.png)
The Ground Game Podcast
Welcome to The Ground Game Podcast, where land investing meets real talk! Join your hosts, Justin and Clay, both 7-figure land investors and seasoned entrepreneurs, as they dive deep into the world of land investing, team building, and personal growth.
The Ground Game Podcast
Episode 36: Landmines & KPIs, How to Stay Profitable in a Tough Land Market
🎙️ Welcome Back to The Ground Game Podcast! 🎙️
In this episode, hosts Clay Hepler and Justin Piche dive into Landmines & KPIs, How to Stay Profitable in a Tough Land Market. They share personal experiences and insights on navigating challenges in the land investing sector, emphasizing the importance of strategic thinking and resilience.
Key Highlights
Personal Updates:
Clay and Justin kick off the episode with some light-hearted banter, sharing their recent adventures, including golf trips and family celebrations. They discuss the joys of spending time with loved ones and the fun dynamics of their group chat.
Understanding Landmines:
The hosts delve into the common pitfalls in land investing, explaining how to identify and avoid potential deal-breakers. They share their strategies for navigating tricky regulations and the importance of thorough due diligence.
Key Performance Indicators (KPIs):
Clay and Justin address the critical KPIs that every land investor should track to ensure profitability. They discuss how focusing on the right metrics can help maintain momentum and drive business success.
The Importance of Strategic Thinking:
The episode emphasizes the need for strategic thinking in land investing. Clay and Justin discuss how to prioritize initiatives and allocate resources effectively to navigate a challenging market.
Flexibility in Funding:
They explore the necessity of having diverse funding strategies, especially when capital is tight. The hosts share insights on raising capital and building trust with investors to ensure financial stability.
Building a Consistent Business:
Clay and Justin stress the need to focus on consistency and volume rather than one-off deals. They highlight how perseverance and strategic decisions can create a sustainable operation in the land market.
Leadership and Team Empowerment:
The hosts discuss the importance of strong leadership skills and empowering team members to tackle core problems. They emphasize how effective leadership can foster a positive work environment and reduce turnover.
This episode is packed with practical advice, personal anecdotes, and actionable insights that can help you navigate the complexities of real estate investing and avoid common pitfalls. Tune in and elevate your land investing game!
Learn about Justin’s 1:1 Coaching
Apply for private coaching with clay
Justin's Socials:
Clay's Socials:
Clayton Hepler (00:00)
Hello and welcome to another episode of the Ground Game Podcast. This is your co-host, Clay Hepler.
Justin Piche (00:07)
is your other co-host, Justin Piche and we're here to show you how to win the ground
Looks like we're both coming in strong with our black hats on this podcast. I've got so many that...
Clayton Hepler (00:28)
What is your hat?
Where is your hat from?
Justin Piche (00:33)
OK, my hat is I went to I went on a golf trip like a week and two weeks ago and I went to Pinehurst, which was really cool and really fun. And this hat is the logo for course number 10. It's like a old sand mine. And so they have this kind of like sand mine train car looking thing as their logo.
Clayton Hepler (00:54)
How many
golf courses, did you say course number 10 or hole number 10?
Justin Piche (00:58)
Course number 10. have, they currently have 10 courses, I think, and they're building course 11 right now on the resort. It's like a big golf resort. It was really cool. We played course eight, 10, seven, two.
Clayton Hepler (01:06)
my gosh.
Justin Piche (01:16)
And then nine, I didn't play nine. I left early, but I'm not particularly well. These are really hard courses, but I shot, I pretty much started at like 104, 105 and then work my way down from there. But I had some pretty like epic holes where I got some birdies and it was the best was ending course two, which is the championship course on hole 16. I birdied it's a long par five or a par five. I just had like killer drive, a beautiful
Clayton Hepler (01:18)
How'd you shoot?
Nice!
Justin Piche (01:46)
shot to end up I was putting for eagle from like 15 feet barely missed it and tap in birdie and then I kind of blew up on hole 17 which is a part three I like bunker to bunker type of thing the greens are really I don't know if you play golf but the greens are like turtle backs so they're really challenging and then on hole 18 where you're coming into the clubhouse where everybody's sitting I killed it I oh man I had an amazing drive again a 52 edge like 115
yards into land about 12 feet from the hole. And then I putted for birdie and I hit the pin and kind of like rounded the hole and it was like two feet off. So I another tap in for par on hole 18. But I still shot like 100 on that. I just had a couple of really good, really good holes.
Clayton Hepler (02:35)
Dude, that's amazing though. That's amazing. You had a good trip.
Justin Piche (02:37)
Yeah, you know, it's
I had a good trip. That was more golf that I played. I played those courses and then I played a course called Tobacco Road, which was just a crazy cool course in North Carolina. But it's.
Clayton Hepler (02:51)
Tobacco Road,
like, you know, that's the rivalry between Duke and Carolina, if you know that. They call it the Tobacco Road rivalry.
Justin Piche (02:56)
⁓ I did not know that.
I did not know that, but that's the name of the course. was like I was playing with two of my cousins who play a lot more golf than I do. And they both were one of my cousins who plays the most golf was saying that it's like it's like you're playing a golden tea course. That's what it felt like, like a video game course of how crazy this golf course was. Beautiful, beautiful fairways, sand dunes everywhere, enormous hazard bunkers or waste bunkers, as they're called.
just pretty pretty really pretty really really fun really frustrating but really fun.
Clayton Hepler (03:38)
Nice.
