Financial Freedom from Land Lending and Investing

0:00You didn't have a military background you went to West Point you know went the Special Forces route you served as a as a Green Beret what made you decide to to get out what made you decide to leave the Army really twofold one was family you know I had missed the first couple years of my son's life just due to deployments and training cycle and then we learned we were having twins which just just really didn't want to repeat that experience so wanted to just stay closer to home so really just more time with family and that'll be like a Common Thread throughout you know what I do even today and then the second was I I wanted to be an entrepreneur I wanted to be a business owner I didn't know what or how but I knew that you know their

0:49Friends and family around me had done it and it was just a a rewarding experience for them and their family and so that seemed to be kind of the next progression for me and and and so it was kind of like a a push and a poll you know the the P the push was like hey you have a family so you need to get out to take care of them and then the poll was like I really want I aspired to to kind of start something on my own you know and build build an organization that where where I can create my own task and purpose my own goals you know create a vision for what I want to accomplish you know what I think has the most impact and so that's what we're doing nice nice nice and so what year was that that you left and then what were kind of the first steps that you took to to lean into that

1:37Entrepreneurial drive that was 2017 I mean I kind of made the decision in 16 15 16 and then kind of started setting things in motion for my exit and 17 my separation I had some friends that were already in real estate fortunately friends and family and so I learned a lot from them like you know in preparation of getting out I had a friend that was doing real estate development in in Florida so right down the street he he was part of a group that was building multif family Senior Living retail he was building Custom Homes you know things like that and then I also had an army mentor of mine that was doing land so I say doing land because there's so many different strategies in land that we can that we can get into certainly U but he was

2:25A a retired Colonel that I had met and he was he was doing all kinds of strategies within Land one of them is was buying and originating mortgage notes backed by land and so it was I I can't remember exactly your question but yeah it was 2017 and it was really those two those two kind of points of contact of mine that were already kind of way ahead of me in in real estate that I was just I kind of jumped in with them and learned as much as I could with them invested with them and that's where I kind of cut my teeth in real estate got it okay yeah and I think there's a lot of people listening that are probably in that position in in their life where they're like okay I'm I've been doing something else I want to get into real estate did

3:14You I'm curious like did you go and work for one of these individuals for a while and sort of like Apprentice with them or did you just kind of use them as a mentor and start your own thing and looking back do you think that that was your approach was the the way you would recommend to other people well I actually did both it was my full-time job so I started with a an unpaid internship that turned into a full-time job at a development shop and that was cool that was great because I could I saw like all all sides of a real estate deal from acquisition to you know the underwriting you know the equity side the debt side putting together the performa all the

4:02Way through you know construction and property management and then even asset management and a little bit of brokerage so kind of seeing all facets of of a real estate deal and and the full life cycle of a deal on the side I was doing land on the side I had my mentor friend and really the land stuff had really nothing to do with like the traditional real estate activities that I was participating in as a W2 employee M so I know not everyone kind of has the opportunity to kind of do both I think both are fine I think as long as you have someone in your in your in your court in your corner if you will that's like maybe not too far ahead of you and they they're willing and able to kind of Coach you and Mentor you through through what they do

4:50You know they have a strategy maybe that you you believe in or that you think you could do yourself I think that's the key is just finding that person that you like and trust that can it's again not too far ahead and then just keep it simple hope that answers your question I kind of kind of did both but as long I mean I think you can do either one it's it's it's I mean just kind of depends on where you're at like what you're you know how much flexibility you have yeah no I think that's great advice and I think it's way smarter than the way I did it you know I got out I wanted to get into real estate investing and just decided I'm going all in you know instead of having sort of an additional source of income I just assumed you know I'm going to figure this

5:39Thing out make a bunch of money so I moved into my parents' basement and tried to get a real estate business off the ground and it took a while to to get going and it took you know a lot of missteps with deals in the beginning because you don't know what you don't know and and so it had to learn kind of the hard way and I look back and I'm like you know had I done something like you where you know you you do both you know you kind of go to the the N9 to-5 and maybe set it up where there's a a N9 to-5 that complements your real estate investing business and then on the side you can start your own and kind of build the bridge as you go as opposed to to Jumping right in so I like that yeah but I think there's something to that though Kirby I mean I think there's I think as long as you don't fail too big yeah I think there's a there's a lot of value to to going for

