Posted on: October 01, 2021
WI 788 | Million Dollar Profit

 

Entrepreneurs may have a lot of things going on in their hectic schedules. Some may be juggling a lot of responsibilities here and there. As a result, things get hard to manage.

In today’s episode, Brent Bowers had a chance to sit down and chat with the amazing Tim Mai, a very successful entrepreneur, hard money lender, and private money fund manager. He has been investing for about 19 years now. His website has helped investors get connected with the right deals. Tim Mai also talks about some useful strategies as he specializes in land deals.

With Tim’s success, you might be thinking about how he manages to accomplish a lot of things without getting too overwhelmed, right? In this podcast, he will be sharing two of the great things he does to stay on top of his game.

Episode 788: The One Land Deal That Generated A Million Dollars In Profits With Tim Mai

We have our guests, Tim Mai, with me. This guy is an amazing human being. It’d be shorter to talk about what he does not do, but I’m going to do my best to talk about a few of the things that he’s doing. Let’s get right into it. He is a hard money lender. He’s also a private money fund manager and is investing since 2002. He’s also the creator of DoDeals.com. I love this site because he connects you, the investor, the person with the deals with the money.

What is the biggest struggle for most real estate investors? It seems to be money. Where do I find the money? I don’t know anybody with money. I hang out with poor people. Kim’s created it, DoDeals.com. Most importantly, I have him on here now because he’s an amazing and interesting person. He puts on masterminds with huge people like Ken Van Liew and Tom Crowell. I was down in the keys at a mastermind that he started. I also want to deep dive into some land deals that he’s doing. Tim, how are you?

I’m doing great. Thank you so much. It’s an awesome introduction. It sounds like it’s overwhelming to the amount of different things that I do. It’s because I’ve been in the industry for so long since 2002. I’ve done all kinds of things. I’ve evolved as an investor and entrepreneur but the people who are still new don’t let all of that stuff overwhelm you. You stop when you add then as you find your sweet spot, you’re expanding to those things.

Our readers are prying a little overwhelmed by talking about all that. How does Tim Mai not get overwhelmed? What do you do? How does your day look like? Do you meditate, time block, shut your phone off? I feel like entrepreneurs always get overwhelmed. My wife is launching a show, writing a book and also a YouTube channel. At the same time, she’s just getting overwhelmed. What do you do to keep from getting overwhelmed?

Two things play the biggest role for me. The first thing is I do every morning is meditating or going on walks in nature, which is part of my walking meditation, getting myself clear and calm because, as an entrepreneur, we always have many things going on in our business. If we come into those challenges with a clouded mind, the results are normally not as effective as we come into it with a clear mind. Morning meditation, I’ve been doing that for a while and then team, leveraging other people is a big part of what I do. That allows me to do a lot of different things.

It sounds like I’m doing a lot of things, but I’m personally not doing a lot of things. My teams are doing a lot of things, and everybody has their place. Those are the two main items for me. When you have enough things delegated, even time blocks become less important. Your time can be used to do what your expertise is and what you enjoy the most out of business. I have quite a bit of flexibility in my time.

I talked to a lot of successful people and two things you mentioned are on their top five things. Why they’re successful is one, they meditate. They take that time to be mindful, be at peace, breathe and then, number two, team, delegate. You were probably the visionary. You’re probably running around in your team and makes things happen. You show me a business owner that’s struggling. I’ll show you one without a team. My personal question here is, what about when your team is stressing you out? Do you ever have that or is that just me?

When your team is stressing you out, it could be one or the other. Either they are doing something wrong or they’re not doing it the way you want it to be done. When they’re not doing it the way that you want to be done, I learned to take a step back and say, “Do I trust them enough to do it the way they want to have it done?” If I do, I’m going to let go of that control. I’m going to not going to stress about it and I’m going to trust that.

They are the ones in the trenches. I’m going to trust that they know what they need to do. If they’re not, it’s a great lesson for them. The big one is giving your team an opportunity to make mistakes and learn from them. That way, they can be better themselves. The other one, if I see that they are clearly doing it wrong, then I’ll jump in and guide them through it or whatever that’s needed to correct what was wrong.

Trust but also verify and that’s my thing. Sometimes my team will be trying to get me on the phone at once. It’s overwhelming for me sometimes. I want to answer them, I want to be there and I want to be the superhero-like the guy on Profit First, Mike McAllen talks about. I was looking back there because I have his book. He talks about we want to be superheroes.

