SMALL BUSINESS SUNDAY
It’s not an official TBP tradition, but everything happens here organically, anyway. I saw a post the other day from a TBP’er about his small business, and I saw that the post got some good feedback, so I thought I’d write a second post about a small business, and see if the trend catches on. You know, that YouTube vid about the second guy, first follower, is really the most important guy?
I started a TBP series back in 2016. It never really caught on. I wrote a few articles and then gave up. I had intended for it to become a long-term journal of a regular rank-and-file W2 earner who gets out of the Rat Race. I sent an email to ask Jim if I could write a regular series about my small business journey. He said that might be a good idea, as the website could use an uplifting article every now and then.
I was going to entitle the series “What’s up, Daddio?” due to the catchphrase my partner and I use on the phone when things are going well, and we’re in a good mood, and about to have a fun phone conversation. But it was really just a stream of consciousness style of writing that didn’t really go where I intended.
And come to find out, I was a little thin-skinned when it came to the comments. I know, I know – I’ve been here long enough to know the rules. Thin-skinned? Get the fuck out. You don’t have to explain it to me. I realized I just wasn’t ready to engage the public at that level.
One positive thing DID come out of that stream of consciousness writing. I made a decision. I decided the “what” of how I was going to leave the Rat Race. Land. I was going to buy land and sell land. Buy low, sell high. I had stumbled on a podcast that teaches how to send out mailers to property owners with offers to buy at below market prices and then re-sell. There are now at least 4 of these podcasts and educational courses online, that I know of. There may be more. There are two that I can say positive things about. The rest, I know literally nothing, and can’t comment, either positive or negative. What I can say, is that the business model works. Due to the popularity and explosive growth of these podcasts and courses, If you own rural, vacant property, especially if you live west of the Mississippi River, you’ve undoubtedly received a letter from either me or someone in my peer group.
And so, in the summer of 2016, I bought my first rural property. Five acres in rural Pushmataha County, Oklahoma. I bought the land for $500 and sold it for $5,000. Dumb luck, in a way, but it was an early home run that sent us on our journey.
Which brings us to the present moment. Maybe I’m writing this post, just to brag a little. But also to engage a dialogue. I’m proud of what I built. I don’t have any specific questions that I’m seeking answers to. In a way, it is EXACTLY what I intended all that time ago, a long-term journal of one man’s journey from rank-and-file W2 worker to a successful entrepreneur. And in the last 3 ½ years, I’ve become fairly well immune to criticism. I’ve been called every name in the book – Carpetbagger, vulture, prey on the weak and the old – you name it, I’ve heard. One guy was even mad enough at the offer I made him, that he sent me a picture of his junk. And I’ve been battling Facebook trolls from Day #1. Bring a great piece of land to the market, and some douchebag has to say something douchey about it. Happens every single time.
So, Flame Away, flamers!! Write any nasty thing you want in the comments, below, I don’t give a fuck. I’ve become a 200 Ton locomotive, running on a laser guided deliverance system at 60 mph to a specific destination that I can see clearly, with lens-like precision. You won’t be able to stop me.
On the other hand, I feel like I know many of you personally. My role in the TBP family is the quiet cousin. I’ve got my favorite TBP family members, and I’m always cozying up my favorite uncle at the Christmas dinner, plate in hand, munching on turkey but rarely saying anything. I’m always paying attention, but on the drive home from dinner, you might not remember that I was there. I’m that guy.
“Great party, wasn’t it?”
“Were you even there?”
But if you wanted to engage in a conversation about small business, that’s fun and engaging, and brings valuable information to the table, that’d be cool, too.
So, the basic business model works like this: Pick a state and county, research pricing data, mail out 1000’s of letters every single month, making an offer on X% of the full value of the land, and buy with cash. The data is available publicly from the county assessor’s office. It’s unsophisticated and it relies on finding someone who needs cash more than they want the land they own, but it works, every single time, and every single county I’ve ever mailed to. We’re looking at other ways of acquiring properties, such as REO assets. Time, research and effort will reveal the proper course.
As for me, here’s where I’m at: Our business has closed about 50 transactions. We’ve sold 5 & 10 acre parcels all over Eastern Oklahoma. Our largest parcel was 28 acres in East Texas. We hit a MAJOR home run on 17 acres, just outside Tulsa. But we also lost money. It cost me $8,000 to learn what FEMA flood maps are, and how to use them. Seems so basic, it’s obvious now – But at the time, I just didn’t know. We bought land only accessible by an abandoned set of railroad tracks. What can look like a dirt road from the satellite imagery may or may not be a county-maintained road. From that experience, we learned to call the County Commissioner if we weren’t sure about the county roads. We bought a 20-acre property, that we literally drove to, unlocked the gate, and drove down the middle of, only to find out that we didn’t have access to the road. We didn’t know there was such thing as a private road, with easements granted to the oil company, but no one else. But we know now. It took me a year to finesse a way to work my way out of that one, but we still made some decent money. I had to hire an attorney on retainer. That was an important step, but bittersweet. We had finally reached enough success where we were targets. I received a letter from an attorney one day, claiming this and that and that we were dirty rotten scoundrels. My peer group all said, “They’re trying to scare you.” I said, “It worked. Let me hire someone who can handle this.”