Justin Piche (03:39)
So yeah, there you go. I'm actually playing golf this next Wednesday, in two days for now, on Wednesday with a friend and investor. And we're meeting a guy who he, ⁓ gentleman who was an attorney and started a huge fund, real estate fund. So we're going to play some golf and got to bring, come ready with some questions and, you know, pick his brain as we chat through each hole, cause he has way more experience in setting these type of
They just funds up and has had a lot of deals provided incredible and consistent returns to investors. And so it'll be a good, a good time to just meet somebody and talk and try to learn as much as I can while hopefully not playing poorly.
Clayton Hepler (04:25)
Yeah, yeah, what else is new man?
Justin Piche (04:28)
My daughter's birthday was this weekend, we had a little birthday party for her. She turned six. It was really fun. We went to Chuck E. Cheese, which I have not been to a Chuck E. Cheese since I was a kid. And obviously things change with time. But I remember Chuck E. Cheese being like this dingy dark kind of arcade with a stage and animatronic animals and like, I don't know, just weird kind of. But it's it's a
Clayton Hepler (04:38)
Mm-hmm.
Justin Piche (04:56)
modern day kids arcade with trampolines and they still do a little show with chicken cheese, but it was great. It was a perfect place for a kid's birthday, six year old's birthday party.
Clayton Hepler (05:06)
Nice dude, I was in DC this weekend for a wedding. And so, you know, it's cool to go to DC. And so, it was in the Decatur house, which is right next to Lafayette Square, which obviously is right in front of the White House. So that was super cool. Got to see some monuments, went to Lincoln Memorial.
Justin Piche (05:10)
Hmm.
Clayton Hepler (05:31)
which is my favorite monument by far. It's actually incredible. ⁓ And I guess in DC they're going over like $750 million or $650 million ⁓ in projects and improving monuments for the 250th anniversary of the United States, which is pretty cool. ⁓ So there was a lot of construction happening and it was a great wedding too. Like it was good to get away from
Justin Piche (05:51)
Yeah.
Clayton Hepler (06:01)
our little guy even though we love him. It's good to have some time just with the wife and I. ⁓ And so yeah, man, was a great weekend. We went down on Friday. No, no, no, no, dude, we were in New York City for her 30th like three months after we had our kid. So we've been away, we've been away quite a bit. It's just, you know, we were actually talking about having another over the weekend and we're like, man, life is gonna change. ⁓ Life is gonna change pretty significantly with two versus one.
Justin Piche (06:08)
Was that your first time both of you guys away from him?
Yeah.
⁓ It is it does it does but in a good
way, you know, honestly, it's like you have two and it's still really hard then you have three and you just are like, whatever. I'm just in this. I'm in this. My wife and I are talking about when number four is going to come. So I know I know some people think we're crazy. I think that I just love having kids and I mean just just before this call.
Clayton Hepler (06:41)
⁓ no, dude.
Justin Piche (06:51)
I had a little break in my schedule. My mom's here watching my youngest. On Mondays we have my mom and my mother-in-law alternating, come watch the youngest. And I just went downstairs and as soon as I get down there she just like jumps off the couch and she like runs towards me with like arms and like hugs my legs and is like, daddy. And I started playing the piano and she wanted to play. So I put her in my lap and she's like banging on the keys and I don't know, man. It's just, they're just such sweet moments and I want more of them. So.
Clayton Hepler (07:21)
Hey man, I'm with you. So we got another Q &A episode this week. ⁓ You know, people has been giving us a lot of Q &A and we figured, hey, this is beneficial because it's really tactical versus us like diving into one specific topic. So I'll start us off here. This was, you know, there's a lot of questions around niche and focus, which is pretty interesting. And so one of the core questions is, you know,
Justin Piche (07:21)
There you go.
Clayton Hepler (07:49)
How did you land on your niche and land and how long did it take to go all in?
So, I would say that I'm still pretty niche agnostic, maybe is the word, which is if there's an opportunity to make money on a piece of land, I'm very interested in that opportunity, right? ⁓ And so, ⁓ I've been doing the rural recreational stuff pretty much since the beginning, because that's what I learned and I haven't really...
gone too far outside of that. Of course, there's opportunities that people bring me for development deals or ⁓ for rural subdivides that we get under contract, but we haven't really gone all in to any sort of niche at this point because we found that there's still very profitable niche to be, the niche is rural recreational, I guess. And so we found it to be quite profitable. And so it hasn't been like we're focusing on anything ⁓ with more vigor.
than just focusing on that widespread kind of market ⁓ in general.
Justin Piche (08:59)
Yeah, I agree. mean, like the lead the niche of land investing in general is broad. And obviously, if you're listening to this podcast, you're either already doing that you're already in that niche of real estate investment, or you're interested in getting into that niche of real estate investment. ⁓ I agree, I am niche agnostic, you know, we do all kinds of different land deals, developments, rural recreational, sometimes we get infills, I don't particularly target
Really any of those, maybe with the exception of I do target rural subdivides with mail specifically, like I'm always looking for those. If I had to pick like a niche that I like the most of all the different types of land transactions you can do, I'd say rural subdivides are the ones that I like the best. Like not tiny lot, not entitlement, ideally not having to build too much infrastructure, you know, large tracts of land into smaller checks of land that are more affordable for folks.
Lots of road frontage. That's my bread and butter. That's my kind of my sweet spot. That's where I find the most success doing those type of deals. I also have the most confidence when I get one of those deals that comes across my desk that ⁓ it's going to work out well. The ones that I lose the most money on are the ones that are the larger scale developments. Not because I do the deal and I lose money on the deal. When I do the deal, we make money. It's more I lose money into diligence, you know, because you have to there's a lot more that goes into a major development and figuring out if it's feasible.