WI 788 | Million Dollar Profit

Million Dollar Profit: Land deals have been the most profitable and easiest deals.

 

We’re always on that high, but sometimes I have to wait several hours to reply to their call or their texts for the question because I know they already know the answer. My biggest thing is sometimes is, “What would you do? What do you think is the best way?” Most of the time, they have a better answer than myself. They’ve already got this.

Trust, but verify. It’s a beautiful thing. Most people have the right answers already. I was talking to you, and mostly it was about your event and in the keys. I was super interested in going down there, but you led into some land deals that you had completed or had going on. Is there one of those that you’d be willing to break down for our readers because I am the way and coached for Wholesaling Inc. I’ve got some people on here and they want to know what Tim Mai is doing in lands? I know that land is not your only thing. You’re doing some amazingly big things and you still have time for land deals. Would you be willing to break one of those down for us?

I’ve done all kinds of real estate deals and I wish I have started with land deals sooner. Land deals have been my most profitable and easiest deals. It meets all the criteria that I would want in a real estate asset class or real estate business. I stumble upon getting into land deals and my specialty in land deals is more in infill lots.

You have these vacant lots in an existing subdivision inside the city. A lot of times, when people talk about land deals, they’re looking at on the outskirt of town or even out in the boonies somewhere. I’m going to share about one of them that’s truly a unicorn deal, but my specialty is not in the outskirt. My specialty is inside the city when it comes to land and lots.

Entrepreneurs have many things going on in the business, so you need to be clear and calm by meditating.

To share with you about this unicorn deal that I got. I live here in Houston, Texas and this land is about an hour from Downtown Houston, on the Northeast Side. I used to do a lot of seminars and coaching where I teach students and a big part of that is for deal flow. One of my students came to me and wanted to partner up with me on this land deal. This was right before COVID-19. We close on it on March 5, 2020, right before the COVID shutdown. At the time that we bought this deal, the tax appraisal on it was $384,000. We bought it for $170,000. We already got a good deal coming into this.

$170,000 purchase price and a tax assessed volumes $384,000, which they’re usually way off. They’re low usually.

In Houston, the new assessment appraisal will come in. In May 2020, two months after we bought this thing, the new assessment came in and guessed how much the tax appraisal was?

$800,000?

It’s $900,000. This is a 43-acre piece of land. I found out the reason why the tax appraisal went in so much is because there is a toll road that is making it loop around the outskirts of Houston. It’s called the Grand Parkway 99. They announced that the toll road was going through that city. Developers quickly jumped out in that city and bought up as much land as they could. That’s what spiked up this deal. I knew about this coming into the deal that the city was going out there. However, I did not know that it would cost such a spike.

WI 788 | Million Dollar Profit

Million Dollar Profit: One acre can easily end up in that market for $50,000.

 

After we bought it, my partner and I were like, “What are we going to do with this thing?” Let’s divide into smaller parcels and we sell it that. We decided, “Let’s divide it into five different parcels.” We sold off the first two parcels. One is a 1-acre, low parcel because of how it is seeded. The other one was 7 acres. We sold off a total of 8 acres. The 7 acres we sold for $150,000, the 1-acre we sold for $28,000. As you can see, selling off the 8 acres, we already made back what we bought for the entire thing. Now we have 35 acres of land free and clear.

$150,000 plus $28,000 equals $178,000. It sounds like you’re already a little profitable and you have no risk. You’ve got your risk back out.

There are closing costs and commissions that went into that but the 35 acres that we have now is pretty much free and clear. Very low risk left. We’re like, “I have an idea.” Let’s imagine a rectangle piece of land. The main road frontage is over here on the smaller side because it’s a rectangle going in. We thought of the idea if we put a road easement right through the middle of that rectangle, that would allow us to make smaller parcels on each side and sell more land that way. We can sell in smaller chunks, even 2-acre chunks.

We calculate that and that would have been pretty profitable. 1 acre can easily end up in that market for $50,000. The 1-acre we sold was $28,000. Let’s say $28,000 an acre. Let’s make it $60,000 per 2 acres. We have 35 acres that would make it, 34 divide by 2 would be 17. If you take $60,000 times 17, that will give us whatever that would be the profit.

That would be a little over $1 million in your profit.

We thought that was a great game plan. Let’s go with that. I came across a broker who’s specialized in mobile homes and RV parks. I said, “Can you come out and assess this property? Tell me if I can get this property to entitlement for a mobile home or an RV park, what would a buyer pay for this land to entitlement.” Meaning that you get the plans approved, you don’t do the development. He came out, did his assessment and everything and took a guess. Once we get it to entitlement for 200 spaces, either space for armies or mobile homes, guess how much a buyer would pay for it?