We bought land that was nothing but ravines, so we learned to buy land in Oklahoma and Texas that was within driving distance of Fort Worth. I started to drive and look at the land and look it over before we bought it. Most of the guys in this model either use the satellite imagery or hire someone from the internet. I’ve put a bunch of miles on and driven to most corners of Eastern Oklahoma and lots in East Texas. We’ve bought and sold land in OK, TX, NM, AR, LA (That was a bastard! They use a derivative of the French Law system, as opposed to the English Law that the rest of the country uses.)
Point is, my experience and knowledge were hard-won. Nobody can tell me what I do or don’t have, because I know what I have in my hands.
The journey over the last 3 years has been a wild and bumpy ride. It’s hard to know exactly what highlights to include in a short blog post. Suffice it to say, I have, literally, had my nuts out there on the chopping block. I’ve been very public about my journey on Facebook. If anybody wants to watch me fail spectacularly, it’s online for all to see. This an all-out, balls-to-the-wall, burn-the-ships mid-life effort in my life. I lost my construction job back in 2018. Long story, but it wasn’t working out for me, or for them. I was willing to give it time to improve. They weren’t. I did A LOT of soul-searching for about a week or so after I got fired. I had been buying and selling land for about 2 years at that point, and had quite a few good deals under our belt, plus the major home run from Tulsa. I decided that I had to try. I couldn’t go back to work as a construction superintendent. I had to try and do land, full-time.
My wife freaked out for the first 6 months of my self-employment journey. I had to learn to compartmentalize and stay focused. She said some crazy stuff during that period, all the way up to, and including, “I want a divorce.” I told her she couldn’t have a divorce, because there was no money. My wife’s fear was the first hurdle I had to overcome. Eventually, she learned to relax, just a little. There’s never NOT been food, and we’ve never been wet and cold, and the vehicles have always been running, so there’s that. We took a pretty hard look at the numbers at the one-year anniversary, and the land business had not outpaced my income as construction superintendent, so we had to make some very real and very hard choices. I knew, at this point, that momma was not over-reacting. This was a legitimate spreadsheet, and it’s hard to argue logic with Excel.
As I thought maturely about my situation, I realized it was time to go back to work. I had taken a whole year off. What a magical year it was!! Probably the best year of my adult life. I took the family to New Braunfels, twice. I went fishing down in South Louisiana. I took my kids to school, and picked them up. I started cooking some around the house to help momma out. I did some laundry. I started swimming for exercise. I made the Dallas Maker Space my office, and learned how to turn on the wood lathe, just for fun. I made some mesquite bowls, some pecan mugs, candles, and other cool stuff. I pursued beekeeping with a passion. I worked hives with a friend weekly. I did a couple of bee removals. In reality, going back to work wasn’t punishment for failing at my business, but a celebration of the year-long Sabbatical I took. I was re-charged, and ready to hit life with vigor!
So, I went back to work. But, the cool thing was, I had my CHOICE about where to go back to work. So, I picked up a totally new career in life – Roofing sales in Dallas/Fort Worth. I know what you’re thinking about roof sales – These guys aren’t storm chasers, they’re legit roofers in my town. There’s some good money to be made, and it allows me the flexibility I need to still build my land business. And I want to master the sales skill set that’s involved. The plan right now is:
- Build up roofing sales as primary income source.
- Land business is still spitting out money every month. Lagniappe.
- Just bought a Subaru wagon, cash. Going to sell the Toyota Tundra, as much as I like the truck. Drive the Subaru until the wheels fall off. Hand off to my 14 year old son in two years.
- Eliminate all other debt, using (1) & (2)
- I should be in a pretty solid place to be able to buy my own land, for my own use, in say, 2-3 years.
Momma and I just started keto this week. I need to drop about 30 pounds to be back in the fighting weight category. I haven’t had a drink of alcohol since before Christmas. I’m not sure what the long term behavior will be. Maybe I’ll drink, or maybe I won’t, but I feel like I need to NOT drink at this stage, to at least see. Because climbing roofs isn’t for over-weight middle-aged men with sore knees!! And I need to make sure I’m in the best shape, ever, because I’m going to need a shit-ton of energy. Right now, my life looks like:
- Wake up early and work land from 6:30 AM – 9:00 AM
- Roofing sales – Knock doors and inspection: Mid-morning to dusk-ish.