And you have to spend money to figure it out in almost every case. So it's almost impossible to know without spending some money on engineering at a minimum on infrastructure, kind of feasibility engineering to decide if you're to be able to move forward with a development or not.
Clayton Hepler (10:47)
Yeah, so I mean, think that the reason why, I'm assuming if I'm reading through this, the reason why people are asking about this is because maybe they're not finding success in their marketing. They're like, hey, I want to niche down because I want to have a higher ROAS. And there are niches within what we even were talking about, which is more rural. There's rural infill, there's just rural subdivides, there's rural hunting land, there's farmland. And I think that
if you're going to choose a lane, you choose the lane. And so at a scale that you have a larger team, you can make money going into a lot of different opportunities because you can make up the opportunity from each one of these specific types of ⁓ exit strategies. But if you don't have a large team or a large budget, it becomes difficult to do that, right? Because you kind of distract yourself.
If we're thinking about how do you actually, how can you choose your own niche, which is what I'm reading for the question, it is finding something that you can consistently do, right? Because there are people that make money in infill, there are people make money in just rural hunting tracks, there's a guy that I met that bought pieces of land in Wisconsin and Kansas, and he would,
⁓ Like put feeding plots on them and tree stands and sell them to hunters. And that was his game. And that was his niche. And so as long as you have staying power to stay in the niche, because people will niche hop, right? They'll go from, hey, I'm going to do infill lots in Florida, and then I'll go to rural recreational infill lots in Florida, and then I'll do this and then I'll do that. And that's where I think that a lot of people fall down. But if you just focus on, hey, this is what I'm going to be doing.
If you're capital constrained, that's probably the best way to do it. Would you have anything else to add there?
Justin Piche (12:48)
Yeah. Yeah. I are. My business may look a lot different than a listeners and I tend to cast a pretty wide net to look at all these different types of opportunities. And I have the team and the budget, the marketing budget to do that. But if I didn't, you know, I, I'd certainly want to try a bunch of them to figure out what works best for me. And then probably niche down until I maybe either had a bigger team or a bigger work chest to be able to spend more and go after multiple, multiple of these kinds of sub niches within the
land investing space.
Clayton Hepler (13:19)
Yeah, and it's hard when you're hearing about the activity of other people, maybe even on social media, you see a win and you see the activity does not mean success. And so people will say, hey, I need to choose this niche or add this niche because it's less competitive. ⁓ But there's a competition within every single niche and it's just understanding that specific game. And so if you know the higher mass outbound marketing or marketing in general, like Justin and I do, then you can do well.
in what we're doing, but maybe you're different. Maybe your capital constraints, you have to focus on something and then you find someone that can help you really dial into that or you figure it out on your own. I think that is the simplest way to define your niche, right? The reality is, think what matters, what I'm trying to say what really matters is you have a principled approach to your marketing.
versus I'm gonna go from subdivides to infilots ⁓ and that's it. what Justin, people ask me this all the time, actually had two hour long sessions with different coaching clients this past week about how to pick new markets, right? And this was from Facebook, or think this was from Twitter, and hey, I'm in Florida, I wanna expand to new markets.
Justin Piche (14:44)
Hey guys, Justin interrupting your podcast again to say thank you for listening. This week we're also clan. also don't know over some questions that you guys had about the land business and our thoughts. And so if you're getting value out of this, please leave us a review. Give us a like and let us know what other questions you have. We'd love to answer live on the podcast. Now back to your regularly scheduled programming.
Clayton Hepler (15:07)
Yep. R2.
How do you...
Do you have a framework for picking new markets? Or yeah.
Justin Piche (15:15)
Yeah, I mean, I
not not really, I mean, this probably is not the best answer, but I there's for me, I look at the macro market when I'm investing in it in an area. I want to I want to I want to pick a state that has economic growth that has population growth. Those are my main. Those are my main criteria. If there's growth, if people are moving to the state, there's if there's economic growth in the state, then I
and willing to market there. there's not, if is lower than it's other, if the growth is lower projections than other states, I'm not going to pick that state. also, the markets I prefer to be in are not less seasonal markets. don't typically like, I don't really invest in wintery areas where snowfall will inhibit people going out to sea or construction or clearing work or whatever during periods of the year. ⁓ So I generally stick to the Southeast.
and I'll just pick an entire state. pull all the data. I'll start marketing. And then after about three, you know, three months, we'll look at the numbers and see how that state is performing compared to our other markets. And that's about the time we make the decision to cut or keep the state. And I've had multiple states where I've marketed to and we've cut after spending tens of thousands of dollars on marketing to a state, just cut it completely because we didn't see the results we wanted to see and moved on to a new market.
Clayton Hepler (16:38)
And is there a specific ROAS that you're looking for? Cost per lead, cost per qualified lead, cost per deal? Like how do you know when you should cut or, and I'm trying to get this so we can focus on the micro level with our, for the listeners.
Justin Piche (16:50)
Yeah, there's
yeah, it's more of a number of deals per outbound marketing. And I could get deeper and look at the I don't look specifically at the return on ad spend for an entire market in terms of deciding whether I move forward or not. ⁓ We generally spend about the same in each market. And so it's more of how many deals are we generating in a three month time period from that marketing effort that gives me the the data I need rather to to say yes or no.
And I wish I had a specific one. It's more like we rank the markets that we're in. We need to be in a certain amount of markets for our outbound marketing. Like we just have to have six, seven, eight states going at a time in order to have enough leads generated, enough new pieces of data, enough new contacts to keep marketing to them. And so we'll just cut the worst performers and go into a new market. It's not necessarily like a benchmark of I need to have, you know, for every dollar of ad spend, I need to see three, four, five, $10 of
Clayton Hepler (17:40)
Mm-hmm. Okay.