6:27It that's true I know l maybe it's maybe it's you know a factor of like the the the the network that I'm in but they like people don't want to fail like they're like I don't want to look dumb don't want to fail like I you know I just want to just kind of play it safe just kind of more conservative that's that's how I am quite honestly but like yeah you have to make decisions you have to do a couple deals do smaller ones you know and and co-invest if you can find a way to like co-invest with someone like they've kind of vetted it you wer you would never really be able to do it yourself but if you kind of jump in some other people's deal on a smaller on a smaller deal whatever the asset classer strategy I think that's I think that's valuable you learn so much by doing and failing point and so like yeah as long as you don't fail too too big I think it's I

7:15Think that's there's some wisdom there actually yeah yeah no that's that is a good point because there's there's classmates of mine who at the same time were getting out they said they want to get into real estate but took you know the 9 to5 and that took so much of their focus they're still in a position where they haven't done a deal or maybe done a couple I've done hundreds of deals at this point and went through some some painful painful experiences along the way where you know I was like rubbing together pennies to try to buy groceries but at this point you know 13 14 years later we're in a really great position where we don't need a W2 anymore and you know we can live off the income from our rentals so so I think there's two sides to every coin that's a great point you bring up so when for you when did you know it was time to leave your W2 and start

8:04or or just focus on your own personal business full-time well again that was always an name of mine when did I know for sure it was when I had the cash flow enough to do it okay like it was when the passive income was predictable enough to to rely on for me and my family got it so that took you know that took years it took six six years okay you know and and and yeah I think that's the I think that's I guess maybe the lesson there is yeah it's just build slowly you know like don't don't play the get-rich quick like no one deal is going to change your life but like multiple smaller you know simpler deals

8:53I think is was at least my strategy there probably different ways to do it but I was like let's build the income let's build the simple safe structure the cash flow structure similar to kind of sounds like what you did and then once that's big enough you can rely on it you know what you're doing and and you see a track like you you can point to a track record and you can lean on like a a pip future pipeline then then maybe it's time yeah and with the and for me it was like I guess maybe when I realized that like my W2 was I was the time was so valuable like I needed that time like I had something there that like I like every hour I was spending in my W2 I was like man these are hours that I could precious hours that I could be committing investing

9:42in my business you know towards my goals you know when I felt that I'm like I'm actually losing money I'm losing money by by working that additional hour at my W2 you know not really but you know what I'm saying like you're the opportunity and and maybe and I probably could have left you know a year sooner but it was just my my conservative nature to be like let me just let me make sure let me spend another you know but I think when you get that feeling that like every every minute that I'm spending here is something that I you know I really could be pushing on my my thing over here then it's then maybe it's time yeah yeah yeah and I I've noticed that I think with most people that I've worked with over the years that

10:31Have eventually left their full-time job for Real Estate for Real Estate it's I feel like they've waited too long in most cases if they're overly conservative and I feel like a lot of people look at it as like I need to get to this point that they look at as like the Des like the Final Destination like I need to get to $10,000 a month of net cash flow to leave my full-time job because that's going to replace my income but that's like a starting point once you free up 40 plus hours a week like you just said like now all a sudden you have so much more time to focus on your business it's going to increase quite a bit from where is the day you leave your your nine to 9 to-5 job if you're ambitious enough to build up that much cash flow you're probably going to be ambitious enough to keep doing something that's going to continue to

11:19To build more cash flow over time so that's a great Point so from a strategy perspective you said you left when you you built up enough you know recurring cash flow to feel comfortable with most people when they hear land they don't think of cash flow you know Banks like tend to treat it as a non-performing asset because you can't make money from it you know it just sits there so how does one build up cash flow from Land to to you know recurring cash flow to live off of well the two strategy that I really start with one was just flipping land we would buy the off-market properties and then flip it within you know a few months and so it's not cash flow it's not passive cash flow but when you have the systems

12:08In place and you have multiple small deals happening that it kind of feels like it is right but the second one the second strategy that I love that is very passive is when you sell those when you can you have land and you sell it on seller financing and you hold the note and your buyer or borrower is paying you monthly monthly payments principal and interest payments then that becomes a a note that you're holding and that's very passive and so that you know you can do that repeat that and that's a that's the very scalable business that that I'm in now is holding a portfolio of notes that cash flow so you're right land is and that's kind of why I like land because you're like land like it it it doesn't you know on the surface you're kind of like why I mean unless you're leasing it to a farmer you know well

