Posted on: October 22, 2021
WI 803 | Land Investor

 

Ever hear the saying “the money talks”?

This is because it’s true. A person with more cash in their pocket has a higher chance of being successful than someone without any, and this holds true for real estate investing as well!

Joining Brent Bowers in today’s episode is a special guest, John Burnett. He will be talking about the Top 3 ways of becoming a successful land investor. As a family guy, John had to think of better ways to earn money a few years back, and now he is making $14,000 a month per month in passive income.

A major thing to remember while doing this business is to not try and recreate the wheel, John will be sharing the strategies and tools he used in marketing whenever it’s tough to stand out in an area that is crowded right now with competitors. He then recommends keeping some general frameworks such as having goals or objectives set before starting any new project – something every entrepreneur should know by heart.

The Top 3 Ways To Become Successful As A Land Investor

I have an amazing guest and a friend of mine. We’ve been friends for a few years now, Jon Burnett. He has four children, works from home and is a rock star land investor. John, introduce yourself. Tell us about yourself. How’s Idaho?

Idaho is awesome. It has been good. We live over in Northern Idaho. It’s me and my wife, Valari. We’ve got four kids. We’re very tired but we’re doing good. It’s that awesome chaos. That’s me and my family and where we live. We’ve been investing in land for a few years now and enjoyed it. It has been a huge blessing to our family. It’s all I do. This is how I support my family. We jumped into it in July of 2017. We’ve been playing with the idea of doing real estate investment.

At that time, I had a pretty challenging and demanding job. I was managing a property management, hotel and reservations company. We liked the idea of having a greater level of flexibility with our lives. We like working hard but would like flexibility on when we work and what we work on especially having young kids. They’re the most important thing.

At that point, my oldest was at a phase where he was sleeping a lot and I was seeing him for maybe an hour a day so that was tough. We reached a point where we decided that we wanted to go ahead, move forward and see if we could do something to provide ourselves with a greater level of flexibility. We listened to Cashflow Quadrant by Robert Kiyosaki, which had a big influence on us. It shifted my mindset with regard to wealth and financial freedom in general.

Prior to that, we were big Dave Ramsey people. We still like Dave Ramsey. His general mindset is a helpful one to have but to nuance that with some of the things that Robert Kiyosaki says was helpful for us to move from the traditional view. I think of it as like the Scrooge McDuck wealth mindset, which is you create this giant pile of money and eventually, you live off your giant pile of money. You were moving from that to creating streams of income for yourself that are able to support you, your family and your lifestyle. That’s the mindset shift that we went through gradually.

We were looking at different forms of real estate investments, multifamily and single-family. Eventually, we settled on wholesaling. We were thinking, “Let’s start wholesaling houses. That will be enough for us to get some funds available to us that we could then use towards multifamily.” We were digging into that, ended up signing up for a course and then quickly realized where we were living at that point that it was not going to work. The homes were way too expensive. It was going to be very difficult to work that business remotely. We would have had to drive an hour and a half every weekend, put up the bandit signs, “We buy houses for cash,” with a phone number and all that stuff.

Land is nice to have in your portfolio when you have a lot of money and you want to diversify and have some kind of a tangible asset.

We realized this is going to be tough, especially with a young family. We were in that phase. I had listened to Kevin Bupp’s podcast for quite a while, which I liked. He interviews various people about what they do for cashflow. He had Mark Podolsky on. I listened to that and what he was saying about land made a lot of sense. Prior to that, my general perspective on land is that it wouldn’t be a good investment. I’ve got a family that had trouble with buying land and then going underwater with it because of the economic downturn. I viewed it like gold and a tangible asset but it’s not going to be an income-generating asset.

It’s not going to make you any income whatsoever. It’s nice to have but it’s not making any more of it. How do we get out?

Maybe it’s something nice to have in your portfolio when you have a lot of money, want to diversify and have some tangible assets. You might invest in gold as something to have as protection against inflation. That made sense to me but the idea of creating cashflow from land, I hadn’t thought of anything like that.

