisis because I flipped houses through it, we survived, it’s fine, I did an article a while back that said, I think 7% of real estate investors lost a house or 7% of loans were taken out right before the real estate crisis, ended up going to foreclosure. It wasn’t quite as bad as many people make it out to be but you still have to be careful.
Was there anything fundamentally core to your business that you think helped you ride through that downturn?
[0:07:02.5] MP: I would say that just the niche itself, because the way we sell it, is intrinsically, we’re kind of recession proof in that way, right? Almost everyone can afford our raw land. From that perspective, I think that really helps, right? I’ll kind of walk you through the model because it’s a little bit easier to see. What we do is we look for people that are distressed in some way. The way we know they’re distressed is they owe back taxes on their piece of raw land. Our lowest hanging fruit is somebody that owes back taxes and lives out of state.
So what I’ll do is I’ll look at the comps in that area and I’ll just divide by four and that gets me like that Warrant Buffet margin of safety of 300%. Then we’ll actually send them an actual offer, right? I might be buying properties for $10,000 or less. I don’t have to use private money, it’s all kind of cash, right? So we go through due diligence, we close it to our seller and then we market it online and our margins are typically 300% to a thousand percent.
Now, the way we get to a thousand percent is we do owner financing and that’s why I call this the best passive income model because we usually get our money out on the down payment from our buyer and then they make recurring payments to us on a passive basis. So we’re getting in this sort of recurring income without renters or rehabs or renovations or rodents and because we’re not dealing with a tenant, we are exempt from Dodd-Frank, we exempt from Respa, we’re exempt from the safe act.
So essentially, we’ve got all this cash flow coming in from these notes and we don’t have to deal with any of the nutritional headaches of real estate. Nothing to maintain, nothing to protect. It’s about a car payment, right? We really don’t get affected too badly in those scenarios.
[0:09:00.6] MF: No, that’s really interesting how that works and then yeah, that’s a great point about Respa and not having to go through the normal seller carry laws and rules. For those people who don’t know, that Dodd-Frank have changed all the seller financing where if you want seller finance a house, you better have a lawyer, make sure you’re compliant, everything’s done right. But with land, you don’t have to worry about it.
When you’re selling these or doing owner financing, are you selling to people who are looking to build a house eventually? What’s your typical buyer look like?
[0:09:30.1] MP: The typical buyer is somebody that heard kind of growing up, “You should own raw land,” right? My buyers are what I call legacy investors. Ted Turner who is one of the largest land owners in the country has a great quote. It’s like, “Buy land, it’s the only thing that lasts.” When you think about it, it’s true, right? It’s the only thing that lasts. We get people who buy land that use it recreationally, use it as an investment, they want to take their family out there, they’re preppers right?
So a prepper is somebody that’s hoping for the best but preparing for the worst, they want a place to bug out to. You know, 90% of the cases, I call it man jewelry. They just want the pride of ownership, you know? They don’t even go out there and visit the property, it’s a very interesting niche. Military people love this property by the way.
[0:10:19.9] MF: Okay, interesting. Are you buying all…
[0:10:23.7] MP: I’ve done 5,000 unique transactions since 2001. I mean, there’s a lust for land in this country. I’ve never been stuck with a piece of property.
[0:10:33.5] MF: Right. Are you buying all over the country now?
[0:10:37.7] MP: No. So, Mark, nobody wakes up and thinks to themselves, “Boy, I’d really love a piece of raw land in Arkansas,” unless you live in Arkansas, right? They do like the idea of owning raw land in California, Nevada, Texas, Arizona, Colorado, Oregon, Washington, Florida, right?
The sunshine states and areas that are growing fast. Those areas are really where we focus and we don’t — I mean, look, I’ve made money in Oklahoma, I’ve made money in Pennsylvania but I don’t focus there.
[0:11:14.2] MF: Okay, that makes sense and of course we’ve always heard the thing about buying swamp land in Florida, I’m assuming you’re not selling swampland?