12:56It doesn't cash flow and for those reasons I like it because not many people are in it it's a it's a less competitive Niche it's it takes a little bit to kind of understand the nuances of of of land a little bit harder to underwrite but that for those reasons that's what we we've kind of we've excelled at it we've carved out you know a nice market share of of what we do yeah nice and and I I'm with you I mean I love land we live on on a farm so we've got a bunch of land here and we it's it's almost kind of Addicting like you have some land and we love going out there on the four-wheeler we love like we we give the hay to a we have a big hay field and we give the hay to a farmer a cattle farmer and then he gives us a half a cow at

13:44The end of the year so got a freezer full of meat yeah so we know it's grass-fed because it's our grass that's feeding it and you know we've got a bunch of animals we grow a bunch of fruits and vegetables but you know once you have it you're enjoying it then it's like you know it'd be cool to have more acreage and but the thing about land that's always been a challenge for me is with a house I can look at a house especially if I know the area pinpoint of value on that house land it seems so abstract and it's it's so difficult because like when we were buying this land it was listed we felt like we got a good deal but there was a lot of people that passed on it you know so it was like it it's kind of like the value is in whoever is buying it so how do you know as a land investor that there's going

14:33To be a market for the land that you're buying yeah well I like to say that it's a it's a little bit of Art and Science because you're right there is there's some subjectivity to it we take the we we start with the the science part and so we'll get a a full you know competitive market analysis on this through land specific Brokers so the the folks out there who like that's all they do Mossy o white tail properties some of these guys like like live and breathe land they're they're Hunters they're Farmers they're Ranch guys like they they know land they love it and so we talk to them specifically like what do you say this wor with this this is worth you know on a per acre basis you know sometimes there's not great comps in the in the mediate vicinities you kind of have to be be creative there but we start with that we start with our land agents sometimes we hire a you know

15:21Appraiser appraiser to get that done and then from after that it's it's just kind of yeah it's it's it's just comparing just the attributes of of your land vers versus what is what has sold you know like you have to you have to go down to you know is this on a dirt road or paved Road what's the slope look like you know what kind of water features are there how's the soil you know what's what are the surroundings like what do the views look like how much Timber value is there you know and so we hire a sometimes a handful of Consultants to to help us through especially some of the some of the smaller properties we don't but certainly on some of the larger ones we'll hire a variety of Consultants to help us pinpoint that that value I

16:10Soil's guys and Timber you know forestry guys M and and they can usually pinpoint pretty well and then and then you know and they tell me it's it's worth this I'm like okay let me take off 20% and if the deal works you know what I mean like if they say it's it this is worth you know 200 I'm like okay let's take off 40K and does it work at that at that you know level that at that value yes then I'm in got it you know let's just assume that and even after telling them to be conservative I'll assume that they weren't because most agents aren't yeah you know they'll try hey it's yeah it's worth this I'll sell it quickly and all these things you know you get it but so yeah we'll we'll be ultra conservative on on value okay so it sounds like you're you're focused on more

16:58Large swats of unimproved not like lots not not individual Lots buildable Lots both both yeah I mean we like both I mean pretty agnostic on the the size of the land we we really take every parcel on its own Merit so I mean I like the the the the quarter acre in an HOA I also like the oh yeah I also like the 200 acre you know in the middle of nowhere Oklahoma you know and everything in between I think we we have our stats on our average acreage size is in the teens okay you know mid teens so yeah I mean generally it's it's maybe where like on the land that you live on it's it's someone that wants to raise their family on you know and have some some Elbow Room and we're seeing so much more of a demand these

17:47Days I mean we just bought a bunch of Acres you know in Middle Tennessee outside of the N just outside of the Nashville MSA and a lot of our you know folks that are interested in that land it's it's people people trying to get out of the the hustle and bustle of of Nashville or sometimes they're moving from California actually and want and they want the the Rolling Hills of Middle Tennessee and it's just people that want to yeah they want to do they want to have some cows and and hay and shoot their guns ride their ATVs and spread out a little bit and so this yeah this is this is a it's a great Niche but it's also it sounds like maybe for you too it's a it's a a fun Niche because I too like enjoy you know Recreation land and kind of getting out there with my with with my kids and our our recreational activi so I mean it's it's kind of has something

18:35For everybody