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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 38: From Submarine Officer to Land CEO, The Justin Piché Story
🎙️ Welcome Back to The Ground Game Podcast! 🎙️
In this episode, hosts Clay Hepler and Justin Piché dive into
Episode 38: From Submarine Officer to Land CEO, The Justin Piché Story.
Justin shares his incredible journey from serving as a submarine officer in the Navy to becoming a successful CEO in the land investing space, highlighting the lessons learned and the values that guide his business.
Key Highlights
Personal Updates:
Clay and Justin kick off the episode with some light-hearted banter, discussing the chaos of summer with kids out of school and the excitement surrounding Justin's recent business milestones. They reflect on the balance between family life and the demands of entrepreneurship.
Transitioning Careers:
The hosts delve into Justin's unique transition from military service to real estate. He shares insights on how his experiences in the Navy shaped his leadership style and prepared him for the challenges of running a land investing business.
Faith and Values:
Justin discusses the role of faith in his life and how it influences his business decisions. He emphasizes the importance of integrity and ethical practices in real estate, providing a foundation for long-term success.
Strategic Financial Planning:
The episode highlights the significance of strategic financial planning in land investing. Clay and Justin share their approaches to managing cash flow and ensuring that profits are effectively allocated to support growth.
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, especially in a competitive 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 collaborative environment that drives business growth.
Creating Value:
Justin shares his passion for creating value in real estate, explaining how thoughtful land development can lead to economic growth and community improvement. He encourages listeners to think creatively about their investments.
Tune in for an inspiring conversation filled with
Learn about Justin’s 1:1 Coaching
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Clayton Hepler (00:00)
Welcome to another episode of the ground game podcast. This is your cohost, Clay Hepler.
Justin Piche (00:05)
is your other co-host, Justin Piche, and we're here to show you how to win the ground game.
Clayton Hepler (00:21)
The tables are turning today. The microphone is turning, actually. A couple weeks ago, we did a deep dive in my journey, and there was some really good feedback from that. And so I wanna hear about Mr. Justin, my co-host.
I want to learn about Justin, I don't want to go through the normal, like everyone's heard Justin on other podcasts, right?
Justin Piche (00:53)
Yeah, if you want to know a lot of background, you can listen to the REtipster podcast that I did with Seth and Ajay.
Clayton Hepler (00:59)
Yeah, yeah, yeah, yeah, so we want to get that boring background out of the way We want to get to some meat meat some meat and potatoes here man because I know you got a lot to offer I need got a lot to offer so Give us a quick Background of you know Where'd you come from how'd you hear about this niche?
so that those who have not listened to that get the abridged version for you.
Justin Piche (01:31)
Yeah. All right. Let's do a bridged version. ⁓ I grew up in Houston, Texas, and I was a good student. I went to LSU, chemical engineering, did some nuclear engineering minor and chemistry minor and all about the engineering. was great. And in college, I decided to join the Navy. So when I graduated college, I went to officer candidate school, commissioned, and then went through a bunch of training and got stationed on a submarine out in Washington state.
Kitsap County, across the Puget Sound from Seattle. Did that for five years. My wife and I decided that it was time to get out. Deployments were tough. I mean, I...
Clayton Hepler (02:14)
Where did you meet her?
Justin Piche (02:17)
We met in high school. We met our freshmen fresh. No, we weren't. We weren't. Thank goodness we were not. The Lord spared her from my ridiculous heathen just idiot high school boy phase. So ⁓ we were we were friends in high school. Our junior year of college. We kind of we were always friends, but we we started dating and we got married when we were 23 right out of college. Actually, the day that I commissioned as an officer.
Clayton Hepler (02:19)
Okay, I scores
Justin Piche (02:45)
I earned my commission as an ensign in the United States Navy was the day that I proposed to her. I had her parents and my parents fly out to Newport, Rhode Island. And she had just, she was out in Africa for the summer and had just gotten back. And so she came and her parents were there and I proposed and I wasn't a Christian at the time. And the first thing after she said, yeah, she's like, I can't marry you. You're not a Christian. And back then I didn't actually know what that really meant. I was like, I don't understand.
we both love each other and like our kids will go to church. But now I totally understand and she was right to say I wouldn't marry you. But that's kind of how we got we got started. So.
Clayton Hepler (03:16)
Yeah. ⁓
Okay,
so let me just, I'm gonna just be interrupting you because it's, ⁓ got the mic here, so. Being Christian is a big part of your life. And so I wanna, right, okay, so what do you mean by that? That, you know, it's important to be Christian, you know, as you're married, like.
Justin Piche (03:30)
Yeah, do it.
The most important part, yeah.
Yeah, that's
a really good question. So I think the number one thing is that when you're a Christian, obviously, there's a lot of things that you believe in. The people who are listening probably know those. But the number one thing is Christ is Lord and Savior and that you are a sinful person and that the only way to heaven, the only way to true joy, the only way to lead a truly
purposeful, meaningful life is to trust in Him, trust in the Lord. And through that comes obedience to what the Bible commands. And a huge part of being a Christian is raising children. And that doesn't mean that's the only thing that can be. There's people that are many wonderful saints that are not parents in any way, and that may be somebody's calling. But that's where it gets, that's where it gets, I think, really important is if you are trying to raise children with a Christian.
a spouse in a secular or non-Christian or atheist or whatever you want to say, spouse, that's going to be really challenging. There are certain things that a Christian values that somebody who is not a Christian would not value. And you're not aligned. You're unequally yoked. And it would be really hard. It would be really hard. It's hard to describe. It's hard to describe.
