The Ground Game Podcast

Episode 9: What are the hardest things about land investing?

• Justin Piche and Clay Hepler • Season 1 • Episode 9

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🎙️ Welcome Back to The Ground Game Podcast! 🎙️

In Episode 9, hosts Clay Hepler and Justin Piche tackle the tough realities of land investing, discussing the hardest challenges they’ve faced on their journeys. This episode is packed with insights that resonate with both new and seasoned investors, emphasizing the grit and determination required to succeed in this competitive field.

Key Highlights:

  1. Quarterly Goals Update: Clay and Justin share their recent struggles, including setbacks in lead flow and team challenges, highlighting the importance of resilience in the face of adversity.
  2. Team Building Tactics: Justin discusses his weekly team meetings, focusing on fostering a positive culture and maintaining team morale, especially in a remote work environment.
  3. The Hardest Aspects of Land Investing: The hosts dive deep into the most significant challenges they’ve encountered, including the critical first six months of establishing proof of concept, the necessity of consistency, and the emotional toll of betting on oneself.
  4. Overcoming Obstacles: Clay and Justin share personal anecdotes about navigating difficult deals, emphasizing the importance of adaptability, trust, and the willingness to learn from failures.
  5. Real-World Deal Review: Clay provides a detailed review of a complex deal he’s been working on, illustrating the intricacies of land transactions and the importance of taking ownership in challenging situations.
  6. Mindset Shifts: The episode emphasizes the need for a strong mindset, encouraging listeners to embrace challenges as learning opportunities and to maintain a long-term perspective in their investing journey.

This episode is a candid exploration of the realities of land investing, offering valuable lessons and practical advice for anyone looking to thrive in this industry. Whether you're just starting out or looking to refine your approach, this conversation is essential listening!

Hosts:

  • Clay Hepler: A seasoned real estate entrepreneur focused on building an eight-figure land flipping and development business.
  • Justin Piche: A former US Navy submarine officer turned real estate entrepreneur, dedicated to building high-performing teams.

#GroundGamePodcast #RealEstateInvesting #LandInvesting #Chall

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Justin Piche (00:00)
Welcome to the Ground Gap podcast. This is Justin Piche.

Clay Hepler (00:06)
And this is your host, Clay Hepler. And we're here to talk about how to win the ground game.

Justin Piche (00:10)
my goodness.

Clay Hepler (00:27)
For those that don't know, we've had people commenting in the reviews about me being the host. And so I guess we have a really good interviewee. He shows up every week. No, no. For those that are seriously making fun of me, this is a co-host. This is your co-host, Clay Hepler, not your host. Justin, what's up, man?

Justin Piche (00:45)
Hmm.

man. Today has been a crazy day. My daughter, my youngest is sick. And so I had a, I actually had a coaching call with my coaching clients. And as the call started, she started crying and I could not get her to stop. And so I had to move the coaching call and it felt really unprofessional. I was very apologetic. Luckily we were able to find another, another slot that worked, but you know, that's like the, there's benefits to working at home. A lot of them that I really love.

And there's also some challenges, you know, that your work day sometimes is more interrupted than it otherwise would be. So maybe not as productive today as I usually hope to be.

Clay Hepler (01:33)
For sure, man. This Thursday, Friday, Saturday, I have my wife is going out of town for a engagement party. And so I have my six and a half, almost seven month old kid, Hess. And yeah, it's gonna be really interesting. Because I have them basically from like nine, nine o'clock. And I have a webinar on Thursday, like Thursday night.

And so in my family, they're not able to come and help out. So basically, I'm going to be like three days in a row because my wife's not getting back to like late on Saturday or a little late afternoon. So basically it's like the end of the day. So it's going to be interesting. Yeah, it's going to be very interesting.

Justin Piche (02:10)
Oof.

You know, I have a little bit of advice if you if you want some totally unsolicited parenting advice

Clay Hepler (02:30)
I'm here, I'm here. Throw the kit, just put the kit outside and just...

Justin Piche (02:33)
No,

Just know that it's gonna be chaos and know that you're gonna struggle. But if your expectations are there, any time that you exceed them, it's gonna be great. And your outlook on the end of it is, at the end of it, when she gets back, is gonna be like, you know what? It was so much better than I thought it was gonna be. And I think giving your wife that confidence at the end and not feeling all frazzled or all like, my God, it was so hard, that'll make her happy, I think.

Clay Hepler (03:20)
Honey, it was so easy, you should leave again for another three days.

Justin Piche (03:22)
Man in all seriousness, we we have a great a great episode today Obviously, we're gonna go give a quick update on some quarterly goals and actually share some like not wins So, you know for those who are listening, it's not all wins. It's not all rainbows and butterflies We'll talk through team building tactics. We got I'm gonna talk about talk about my weekly meeting and just kind of how I build How I build a really good culture on my team and then the main topic

What are the hardest things about land investing? What were the hardest things on your journey? Clay and I both have, we have some similarities, but we also have some differences. And so we're just going to dive in and talk about those. And I think a lot of listeners will resonate with some of these challenges because it is hard, What the gurus sell is that this is a quick way to make a bunch of extra income. But the reality is it's challenging to scale this business just like any other business. It takes hard work.

It takes pivoting, right? And being okay pivoting. takes understanding where you are wrong and improving. And it really takes a lot of trust. mean, we both had, you we had to bet on ourselves. We'll get into it later. And then Clay's gonna share some, a deal review, some details about a deal he's working on. So Clay, how are your, how are your Hortley goals going?

