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Michele and Special Guest Talk Passive Income and Investing in Raw Land
May 3, 2022 | Posted by: Michele Cummins
Warning! This is a digitally automated transcript of the show so there will be mistakes throughout - including the spelling of Michele's name!
Curtis Pope:
time of the week again, it's time to join Michelle Cummings for the commercial real estate group show. My name is Curtis Pope. Good morning, Michelle.
Michele Cummins - PREC:
Last day of the month, Curtis Good morning. Good last morning of the month.
Curtis Pope:
It is I you know, I didn't even think about that it is isn't it? Yeah, tomorrow's may already.
Michele Cummins - PREC:
me flowers. Where are they actually they're springing up. Yeah.
Curtis Pope:
I've got some flowers growing in my yard. Yeah, they've already started. What colors are they? Well, I don't know what they are. Well, for one thing, I have the beautiful magnolia tree in my backyard, you may recall that one didn't bloom quite as nicely this year. I think the weather wasn't quite ideal for it still looks beautiful, but didn't quite look as good as it did last year. And then I've got some other flowers blooming that i i have some tulips I know that but after that, I don't know what some of them are called.
Michele Cummins - PREC:
Well, you need that app that shows you what the vegetation is around your property
Curtis Pope:
that would probably be helpful. I remember you telling me about that before I should probably get with the program and and get that
Michele Cummins - PREC:
with it. Just open up that app store and download it today.
Curtis Pope:
I'm going to because now I'm in now I want to the other flowers are. Some of them could be weeds for all I know they might be weeds. I'm going oh those look pretty and No, those are actually not good for your garden.
Michele Cummins - PREC:
Yeah, don't touch it if it's sharp, or if it looks like something that may give you itches, you know? Yes. Yes.
Curtis Pope:
Good call and I have been feverishly fighting the dandelions already this year because they're my sworn enemy. And I'm doing a good job of keeping those at bay.
Michele Cummins - PREC:
Is there something you could take for that? Probably?
Curtis Pope:
Well, there's stuff you can spray on it now but I find you know really never really works either. Unless you can get the entire root out of those things. They just go back.
Michele Cummins - PREC:
Well, growth is inevitable and change is inevitable and the season tis the season right for all this change and I pollen and different things change year after year as far as how it affects you is that, like I don't suffer from any allergies. I am so thankful but I my brother does really bad and I know some other people and sometimes they say some of yours are worse than others. I guess it all kind of depends.
Curtis Pope:
Yeah, I have some allergies to some pollens and it is absolutely some years it's worse than others. And even like for example, when I lived up north where the climate was quite a bit different. I didn't have any allergies up there because they guessed the same pollens weren't present.
Michele Cummins - PREC:
And nothing's bugging you yet.
Curtis Pope:
Nothing's bugging me this year yet. The big one that bugs me is camera. It's the plants called broom. Broom plants. Really? That's when it really kills me.
Michele Cummins - PREC:
Never heard of that one.
Curtis Pope:
It's like a yellowy flowery kind of Bush kind of thing.
Michele Cummins - PREC:
Like a broom. Looks like a bright yellow.
Curtis Pope:
Yeah, like to think my wife drives to work. I'm kidding. I'm kidding.
Michele Cummins - PREC:
Well, we aren't gonna tell on you. Oh,
Curtis Pope:
I don't know why I use that joke. It always comes back and bites me on the butt.
Michele Cummins - PREC:
As right it should. So Richard's birthday was last weekend. And boy did we have a blast at the broken whisk. It was so much fun. And Chef Mike, he made this amazing, most delicious cheese cake for him for his birthday. And the music was nonstop. He literally didn't take one break. And then he invited one friend up and he did a song and he another guy came up and they shared a song and then two guys came up in mail three did a song and like it was so much fun. It was a lot of it was good.
Curtis Pope:
And I had to miss it because it was my father in law's birthday too.
Michele Cummins - PREC:
Did you have some music there?
Curtis Pope:
Just whatever the restaurant was playing.
Michele Cummins - PREC:
What restaurant did you go to?
Curtis Pope:
We went to a little place in white rock on your the inlaws place Liberty kitchen.
Michele Cummins - PREC:
Oh, yes, yes, that place has a good ecstatic like that's been there forever and ever hasn't
Curtis Pope:
while Yeah, it's it was cool. It was it was it was a good meal. And it was it was perfect for the for the father in law and and the brother in law and me we're having a good time. And you know, we got through the night okay, without getting in too much trouble. I don't believe that. No, we got me and my brother in law. We're always in trouble.
Michele Cummins - PREC:
You walk the pier.