Hearing Mark talk about it and realizing, “When it comes to buying an asset like this, it’s a lot simpler than something like multifamily because you don’t have to deal with all the complications of maintaining that house when you have a renter in there, finding the renters, and making sure that your renters are paying rent.” All of that complication goes away.

That was appealing to us but the biggest thing was that we wanted something that we could do remotely. That was important to us because I didn’t want to be traveling all over. I saw my son for an hour a day. We’re not compromising on that and going to go any less with that. We want to not over-complicate our lives because you don’t want to sacrifice your family on the altar of finding financial freedom for your family.

We wanted a model that allowed us to do this remotely and with flexibility. That’s what we saw in the land model. We ended up taking advantage of a guarantee on the wholesaling side that we had invested in, switched across to land and haven’t looked back ever since. We started buying and selling land, mailing out and ended up jumping in on coaching. Coaching was so valuable for us because we knew that we were busy.

WI 803 | Land Investor

Land Investor: When you’re succeeding, you’re moving from that to creating streams of income for yourself that are able to support you and your family and lifestyle.

 

I remember how busy you were. When I met you, you were still running the property management and working for Valari’s dad or your dad. I remember seeing it on your face. You were the busiest guy I’ve ever met in my life. Seeing you a few years later, you look relaxed and amazing. You said so much. I want to unpack a lot of it. I was going to ask you what made you choose land but you already explained much of it. You like to work remotely and want to be home with your kids. I also remember your three-year-old at the time wasn’t sleeping hardly at all. I feel bad for Valari. Does Valari work outside of the home?

She doesn’t. I run the business and we talk about various aspects of the business and things that we’re doing. She’s able to focus on the kids, which is awesome because they need so much focus.

I was in middle school and my dad was doing well with the company he was working for. I was in 6th, 7th, or 8th grade. My mother was there every day when I got off the bus. That’s a lifetime cherished memory of mom being home. I remember being at daycare to 6:00 or 7:00 at night and then my mom or dad would pick me up. I’d always hear it when my dad’s car was coming because they’d be like, “Brent, your dad’s here.” It’s this junky loud car but I wish he would have kept that thing. My mom would pick me up late, she cooked dinner, we’d hurry up and eat dinner and then wash the dishes.

We didn’t have a dishwasher growing up. My mom would rush all day long to get to work, come home, clean, cook and all these things. That is amazing. You have no idea. Give yourself a pat on the back that Valari gets to stay home and be with your four children. She doesn’t get probably enough praise. That’s a hard job. My wife does the same thing.

A lot of people say about Emily, my wife, “Does Emily help you in the business?” She does but not in the way you think she would. I use her as a sounding board. I’m like, “Here’s what we’re dealing with.” She’s almost a neutral third-party. She’s not doing it with the ants. She’s able to look up from above and give a higher-level overview. That’s priceless. I’m sure that’s what Valari does with you.

It is. It’s helpful. We’re so grateful to have so much focus on our kids. If you think about it, that’s our legacy. In 100 years, nobody’s going to remember that I sold land but they will remember my kids. That’s what we want to be spending our time and energy on.

I’m so glad that you’re here. Some days I get in the way and I’m like, “Hurry up. Get out of here. Daddy has got to work.” We’re never going to get that time back. I get to see my kids every morning. They’re in preschool. We get a break during the day, I get to spend breakfast and I’m here when they get home at 4:00. You better believe that I better be done by 4:00 because they’re going to be barging through that office door. My second job starts and that’s to play was Zechariah. Let’s talk about the success you’ve had in land. You’re looking good. How many land parcels would you say that you have done since 2017? Where are you at?

Don’t be afraid of the market. Go out there.

We’re at about $14,000 in passive. We were at a higher number. We’ve had some defaults in the wake of COVID. We’re trying to work with people with COVID and stuff like that as people are impacted by that. We’re right around there. As far as sales, we’ve probably done between $125,000 and $150,000. It has been wonderful but early on, we ended up doing a lot of wholesale and shifted pretty much exclusively to terms. We’re starting to build up a cash flip wing of our business that focuses on larger dollar properties as well. That’s still getting off the ground but that’s where we’re at from that perspective.