[0:11:22.4] MP: Well, you know, it’s funny because swampland I’ve actually had somebody say to me, “Mark, buy me some swamp land in Florida and I’ll pay 80 cents to the dollar for it.” And I’m like, “What are you going to do?” They’re like, “We’re going to grow shitake mushrooms on it.” So the swampland in Florida actually does have the highest and best use.
It’s crazy. I had a guy, I mean, this is the land that looked like Chernobyl, it was so ugly. He wanted raw land in Arizona, in this one area in southern Arizona and I’m like, “What are you going to do there?” He’s like, “Well, I’m going to grow olive trees and I’m going to start selling olive oil,” and that’s what he did.
[0:11:59.2] MF: Wow, that’s cool. I guess you shouldn’t have your preconceptions about what is good and what is bad. You can use land for so many different things.
[0:12:08.3] MP: No, it’s true. You’re not the market, the land that I wouldn’t buy doesn’t mean that someone else wouldn’t love it. I have to remember that all the time and you know, today, I mean, I really kind of fight being a land snob and I’d live by the creed, there’s a pig for every barn, and there really is.
[0:12:28.1] MF: Nice. Now, you’re dealing mostly in low price transactions. I’m sure you have to do quite a bit of them to keep your income up, to keep the passive income up. Have you built a business around kind of managing and finding these deals or are you still kind of the primary person doing the work?
[0:12:44.3] MP: Yeah, so the company’s 90% automated with software. Basically, I work two hours a week in Frontier Properties, the land investing company. We did 192 deals last year. The way that we can do that kind of volume and I myself personally only working two hours a week in the business is it’s all software driven and then we have an acquisition manager in a VA team running the business.
I’m kind of just handling the meetings and looking at reports and it’s a machine and on the back end of it, we actually created a software product and there’s a lot of different use cases like landlords could use it, called Paymentgeek.io and what payment geek does is it automates collecting payments from our land owners that are borrowing from us right?
It’s a set it and forget it system, it does on the back of accounting because we’ll charge them interest and then it does amortization for them, they could log in, they can see their current balances, they can make a prepayment, they can pay via ACH. If ACH fails we charge their credit card on file. So that lowers our default rate considerably by having two forms of payment, automated. Even that is set it and forget it. It’s just all recurring billing and management on that end of it.
[0:14:02.5] MF: Very cool, that’s the way to run a business, it’s hard to do but getting yourself out of it is key.
[0:14:06.5] MP: No, I mean. Look, it took four years to grade systems and processes but it’s worth that time for sure. Not today, I’ll buy anything that will save me time because I can always make more money, I can’t get more time. It’s the only nonrenewable resource.
[0:14:22.6] MF: Yup, exactly. Now, when you’re doing these seller financing loans, what’s a typical loan look like, is it a 10 year term, is it 10% interest, what do you usually charge?
[0:14:34.2] MP: You know, it just depends on the deal. I don’t have a typical deal in that sense, right? You know, I’ve gone out 15 years, I’ve gone out 30 years, I’ve gone out three years, I’ve gone on five years, everything from 0% interest to 12.9% interest. I try to keep it at a car payment. I have notes from $99 bucks a month to $5,000 a month.
[0:14:55.8] MF: okay. You mentioned too about having the double payments to reduce the default rates, what do you see for default rates typically with your land, seller finance land deals?
[0:15:05.7] MP: Now that we’re automating it, now it’s about 5% but back when it wasn’t automated, it was about 10%. In a bad market, it’s 20%.
[0:15:16.7] MF: Yeah, I imagine in a bad market, that’s kind of the first ting people would let go.
[0:15:20.6] MP: Yeah.
[0:15:21.4] MF: Their land, they’re not using.
[0:15:22.7] MP: Right, absolutely. You know, we have some things that we do to really lower those default rates as well because we constantly remind them what a good investment they made. We constantly tell them, “Hey. Thanks for being the kind of person that honors your commitments,” right? And then they’re like, “Oh, I honor my commitments,” they’re less likely to want to default with us.