Curtis Pope:
We didn't this time. No. No, I haven't met have many times though. I know the pier. Well,
Michele Cummins - PREC:
it was good weather though, too, right? Yes. Yeah. And after everything that happened. It's all newly built since last year, right? Yeah,
Curtis Pope:
there's a good chunk in the middle that's given completely rebuilt. Yeah,
Michele Cummins - PREC:
I was there. We rode our bikes out there on Easter Sunday, actually that that was the first time I've been back to white rock in a long time. I don't know why I hadn't been there for a while. But I was like, oh, so we went to Charlie don't surf.
Curtis Pope:
Oh, yes, please been there forever.
Michele Cummins - PREC:
Yeah, there's a bench that that's on the porch. And it's a bench and it's just as my favorite seats, and you get the views of the ocean.
Curtis Pope:
Yeah, it's a good spot, that's for sure.
Michele Cummins - PREC:
So we have a special guest on our show today. And actually a not a very local guest. And so, but very property. Wise, his name, his aka name is the land geek. He is so interesting. He's so creative. And he comes with a lot of knowledge. And as you know, with a real estate show, and myself, of course, 24/7 Reading real estate and loving it, and investor and just he comes with some really neat ideas that I wanted to share with our listeners. And so his name is Mark Podolski and he again, as I say, aka, the land geek. And so he's on the line. He's been patiently waiting to talk, but you know, when I get talking you there's nobody talking through me. Sorry, Mark. Hi, Mark. Are you they're still
Unknown:
on the show. I Curtis, how are you guys? Good, good. How
Michele Cummins - PREC:
are you?
Unknown:
Is normal respiration sign I'm excited to be here.
Michele Cummins - PREC:
We're excited to have you on and I just really thank you for taking the time because I know how busy life is especially for you. And so let me live I first want to introduce the listeners to you. Not only is mark the land geek, but he's widely considered the country's most trusted and foremost authority on buying and selling raw, undeveloped land within the United States the place of my birth, I he has been actively investing in real estate and raw land since 2001, and has completed over 6000 unique transactions. So March company is called frontier equity properties, and it's an A plus rated triple B real estate company. Mark has achieved this level of success largely due to his core business philosophy, which is happy customers guaranteed. Mark is the author of dirt rich how one ambitiously lazy geek created passive income in real estate without renters, renovations, and rehab, the three R's. Mark is the host of one of the top rated podcast in the investing category on iTunes, aptly titled The Art of passive income model, which I subscribed to. He is also the host of the land geek podcast, work smart. Earn more, learn how and the best passive income model podcast. And you don't want to hear any more from me. So let's hear straight from Marc. Marc, what is your current focus? And and how did you get in 2001 doing this and share with us all your success,
Unknown:
please? Yeah. So if we rewind the tape, the 2000s I was a miserable micromanage, 45 minute commute to work and back investment banker specializing in mergers and acquisitions with private equity groups. And guys, it got so bad for me, I wouldn't get the Sunday blues anticipating Monday coming around. I'd get the Friday blues, anticipating the weekend going by really fast, and having to be back at work on Monday. So my firm hires this guy. And he's telling me that as a side hustle, he's buying raw land, pennies on the dollar. He's flipping them online, and he's making a 300% return on his investment. And I'm looking at companies all day long. And a great company great as 50 50% EBIT dot margins or free cash flow, great company, average company's 10%. And I'm looking at companies all day long, less than 10%. So of course, I don't believe them. So I got three grand saved up for car repairs. I go to New Mexico with them. I do exactly what he tells me to do. I buy 10 Half Acre parcels and average price of $300 each. I sell them online, and they all sell for an average price of $1,200 each at work your 100% So I took all that money and went to another auction where I live in Arizona. And again, this is 2000 There's no one in the room. I'm buying up lots of acres like nothing. And I sold all that property. I made over $90,000 cash. So I go to my wife and she's pregnant. said Honey, I'm gonna quit my job. become a full time land investor that she's like, Absolutely not. That's it. Okay. Okay. So it took me 18 months to land investing income to exceed investment banking income. And then I quit and had to do it full time ever since I absolutely love it.
Michele Cummins - PREC:
And like, history is history, and you haven't looked back.
Unknown:
I have not looked back, I continue to do it. And it's, it's what I would call the best passive income model.
Michele Cummins - PREC:
So So how's that and your wife? Because she was like, Absolutely not. So what's your take on it now?
Unknown:
What we're separating now. So it was, you know, she loves it. I'm doing it because now she's, she's getting, you know, half the net, the net worth, and he's very happy.