My guess on 200 spaces in Houston, Texas area, 200 spaces ready to go, you haven’t done roads, you’ve got it from the city saying, “They’ll allow it on a piece of paper.” That’s all you did. You’re about to sell a piece of paper. I think maybe $5 million.

I wish that would be awesome. It’s $2.5 million.

You added another $1.5 million to it. That’s amazing. I was looking at it as a very simplistic approach. I was like, “Tim sold those 8 acres for about $22,000 an acre.” $22,000 an acre times 35 more acres is $770,000. That’s probably the minimum you’ll make on this one land deal. I know you’ve done others. This is what amazes me.

We’re going to move forward with the mobile home parks idea and what’s even more amazing is because doing 200 units still allows us to have a few more acres of the road frontage side. We still have a few acres that we can sell to a dollar general. It gets better through this idea, but it’s the unicorn deals. Don’t expect all of your deals are like this way. These land deals are phenomenal. I have another one that we’re looking at right now, it’s 65 acres and we’re getting it for $300,000, something in a different part of town. By the time we’re all done with that deal, we’ll easily make $500,000 off of that deal. I’m being conservative.

What I love about land is that a lot of times, these homeowners don’t want these properties. In houses, we talk a lot about having to find motivated sellers. With land deals, they’re way better than motivated sellers. They are unwanted sellers like they don’t even want it. It’s a different motivation. Some of these deals blow my mind away. I bought an acre. That’s pretty near Houston, a little bit on the outskirt, but fairly near the town. I bought it for the same price that the seller bought it for in 1989.

That often happens with us. A lot of times, we’ll pay even less than what the seller paid for the land many years ago. I might be wrong and all of our readers might completely disagree with me. I want to know your opinion. I feel like a landowner willing to sell a piece of land that they’ve owned for twenty years at a discount, a loss or even the same price they paid for it many years ago.

Let’s go to the reverse opposite side of that coin. We have a house seller that’s lived in this house for twenty years. They’ve never painted, barely mowed the grass and they think they need to make $50,000 plus profit because they lived there for twenty years in a crappy neighborhood. What are your thoughts on that? Is that what the homeowners look like?

Your personal network is the easiest source of money.

In real states, one of the big things that add value to a property is someone able to use that property. In a house, the homeowners can use it and live in it. They can rent it out and the tenant can use it. The house is much more usable than the land is. When land is sitting there, nobody can use it. It’s a hassle for the seller because they have to pay the taxes. If it’s inside the city, which is the land I deal with a lot, they have to mow the grass because if not, the city fines them.

I bought three vacant lots during COVID and it seems like the city had nothing to do but sit there in front of my yard and wait for the grass to grow a little bit tall and give me a ticket. These three lots are next to each other are adjacent. I got five tickets worth $300 each on those slots because they wait for the grass to be tall enough to write me a ticket. I get to understand the pain that these sellers go through.

That’s probably why it’s like that, “This house, you can rent it out. This land takes it from me. I’m tired of it.”

Whenever you look at something, a piece of property, the more used that the property has, the more likely the seller will want more money for it. The less used that property you have, the more likely to sell them will want less for it. I’m good when it comes to targeting the right sellers and that’s a major point in what I look for. It’s anyone having a use for this thing. This 1-acre, I bought it for $35,000. For 1 acre on the outskirt of Houston, that’s a phenomenal deal. I closed on this thing because it was such a good deal. We put out signs to sell it and we sold it to the one next-door neighbor.

That stack so often. I’ve purchased land that wasn’t even buildable. I was like, “What in the world is anybody going to do with it?” I bought it for cheap. We posted a sign on it. A neighbor, four houses down purchased it from me from that one side. We call it neighbor letters. We oftentimes will mail all the neighbors like, “We have this lot next door. We’ll finance it.” Let me know if you want to buy it. We’ll make you a deal. It’s amazing.

WI 788 | Million Dollar Profit

Million Dollar Profit: The more use the property has, the more likely the seller will want more money for it.

 

Most of my land are in the city, so most of my buyers are cash buyers. We don’t have to sell and finance it, anyway, $115,000 cash.

You took $35,000 and turned it into $115,000. How long did this take?

I did close on it and I have to wait for the buyer to close on it, but it’s one month and a half in total.