[0:15:46.8] MF: Right, like you said before too, you got it setup where their down payment is probably coming close to or exceeding what your investment was. So while it’s not always fun to default and have to go through that, it’s not hurting you that badly and you can probably go find another person to sell it to if that does happen.
[0:16:04.3] MP: Well it really increases my ROI, because we use a land contract as opposed to a deed of trust. So there is no cost of foreclosure. If they don’t make their payment. Let’s say they are 30 days late and then they have 30 days secure, if they don’t cure in 30 days that we own the property so there’s no cost for closure. We keep all the money that they put in and then we just resell it and we get another buyer and then that just increases our ROI.
We sold a property yesterday and my acquisition manager’s like, “I know we’re not getting that at best and highest price for it, but it’s already been paid for, so it’s all profit.” I’m like, “Well okay, let’s just do it then”.
[0:16:42.3] MF: What percent? Are you trying to keep all of these solely financed or are you selling it so from outright? Is there a method to that?
[0:16:49.5] MP: You know I don’t buy this one, all right because I like the note income every month and build that note income. So 99% of my deals are now owner financed and if I need cash for a big acquisition then what we’ll do is we’ll sell 12 to 18 months of that note portfolio to an investor. They’ll get, let’s say 12% of their money and they’ll have a security agreement so they won’t even feel default if one of their properties in that portfolio falls out.
So that’s one of our ways of doing it so it gives us more flexibility. We get the higher up margins, we get the cash flow, but if we need cash for another big deal then we can always sell off that cash flow for 12 to 18 months and then redeploy that capital and then get that passive income back and we’re back to us in 12 months.
[0:17:43.3] MF: That makes sense. I am in Colorado and one thing that I’ve seen around here is oil and gas drilling mineral rights have gone through the roof. There are some farmers who are multimillionaires now just because of the land they own. Do you ever get bonuses from mineral rights or how do you handle that with your land?
[0:18:01.1] MP: That’s a really interesting question because usually what we’d do is we have a mineral rights strategy. It’s a little complicated and probably be on the scope of this podcast but with that being said, we do stake a claim from all mineral rights on all the properties that we buy.
[0:18:18.3] MF: Okay, cool and when I’m flipping, I’ve got 17 flips going right now and one thing I’ve done to increase my ROI is we will keep all the mineral rights in those flips, sometimes sell them. There’s companies around here who are just buying them outright for five to $6,000 an acre. That’s one way we’ve increased our ROI but it’s a simple way to do it but so many people sell a house without even realizing they have the rights or they can keep them.
[0:18:45.3] MP: Right, absolutely. It’s one of those unknown things.
[0:18:48.7] MF: Very nice. So what about goals for the future? Are you just hoping to continue your trajectory now or is there anything exciting and new that you are working on or are you trying to grow a lot? What’s the plan?
[0:19:00.5] MP: The land gate community is growing and for me, I get probably a bigger thrill now and when someone tells me, “Hey Mark, I made a $100,000 last year working part time in land and now I am retiring my wife,” or, “I am quitting my job,” right? So now I’m helping other people and that’s way more satisfying for me personally than just buying and selling raw land. So land geek and the training is really, really gratifying for me.
But then as far as the business side of it, we’re growing that. We are also going into more software type of strategy so paymikey.io, we’d been spending a lot of time there. Growing frontier so we might have a fund and take that to the next level. We’re also looking at mobile home parks because again, we’re just buying the lot. So in that way we can deploy a bigger capital if we need it.
[0:19:59.8] MF: Now do you ever invest in regular houses yourself or is it all land?
[0:20:04.7] MP: I don’t like housing because I can’t change a light bulb, Mark. Like I mean I did a fix and flip in Phoenix and I made a 100 grand on it and I was miserable. I was driving back and forth and meeting the subs and watering plants. I don’t know if I was getting hosed or not but it was not fun for me. So from an effective hourly rate standpoint, I can scale and roll in. I don’t have to go and visit the property, it’s all done online. My due diligence is done online.