Clay Hepler (04:46)
Yeah man, last week was a tough one. We hit it with a big old zero and no deals under contract. We actually had one deal under contract, fell out of contract. And it was, there's a couple of reasons why I think, but I think it's a lot, a lot has to do with our lead flow over the last week. So I think it has a lot to do with our lead flow and

that we made adjustments really quickly, like Justin said, man, sometimes you just, some bad happens and you don't hit what you hit. And for us, it's two to three contracts a week is sort of our normal. And when you have a goose egg, it doesn't feel good at all. So yeah, that's definitely something that we're working on to fix this weekend.

feel really optimistic about it's Tuesday right now when we're recording this episode and we have some really great opportunities in front of us. But another loss was my lead manager called in today. I she fell down the stairs and like busted her eye and it's super swollen shot. My transaction coordinator, which we were talking about in an earlier episode, I recently got it on, had a very serious health issue and had to take

Justin Piche (06:00)
you

Clay Hepler (06:12)
medical leave and had to resign because of a serious, yeah, like very serious, very personal and dire. And so, then last week, about a week and a half ago, we had our revenue operations person, which is essentially our pipeline manager, right? They're tracking KPIs, they're managing our pipeline, making sure that everyone's on top of everything. They...

Justin Piche (06:17)
my gosh.

Clay Hepler (06:40)
They basically, after the typhoon in the Philippines, just went completely AWOL. So it is not all sunshine and rainbows. it teaches you every time you go through something like this, you face adversity. It teaches you more lessons, right? What can I do differently is the question that I always approach it with, It's like there are things that I can do in order to get the business up and running or what we recently implemented.

Justin Piche (06:45)
You.

you

Clay Hepler (07:09)
No, I'm kind of going off script here, but we have areas of output, AOL. And I've talked about this before, but every position has an area of output. And there's the original owner of output, right? Which is if I'm a lead manager, I own the output of producing qualified leads for Closer. But then if you're in a transaction coordination position, a data management position, a more administrative position,

then there's backup owners. And so if someone's out, if someone's on vacation, then there's basically a backup owner. So we have a standard operating document in our notion that has, here's the SOP for the position underneath the data management. And then there's the area of output, the SOP, the loom, the definition of dumb, the step-by-step, the resources required to execute. Then there's the person who's assigned to this task.

Justin Piche (07:51)
Thank

you

Clay Hepler (08:09)
and then there's the backup owner, right? So if something bad happens, that person is gonna be called upon. And one last thing, we're creating a Notion dashboard, a new Notion dashboard for everyone, which is basically Hepler land holdings in a box, right? And so everyone has their own personal dashboards. And so what we're gonna do is we're gonna create an automation that if someone's out, they can hit a button and they say, I'm out between these three days.

that will automatically assign their backup owner the task. And so they would be responsible for a reduced amount of tasks, but tasks to keep that position going when they're gone. you know, it's been tough. It's been really, really tough, but you know, every, everything like this just presents an opportunity to continue to learn and grow.

Justin Piche (08:59)
you

Man, that is a lot. That's tough. One of the things I think that one of your employee kind of goes out unexpectedly, you realize, and for those who don't have employees and they're doing literally everything themselves, you always know it's all on you to get things done. But when you start assigning responsibilities or outputs to certain members of your team, you start to see where your holes are and your risk is, especially if one person is responsible for...

Critical outputs time-sensitive outputs or a lot a lot a large number of critical outputs and so what like Along those lines, you know, maybe a little bit different as we we try to cross-train. don't necessarily have like a back a Person who's the backup responsible for those outputs? Although I I really like that and so we may may implement something similar But we do cross-train in the event that something happens to one of our employees and we need to bring somebody over To fill in that gap

But yeah, it's tough. mean, when you're solo managing your business, it comes with its own set of challenges, but you're the one who's responsible. And when you have other people that you're reliant on, you start to open up yourself to different risks, right? Maybe you don't even have all the same skill sets as your team as it grows. Ideally, if you're hiring right, you're hiring people with better skill sets in some of the areas of your business than you have. But yeah, it's definitely a risk that you need to be aware of.

Let's see, for me, I did not sell anything last week. So we have no increase in pipeline revenue as well. Sorry, not pipeline, realized, my mind was 800K realized gross profit in Q4, no sales, no realized gross profit. So we're sitting at the same as last week. But I do have maybe a positive update. One of my goals is to get two big subdivides on a contract. And I qualified big as 250K.

like gross profit management fee type of deals. That was kind of what I set as my big, even though that's not really that big, but that's that was the minimum criteria for that goal. so some partners actually incredible guys asked me to be involved in another deal. And we are still in the very early stages. This deal could totally be killed, but we got a 150 acres in Texas Hill country near Austin under contract for two million.

And we're in the stages of evaluating the highest and best use for this land. know, in Texas, 10 acres and up is an exempt subdivision and it would be great to be able to do that. But I think the price we're paying and the market price for 10 acre tracks in the area may put that slightly out of reach given the amount of clearing work and road building that we have to do. Certainly it would still have a positive return, it doesn't, wouldn't, it might not meet our return threshold.

And so right now we're looking through the actual plotting process because it's just an incredible property up on kind of a bluff, like a plateau with views. if we clear out the Cypress trees, views for miles, less than an hour from Austin. So I'm pretty excited about that. And I had another deal this morning that another kind of partner pitched me in Georgia that is another potential high profit deal. we're in the early stages of evaluating that deal as well.

Yeah, just positive direction. You know, I can't say for sure that that's pipeline profit yet because we're still trying to find deal killers and both of those, but they both look really promising. So we'll have an update there.

Clay Hepler (12:41)
That's incredible man. That's like, you put yourself out there. I always talk about this, putting yourself out there on social media or putting yourself out there content wise or discussing, this is what I have going on. A lot of people have the imposter syndrome, hey.

I'm not as good as this one person that is in the industry or a couple of people in the industry. But the reality is people want to partner with people that they like and people that they maybe have shared interests with. And I always talk to people like in the accelerator, right? So in the Landman Profit Accelerator program, they say, know, why is someone going to sell to me? just starting out, right? Well, one of my students had a conversation with a guy.

who grew up, the landowners in this county that this guy's dad lived in for the majority of his life. He was a farmer in this county and he said, dude, I get letters every week and I decided to call you because I don't know why. I just felt that I needed to. And then when I got on the phone with you and built that relationship, I feel like you're a legitimate guy. So I want to do a deal with you.