Michele Cummins - PREC:
Oh, no, it's all good. It's all good. Okay, Life is funny that way. So,
Unknown:
yeah, but you know, at the time she she was, you know, a little nervous. And, but then, once, you know, I said to her, hey, look, what's the worst case scenario here? We oh, we're all in, we have an asset, it can't be destroyed, there's nothing to be maintained. I'm not filling up the garage with a bunch of stuff. There's nothing to protect. And if I can't sell it, I can always barter. Maybe I'll get free haircuts for your food demonstrate. And so that was that's what really kind of wandered over.
Michele Cummins - PREC:
Oh my gosh, okay, so we I know we have to go on break soon. But when we get back, I have to find out how many properties you currently own as well as do you buy anywhere everywhere in the US and other areas? Such as maybe Canada and our area? Great North and, and some other great property your like your best deal that you've done? So I don't know if you want to hold on to those questions or or think of the answers when we when we get back? No worries.
Curtis Pope:
All right. So I like that we're giving people a warning. Now we're giving them their question in advance. I liked that. Michelle.
Michele Cummins - PREC:
Yeah, element of surprise. You know, that was still yesterday.
Curtis Pope:
All right, well, no surprise here, we're going to take a real quick break. And we're going to come right back with more right after this. Segment Number Two of the commons Real Estate Group show with Michelle Cummins and myself Curtis Pope. And I know Michelle, you want to get right back into the questions with our guests.
Michele Cummins - PREC:
Thank you. Okay, so how many properties do you currently have Mark? Not including your primary. So.
Unknown:
So, you know, I probably owned currently over two to 300 properties at any one time that we're constantly buying and selling. We're trying to do a deal a day. So trying to buy a deal a day and sell a deal a day.
Michele Cummins - PREC:
Okay, how many people do you have working with you? Because that will take an army. That's a lot to handle and to manage?
Unknown:
So we have we have a team in the Philippines. It was a team in Jamaica. And we have a couple of US based people running the show.
Michele Cummins - PREC:
Wow. Okay, so where you see Jamaicans so what, what areas outside of the US and within the US Do you mostly look at for this raw land that you don't have to renovate rent or, you know, a third art
Unknown:
rehab? Yeah. So I think Michelle, let's just be honest, right? Nobody wakes up and thinks themselves. Well, I'd like some raw land today in Iowa, unless you live in Iowa. So we want to focus on the sunshine states, New Mexico, Colorado, Arizona, Nevada, California, maybe a little bit the Northwest Washington, Oregon, and Florida. Did I say Texas, Texas and Colorado as well. So these are fast growing states. These are the sunshine states. And we you know, I don't do deals in Canada because of the frictional costs of doing real estate in Canada compared to the United States and there's billions of acres available in the United States and I'm quite comfortable with the legal same structure here, versus Canada. So that's why I've never ventured outside of us.
Michele Cummins - PREC:
But the same philosophy that you use, though could be used with a Canadian doing it in Canada, the same type of thing.
Unknown:
That Yeah, absolutely. If you want, I can walk you step by step through exactly how I do it.
Michele Cummins - PREC:
Okay, so So you've mostly focused on the US and it sounds like for you personally,
Unknown:
mostly focus. Yeah, I actually I only focus in the US, but we have clients from all over the world. Because you can run this business from anywhere in the world, you just need an inexpensive laptop and internet connection.
Michele Cummins - PREC:
And that's pretty much everywhere, pretty much. So I have my other question for you was, what is the big like, what's your favorite for best deal in your eyes? Because sometimes, you know, success is different. It's been the eye of the beholder. So what is maybe one of the best deals that that you've done that you feel you've done?
Unknown:
So one of the best deals I did was in Nevada, I started buying fixing up 640 acres section from the railroad, it was actually a public company that bought all this property from the railroad. And they were a company that wanted the mineral rights, they didn't want the land. So I came in there and negotiated, hey, I'll buy up all these sections for $30 an acre. And they said, Well, okay, that's fine. And I started then subdividing those sections into 40 acre parcels. And so I then started selling those, and I sold those at $500 an acre. And on that one deal, I made over $5 million.
Michele Cummins - PREC:
How long did that deal? Take you?
Unknown:
That deal took about four years.
Michele Cummins - PREC:
That's pretty good return after four years now, is that gross or net?