It was slow going to start. The first year was like an asymptote. You get this hockey stick thing where it starts slow something clicks and then it jumps up. A lot of times, marketing is such a tricky thing to figure out how to sell property effectively, especially in an area that’s got a lot of competition. You’ve got to figure out a way to stand out from the crowd or go somewhere where people aren’t. Once you figure that out, things go well.

You’re not afraid to go out there and clear that trail on a new path to be where they’re not at. I didn’t start like that. I was like, “I’m going to do what everybody’s having success.” We tried these other little things that people laugh at me and think I’m crazy but go away from the herd mentality and you start seeing success happen quick.

The one thing I want to go back to is $14,000 per month. You said it like it was nothing to you. In July 2017, you pretty much started this, left your full-time job, had three babies and made $14,000 per month in passive income. That is something to celebrate. You talked about defaults. That’s one of the ugly natures of this business.

We do everything we can to work with the buyer. We’ll adjust and pause their payments but no matter what is going to happen, we’re not doing background and credit checks, this, that and job checks. We’ll have people pay sometimes 6 or 8 months and be profitable on the land. They’ll throw their hands and no longer want the property or be late a couple of months.

We do everything we can to work out. One thing we do is, “You’ve already got $3,000 invested in this parcel of land. If you ever want to buy another parcel of land, I’ll credit that money to another parcel.” It’s crazy. We’re already profitable on this land. If I bought it for $3,000 and they’ve paid $3,500, I’ve already made $500 profit.

WI 803 | Land Investor

Land Investor: Buying an asset like this is a lot simpler than multifamily, because you don’t have to deal with all the complications of maintaining that house.

 

I resell this land after we send the cancellation of the contract and make sure we cover all the bases. We email it, phone call, text and send certified mail because we want to make sure they understand exactly what’s going on. Sometimes we go back on. They’re back on their payments again or lost their phone or job. It’s amazing to see the success story.

We went from one guy paying $399 a month to $80 a month. He said, “I had no clue that you would be willing to do this. That’s why I wasn’t taking my phone calls. I was afraid and embarrassed.” He sent us land buyers. At the end of the day, my goal is to eventually transfer that deed once they fulfill that contract whether it’s $100 a month for 30 months. When we transfer that deed, we’ve now made a happy land buyer and they send us referrals. Our referral was the biggest number. When you resell that defaulted land that you’re already profitable on, what’s the ROI on that?

It’s huge. We’ve got the same thing. We take a very similar approach to you where our general policy is like, “Things are crazy. The world is exploding. We want to work with you.” We’ll say, “We’ll lower your payments to $50 a month for a while if that will help you get a leg up. Borrowing that will hold all of the equity that you put into this property as a credit against your next property for a couple of years.” We’ve been doing the same thing even pre-COVID. My policy is that if somebody has communicated with me and they want to work then we’ll work with you and try to make this work.

In other properties that have defaulted, there has been $25,000 to $30,000 in payments made on those already. I’ve got an amazing salesperson so we’re able to turn. I’m grateful because it’s a little bit harder to acquire. It has also been a little bit of a blessing in disguise in that I’m able to maintain an inventory for her to sell. Early on in your business, if your margins are a little bit too squeaky, that hurts bad when you get a default.

When you get a default, pass the point of profitability in your business and now you’re back where you were. Once you’ve got a little bit of wiggle room there, for me, it’s not that emotional. It’s emotional in that I talk to these people who are losing their jobs and going through some difficult stuff. In terms of my business, I’m not losing sleep at night over the notes that we’re losing because I know that we’re going to sell these properties again pretty easily and we’re doing right by our customers. It’s not that big of a deal.

You hit on something that I’ve been preaching. It’s harder to buy land because there’s more demand. We’re still buying but I noticed it has slowed down a little bit on the buy-side. However, on the sales side, it’s almost like this piece of paper I throw in the air. You’ve got the wind flow. You were wholesaling houses for a little while or starting to. When you’re in a buyer’s market, you can find deals all the time.