Right, and so people do deals. This is sales. This is an emotional game. So someone might do a deal, a subdivide deal, because they like who you are, but they might do a subdivide deal with someone else because they like that person in particular. So you hear Justin getting all these deals from other people. And if you put yourself out there, you could as well.

Justin Piche (14:21)
Yeah. I mean, yeah, I'm the same way. Like I love partnering with people that I enjoy, that I like to work with, that I get along with, that I want to build, that have a shared vision for what we're going to build and.

That's awesome. Well said. All right. The next section of our podcast here is team building tactics. And I'm going to talk a little bit about my weekly team meeting and kind of how I use it to build a culture that I want on my team. So this is a very lonely business.

All right. Especially if you're working by yourself, it's incredibly lonely. That's why a lot of people join coaching programs or masterminds. It's to be around. Clay and I were talking earlier about this. It's to be around like-minded people or people that are ahead of you so that you can learn, so that you can get sounding, have sounding boards to help you figure out the best path to navigate what's worked, what hasn't. And that's honestly a huge reason why we started this podcast is because, you know, both Clay and I have had sounding boards throughout our journey that have helped us get to the next level. And

It's so important. It's so important on my team. We're all working remote as well. And so I worry about that same loneliness feeling for people who are working in the Philippines and somebody else is working in Columbia and Argentina and all over the world, especially if they're doing something like cold calling where they're on the phone with these sellers all day long, getting hung up on a ton of times a day. It's tough. Like that's a tough job. It's a tough job. And so I have a weekly meeting.

Everybody on my team joins. I make them all turn on their videos. There's something weird about staring at a black screen when you already don't see anybody all day because you're working by yourself in your office or your room or whatever it is. So I them share their video and I do a couple things. The first thing I do is I basically give an update to the team of kind of what's going on. Where are we? It's more of a transparency thing than anything. I want the whole team to understand what changes have happened in the business in the last week.

my personal focus, what's my personal focus. And then we go through, so I give that like today, we're hiring two new call callers. And so I gave an update, hey, we had four interviews, like two of them were fantastic. We extended job offers to them. I gave an update on how excited I am that our US based sales or acquisitions agent has joined the team and how much value she's already bringing, sharing things like that. And then the next step is we go through department updates. And so we'll talk.

The acquisitions will talk about, these are the deals we have in the pipeline that we're negotiating on. We have these contracts out. These ones are have been sent back in the mail, just a health check update on where we are acquisitions wise. We do the same thing with sales. What are the properties we've gotten offers on? What are we changing and dropping price on? And it's kind of an alignment meeting at the same time. It gets the acquisitions team understanding how we're operating on sales, sales, how we're operating on acquisitions. Everybody kind of gets a feel for the whole business. And then at the end,

we go over, I make the team share four wins. And sometimes it's kind of awkward because I sit there and I'm just like, all right, guys, it's time to share your wins. I need four of them. And I just look at them all. I look at them all and I won't end the call. I do not end the call until we have four wins from the team. I never end it. I won't. They know it. And so they have to bring wins. And today we had some really, really solid ones. One of our employees

Shared that she's kind of been on a fitness journey and has had some some great weight loss towards her goal, which was really exciting We had another one Share about her nephew taking his first steps Which is super exciting. Like she really takes care of this this nephew and so It kind of almost like a mother like watching her baby have first steps. It was really really awesome.

So those two, and then we had another team member share that she got this really beautiful tattoo that she was really excited about. you know, awesome for her. And then the last team member shared that her, she's, she's an immigrant to Argentina. She's from Venezuela. She lives in Argentina. Her whole family basically still lives in Venezuela. She has one cousin who lives in Europe and her cousin surprised her.

came and flew to Argentina to stay with her. And then they together got to basically FaceTime or video call all of their family members and brighten everyone's day by showing they were together. And it was just really special. And I think that little act, takes maybe 10 minutes, but it gets the whole team kind of updated on some good things that are happening in each other's lives and really just builds a sense of camaraderie and a sense of friendship and something that's a little bit deeper than the normal kind of you clock in, you clock out.

type of job. And I think for a fully remote team, especially a team that's doing a hard job, you need something like that, right? You need something where you feel connected and tied to your, your, your fellow employees or your fellow teammates to keep you coming back and enjoying work and makes work more fun. So that's a little bit of a team. That's my team building tactic is build a good culture, build a culture where people want to work, where you actually show care for people.

Clay Hepler (19:34)
Justin, I have a couple of questions about that. That's incredible. As business owners, often sort of, we isolate our own thinking and feel that our team members maybe aren't feeling the same thing, right? Or if they're global talent, right? If you haven't had a lot of global talent, it's a different type of employee, right? They're used to doing virtual.

They're used to being a virtual employee, right? They've been working in the BPO industry for a decade. But I think it's like Justin said, know, the team building tactics are important, and especially if you're bringing people together. So how many people are on your team, Justin?

Justin Piche (20:18)
I guess with these new two employees, 23.

Clay Hepler (20:24)
Okay, 23 people on your team. How long does it take you on a week, every week? How long is this meeting?

Justin Piche (20:34)
It's usually about 30 minutes, 30 minute meeting.

Clay Hepler (20:37)
Wow, that's a fast meeting.

Justin Piche (20:40)
I'm not a big like tie up everybody's time for a long time kind of person, right? The meeting has a very specific agenda. We move through the updates at a really high level pretty quickly. We also, mean, we have department meetings where more specific information is passed down to the team. So it's not really like a, when I have the entire team on the meeting, it really is more of a, let's all look at each other. Let's raw. Yeah. I mean, it's not all raw raw. There's obviously some content to it, but it's more of a let's all see each other. And like, because we're a part of a team, we're not.

Clay Hepler (20:45)
Wha-

Rara.

Justin Piche (21:10)
We're not just these disparate departments in the ether. We're a team working towards a common goal.

Clay Hepler (21:17)
I like that. I like that. And it's 30 minutes. So it's for the listeners. We get on the call. We're a cool calling team updates, acquisition updates, disposition updates, four wins at the end for company wide or into everyone gives four wins per person.