Unknown:
That's met? Oh,
Michele Cummins - PREC:
wow. That's really good. Mark. Okay. So you've kind of explained why man investing is a great choice, because obviously, the three R's but just so do you actually close on your properties? And then like that one, you're you're, you're reinventing them to be the best use and getting the most out of it. So you're actually you've got closing costs, and you've got selling costs? Or do you do a mix of that, as well as maybe like flipping where it's like paper? It's like you, you bought it on paper, but you haven't closed yet? And so you flip it and sell it to somebody else in the meanwhile, before it closes? Which way? Do you do it?
Unknown:
Yeah, yeah. So if you want I can use Curtis as a example.
Curtis Pope:
Is this gonna be a good example? Or a bad example? Because I'm often used as a bad example?
Unknown:
Well, I think you're gonna be a great example.
Curtis Pope:
Okay, let's go with it, then I'm good with this.
Unknown:
You're, you're in Canada, right? I am. Okay, so I'm gonna assume that you, you and your wife, were vacationing in Texas, and you looked at this 10 acre parcel, you're like, boy, one day wouldn't be great to live in Texas. And so you guys buy it. And then a few years go by to keep paying the property taxes on it, you know, we're never gonna use this property. So you start not paying your taxes. So you start getting notices from the county treasurer, saying that if you don't pay your property taxes, you're gonna lose that property to a tax deed, or tax lien investor. And so I can see this on the public record. Oh, there's Curtis Popey, oh, 10 acres of raw land in Texas and owes $200 of back taxes. So essentially, you're advertising two important things. Number one, you build emotional attachments around here in Canada, the properties in Texas. And number two, you're financially distressed in some weird way. Because we don't pay for things like property taxes, we don't value them in the same way. So all I'm going to do is look at the comparable sales on your 10 acre parcel for the last 12 to 18 months, I'm going to take the lowest comparable sale, and divide by four. And that's going to give me what Warren Buffett would call a 300% margin of safety. So let's just use easy math and say the lowest comparable sales $10,000 I send you an offer Curtis for $2,500. Now you accept it. Because for you $2,500 is better than nothing. In reality, three to 5% of people will accept your quote unquote, top dollar offer. Now that you've accepted it. You have to go through due diligence or in depth research. We have to confirm that Curtis still owns about me. You have to confirm back taxes are only $200 us to make sure there's no breaks in the chain of title. There's no liens or encumbrances. And you can have this all outsourced to a team in the Philippines for $11. They're connected to the title company, or you can close traditionally, through an American Title Company. They do all the hard work for you. So Michelle, I'm gonna sell this property in 30 days or less and make a cash flow. I have a built in best buyer DW Curtis
Curtis Pope:
No, no, no, my buying my property back. I'm so confused. Michelle
Unknown:
Steve showed me the property
Michele Cummins - PREC:
throwing you for a loop. I can't let me I'll be the one.
Unknown:
It's the neighbors, the neighbors. So I'm gonna send out neighbor letters say, here's your opportunity, protect your privacy, protect your views, know your neighbor. So oftentimes your neighbors will buy it. Right, so I'll go to my buyers list, or I'll go to a little website you guys may have never heard of, because you're Canadian. It's called Craigslist. It's a 15 was trafficked website and I'd say,
Michele Cummins - PREC:
oh, yeah, more Kijiji here, but we know
Curtis Pope:
we have Craigslist as well. But yeah, I don't know. Have you?
Unknown:
Then there's another website? I don't know if you guys have heard of it. It's called meta to Facebook Buy Sell groups in the marketplace?
Michele Cummins - PREC:
Yeah. Yeah, you guys have that in Canada? Marketplace and Facebook? And yeah, yeah. Yeah, we have
Unknown:
to go to win voted on calm. Yeah.
Michele Cummins - PREC:
So okay, so that I can see that that can be very profitable. And there's a lot opportunities here. Is that what you like? What about creating passive income by investing in raw land,
Unknown:
because that's what I'm going to tell you. So now, the way that I'm going to sell it, I'm going to sell it in 30 days or less, and then make a cash flow. So what I'm going to do is I'm going to ask for on my pricing is a $2,500 down payment, and then I'll make it a car payment, let's say 297 a month for next 84 months. So it's a one time sale. I get my money out on a downpayment where I could go six to 10 months out, and then anything 297 A month, that 84 months. Michelle, no renters. No rehabs, no renovations, no rodents, and we call them that deal with a tenant. I'm exempt from Dodd Frank restaurant in a safe act all its owners, real estate legislation in the United States. So it's a simple game. Enough man notes where my passive income exceeds my fixed expenses. And then I'm like Curtis, working because I want to not because I have too.
Michele Cummins - PREC:
Nice. Curtis, do you want to start doing that?
Curtis Pope:
I do. But I'm still you know, I'm not as quick as you. So I'm still three or four steps behind in this process from what you were talking about. But I'll get there eventually. It sounds amazing.