You made more in one month and a half than some people do in two years.

That’s why I said, “I wish I had thought it would land sooner.” I’ve been in real estate since 2002. I got into land at the end of 2019.

You are still practicing. I want to see when you get good at this. We’ll talk in a couple more years and see how your 35 acres goes. I’ve got so many questions and you talked about stumbling into the land. You keep talking about this unicorn. These don’t happen all the time, but I kid you not, you told us about 3 or 4 unicorn deals.

I love what Dolf de Roos says, “The deal of the lifetime comes about every single week. If you’re looking for.” There you go, unicorn land deals. I want to ask some questions that I’m thinking some of our readers are thinking in their minds. I’m also thinking this too. Maybe it’s a little selfish on my part. How in the world are you finding these unicorn land deals?

I normally do what you would do with the exception of that deal that my student brought. That’s a little bit different, but all the deals that we source ourselves, we do like we do with the single-family home stuff. We pull lists, text them, call them, those whoever we can’t get ahold of through texting and calling, we’ll direct mail to them.

You got to get in front of the person that owns the land, house or property, communicate with them, build rapport, trust and communication. How are you finding the money to fund these land deals? There are a lot of people out there that think, “I can’t find any money, I don’t know anybody with money or they won’t land on land.” How do you find the funds for this to close these properties?

One of the things that I like about what I do with the land is that it’s similar to what I do with houses because the type of deals that I focus on are mostly inside the city a lot. A lot of them, I’ll close with a private lender just like I would do what houses and even my bigger deal because I already have established relationship with my private lenders. It was easy for them to land on other deals that are not normal houses because of the trust and the rapport that you built. Your personal network, people you have relationships and connections with, are the easiest to find the money.

When you treat lenders well and pay them on time, they become a massive asset for you.

My first private lender back in 2002 was my sister. I teach a lot too about how to find money. I tell people all the time, “Your phone contact has over $1 million of private money in it. You don’t know how to untap it yet because you don’t have the confidence to approach them, but do you know how many people in your phone?” Like in my sister’s case, how many were sitting on a CD? At that time, the CD was paying 1.2% or something like that. I went to and said, “The bank’s only paying you 1%. How about I pay you three times that amount and I’ll pay you 3%?”

She went for it because I already have a close relationship with her. Personal contact is an amazing source of private lenders. As you know, I do a lot of hard money lending and private money lending brokerages as well. Guess where I find those lenders from? My phone, my personal contacts. Most of my private lenders are either friends, family friends or someone I know by referral. I rarely have to go outside of my circle of the network to find a private lender.

Their phone is worth over $1 million and gives us a practical step. Let’s say, “I’m looking at this one-acre land deal. I need to quick $35,000.” I think the land’s worth maybe $180,000, $170,000 or something like that.

I started with $115,000.

You’re buying it for $35,000. You sold it for $115,000. Give me a practical step like, “I got this 3,000 contacts, but I don’t know what to do now. I’m afraid to ask.” We were always told never asked for anything growing up. You’re begging for money and a lot of people have that misconception of like, “I don’t want to sound like I’m the desperate type of thing.”

The way I went about it is going to be different from the way someone else who hasn’t established that relationship and that credibility. I’m going to answer it by going back to my sister. I would start with your immediate friends and family. Find out who would be interested in making a great return much more than what the banks, the CDs, even what the stock market is giving them a lot of times. Who is interested in making a better return on their investment? They might not know that they are interested in real estate yet, but you know that they have a pain. Their pain is that the money that they have in the savings accounts is not earning anything.

Most land deals are fairly inexpensive. $ 35,000 is pretty easy to pull off. You would reach out to your immediate network and say, “I have this land deal that I can buy for $35,000. I think it’s worth at least $135,000. Even on a quick sell, I can sell for $100,000 easily. If you’re interested in it, I’ll pay you depending on how experienced they are not experienced.” The non-experienced one doesn’t expect you to pay a lot. Sometimes it scares them if you pay them too much.

“It sounds too good to be true. This must be a scam or there’s no way I’m not lending you the money for that.”

For an inexperienced lender, I would never offer them more than 10% because you will scare them if you do that. It sounds so funny how it works, but people who are not used to investing, a lot of times, are very conservative and afraid to lose their money. They prefer to put into a CD because they trust the bank. Like in my sister’s case, it only owns 1%, but she trusts the bank. She’s okay with that 1%. If you try to get my sister, that person with that mindset into a risky deal that can make them 100%, for example, she would still say no to that risky deal because that’s not her mindset.