- Land Business – After dinner, until I can’t keep my eyes open.
- Saturday mornings – Roofing – Knock and inspect, because that’s when people are home.
- Sunday – Land Business.
Obviously, I can’t maintain that pace forever. But I can pour energy into both systems, until the systems begin to multiply. Both systems can grow exponentially. In the meantime, I rest when I can. Sometimes, I have to take some down time and sleep and nap. But, in an ideal world, that’s what my worklife looks like.
Ultimately, what I like about my situation is that I’m 100% responsible for my own situation. I’m in charge of the decisions and the choices that impact my life. I can choose to go knock doors on a rainy morning, or not. I can choose to buy land, or blow off returning calls for another day. I really think there’s a strong correlation between business owners and freedom. Maybe that’s a post for another day.
I just re-read this for proofing. I realized I used first-person in both the singular and plural interchangeably. It’s because I have a partner (The Daddio of “What’s up, Daddio?”) but he chooses to remain anonymous, due to his career. We’re going to lift this thing off the ground in a big enough way so that he can announce himself publicly, soon enough.
I don’t know exactly how to close this – Again, I’m not seeking specific advice or have a specific question. But that’s the story of my journey and where I’m at now, and where I intend to go. If you want to see what we’re doing, check out “Rural Land Watch” on Facebook. We do have a website of the same name, but we don’t have much there. We’re in the process of making it a more efficient sales funnel for us, but in the meantime, we’ve found Facebook to be the most powerful marketing tool we have access to.
If you have any comments about my business, or your business, or any business at all, please contribute something to the conversation!
Hey, why not? If you know the valuations, and are able to turn the land quickly, seems like a decent way to add to your stash. It is subject to govt changing regs at any moment, tho – tax rates, transaction taxes, etc. If it is a good thing that a small guy can get into, then there is a good chance they will take steps to screw you out of it – require you to be licensed, etc etc etc.
We try and evaluate our pricing strategy on the sell side in a 30-60-90-punt scenario. We list the property for what we think the market will bear. We evaluate at 30 days, evaluate again at 60 days, and at 90 days, it’s time to punt. Drop the price to rock bottom and move on.
As to gub’mint and taxes – I get what you’re saying, but what can a guy do? Not try? I’ve at least got a competent CPA on board to help me navigate those waters.
You always make your money on the buy in real estate….
I’ve been called every name in the book – Carpetbagger, vulture, prey on the weak and the old – you name it, I’ve heard.
If the shoe fits more power to you.
This has been the pattern in this area for 30 years. The result has been more building, growth of population and increased taxation levels for the earlier residents. I’m not a fan. Developers bring in outside money from more affluent places, turn a buck in the process and it decreases quality of life for the older residents.
So as a point of clarity, we buy rural, vacant land in 5-25 acre parcels and re-sell them to people looking for recreational land for weekend use. I don’t think our business model puts us in the “developer” category. But I see what you’re describing in McCurtain County, OK – People from Texas with money are buying up land in and around Broken Bow for cabin rentals. Land sells for about $42,000+ per acre there.
Enjoyed that. I also remember the earlier articles and thought many of the comments were great. When it comes to brokering anything, knowledge and connections are like gold and silver – money in the bank. But both are mined through experience and refined by the fires of integrity and trust. Personally, I never gamble with what I can’t afford to lose. It’s why I’ve outlived any mistakes made thus far. While mortgage brokers get rich using other people’s money, I’ve always preferred to self-fund, start small, and let it grow incrementally until exponentially. Then start over. IMO, nothing beats the thrill of the chase. And timing is everything.
Fun read. I’m not in that business, but am curious how you come up with your valuations, both buying and selling. I’m assuming you pay an attorney to do the closing on both the buying and selling sides, and when you sell, do you try to sell direct or do you have a broker (using MLS?) That realtor cut (6%?) would be a tough pill for me – so I’d probably try to get my own broker license if I were in your shoes, but that might limit you to one county, etc. I’ll add that my Mom is a realtor, and it seems like a scam – the ante in fees and “continual learning” she has to pay just to have the business card is staggering. The whole MLS/realtor thing seems like a business just itching to be revolutionized.
As far as valuations, we use lots of online sources. Anything from Craigslist to Zillow and everything in between. We build some spreadsheets and make note of what people are asking for similar properties. We can also get certain sold comps for raw land from MLS listings and lands of america dot com has reliable information. We build a spreadsheet, and then make an offer anywhere from 25% to 50% of full retail. Then, once the property has been acquired, we tend to sell the property below full retail, so that we’re the lowest price listing in our category.