Michele Cummins - PREC:
Okay, share with us, Mark, how to invest in real estate with no money down?
Unknown:
Well, you need to have some money. You need to have money to send out a mailer that there was was that I thought there was that crystal ball?
Michele Cummins - PREC:
You just whispered in there? No. So it does take a little bit of skin in the game, then you're saying? Yeah, I
Unknown:
started with $3,000. I plan to start with $500. But you need to have some money.
Michele Cummins - PREC:
And a lot of people think that the expect to get quick, rich quick, right? It's Oh, no money down. You do hear that a lot. I always say you know, it takes your first you know, downpayment of 5% up here in Canada. 5%, right, you know, is the minimum downpayment and not for raw land that's different for up here. But if you're gonna loan on something 5% down, the price of the things appear different, but raw land, that's why there's there's a lot of aspects here. And I know we don't have time to go into all the fine details, because there's, there's taxes to think of there's capital gains taxes, if you're going to sell it quickly. There's there's the GST on raw land, and then but if you just go do the paperwork, and so there's a lot of aspects here, if you close on it, or don't close on it before you flip it, or sign it. So what else can you share with us quickly? Because I think our time is about to end. And this just went by way too fast?
Unknown:
Yeah, I mean, I would say that if you're interested in acquiring us land, I do think that this is the best passive income model because of the simplicity of it. But I would warn people, there's nothing easy about it. So just because it's simple, doesn't mean easy. And you certainly want to get educated on the process. So that you can do it, but I can tell you just a quick story. A client Roberto child has a full time attorney in El Paso, Texas, and working at a corporate law firm 50 hours a week in his first year landed up and he brought his passive income to over $10,000 a month and went from five days a week, down to three days a week helping his dad on his ranch. His second year and land investing he brought his passive income up to over $25,000 a month. And then his third year he quit his job. And him and his fiancee Maria are traveling around the world is working on his land business. Part time. He's created a passive income machine And he's now got the trifecta. He's got time, money and energy to live the way he wants to live in the peak of his life. And I think it's just a phenomenal model.
Michele Cummins - PREC:
That is, it's so it can be so successful, and it's a passion. And you've you've, thank you so much. She's, you've proven that it works. And, you know, so many people, obviously, with that story that it has worked for, as well. Thank you for sharing. Thank you for taking the time to speak with us and our listeners today. And like, where can they find you, Mark?
Unknown:
So I would just go to the land geek.com, the Lady Gaga calm. And from there, you can find all these other free resources.
Michele Cummins - PREC:
Awesome, thank you so much. Okay, so going into quickly into my new listings for everyone who is out there wanting to go to open houses this weekend. up like today between one and three o'clock at a new condo listing a penthouse top floor corner with it in Abbotsford, and it's at unit 360. And at 2821 pins that's 123 today, and that price point on that new brand new listings 549,000. It's a three bedroom, two bathroom. And then we have our high growth place row homes, which is the luxury Park Row home project. New price announcements. Inside units are now only 1,175,000 for the pre sales unit. estimated completion dates next summer. The they're almost 620 600 square feet. They're four bedrooms, four bathrooms, two story political walkout basements, and the ad units are now 1,275,000. So call me today if you're interested in one of those beautiful presale row homes. And then brand new listing on the market is on the lake lake views right on the lake lake front. And this is a 1981 built strong home, five bedrooms, four bathrooms, it's almost 24,000 square feet of land, and it's on for 2,495,000 in mission. And those are the brand new listings for this week. And thank you so much for listening. And Curtis. Are you excited about that new idea that he gave you now you're thinking about Texas?
Curtis Pope:
At one point, you're asking the question, and I just ordered the book off of Amazon. So yes, I am interested in in this. It sounds amazing.
Michele Cummins - PREC:
I love Texas. You know that's where Magnolia is.
Curtis Pope:
That's true. And I've never been to Texas. I've flown over it. But I've never been there.
Michele Cummins - PREC:
Maybe that's the trip you and Kelly and the kids have to take this year. Why do
Curtis Pope:
I have to take the kids?
Michele Cummins - PREC:
I don't know I guess you don't like it, the kids would like it even more.
Curtis Pope:
They might that's true. All right. Well, people want more information about your listings and the services you provide as a real estate agent, where can they go and join us again next week and we will talk real estate in order to unlock your real estate potential on the show real estate is maximized. Thanks for listening
If you missed last weeks episode where Michele and Curtis dive deep into interest rates and listings, please go back and take a listen - it's well worth it!