Justin Piche (17:48)
⁓ of pipeline profit that then is realized as actual profit six to 10 months later. It's more, which is the worst market we're in? Is there a potential better that we haven't tried yet? Cut the worst market, go into the next market, try it out, see how goes.
Clayton Hepler (18:04)
Okay, okay. For me, I kind of think about that in the same way. Again, we're just like how I do the mass texting, mass marketing. So it's a little bit different than maybe someone that's trying to be more thoughtful about how much they're sending out. for picking new markets, I think that everyone wants to go to certain markets and you know what those markets are.
And then everyone thinks they're clever and they go to the other markets that people think that the people that are not going to the hot markets are going to, right? ⁓ And so, you know, we're never as clever as we think we are. And so my approach is this. I need to have a strong enough sales function in my business and marketing function that no matter the market, we can convert deals. And then like you said, we look back and say, of the markets that we've gone into,
which have been the best at converting those opportunities, which has been the best at fulfilling what our baseline for our conveyor belt is. And it's pretty much that simple. I mean, depending on the quantity of markets that you're actually hitting, ⁓ it could be a couple of counties every month, or it could be dozens and dozens of counties every month. And it's really about how do you give yourself feedback for what's success in your business.
Justin Piche (19:30)
Okay.
Clayton Hepler (19:30)
A couple of years ago, everyone was talking about, hey, sell through rate, sell through rate, sell through rate. And I talk about this all the time.
Those people were also saying that you should buy their app, their data that shows you the best sell through rate. And so you have to know where it comes from when you're hearing about all these stats of what you should focus on. And use common sense. But at the end of the day,
What matters more is that your systems are dialed in, your sales function, your marketing functions are dialed in, your KPIs are dialed in versus trying to have some like super secretive way of picking markets. I heard when people were getting started a couple of years ago, like before the whole rush into the market, that essentially there was this secret list that someone would sell. I don't remember who sold it or who sold it, but what...
Justin Piche (20:02)
Okay.
you
Clayton Hepler (20:24)
or where it was or whatever, but there is no secret list.
There is no secret approach to market selection. It is just how good is your business at converting the opportunities that come through your door into deals.
Justin Piche (20:39)
Yeah. I mean, I have a trouble answering this question because the way we do it is just not the way that I specifically pick markets isn't really that analytical. Like, frankly, it's not that challenging. just are people moving to the state. Do people want to live here? Is there economic growth? Yes. OK, I would like to market here. Period. That's it. It's no more no more challenging for me than that.
Clayton Hepler (21:03)
And because we have a virtual business, we can target a bunch of different markets. And so like you said, it's kind of like, hey, let's just dumb this down. Let's just make this really simple. So ⁓ the next question here, and it's a little bit underneath what were this question. It kind of works together.
Are there any landmine counties or states where deals look good on paper but die in due diligence?
Justin Piche (21:37)
The only state that I have continuously had properties die in due diligence is Virginia for specifically for rural subdivides. V dot in Virginia is incredibly challenging, just obscenely challenging to work with. They have such crazy rules. It just boggles my mind. And just one example, I had this property. It was actually brought to me.
through a partnership with a coaching client and on paper looked fantastic. It really did. It was 105 acres, 30 acres on one side of a county road with 2,700 or something feet of road frontage and 70 acres on the other with about 2,000 feet of road frontage. So tons of road, almost 5,000 feet of road frontage. Beautiful.
Beautiful and the county regulations for splits allowed me there were separate parcels the county regulations for splits would have allowed me to because it was It would have allowed me to do three lots on each one So six total lots like 325 acres on the south and three tens on the north parcel However V dot would not let me access the road they said I had in order to get three access points I had to build an adjacent road that was up to V dot specs
in order to serve those parcels, which was just insanity. There's it was it was like a 40 mile per hour to laying county road. Like this is not some crazy highway or something where it's like, OK, it's not safe to stop here or anything like that. There were already existing like dirt driveways and multiple spots. But in order to create actual access and get a plot approved, I had to create an entire new asphalt road like right on top of and below the county road so that I could tie in access.
And I went back and forth. were talking to VDOT. We were talking to the county. The seller was like, I don't think this is true. And he worked on it with his attorneys because he wanted to get it done. And in the end, the deal died in due diligence because obviously the project was not profitable enough to build a million dollar road to access six properties. It just didn't make any sense. And it was just really frustrating because it was such a beautiful property and it could have been, it was, the prices were great. But that, that requirement, the kind of unnecessary administrative burden made it.
Not not workable
Clayton Hepler (23:58)
my gosh.
I've had troubles in Missouri. I just have not had any luck in Missouri. ⁓ And I've also had troubles in Georgia. ⁓ Georgia is insanely competitive. ⁓ And so I've had troubles in both of those states. ⁓ Missouri, because it's a lot of farmland, and so there's not a lot of actually
Justin Piche (24:02)
Ms. Durie.
Clayton Hepler (24:28)
counties that have the type of land that we're looking for. And then second of all, it's a non-disclosure state in a lot of the counties. So that makes it difficult to come. And then third, it's just haven't found enough. I didn't find a lot of motivated sellers there. Georgia is like, everyone thinks that, know, Georgia is more competitive in my experience than any other state. ⁓ I don't know why that is. I have no idea. I have zero clue, but it seems to me like it's the most competitive state by a long slot.
Justin Piche (24:54)
Yeah.
I'll second Missouri. We spent a lot of money marketing to Missouri and did a handful of small deals, canceled a lot of contracts and had very little success there. That was one of the markets that we went into. Three, four, five months in, I cut it.