Justin Piche (21:33)
No, no, no company just for across the whole team. So not everybody shares four wins. There's yeah, that would be, that would be, dude, that would be a long meeting. It would be an awesome meeting, but that would be a long meeting.

Clay Hepler (21:38)
I was gonna say, dude, I was like gonna...

Yeah, yeah. So is that, did I hear that correctly or is there anything else that I missed?

Justin Piche (21:49)
Yeah, no, it's updates, transparent updates on the business, the health of the business, things I'm thinking of next steps, things we're going to try out and then department updates, acquisitions, sales, marketing transactions. And then at the end, four wins across the whole team.

Clay Hepler (22:05)
we're gonna go into the main topics for the week. Justin and I are and dissect the five things that we believe trips up more land investors than anything else. And these are the things that

prevent people from scaling, the things that prevent people from getting traction, and the things that discourage people so that they're really not hitting their goals in a timeline that they want to hit. So what we're going to do is we're going to go one by one. For those in the comments, if you want to rate each one, feel free to. You can put them in the comments and rate and review them below. Clay, I love all five of Clay's, Justin's. They could use some work.

I'm just kidding. Yeah, so we're gonna start us off here. Justin, would you like to kick us off for your first thing that prevents land investors from starting, getting traction, and scaling?

Justin Piche (23:06)
Yeah, and this is this is we share this one we were texting about this earlier we share this one it is the first six months of the business and Really? It's the proof of concept. I hear this all the time from people and I felt this exact same thing is Is this going to work for me? Right? How do I know that I'm gonna make money because frankly you have to spend money to get access to deals if you're going to run a

essentially an off-market marketing land business. Now there's ways to invest in land without spending money. You could look on the market, you could do value add type things that are on the market, but that's generally not what people are doing in this space. They're understanding how to value land and marketing, sending mail, cold calling, whatever you are doing to outreach to sellers. so you have to spend in some cases, 10,000, 5,000, 8,000, $20,000 before

you have a deal that is going to be profitable for you. And that is really hard. It's hard to mentally jump over that hoop of I'm putting this, I'm paying this money and I don't have proof that I'm going to get this money back yet. For me and maybe just how did I overcome this? I I joined a coaching program right when I started. And so I was in the room with successful investors. It's like as soon as I started my business,

And I had that proof of concept because I friends that had done it and I was in meetings on a weekly basis with people that were doing it. And so I had that confidence seeing it worked for other people and knowing that it would work for me. That's really the only thing that kind of kicked me off. I listened, I was before doing that. I listened to so many podcasts and I just like this one. Although this one didn't exist. I wish it did. I really did. I do. I wish this existed when I was starting. But.

I listened to a bunch of podcasts and I felt like I knew a ton of stuff, but I still hadn't pulled the trigger. And this was the thing that tripped me up was how do I know that I'm going to spend this money and then it's going to come back to me in the form of profitable land deals.

Clay Hepler (25:17)
Justin, do you have a recommended number of savings that someone should have before jumping into this space? Conservative?

Justin Piche (25:27)
Hmm.

Man, what a good question. Maybe instead of going down that road of like a recommended number of savings, maybe I would say, do I have recommended like operating budget that somebody should commit to and plan to potentially lose but bet on themselves to make things happen? Yeah, I think somewhere around 25 to $30,000 is what number is sticking out in my head of I think if you have access to that much cash,

Clay Hepler (25:41)
Yeah.

Justin Piche (25:59)
to actually invest in your business. I think that is the right foot to set yourself off on.

Hey guys. This is Justin interrupting your podcast. I hope you guys are getting a ton of value from this. I certainly have put a lot of time as long as as well as clay into making this content something that you guys can learn from and get a lot of value from. If that's true for you please take a moment now to follow subscribe.

set your downloads to automatic, know, it helps the numbers and it really helps us reach more people and provide more value. So now back to your regularly scheduled programming.

Clay Hepler (26:36)
Yeah, I actually, I say the same thing with coaching with operating anywhere between 20, 25 to 40, 25 is on the low end 40 is kind of, so five to six per month for six months.

Justin Piche (26:46)
Yeah. Yeah.

That's exactly what I think is kind of the, at this point right now, maybe it was easier before when you could send, you know, less mailers and get some deals. think today, I think 30 K is basically the minimum I would recommend anybody start with to say, I'm going to commit to investing this money in my business, in my education, to, to ensure that I'm successful. And it's still completely reliant on you actually learning, adapting, making good decisions, building up the skillset.

Clay Hepler (27:00)
Yep.

Justin Piche (27:21)
There's that is the money is one piece. The work is the other piece.

Clay Hepler (27:28)
I would agree. So my first one also is the first six months. So in the accelerator, man, people are always asking me like,

I'm two months in, one of my students, I'm 90 days in, so I do coaching calls with all of our students 90 days in to just check in, really wanna make sure that they're set up to succeed, And people are either head over heels or they are saying it should happen sooner. And I was having a conversation with one of our students and he went to, on a vacation to Hawaii.

And on a business conference to Atlanta, it didn't send a piece of marketing for four weeks. It was frustrated at 90 days. And what I told him was this, hey, when you came into this program, we had agreement that I said, you will set yourself up to succeed. Can't guarantee success for anyone.

Justin Piche (28:17)
Okay.

Clay Hepler (28:40)
Right, but you'll set yourself up to succeed if you commit to get a kid dedicating the time and financial resources for six months. Some people can't follow a diet for six minutes. And so it's, hard for a lot of people to keep on the path. But the first six months is critical. It's when people give up and say, I can't believe I didn't do this. The question that I always say to people is

People feel the same way about business as they do about dieting. Why is it that some people can make a transformational change in their life in dieting using the same exact diet, lifting the same types of weights, and someone else can't?

that happens in every single business. you might have a thyroid condition. great. You might have X. great. but just like if you send out marketing, you will get responses. So if you reduce your cap at calories, you will lose weight. If you eat less and move more, you're going to lose weight. If you send out marketing and have quality conversations with sellers, you will be successful. so that's what I tell all of the

Justin Piche (29:43)
Okay.