The biggest important thing in real estate is investor funding.

We saw that in 2009. There were three deals on every street. In a seller’s market, they know that they can get $50,000 over the asking price and multiple offers so it’s harder to buy houses. When you do get a deal, it’s gone and you sold it multiple offers. That’s the same thing with land. When this whole COVID thing started, I have a lot of friends that buy and sell, fix and flip and wholesale houses. Their business came to a screeching halt in March 2020. My land sales exploded.

I was worried that we were going to lose all of our passive income for our land payments. Our land buyers were like, “They’re going to lose their jobs.” They were paying extra on their notes because they were getting all the government existence. We did not lose any notes during that time. We’ve had a couple of random defaults. It’s weird. That didn’t skip a beat for us and our income went up because we’re selling a lot of these recreational lands in the desert and the mountains.

People want a place to get away from it all. We don’t talk politics on the phone but whether they were for one president, against another or vice versa, it didn’t matter. They all wanted land. It has been a perfect storm for us. I only have two more questions for you. You went from wholesaling land to terms. What made you go through that shift?

The biggest thing was investor funding. The tempting thing early on is to do a bunch of wholesale flips to try to fund your business and yourself. I had quit my job and we had moved to Northern Idaho and lowered our expenses. I was reaching a point where I realized that I would need to get a part-time job or something alongside the land business. I met with somebody to ask them for a job originally and shared what we were doing in the land business. He told me, “You don’t need a job. You need to keep on doing this. You can’t get these numbers from a job.”

That was invaluable. We brought him on as an investor, which allowed us to pay ourselves and not get a job. The other thing is that as he looked at our numbers, he’s like, “One of the things I would tell you is to stop wholesaling because of the return that you’re getting on all of these other deals.” Having an investor enables you to do that because you’re not so desperate for cash. The acquisition is the trickiest piece.

If I wanted to fund my acquisitions with my passive income at my rate of acquiring and selling, I need to be at $25,000 or $30,000 in passive to do that. When I’m at $25,000 or $30,000, I should be at a point where I’m able to buy and sell way more land than I’m buying. It’s this eternal problem but to bring on an investor allows you to be profitable far more easily because the returns that we get on our term sales are able to pay off enough. You get some of a note or something like that. The payments that we get on our term sale can easily make an investor very happy while we still have incredible returns for ourselves as well. Making that shift allowed us to shift from wholesale and focus more heavily on terms.

WI 803 | Land Investor

Land Investor: You have to be careful with investors who you pick.

 

That guy was a blessing. It’s time to look at that because most people are starting to get that type of advice. He saw the numbers. At the end of the day, it’s data, not drama. You felt like you needed to go out and get another job but this guy was able to give you that permission almost or competence to keep going where you’re going, Jon. What dollar would you put on that education and a couple of hours he gave you?

I’d give a lot for sure. That was a critical and pivotal point in our business. You have to be careful with the investors you pick but we picked the perfect investor. He has been an invaluable voice in our business. He has similar values. Having an investor who we can raise ethical questions to like, “This person is doing this thing and we feel a little bit uncomfortable about it. We feel like we should do this and it might cost us $900.” He’s like, “We should do that.” To have somebody like that on our team has been so wonderful.

He’s also a good person. That’s what it sounds like. He’s got a level head and not just about the bottom line. Where did you find this guy?

He was somebody I used to work for before in a previous position. He goes to our church and is an old family friend. I knew that he was interested in real estate investing as well. He had asked me about our business so I wanted to give him a little bit of input on that. It was wonderful to have that conversation and shift happen, especially at that moment in time, which was particularly stressful.

He invested in you and Valari. He saw you had a great business but it was also because of who you are. You didn’t go out and solicit this guy. You built a relationship over time with him through church and family friends. I get a lot of questions from people like, “I’m trying to do this deal. I don’t know where to find the funding.” Sometimes I’ve got some students I’m coaching and they’ve asked me, “Would you fund this deal?” I don’t want to be involved in their deal and take anything from them. I want it all to go in their pocket. That’s the big question. Where do I find the money? One day, I held a local meetup and partnered with my real estate broker.