Clayton Hepler (25:13)
Yeah, yeah. And you know, that doesn't mean that the listeners can't benefit from, you know, getting deals done in Missouri. I've you know, I've never had, yeah.
Justin Piche (25:23)
There's
some other interesting state rules. Louisiana, Louisiana's a state, I've done quite a few deals in Louisiana, but that's a state you need to be careful in if you're doing deals in. It's a non-disclosure state. It's a pretty low population for the whole state. mean, the whole state has less people than the city of Houston. So when you're buying land, sometimes it sits for a long time.
That's even if you're the best priced property in the area, there's just not nearly as many buyers as in more populated states or more desirable states to live in. And the other issue with Louisiana is there's there's I don't know what the law is called or, you know, but I can kind of define it. If you buy a property for and then resell it for two times or more, the price that you purchased it from, then you ⁓ you could be sued by the seller. And there's attorneys that sued him.
have to pay them basically. Yeah, there's there's attorneys that actually kind of ambulance chase, if you will, land transactions that happen like back to back and try to get information from the seller of how much did you sell it for and figure out how much you sold it for and can file a lawsuit against you for making too much money. And it's basically to protect landowners from getting swindled essentially by people paying pennies in the dollar for their land.
Clayton Hepler (26:16)
What?
Have you ever been involved in a lawsuit?
Justin Piche (26:44)
No, no, no, because I, was actually pretty careful. I knew that rule going in. And so was pretty careful to either a substantially improve the property if I was going to sell it for more than double, generally in the form of subdivisions, I did several rural subdivisions in Louisiana. And so it's, it's kind of like, it's not apples to apples. And in the other case, I just didn't sell things for more than double. I specifically priced properties that I had bought in Louisiana for less than double what I paid so that I would sell them quickly and I would not have to
worry about that kind of lawsuit potential. It's double. Yeah, it's not triple, it's double. So if you bought a property for 100,000 and you sold it for 210,000, you could be sued. If you sold for 199, no suit.
Clayton Hepler (27:15)
So it's about double, not triple.
Huh.
Justin Piche (27:29)
Now it's not saying you're going to be sued. It's just saying that you could be because of this law that I don't actually know exactly what it is, but I know that that's the general gist of it. And there's another, yeah, this is not legal advice. You can sell your attorney. Another state that's interesting is Vermont. Vermont has some interesting rules about reselling land. don't, yeah, it's like, there's a huge tax.
Clayton Hepler (27:38)
It's some variation, okay, some variation of that. This is not legal advice kids, this is not legal advice. ⁓
Yes.
Justin Piche (27:56)
on reselling land within, I think it's a six year period and it like drops each year for six years or five years or something like that. But it's essentially to discourage flipping land specifically. So if you buy a piece of land for, I don't know, 100 grand, you sell it for 200 grand, that profit is taxed really heavily if you sell it in the first year.
Clayton Hepler (28:18)
Yeah, that's interesting. know Vermont too has an attorney. Like we're doing a couple of deals at Vermont and they have an attorney. Like both seller and buyer needs a separate attorney.
Justin Piche (28:35)
Yeah, there's a, mean, North Carolina is an attorney state where the same, same thing.
Clayton Hepler (28:39)
No, but
it's different. You can have an attorney representing both the seller
Justin Piche (28:43)
Yeah,
you just have to avoid it or you have to like you have to agree to it and sign something that basically an affidavit or something that says like they aren't going to take sides and they're just representing the transaction, but they can't represent either of you in any kind of dispute or lawsuit. So in Vermont, you cannot. You have to have different attorneys. That's interesting.
Clayton Hepler (29:01)
Yeah, look, there's so land gains tax. So for land help between four to five years,
a huge game, there's a huge my gosh 60 % if gain is more than 200 % of the basis,
Justin Piche (29:09)
Yeah.
some other landmines that I've figured out over the years. Another one for Georgia specifically is conservation taxes. So land in Georgia can be put into a conservation for 10 years. And during that 10 year period, you are obviously extremely reduced taxes on that. And if you pull the land out of conservation early, then
there's some pretty steep penalties. Obviously, just tax repayment for all the taxes that the owner didn't pay over that period of time. And then on top of that, additional interest and fees and charges and things like that, that can add up pretty to a lot. And I found this out because I bought a property. ⁓ It was 50 acre subdivide. We did really well on it, but I bought it. was nine and a half years it had been under conservation.
And at the nine years and 11 months period or nine years, 11 months and some change, if you were to take it out of conservation at that point in time, that would be the steepest penalty. You'd have to pay 10 years of these taxes that were foregone, plus a ton of interest and penalties and all kinds of things. And so we found that out because I kept, I was kind of digging in and looking, I was looking at the tax card and I was like, what is this, like, what is this meaning? I don't understand. Like what's the zoning? What does this mean? And kind of figured it out. And so we ended up going to the seller and saying, Hey, look,
We had this under contract in April or something of 2022 maybe. Or 2023. Yeah, April of 2023. We ended up extending closing all the way until December of 2023 and closed either the of December or January 1st when it fell out of that conservation. We had just hit the 10-year point so that I was able to do my subdivide and sell it without incurring any of the penalties and just take it right out. But I didn't know that before and so then every other property I've looked at...
Clayton Hepler (30:45)
Yeah.
Justin Piche (31:10)
I've had to factor that in and actually just bought a subdivide and have sold three of the four lots and it's a great deal. We've, have one lot left and we've already made it a 355 % return on cash because I used, I use leverage. It was like a 43, 44 K total investment. Got a 70 K bank loan, did some improvements, but have profited or got back 155 K and then still have a lot to sell on. But that one,
Clayton Hepler (31:23)
Woo!