We don’t use an attorney for closing – Oklahoma and Texas utilize a title and abstract company. We use those, a lot. I’ve talked about getting my real estate license. I understand there are certain tax incentives to do so, but haven’t had the need to, as yet.
We tend to sell the properties ourself. But as we look at scaling up, we think it’s going to be easier to utilize a realtor in most cases. Lots of people in the land investing niche have negative things to say about realtors, for exactly the reasons you bring up above.
I’ve received 2 of these in the last week and 4 over the last year … you’re probably mailing to me (Seminole County, OK)!
No, it wasn’t me, but I can guarantee, with almost complete certainty, who did send it.
My Family of Families group bought several hundred acres near Stratford…
Great ideas and fun read.
Ignore the negative vibes! Look what I survived with a little help from a friend or two, unknown and lurking or not ashamed to know me…
The wheels won’t fall off the Subaru, the head gasket will blow, promise.
That’s what my Subaru Guru said, too!
Thanks for the article and ideas, been roofing a long time now, also have received a couple of those letters.
My ’84 blew but it was easy to work on. I replaced an alternator and water pump. Put a cruise control on my ’83.
good read…thanks for sharing.
good article,tim–
i’ve got a buddy who became very successful by buying isolated,landlocked properties & then figuring out a way to get access to the property–
otoh,always check 4 anything that might be the cause for the property being Cheap–like another buddy who bought a double lot in drew park(an industrial area that borders the airport) for taxes thinking that warehouse builders would snap it up–uh oh,it had a gas pipeline running underneath both lots–
good luck to you–
Mineral Rights are another thing to check before you buy, depending on location. There is a lot of fracking in areas with deep natural gas deposits in OK, PA, WV, KY and other states. When I bought my farm back in the 70s the lawyer who did the title search reported that there had been a gas and oil lease on the property, held by small outfit in Texas, but it had been dropped. Wrong. The company had sold the lease to Phillips Petroleum. I found that out from my local bank. They called one day to tell me there was lease money in an account set up for the former owners and it was now mine to claim. I called and wrote Phillips, with no response, but the payments stopped. Fortunately the 20 year lease soon ran out, was not renewed, and I was home free.
Good essay, Tim. My sister and brother-in-law started buying small houses in a small OK town about 20 years ago. They renovate them and then rent them out to people they know and trust. Nothing they have rents for more than $450/mo and they currently get about $6,000/mo in rent. Pretty nice additional income for a couple of retired folks.
1. Balance- don’t forget the wife, kids too. You’ll pay dearly for ignoring your marriage.
2. Hire some guy to look at the land and report back to you. You don’t make money driving.
3. See #1
Best of luck.
We need more entrepreneurship in this country imo.
Need more confidence in govt. stability and sanity before that will ever happen on the scale that industrialized this country between 1850-1950.
During the back to the land movement of the 1970s a local guy figured out that he could buy old worn out farms and turn a huge profit by advertising in the Philadelphia and DC newspapers. Starry eyed hippies were his market. Some of them were planning to grow pot and get rich selling their contraband to connections in the city. A few succeeded, others got busted and went to the slammer. People who had skills found honest employment or created their own businesses, raised families and have lived the dream.
Now, the market is different. No more hippies, jobs are scarce, and the profit margins are not so fat.
Buying and selling country land is no longer that easy, but it can be done. You seem to have a good approach and have learned a lot. I wish you luck.
Wow Tim seems you could just sell your vote to a democrat, sit home collect some free shit, a free place to live, obama phone, and cable (maybe some free obama netflix too). You gotsa get with the program dude….lmao
I had no idea rural land could be turned over so quickly, and for a decent profit. Where I’m from (No. Illinois), I’ve watched wooden For Sale signs on open land sitting so long that they literally fall apart from the weather.
In our experience, it’s always about price. When the land is priced low enough, someone will buy it. As folks have mentioned, it’s about the buy, not the sale. If the landowner thinks he’s on a field of gold, and won’t budge on the price, it’s likely to sit there forever.
Loved your post and hope you keep writing…….. may I suggest that you write an ebook on your land business? With your writing ability and a subject that lots of people like to read about, my bet is you’d sell quite a few copies. Always a market for those type of books.
Getting over the fear of being offended is first step on the road from Perdition.
RiNS
What type of land are you looking for, for personal reason?
Not sure exactly what you’re asking – Are you asking what the criteria is for us to buy as a company? Or is the question: What am I looking to buy for myself?
I’m keeping postcards from all the guys who want to buy my house in the city, as-is, no repairs, cash! We aren’t ready to sell and may not be for years, depending on children / circumstances.
If circumstances change I’m thinking of inviting them all to an auction, and let them bid against each other and whoever else shows up …