It’s crazy how we can scale this thing and I don’t physically have to go and look at raw land so for me I do not love housing and if you go to a RHEA meeting and there’s a 100 people in that room, 99 of them are house flippers or wholesalers. You and I will be going land guys. So we had this massive market in a very non-competitive niche as well. So I have probably more deals than you can handle. It’s literally more deals than you can handle because it’s just so big.
[0:21:04.8] MF: It’s not a bad problem to have and I know you touched on a little bit where you’re looking for the distressed owners. Is that the main way you are finding people? Is it back taxes and out of state or you’re still buying from the deed sales and looking at other sources?
[0:21:18.2] MP: It depends on the market. In 2008-2009 deed sales are great because nobody had any money. They’re really scared right? So when the market heats up again, people start bidding up properties and they are buying them 80 cents a dollar. I’m not interested in that. So my favorite way is to do the offer strategy and get the properties from those owners before they go to tax deed sale or before they go to a tax lien investor or even if they go to tax lien investor before they go to foreclosure with the tax lien investor.
[0:21:49.8] MF: That makes sense, kind of the way a lot of flippers and wholesalers will find houses, looking for the distressed properties before they’re listed or go into foreclosure.
[0:21:59.0] MP: Exactly.
[0:22:00.9] MF: Very cool. Great information, Mark, and I know you mentioned Land Geek a little bit but tell us a little bit more about how you’re trying to help people, how people can get involved in this if they want to learn more?
[0:22:11.1] MP: Yes, so we have three podcast. We have the Land Geek Podcast, we have the Best Passive Income Model Podcast and the current one is The Art of Passive Income Podcast. So we literary have a program that just teaches people step by step how we do this and the best place to really go and learn more and see if it’s even for you is thelandgeek.com and you can get access to the free membership site. There is over 100 podcast just related to land investing and then we have the e-book, how to avoid the thief if you are land buying, the stakes, we have the passive income blueprint and it goes on and on from there.
[0:22:49.5] MF: Very cool and I’ll have show notes that link to all of that as well for people if they want to check it out.
[0:22:54.1] MP: Yeah, I think actually for your listeners we actually have a free gift. If they go to thelandgeek.com/ifm, they can download for free the passive income launch kit, which is a $97 product.
[0:23:07.4] MF: Very cool, all right. We’ll make sure to get that in there. Well great job, Mark, I think that’s all the questions I have for you. Is there anything else you want to add, maybe parting advice for somebody who’s interested in land and has no idea what they are doing?
[0:23:21.0] MP: Yeah, you know, just like anything, you should really get educated right? I wouldn’t start after listening to this podcast start making some blind offers and learn step by step how to do this and then do it, right? Take action. I’m sure you see this all the time Mark where people will learn and learn and learn but they’ll never execute. So you’ve got to do both. What do you think?
[0:23:45.5] MF: No, I totally agree. I don’t know what the percentages are but I would estimate 90 to 95% of people who want to invest in real estate never do it. So whether it’s money or just getting excited and never doing it, it’s a very small percentage of people who take the time and dedicate their selves enough to make it happen.
[0:24:02.1] MP: Yeah, absolutely. I remember reading the Rich Dad, Poor Dad and I was like, “Wow” it was really motivational in that sense. Remember the first you read Rich Dad, Poor Dad?
[0:24:12.1] MF: Yes and it was one of the first books that really got me into real estate and it’s funny too because it was a really good book but I always say it’s short on details and execution and I kept reading four of his other books waiting for when he told me to actually do. It’s very motivational but then I’m like, “Okay, I need to find another way to actually figure out how to do this” but really good motivational book.
[0:24:33.8] MP: Yeah, I think you need both. I mean you didn’t have the motivation, it helps if you are miserable like I was, that’s really even more motivation. It’s like, “Oh life is short. Do I really want to spend the rest of my life working at a company that I don’t care about and doing other stuff or working for myself and my family?” so that helps too but yeah, absolutely. The nuts and bold of it, I think are just like any other learning curve.