Justin Piche (31:39)
had ⁓ a conservation, it was like in year two or something like that. And so we were concerned with how much it was going to be. And we had this other company do the search and figure out exactly what it was. And it ended up being only about 6K. So I was buying the property for 90. It was 6K of these taxes. And we went back to the seller and negotiated that we would split them. They would pay three, we would pay three ⁓ and got the deal done.
Clayton Hepler (32:05)
That's awesome, Yeah, I mean, there's all types of like, if you reclassify in South Carolina, know too, if you reclassify land after you take it from ag to residential, there's a ton of back taxes that you have to pay, right, like you saying, but I think it's like three or five years in South Carolina. And I did a subdivide in Ohio.
and it wasn't crazy, but it was a specific type of county tax that if you subdivide it under a certain acreage range, you have to pay all these taxes. Crazy, Crazy. ⁓
Justin Piche (32:41)
Yep. Same North Carolina.
North Carolina, bought it one of the first big, bigger deals that I did. I bought a piece of land that was in timber conservation. ⁓ and I thought I could keep the timber report and like keep it as a timber timber land. And so I like had a forester prepare it and went and then the County said I could not because my business entity was not for the purpose of forestry.
Specifically, they said because your entity is an entity that buys and sells land, you're kind of a dealer, you do deals, you don't actually call your entity cannot qualify for this force or exemption. So I didn't think I was going to have to pay and I up having to pay as a few grand. But even though I tried to keep it in, I couldn't keep it in. There's a lot of these little nuances, maybe another one just to look out for for anybody. I can't tell you specific counties because there's dozens of counties that are like this, but there's a lot of counties that have rules about.
Clayton Hepler (33:25)
Got it.
Justin Piche (33:36)
re-subdividing child parcels. if somebody has, sometimes it's like 20 years, sometimes there's timeframes around it, sometimes it's like ever. If there's a parcel that's been subdivided and then you buy a tract of that subdivision, even though for you it might not look like anything because it's still a huge tract. Maybe it was like a 500 acre tract that got split into four lots, 125 acres each, and you're buying one of these 125 acres and it has tons of road frontage and you're like, oh yeah, this is great. The county may have a rule against
re-subdividing already subdivided land. So that's something to look for in the county subdivision regulations for sure.
Clayton Hepler (34:11)
Yeah, yeah, I mean, there's so many little things, right, that you're, you know, ⁓ yeah, really, really interesting stuff.
Justin Piche (34:18)
Yeah, the list could go
on forever. I would just encourage anybody specifically to read your county subdivision regulations, talk to the county engineer, ⁓ look at these things while you're doing, you know, while you're getting things under contract. And once you find something out about a county, you know, make a note somewhere. So if you're future marketing there, you can know to look out for those landmines, so to speak.
Clayton Hepler (34:41)
100%, man, 100%. So I wanna go into some data discipline, right? Some KPIs, like this is something that just comes up and up and up. So I wanted to just kinda talk with you about some non-negotiable KPIs that you track every single week that's kind of super, super critical for you to focus on.
Justin Piche (35:05)
Yeah, I don't have a ton of non-negotiable KPIs. All my non-negotiable KPIs are wrapped around output. Like what is the team actually doing? So things like how many outbound calls are made? How many outbound touches? ⁓ How many? Yeah, I mean those are the things that like they have to be done. How much talk time are my agents having? How many follow-ups are we achieving? What's our time to lead? Are we meeting our time to lead requirements?
Clayton Hepler (35:14)
Okay?
Justin Piche (35:33)
Like the things that are people actually doing the work, those are the non-negotiable KPIs. The rest of the KPIs, like how many leads are pushed, how many contracts do we have, how many deals have we closed, or I don't know, how many offers do we have on the sales side, so on and so forth. Those ones aren't necessarily as non-negotiable, because the team only has, they only really have control over their outputs. They don't necessarily have control over those.
those kind of results of their outputs. So I don't make those non-negotiable. I have targets, but they're not non-negotiable.
Clayton Hepler (36:05)
Okay, do you have the numbers here? Because I'm happy to go into my numbers for some KPIs that I track every week. ⁓
Justin Piche (36:12)
Oh man, that would
require some asking of my acquisitions team. I'm not prepared for this question in as much detail as you probably are.
Clayton Hepler (36:17)
Some dig, some digging, some digging.
No, ⁓ So, I mean, ⁓ for me, the number one leading indicator for success is offers per week.
Right, if we're getting enough offers per week, that means that we're getting enough touches per week, which means we're having enough qualifications per week, which means we're getting deals for the pipeline, which means we hit our goals for, our profit generating goals, right?
For us at this point our offers per week is $35.
And we know we can normally close one in 12 to one in 15 at this point. And so that means we're hitting two to three deals consistently every single week. And so for us, that is the non-negotiable KPI. Like that is the thing. And I think that for any land investor, a good thing to start with would be those offers per week. It's a huge KPI.
Justin Piche (37:08)
you
Clayton Hepler (37:20)
people will come to me all the time and say, hey Clay, I need help for, help me scale my business or whatever in whatever capacity. And the first thing I always look at is how many offers are you making? Because that indicates everything else and everything else. If you're making two offers per week, it's hard to build a business that's a seven figure business. You gotta be making more offers, right? You gotta be tracking down those KPI's.
Justin Piche (37:40)
I have
to agree. looking at, I just asked my acquisition manager to give me, give me that data specifically, but we do post it every day, not in like a format, like a, it's more of like a, team, here's what we did today on our acquisitions channel and Slack. But, ⁓ let's see on Friday. So this is last Friday. We only had five net leads and Fridays are almost always our slowest days. are kind of.