WI 788 | Million Dollar Profit

Million Dollar Profit: People who are not used to investing are very conservative and are afraid to lose their money.

 

If this is your first deal, start with your personal contact. People that know you are your best resources. In that particular case, I have a friend who’s an attorney. She’s been interested in investing in my deals. I reached out to him and he is a more experienced person. It’s like, “I got this deal. I expect to be in and out of this deal with them for two months because of the strategy I’m doing. I want a $40,000 loan that will cover my purchase, closing costs, holding costs and whatever I might have to do with this deal.” In her case, I paid a percent, which is 1% a month. She made two months of interest on this deal, $700. I feel bad for these lenders, but they make a good return.

You built a business that’s serving you, your family, as well as others. They’re making money as well. At the end of the day, I wouldn’t feel bad. I bet she’s asking you, “Let’s do another one.”

She has done a number of deals for me, including that unicorn deal. That’s the thing with these private lenders. Once you find one and you treat them well like you do what you say you’re going to do and pay them on time, they become a huge asset for you. You don’t need tens or even hundreds of lenders. You need a few lenders and that will be more than enough for you to do all the deals that you can imagine with these deals, especially if you’re going to be in and out.

If it’s long-term, that’s a different story because you need more lenders if you’re going to hold them long-term. If flipping, you’re going in and out, then you just recycling the money over and over. My lenders love the deals that I do and love working with me. Every chance they get like I’ll be preferred borrow that they would land on and they rather deal with me dealing with someone else that they don’t know well.

We got on here talking about land and that’s one of the biggest questions I have is like, “Where do I get the money now?” Thank you for sharing all that. That’s amazing. Tim Mai, where we find out more about what you’re doing? You’ve got all these things going on. Where can we find out more about you?

My Facebook personal profile is the easiest to get ahold of me, but DoDeals.com. One of the things that I do, like the event that you mentioned in Key West. It’s spec9ifically for real estate coaches. What I’m doing is, I am rounding up the best coaches in the nation, the hot-driven, hot center type coaches. I start to identify that there are two types of coaches. There is the type of coaches that are in the coaching business to make money as their main goal and the other types of coaches who are in the coaching business is for fulfillment as their main goal and money as the secondary goal.

The best coaches I’ve found are the ones that they make great money with the real estate business. I don’t need the coaching business, but they do it because they love to do it. They’re entrepreneurs. They’re going to want to make money, though. There’s no doubt about it. Which one is your priority versus makes a huge difference in how you do as a coach?

I’m looking for that type of a coach, the coach that it’s about servicing others, fulfillment first and then money as the secondary goal. The readers who might fall into that category or know someone who falls into that category have them go to HeroCoachesSummit.com. The word HERO is an acronym for Heart-driven Entrepreneurs Enriching Others. That’s specifically the profile of the type of coach I’m looking for. I’d love to have them come out to our event.

Thank you so much for joining me, Tim Mai. Go to HeroCoachesSummit.com, DoDeals.com or look him up on his Facebook page. Thanks for joining. If you’re interested in getting started on your way to generating passive income through land or crushing it like Tim Mai and land deals, head over to WholesalingInc.com/Land and schedule a call. My team’s going to hop on a short call to discuss your investing goals. If it sounds like we’re a good fit together, I’d love to help you on your personal journey. We’ll see you next time, land sharks and the rhino community. Talk to you later.

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 About Brent Bowers

WI 623 | Wholesaling LandAs an Army Officer with over 8 years of service, Brent Bowers was spending a great deal of time away from his family, and he knew he needed to make some changes in order to be more present with his wife and children. His interest in real estate began in 2007 when he purchased his first home, so Brent began exploring real estate investing as a way to support his family while being able to enjoy more time with them as well.

In a short amount of time, Brent was able to expand his business, hire a team, and (most importantly) spend quality time with his family while still working hard and helping others. While Brent invests in many different types of real estate, his favorite investment strategy deals with buying and selling vacant land, and he enjoys sharing his expertise in this area with his coaching clients. Brent chooses to live his life based on Bob Burg’s quote, “Your influence is determined by how abundantly you place other people’s interests first.” He is passionate about helping other people find success in real estate investing, particularly in land investments.

Brent Bowers is currently the CEO of ZechBuysHouses LLC. Vacant Land of the Free, Discounted Houses Colorado Springs, Rent2Own Colorado and Co-Working & Shared Space are all under the ZechBuysHouses Brand.

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