You’ve got to embrace the suck. You’re going to suck at first but that’s okay, right? You’ll get it better. I know I did but I am still learning. We just do it, trying out new things. It’s fun, business is fun. If it’s not fun for you do something else.
[0:25:15.1] MF: Right, yeah and here’s a really good quote or I don’t know the exact quote but the other day is just talking about if you see somebody who is really good at something, whether it’s business or sports or whatever it is, realize that they suck at it longer than most other people did to get to that point because they are willing to suffer and get better where most people would give up.
[0:25:33.9] MP: Oh it’s so true. If I had to say it, if you want the secret to success, its grit right? That’s it just go at it longer don’t give up and just know you’ll get to the other side of it, eventually. Let go of that these little mind games that you play. Like, “I should be a Mark Ferguson in 12 months.” Well Mark Ferguson probably wasn’t Mark Ferguson in 12 months, you know what I mean? So it’s like, let go of these times tables and just do your best and have faith that something good is going to come out of it either way.
[0:26:14.2] MF: Yeah, I even get stuck in that sometimes too where I get frustrated because things aren’t happening as fast as I think. But I have to remind myself as long as I do something every day that gets me a little closer at success. So it doesn’t have to happen in one day that’s for sure.
[0:26:28.7] MP: Yeah, absolutely.
[0:26:32.0] MF: Awesome. Well, Mark, thank you so much for being on the show I really appreciate it. Great advice, great information on land. I guess there’s one more question I have before we go. If someone wants to invest in land, how much money do you think they should have to be able to get started?
[0:26:49.8] MP: They don’t need any money, honestly. Maybe the cost of sending out a mailer, maybe a couple hundred bucks because I’ve got clients that have no money and what they’ll do is a brilliant strategy that we teach them is you send out the offer. So let’s say Mark you’re distressed, you owe back taxes, you live in Colorado but you’re properties are in Texas. So you accept our 20 cents offer, let’s say it’s $2,000, right? Well I don’t have $2,000.
So I say, “Hey Mark you know due diligence is going to take us about 45 days and we’ll close with you in 45 days.” Well guess what, it doesn’t take us 45 days due diligence. It takes about a day okay? So now I’ve got 44 days to send out neighbor letters and I will say to the neighbors, “Hey we’ve got this property locked up and we’re buying it but before we take it to the open market we want to give you first chance to buy it.” and the neighbors are like, “Oh my gosh. I could have a larger track or who’s going to build next to me.”
You know maybe they will ruin my view so they’ll buy it right? So then you do a dual close so you might finance the neighbor with $2,000 down at 349 a month for five years, right? You take their $2,000, you pay off you the seller and now you’ve got this note for $349 a month and you’ve got an infinite ROI, does that make sense?
[0:28:17.9] MF: Yeah, that’s a fantastic strategy and very interesting, go in with no investment and take away $300 bucks a month, not bad.
[0:28:27.0] MP: Yeah or something like that, you know money is never going to be an issue. It’s always if you buy any asset or you lock up any asset, 23 cents a dollar, there’s another ideal wholesale to me. Make yourself a 100% like I will buy it, you know?
[0:28:43.0] MF: Right, if you can find the deal there’s going to be a buyer.
[0:28:46.1] MP: There’s always going to be a buyer, yeah. Money should never be the issue. There’s so much money out there.
[0:28:51.4] MF: Awesome. All right, well I got through my last question for sure at that time.
[0:28:56.5] MP: All right, cool I know.
[0:28:58.2] MF: Mark again thank you so much for being on the show. I really appreciate it and then yeah, we’ll get those links up. Hopefully we can keep in touch and great job.
[0:29:05.1] MP: Thanks Mark, I really appreciate it and hopefully you’ll come on The Art of Passive Income podcast as well.
[0:29:10.2] MF: I would love to.
[0:29:11.4] MP: I’l get to grill you.
[0:29:14.6] MF: Awesome.
[0:29:15.8] MP: All right, thank Mark.
[0:29:16.6] MF: All right, thank you. Have a good one.