One day, I talked about my land process and had a couple of guys come to me at the very end. One guy was like, “I’ve got $30,000 that’s doing nothing.” Another guy wanted to partner with me and I told him no at first but we became friends and struck up a relationship. The guy was serving me, offering to help and this and that. I took him on as a business partner for land. It has been one of the absolute best decisions I ever could have made. He turned into a great friend. It’s all about relationships and speaking at the meetups. I don’t know if you’ve ever spoken at a meetup but podcast hosts are always looking for good people like yourself to speak in meetups and podcasts.

The thing to remember is to not try to recreate the wheel. There are areas where it’s important to be creative. If your marketing looks like everybody else’s marketing, it’s going to be tough to stand out from the crowd, unless you’re in an area that’s not grounded.

I’m trying to give this to our readers. People are always looking for good content. You might not think you have anything to talk about but you are probably an expert in some field or another like you and your land business, wholesaling and terms. We don’t talk about our cash price anymore or wholesale any land. It’s all terms only. If someone wants to give us cash, we might give a little bit of a discount but it’s all about that monthly payment for us. Jon, it’s truly a pleasure speaking with you. Last question. What advice would you give to the person reading and thinking about getting started and building their passive income through land investing?

The thing to remember is not to try to recreate the wheel. That’s very important. There are areas where it’s important to be creative. Marketing is a good one. If your marketing looks like everybody else’s marketing then it’s going to be tough to stand out from the crowd unless you’re in an area that’s not crowded. There are other areas where the general framework of the business is it’s important to do what other people are doing. For us, that meant going to counties where we saw other people having success. We knew that if they could have success there then we would have success there too. We wanted to treat the business more like a franchise than us starting something from the ground up.

We’ve talked about the value of coaching and having somebody who has experienced the mistakes so that you don’t have to experience them yourself. To experience their wisdom and their knowledge is critical and invaluable. That was so beneficial for us and to go through flight school, coaching and have the accountability and push to make it happen. It’s hard. Anybody who goes into something like this is going to be extremely optimistic. We were extremely optimistic. We were like, “What’s the best anybody has ever done? That’s going to be us. We’re going to be spending so much time on this. We’re never going to skip a day. It’s going to be amazing.”

The reality is once you get into the slog, things get a little bit less exciting. To have people around you to push you is incredibly helpful. Follow the recipe from somebody who knows it well and get guidance and coaching where you’re able to. The third thing is to surround yourself with the community. I have an accountability group with other land investors. We meet every week. That’s so helpful. It can be a lonely business.

Thankfully, I got my wife. That makes it a lot less lonely. Talk to other people who are going through the same struggles, experiencing the same thing and can also hold you to account and say, “Why are you not doing anything in your business this week?” That’s critical. Those three things have been game changers and helped us to reach the level of success and the amount of time we have.

You have crushed it in such a short time and those are amazing points. Take action and hire the right people. I’m writing the top ten biggest mistakes I’ve made in land because even though I had coaching, I made a mistake and sometimes I didn’t listen to my coaches. There are always mistakes and if you can learn from other mistakes and not make those mistakes, that’s truly a wise person.

Smart people learn from their mistakes but wise people learn from other people’s mistakes and completely avoid them. I don’t even know if you could put a dollar amount on that. Thank you so much for joining me, Jon. If you’re interested in getting started on your way to generating passive income through land, head over to WholesalingInc.com/land and schedule a call with me. We’ll hop on a short call together and discuss your real estate investing goals. If it sounds like we’re a great fit, I’d be honored to help you on your land investing journey. I’ll see you next time, Land Sharks.

 

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About Brent Bowers

WI 623 | Wholesaling LandBrent Bowers, is an investor and coach with a focus on buying and selling vacant land. As an Army Officer with over 8 years of service, Brent 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. In a short period 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.

 

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