Clay Hepler (29:59)
the people in the accelerator, this is when it's going to be the hardest in your entire business. And I think Charlie Munger says something like this, like, it's much harder to make $100,000 than it is to make a million dollars. And that's true. And so it's much harder to get your land business off the ground in the first six months than it is to keep your land business profitable for the next six years, in my opinion. So

Justin Piche (30:10)
Okay.

Clay Hepler (30:28)
Josh, do have anything to add to that or do you want to move on to number two?

Justin Piche (30:30)
No. Yeah, let's go. What's your number two?

Clay Hepler (30:34)
My number two is consistency. Gosh, so cliche. it's so true. It's like painfully true. And really we need to be reminded about this more than we need to be taught. We need to be reminded that doing the same thing over and over again is a mark of someone who is consistent.

Justin Piche (30:43)
But so true.

Clay Hepler (31:04)
What's helped me stay consistent is understanding timelines and then doubling them. Right? So if you're starting a land business and you hear the guru say, Hey, I have a student that made 300 K in their first six months. you could say, okay, that could happen to me, but most likely it's not going to happen to me. I would, I always say that I'm most likely I'm to have to work twice as hard, do twice as much stuff.

and I'm still not gonna be successful. That's how I approach it and it always sets yourself up to succeed. In addition to that, when you're starting a new marketing channel, the reason why people aren't consistent is because they'll start sending marketing and they'll say in 60 days, hey, I'm not getting the results that I want. In reality, it takes 90 to 120 days, depending on your lead channel, for someone to enter your system and actually be converted into a lead. Of course, you're get the 10 % of leads that come into your business.

Justin Piche (31:37)
you

you

Clay Hepler (32:02)
and they're going to be ready to sell today. in reality, the majority of your profits happen after you have a compounding amount of people in your system. But people want the instant 10%. And they're not good enough. And they haven't put in the time to have the consistent results and effort that it takes in order to do that. So consistency for me is number two, because it is a prerequisite to be successful in this business.

Justin Piche (32:33)
Yeah, man. Well said. It kind of brings up the point. One of the things you said there, it really ties into my parenting advice for you, which was, you know, set your expectations at a certain level and you will feel successful at the end. I think a lot of that is the mindset that folks need to have when they come into this business, which is don't buy the bill of sale that a guru sells you, which is that this is an easy business and that you can quickly make a huge profit. I think

What you should take away really is like, if I am consistent with my marketing output that leads to quality seller conversations and I do it over enough time, I will be successful.

My number two is actually going all in. And I also have written here, putting my family's financial security on my shoulders. This is a huge mindset shift for somebody who has been working, like many of us have a W-2 position where you go to work, you do this responsibility that you've been hired for, and you get a consistent paycheck. When you're launching a land business,

You have all these questions. mean, Clay was just talking about it. I get the same questions from coaching clients and new folks that are reaching out just for advice. And it's how do I know this is going to work? How do I know I'm going to actually make money doing this? And honestly, nobody can tell you you're definitely going to like it depends on so many things. It depends on so many things and this mindset shift of just I'm now betting on myself, my work ethic, my intelligence, my ability to learn, my ability to adapt, my ability to be consistent.

That's what I'm relying on. I'm not relying on some company to give me my paycheck for a set job description. I now have taken on a whole bunch of other responsibilities and cutting that cord of like quitting the W-2 while I certainly wanted to and was very excited to do it. It still took a lot of faith. It took a lot of overcoming fear to actually do it. That was something that I think that's something that holds a lot of people back in this business.

Clay Hepler (34:45)
I like that. think that in life where I felt fear full of outcomes, when you actually set them, and I think I learned this from, I don't know if it was Tim Ferriss, but some, I think it was maybe Tim Ferriss, but when you actually sit down and write out like what's the worst that could happen, it's actually a lot, it's a lot less bad than you anticipate.

Justin Piche (35:11)
Gosh, that hits home. That hits home.

Clay Hepler (35:11)
And so when you are facing the fear or you're facing the unknown, a lot of times when you write those things down, when you seek clarity through putting things down on paper, you end up saying, wow, that's just my irrational human brain, my primitive mind, my monkey mind that's telling me this is such a greater, a bigger problem than what I originally thought.

Justin Piche (35:42)
I did that exact same exercise. That is like the thing that helped me. I'm so glad you brought that up. I looked at kind of our life, our financial situation, and that's exactly what I did. As I said, what is the worst thing that happens? And for me, the worst thing was I lose some money and then I get another job and we're fine. You know, we're fine. Maybe we sell an asset, a house or something. Maybe we rent somewhere for a while, but

When I did that, I was like, all right, it's time. It's time. That's such a good point.

Clay Hepler (36:19)
So then for me, number three would be changing directions. You listen to a podcast like this, we sound like we know what we're doing. You hear us talk about subdividing or entitlement or massive rural recreational land flips or adding an additional marketing stream in your business, cold calling, direct mail, texting, RVM, whatever, PPC, whatever channel, and then instantly you go out and implement it. And there is a lot of benefit in

being the type of person that's an action taker, but a lot of times what holds us back is not our initial knee jerk response. Just like in an argument with a spouse or an argument with a business partner, the best thing to do is most often not what you emotionally feel that you should do. It's taking a breath, it's taking some time away and saying, is this the right thing that I need to do right now? And just when I talked about this,

Justin Piche (36:58)
Okay.

Clay Hepler (37:19)
a week or so ago about building, starting with the end in mind. But a lot of people don't have that. And so they change directions. Like they're ordering coffee every single day. They're like, want a latte today and tomorrow I want a mocha frappuccino and the next day I want an espresso because they want to try all the flavors of the land business. But all the flavors work. What you need to do is commit to, again, this is kind of consistency. This is a reiteration of consistency, but

the changing of direction is the equal and opposite of this. so focus on what you do, whether it's info lots or subdividing or whatever it is and get really good at that. And that could build a seven figure business. And then after you build that seven figure business, a million dollar a year business, then you can add the extra channels. Then you can add the extra marketing. Then you can add the extra opportunities. Because anything before that, it's just adding so much to your plate.