Yeah, they're basically our slowest days in terms of actual new leads always, but we have five new fully qualified leads come across on Friday. Guess how many offers we made though? Just try to guess.
21 21 offers were made and delivered so that's offers on obviously those new leads and then offers on all the follow-ups that we weren't able to either to get a hold of that we've been following up with or Maybe people that we were in negotiations with but hadn't yet delivered the offer But I consistently see our offers made at any so Thursday was 14 Wednesday was 18
Tuesday was 14, Monday was 14. So we're consistently making serious offers on every lead that we can.
Clayton Hepler (39:05)
So for the listeners that haven't heard Justin and I talk in the past, there is an important caveat here. Justin offers on deals differently than I do. We go through a whole qualification process before we, ⁓ in a comping process, it disqualifies leads very quickly, whereas Justin has a, he offers on more deals per deal that comes in, for example, right?
Justin Piche (39:27)
Yeah, we do.
We are. We're seeing a deal for every 20 to 22 offers. And you were saying you're at a deal for every 12 to 15. So I tell my team like we do. We do a lot of prequel. So we're not forwarding garbage leads, junk leads. These are all leads that are possibilities. I probably have a little bit more lax like price qualification to actually make an offer on. I don't really care if we offend somebody. Honestly, it's like just make the offer.
see what they say. ⁓ But we do offer my requirement to the team is every lead that's forwarded requires an offer unless it's disqualified because it's a bad property. It's already been called for. They've already been qualified on motivation. They've already been qualified on the property itself. It should be a good property and they're motivated. It's really the price problem that we don't know yet. 100 percent. We're trying to qualify on the first the first calls and we do a pretty good job about it. But some people, as you know, just don't give their price and we're not going to push people away on the first call.
You know, it's a cold call. Our cold callers are not the most qualified people to really dig into price. They don't have the sales skills that our negotiators do. And so we don't want to push anybody so hard on the first call. They don't want to volunteer the price. Maybe we'll ask them a second another way. If they won't give it totally fine. If it's a good property and there's some motivation, we'll forward it on. But then my requirement for my closers is that every one of those people gets an offer.
Clayton Hepler (40:50)
Right, so the way we do it is we will do some prequalification upfront and then our lead managers will actually qualify the lead. And so the lead manager actually goes through, has a conversation, extended conversation, 12 to 15 minute conversation, and of those, usually about 30 % of those gets an offer. So that's kind of the, you know, the...
the reason why we're qualifying that quantity of leads.
Justin Piche (41:24)
for our listeners, think the key thing to focus on if you don't make offers, you're not going to get deals period. Like there's just no way if you don't tell somebody what you're willing to pay and follow up with them until they either say, no, I hate you get lost or maybe let me think about it. And then you follow up with them incredibly hard until they finally give you that. No, I think it's what is it billed at is like, I'm to follow up with somebody until they die. I die or they
Clayton Hepler (41:50)
haha
Justin Piche (41:52)
Tell me to get lost. Like really, truly tell me to get lost.
Clayton Hepler (41:57)
Yeah. what's a KPI you used to care about, now ignore.
Justin Piche (42:07)
⁓ man.
Pipeline profit.
Clayton Hepler (42:15)
That's a...
Justin Piche (42:16)
Uh,
when I was first starting the business, like, and I didn't have like a lot of deals coming in. I, yeah, I was like, Oh, look, this is how much profit I have, but I've just had so many like deals fall apart for any number of reasons. And so I just don't rely on that as any kind of like financial performance metric for my business. It's like, what do we actually, what is gross profit in that month? What are we realizing in that month? And then how many contracts are we getting? And then we can run some calculations and say, we're probably going to, if we have a million dollars of pipeline profit, let's just say.
you maybe I'll use like 60 % of that as like an estimate for how much may actually be realized. but I don't, just don't even really look at pipeline profit at all. I just look at how many contracts we have, how many things are in closing and how much gross profit we actually got for what, for, for the last month.
Clayton Hepler (43:03)
Yeah, know, a deal can go from 500k to 300k to 100k in like a matter of hours. So pipeline profit, like even though in the fall I was really focusing on that in the earlier Grand Game podcast, like it really doesn't matter that much because a lot of times it's
Justin Piche (43:11)
I know.
Clayton Hepler (43:30)
It's a good indication of the health of where you're going, but it's just not as significant as closed deals. ⁓
Justin Piche (43:34)
Yeah. Yeah. And I
wouldn't, I wouldn't tell somebody to not pay attention to it. Cause like it helps having deals in your pipeline and understanding approximately how much revenue you can expect to receive from those can help you plan. It can help you in your budget. can help you plan for when you need to grow or how you need to hire. But it's not something to like hang your hat on because I know Clay and I have both. I mean, I've had a million dollars of pipeline profit go like, we found out some DDE on a deal.
Yeah, that killed the deal. it's like, okay, well, it's not a great metric if it can drop by a million dollars in a matter of hours.
Clayton Hepler (44:12)
Yeah, man, I completely agree with you. How do you keep your, this is the last question here today, because we're gonna be wrapping up here. How do you keep your team hungry and focused on pipeline even when deals slow down?
Justin Piche (44:27)
Why don't you take this one first and all? ⁓
Clayton Hepler (44:29)
Yeah, I think that
the most important thing is teaching your team to focus on the activity versus the outcome. The activity matters more than the outcome, because if you have enough data to indicate that this activity equals this outcome, you're going to be in good place.