Justin Piche (37:59)
Okay.

Clay Hepler (38:16)
that you see, I actually had a comment on one of my Instagram posts the other day. I had the meme of the Halloween, the spirit Halloween of a land investor and someone said, month two, I'm gonna be a subdividing and commercial guy. Because they're like, I'm changing directions so quickly. So that's my number three, four things that really prevent a land investor from scaling and building a powerful business.

Justin Piche (38:44)
I like to call that

kind of shiny object syndrome. That's kind of, and honestly, as somebody who is loves to have, I don't love chaos. Okay. But I thrive in chaos. And so I love to have so many things moving at once. keeps me busy. It keeps me motivated because there's so many plates spinning. But I also know because of that in this business, I might see something I'm like, Ooh, I need to do that. Ooh, I need to do that. Ooh, I need to do that.

Right. Now I'm at a place where I can investigate those and I can put money, you know, I can put time and energy into seeing if that's the right move for my business. But I'm doing it from a place where my business is operating and successful and we're not killing what's working. Right. I'm not changing the full direction of the business to go down a different path. I might add something else that will help increase revenue or profits on top of it. But when you're first starting out and you're trying to build your base and build your consistent business, that's where shiny object syndrome, in my opinion, can really hurt you.

Right? Cause you will divide your time, energy and resources to do, to basically start multiple things before actually growing the thing that you originally started to a place where it is sustaining or at a level that can produce reliable and consistent revenue.

Clay Hepler (40:02)
I love that man. That's a really good addition.

Justin Piche (40:06)
My number three is the lumpy profits and planning. All right. This is more of like a scaling thing, I think, than like a starting, right? Because obviously if you're having lumpy profits, you're having profits and that's a good thing. Clay, you posted an X or whatever a couple of weeks ago, like month one, month two, month three revenue. And it was like plus 100K minus 30K plus.

15 minus 20, whatever, like kind of went like that. And I related, I laughed so loud. I laughed out loud on that because it is so true. And if you haven't been through a full year cycle of a business operating consistently, maybe you're just getting started. You might not realize that everybody deals with this lumpiness in this business. It's really only when you get to quite a large scale and you have very consistent, very consistent acquisitions and sales.

that you can kind of start to smooth that process out. But even still, even at like the scale that I am, or we're selling 10 deals a month, I still have dry months where we sell almost nothing. There's seasons where the buyers just don't buy. And that is lumpy. And I started experiencing that pretty early on. My first like six months, I went through a summer where we just didn't have any sales. Like the spring was fantastic. And then the summer hit and I'm like, my gosh, am I, did I?

Like, did I just misunderstand this business? Why are things all of a sudden not moving? And that's the lumpiness is just, kills people, right? It stops people. gives people that mindset of, no, maybe I don't know what I'm doing. But if you know that going in and you properly plan your OpEx for that, you keep enough cash in your accounts through those slow months. You plan ahead, you save those profits. You don't maybe reinvest all those profits in a deal and instead bring on a money partner, even though you could keep all that equity because you know,

the next two months you may be maybe slow on sales and the revenue is not going to come back in. You need that cash to keep your business consistent. So that yeah, that's I think that's a big scaling block for people.

Clay Hepler (42:12)
I want to just take a moment aside here and discuss business philosophy. what is the number that, first of all, that you like to have in your bank account for how many months out? If you didn't sell a single deal, what is that number? it one month, two, three, four, six?

Justin Piche (42:18)
All right.

No, that's a good question. I'm kind of like at a six weeks kind of cash in the bank, but there's a couple of reasons why. Now, let me tell you, let me tell you, let me tell you. I think everybody, is, and this goes back, this goes to a discussion on levers. All right. In your business, you have to know where you can pull cash for operating expenses. I prefer to keep cash working in deals and I buy a lot of deals just completely cash. So we have a ton of equity just sitting on the books. Now,

At first it was more like three months, but as I've built up banking relationships and funding relationships, as I've built a portfolio of notes and that I, and I know how to sell those notes relatively quickly, I now have levers that I can pull where I can get access. can pull out a hundred K, 200 K, 300 K in six weeks if I need it. And so now I'm at a place where I have more consistent levers to pull. I don't necessarily need to keep, I don't know, 200 K cash just sitting in the bank all the time.

I'm comfortable with 100k sitting there and running with that and knowing my levers. Now, if I don't have levers, okay, then I need to build up a bigger cash position. If I don't have other levers to pull where I can get access to quick liquidity, then I need to have more cash in reserve for those slow periods.

Clay Hepler (43:58)
So what are the, if we're gonna just talk about levers, top three levers that you have, because for example, I have at this point five to six months out of cash.

just sitting in the bank, right? And I think that's partially because I don't have as sophisticated as it, I'm being very transparent, I don't have as sophisticated as a dispositions team. And also I have notes, but probably not to the extent that you do. So why, what are your levers that you use in your business?

to be able to pull out 100, 200, 300K at any one point.

Justin Piche (44:44)
Yeah. Number one easiest lever is our note portfolio. That's the very first lever that I can pull. So I like the consistent cash flow, but sometimes I want the cash now to either maintain more equity in the next deal or get through a slow period, pull that profit forward at a slight discount to the principal value. So that's the easiest and first lever that we pull. And so I probably have a half a million, maybe 600,000 of principal value notes that

are on my books right now. And so I can sell those notes or some percentage of them. And if I really need money quick, I can sell them at a super attractive yield and close on them in a couple of weeks at the slowest. that's the first lever. The second lever is that I own a lot of deals in cash and I have banking relationships now in four or five states that will lend on properties that are worth 100 grand or 80 grand or 200 grand. And so I can get loans on properties that I

currently have owned outright. So that's lever number two. That takes a little longer. You know that that process might take six weeks. So if I see a cash crunch coming, then I need to get started on that process pretty early. The third is I can sell equity positions that I own in my deals to other investors. And this is one that I don't think very many people think about or talk about. But if I have a deal, for example, that I own completely that has a hundred percent

projected return on cash. I can sell that position to another investor for a 20 or 25 % return on cash.

Clay Hepler (46:23)
Mm-hmm.

Justin Piche (46:23)
Like people don't, I don't know if anybody, not many people think about that lever or talk about that lever, but that is if you have a network of investors, which at this point I've built up a solid network of investors, I can give a sell essentially equity at a discount, right? So they can get a good return for the risk. I can sell that equity and that's even quicker than a bank if I really need it. But then you have to give up some of your profits that are in your pipeline for that. And then the third, maybe the fourth, the fourth thing that I,

do the reason why I hold maybe a smaller ongoing OpEx cash position is that I do an exercise called a 13 week cashflow analysis. It's a rolling quarterly forecast of ins and outs of my business. And so I'm not really caught off guard by big expenses or or or you know, money not coming in or too much money going out. I can see that 13 week cash flow analysis and I can plan ahead.

for bringing on a money partner. I mean, the biggest costs in my business are actually acquiring the deals on the front end, right? And so now that, so since I can see that forward looking look or that forward looking forecast of when I need those funds, I can plan ahead for bringing on money partners or taking the deal down myself or lining up a bank to fund it. And it really helps me keep a lower cash position and more capital deployed into deals, maintaining more equity in my deals.

Clay Hepler (47:47)
That's great, man. I thought that the listeners would really benefit from that. In addition, could set up a, depending on your banking relationships, you could set up a line of credit against your receivables, which are the, you know, your notes. So you could actually sell the equity and get a lien on the equity of your,

of your notes to a bank and get a line of credit off of that. that's another thing that could be a fourth lever that you could pull depending on how much you have. You could sell the equity, not sell the equity, but it would be leanable equity from a bank. And that's all based on your banking relationships. So for me, number four would be hiring, right? So this is a huge, huge constraint. was talking with one of my coaching students and he was talking about

I was talking about my hiring process and he was like, I like talk to like one or two people. And then based on that, I will basically hire someone. And I'm like, here's what we do. We post on a job posting site or we use recruiter depending. We'll then send 20 to 30 DMS per day to potential applicants.

we'll have them and the people that are on the job post fill out a type form, which video, resume, some basic questions. Those are the people that we actually have conversations with. And then we do group interviews and then we'll do references for the top people in the group interviews. And then we'll do final interviews and then trial day, depending on the position. And so it's a much longer process, but you get a higher...

a higher quality of candidate. so hiring for me, because we're running out of time, is a big thing that constrains growth or accelerates growth because the amount of time it takes to get a quality person, even if it's global talent, your standards have to be higher than most people have.

Justin Piche (49:52)
Yeah, I don't have anything to add. think that's really, really good. for me, number four is kind of along the same lines is giving up control. I think this, somebody, when you've built something right. And you've invested so much time and energy and you are, you are, you are dependent on this thing to pay your bills, to fund your lifestyle, to fund your future goals for your family. It is really hard.

to give up some control of that to somebody else. And what I mean by control is along the lines of hiring is you are probably going to be better than most of the people that come in at certain things in your business. Now, when you hire really truly good people, you're hiring people that are actually better than you. That's where hiring becomes an incredible superpower is when you can hire people that are better than you at certain tasks. But in a lot of cases, you need somebody to do the job for you and it's okay if it's 80 % as good.

that is okay because it frees up your time to work and focus on growing and scaling. But that giving up of control, a lot of people have just tons of trouble with empowering their employees to do the work and giving them the tools they need to succeed. They kind of put their hands in the pot. They don't really want to fully give it up. They kind of maybe tend towards the micromanaging, do it this way, do it that way. But I don't think that's an effective way to scale. think what you really need to do is hire good people, give them the tools to succeed.

the training, the feedback, and empower them to actually take ownership over those tasks and improve upon them.

Clay Hepler (51:25)
Justin, this brings us to number five for me, which is I'm ripping this from traction, letting go of the vine. It is also giving up control. And we do that through structure, accountability, hiring really good people and in building out the processes and like I said, the structure to empower them to succeed. And that takes a lot.

And a lot of times people say hey, I'm hiring someone I'm either gonna go on one end which is completely abdicating all responsibility Right and not checking up on that person or on the other end which is total micromanaging And you got to kind of live in that that between which is very difficult

Justin Piche (52:05)
Yeah, I didn't mean to steal your number five there, but yeah, no, that was great. Great addition. All right. My number five is the funding of deals. And this is something that I think affects land investors from the very beginning, even to seven figure land investors is how, what is the right funding structure?

Something that is really helps your bottom line of your business is finding and moving your sources of capital to inexpensive sources of capital, consistent, reliable, inexpensive sources of capital. There's a whole bunch of methods. We've talked about this in other podcasts of how to run this business. You can be a wholesaler, right? Not ever actually really fund deals and just try to find the buyer and line it up. That has its own set of challenges. when you are

doing, especially when you're doing deals like subdivides, it's really hard to wholesale a subdivide. I mean, there are ways to do it. You can split it up. You can have some sort of agreement where you sell portions of somebody's parcel. Those are super hard negotiations and I would say not common, although possible. But in most cases you have to fund and finance those. And when I first started in this business, I honestly didn't even consider the fact that banks will fund these deals. I don't know why that wasn't like something that I, I mean, I got a loan on my house. Like why wouldn't a bank fund?

an asset back real estate deal, but figuring out all the ways that you can get funding. If a deal is good, there is money for it. I think that's like the critical piece of information that maybe anybody new needs to hear is that if the deal is good, there is money for it. And don't let that be a limiting belief to your scaling. I think it's also what stops people from going after bigger, more profitable deals as they say, how am I going to pay for this $300,000 deal? If it is a good deal, there is money for it.