Justin Piche (44:52)
Yeah, I agree. I think that's really important. We had, think we talked about this maybe on the last podcast or one of the previous podcasts, but especially for like high powered salespeople, they can get really discouraged when they're not producing results. But if they're doing the work results will come right. And you may need to tweak it, right? You may need to get better. You need to, you need to self-improve. They need to look at what they're doing and evaluate what's not working and work in new strategies or
Clayton Hepler (44:52)
And that's how I keep my teeth from hungry.
Justin Piche (45:22)
build on the areas where they keep failing, you know, isolate the place where they fail most often in a, a, in a sale or a conversation and improve that specific point to try to get better at it. But a lot of this business comes down to actually doing the thing, sending out the marketing, negotiating with the leads, having good processes and just doing it at a large scale to see the results. And it's one of the things that I think is really challenging for newer investors.
When people are like, this has been a rough month. I only have one deal under contract. And I empathize with those people because I've been there and I've had that one deal in a month and been really frustrated with the amount that I thought I was doing. But when, but now that I have obviously a much larger business and I'm sending out quite a bit of marketing, I realize how much it really takes to get these good deals. Like we have a few, I mean, we have a lot of deals that are pretty average that come across every year.
Clayton Hepler (45:56)
Yep. Yep.
Justin Piche (46:20)
a lot of just average deals. Maybe we make a 40 % or a 70 % profit. In a lot of cases, people would say, that's great. But in the land space, we know that's like a base hit. In some cases, some people might even turn those down. 40 % profit may not be even worth investing in for a lot of people.
Clayton Hepler (46:35)
What Justin,
can you give an example of what that would look like?
Justin Piche (46:39)
Let's say you bought, yeah, yeah, yeah, perfect. I have a deal and I was just looking at this with my, one of my assistants the other day. had a deal that we bought ⁓ in Georgia for 58,000 and some change all in survey, whatever, all the costs, all in costs. And we had it listed at like one ⁓ eight, one 10, something like that. We've had an inventory for six months and we finally have it under contract and we have it a contract at 80 K and we're going to net out from the deal.
after closing costs and everything about $22,000. That's a 40 % profit on our initial investment over six months. And if I had known that when I was doing the deal, I probably wouldn't have done it. Honestly, I probably would say, eh, let's save that capital for something else. We're still making money. It's just not a great, you know, it's an okay deal. And like that's it. That's a, that's, that happens all the time. We do a lot of deals like this where we, we comp it as best we can. We, uh, we get a broker price opinion.
We think we're going to sell it for something. We close on it. The market tells us otherwise, and we sell it for less profit than we thought.
So like we have a ton of those type of deals, but we also have some deals like the Georgia subdivide where I spent 42 K and I'm going to make 200 on it or actually 220. It will probably come back to me. So I'll make $175,000 profit on a 40 K investment. Like that's a great return deal. That's a fantastic return deal.
Clayton Hepler (48:03)
I was looking at some KPIs with a client the other day. ⁓ he basically told me, ⁓ hey man, I'm experiencing this problem in my business, I feel like I'm inconsistent, I'm not getting as many deals as I thought I would get, right? And we looked at his numbers and it's like.
he was focusing on the deals and not the profit. so sometimes in this business, you get one or two deals, they make the year. You might make a huge, he had a deal he's gonna make 400K on. And so, and he's concerned because he's making 18K on a deal and 12K on another deal and five K on another deal. And I said, yeah, but you're about to make 400K dude. And so,
Justin Piche (48:33)
Yeah.
Beautiful.
Clayton Hepler (48:53)
Like you were saying, some of these deals surprise you, but keeping that velocity of the deal through your system is really what matters.
Justin Piche (48:59)
Yeah.
Yeah. And man, I, it's funny, I can look at back at last year and I can identify like six or seven deals that made us all the money we made. Right. And the, and and the other literal hundred deals kept the lights on, made some money, but not much. And so it's just the biggest value that I find in having a business the size that mine is, and am able to see as many deals as I see is that.
We can do these smaller deals or maybe not even smaller, but they're just less profitable deals for the capital that we invest. And it's good. Like we are making money. Our team is employed. We're funding our marketing and we're able to, but we were casting such a wide net that we're able to see a lot of really good opportunities that come across and take advantage of the good opportunities when they come. I mean, have another, another one that's we're closing here in a couple of weeks that I bought for $60,000. I think my total
investment in it is about 30 for an easement and a road to get back to the property. And I have another contract for $350,000. And it's just one deal out of hundreds in the last year or so that I've done. And it's going to make a huge amount of profits. It's going to make almost, you know, whatever that works out to be $250,000 worth of profit on one flip. But for that one flip,
Clayton Hepler (50:25)
That's right. That's right.
Justin Piche (50:29)
There's literally like 80 deals where I just were where they were okay. They were just okay.
Clayton Hepler (50:34)
Right, yep. All right, man, well, you know what, at the end of the podcast, ⁓ the gentleman's agreement is for people that have been listening to it, we always appreciate when you guys give feedback, right? And feedback comes in the way of leaving a rate, reviewing and subscribing, letting us know, hey, what are you liking, what are you don't? We haven't had feedback in a while, and it's really helpful for us to get this, out there ⁓ for you guys.
Justin, anything else before we end for this week?
Justin Piche (51:04)
⁓ We are going to be at the X supercars in land event. There's no more supercars, but we're still going to the land event in Colorado. So I just if anyone's going to be there, let us know. We'd love to hook up and and see you guys there. That's it.
Clayton Hepler (51:23)
Awesome dude. Until next week.
Justin Piche (51:25)
Until next week.