Clay Hepler (53:55)
I agree with that, I agree with that.

This is really hard and this goes deeper than just this conversation. But the reason why people don't want to take on funding and they kill deals is because they don't want to give up their little baby grape. And it's better to have a watermelon, a bite of the watermelon than a baby grape, right?

And so I love that man that that's a really good final edition here. So we're going to go through the deal review here right before we end this podcast. So this is a deal that I've been working on for three months and it's not a big deal. I'll probably make 40 grand on it and it's been really difficult. So first things first, there are two sellers. One is a daughter, step daughter, no.

This is a... One seller is the daughter of a guy that married the ex-husband of the other seller. You can see how this gets confusing. Okay, the daughter of the ex-husband of this person who inherited... Yeah, ex-stepdaughter. Who inherited this land. And then...

Justin Piche (55:06)
Yeah.

stepdaughter, ex-stepdaughter.

Clay Hepler (55:18)
This seller is incapacitated. And so we have been in contact with her husband. Well, then we split this deal up so that the husband and the wife who's incapacitated and the ex-stepdaughter could have, we subdivided this part of the parcel out. $8,000 subdivide because it's really complicated. That's how much I'm into it.

Justin Piche (55:22)
Mmm.

Clay Hepler (55:48)
total fees. Then we get notified a week before what should be the closing that we need a power of attorney. And so we then track down apparently there's a the conservatorship was the husband's sister. And so we track her down, which takes us four weeks because she's incredibly unresponsive.

Then she says I actually don't have the power of attorney. I'm just like was a conservative Whatever conservatorship of of this property. I don't really even know the tech to house and so then we two weeks later finally get the information of the Sister of the incapacitated This was recently sister of the incapacitated Seller

And she's the power of attorney that we finally figured out after we called three different counties and she is refusing to sign the closing documents or the POA because she thinks that the husband is screwing the wife. And so the ex stepdaughter has never done a real estate transaction in her life. And the

husband is like a Seems to me like someone that is abuses drugs and alcohol and it's also really difficult to get a hold of so You think it's easy and so I got a call from our title company today She's like this is not so basically we have to sue or Convince the sellers each individual want to get attorney representation. I said there's no way they're gonna get attorney representation Let me take control

Here is the lesson learned. If you are starting a business, it is your responsibility to be the person that is the backstop of everything. The buck stops with you. I got that email today, I called up the title company and I said, tell me what's going on. And I'm going to call this woman and I'm going to convince her to sign this document. I don't care if she says no, I will convince her.

Justin Piche (57:51)
you

Clay Hepler (58:17)
And know I can. you have to have that sort of belief. You're $9,000 in which I am of my cash. there's only one way down this street. There is only one way and it's talking to this person or getting into a suit for a $40,000 deal, which is basically not worth it. And so I have one opportunity to have this conversation with this woman to convince her and I'm going to do it.

Justin Piche (58:33)
Okay.

Clay Hepler (58:43)
and you have to that belief in yourself and that belief is built on hard work, but that belief is also built on the total ownership mentality of it. It is my responsibility to be the person that handles this. I'm not gonna pawn this off on my acquisition guy. I'm not gonna pawn this off on my transaction coordinator. I'm not gonna get an email from the title company and they're gonna tell me, hey, you have to hire an attorney

Justin Piche (58:59)
you

you

Clay Hepler (59:08)
not say that that's not true, I'm gonna handle it. It's up to us guys. If it is to me, it's up to me. It's up to me. So that's my deal review. We're not making any money yet on this deal, but this was an example of sometimes when deals go like this, you just have to keep pushing and pushing and pushing and take responsibility, Justin, for the outcomes.

Justin Piche (59:27)
I have had my fair share of deals that are similar to that. And I have a question for you. Would you recommend a new investor try to take on a deal like that?

Clay Hepler (59:40)
It depends on a couple of factors. I would say cash position is one, but the scars are what make us who we are. And experiences like this are, teach us so much more than a deal that goes right. So I think that you either go after that or you rely on someone that's a pro split equity and say, Hey, I have this problem. I need, I need your help.

Justin Piche (1:00:06)
I agree. I was thinking when I asked that question, I thought my first answer would be like, no, as a new person, you probably shouldn't take on something that complicated. but I immediately thought, no, because those are the deals where you learn so much that you now have the ability to take on more and harder deals. So, yeah, well said. There's a lot of good lessons from that. All right, man. I think that brings us to the end of our podcast.

Clay Hepler (1:00:35)
Yeah, guys, so you know, at the end of podcast every week, if you get benefit from this podcast, the gentleman's agreement is simple. and I pour ourselves into this podcast every single week and we don't hold anything back. And the things that help us grow and impact more people and reach more people is if you rate, review and subscribe and make sure that when you rate, review, I can't even make it. Make sure when you rate, review and subscribe.

Justin Piche (1:00:59)
You make sure when you rate, review, and subscribe, you point out how amazing Justin is.

Clay Hepler (1:01:05)
No, no you say thanks for the host for hosting this podcast clay. Thank you so much No, but seriously guys we always appreciate you. You know spending your your time your energy and effort So please if you got benefit from this share it with your friends We are about to eclipse in less than a month a thousand downloads, which is

Justin Piche (1:01:24)
No, think today when I launch episode six, I think we're gonna hit it. We're at like 950.

Clay Hepler (1:01:31)
Ridiculous, ridiculous in one month. mean, I can't even, I was like, wow, that's nuts. So guys, what you're doing is contributing to that. So if you get benefit from this, you haven't done it thus far, which means the majority of our listeners haven't done it. Please spend that time, whether you're listening to us on your way to work, pull over, don't do anything stupid. If you're sitting at home and listening to us, please rate, review and subscribe us.

Subscribe to the podcast and check us out on YouTube too. Justin, any parting thoughts here?

Justin Piche (1:02:05)
That's it. Well said. This has been another episode of the Ground Gave podcast and we will see you guys later.