Clayton Hepler (05:08)
What? Yeah,
yeah, yeah. What specifically? Because I think this, you know, we're going to get to this, Justin, but I think that this is the backpinning of your success in real estate.
And so what specifically do you feel is like the value chain? Because you're a very high, I know you's a very high integrity man, right? And I think that that is truly a Christian ethic.
Justin Piche (05:39)
Yeah, I mean, there's a story in the Bible where this, this Pharisee or this teacher of the law talks to Jesus, says, Lord, what is the greatest commandment? And Jesus, then he says some and Jesus says, you've said it, it's, love the Lord your God with all your heart and love your neighbor as yourself.
Clayton Hepler (05:53)
Mm-hmm.
Justin Piche (06:04)
basically sums up the rest of the commandments. And that is, I mean, that's like the core tenant of the Christian faith, right? The core commandment from the Lord. And so when I'm conducting business or I'm doing anything, like I, my job, my calling as a Christian is to show other people to Jesus or to have people say like, why is he different? Or, you know, what, what about him makes him this way and be able to point back?
to Jesus and shine a light on him.
And so I don't know, maybe the way that I conduct business with people, that's what I try to think about, right? I try to think about, I glorifying the Lord in what I'm doing? And if I'm not, then I'm not doing the right thing.
Clayton Hepler (06:51)
That's right, that's right. So you guys met, you decided, hey, this is a big change, I wanna marry this amazing woman, but I feel that she wanted you to commit fully to Christianity at that point. Sounds like you were not always ⁓ Christian. Did you grow up in that kind of a household? was your, okay.
Justin Piche (07:12)
I grew up Catholic, so my
family went to Catholic church, Catholic mass. I had my first communion. I was baptized Catholic as a baby. had my first communion. But my family stopped going to church at some point. I joined a youth group of a local Lutheran church in high school. I didn't really, I would have said I was a Christian back then, but I didn't really know what that meant. ⁓
I went to hang out and play guitar in the worship band and had fun, had a lot of friends. I went to hang out. But just nothing about the way that I lived my life or the way that I prioritized my time or my thoughts were the right thing, let's just say. They were not the right thing. I was very much focused on me and the world and things and...
there wasn't really like a greater purpose. Like what was I living my life for? To be successful and make money and you know, that was it. That was my highest purpose and highest calling. And so I had to just fall away. I didn't go to church and college. We got out and I had been going to church with Julian. I just hadn't really accepted Christ. And then ⁓ from through that, our engagement, which is about a year, I just invested so much time and energy into reading.
talking to people, pastors, youth pastors, friends, and I'm about to share like a bit of a testimony here. This is a little, little intense, but it's usually this makes me cry. No, no, no, we will. This is, it's okay. It's okay. I honestly, why not? We have this platform. Why not? Why not? Uh, so I, I had been going to this church called family of faith Lutheran in, uh, in Cypress, Texas, North, North of Houston, and I'm playing guitar there and they,
Clayton Hepler (08:45)
We don't have to go we don't we don't have to okay ⁓
Justin Piche (09:04)
To the communion, every, there two services and they do communion first service and part of the band would go and take communion. Then the second service, the other part of the band would go and take communion. And I just, never took communion because I knew that I hadn't accepted Christ. And through, and this, this one day I go and I play guitar in the morning. It's kind of a stormy day and it's practice. And then I leave to go get some donuts and I come back like the parking lot's empty.
And I'm walking up to the church doors and all of a sudden the doors, these big double doors just go boom and just like blasted open. Nobody was there. Nobody in the hallway. Nobody in the parking lot. Some cars and then me like walking in holding a box of donuts. And it was just like, God was just like, come on in. Like, I've been here the whole time. ⁓
Clayton Hepler (09:59)
Yeah.
Justin Piche (10:03)
And that was first day I took communion. And it's been a journey since then, obviously learning more. ⁓ but it was crazy. It was crazy. Most people, you know, my, my prayer for my kids is that they don't have a story like that. My prayer for my kids is they never go a day without knowing the Lord. Yeah. I don't want people to have a, I prefer my children not have a story where they were living in sin for decades of their life. And then all of a sudden they finally realized that rather than have a story of no, no, no, I've always known. I've always known.
Clayton Hepler (10:31)
Mm-hmm. Mm-hmm. Well, thanks for sharing that man. That was super vulnerable of you and and I appreciate that. I appreciate that. So you and Juliana end up getting together. You go to Washington and I understand that your time in real estate and entrepreneurship started as you were in the Navy.
Justin Piche (10:57)
No, no, no, no, no, actually not at all. We rented, I own no house, no house, nothing all through the Navy. I got out of the Navy in 2017. We moved back to Houston, Texas and bought our first house. That was my first foray into real estate was buying the house that I'm about to finish remodeling and moving in and next couple of weeks. Yeah. 2017, October 30th, Halloween 2017. That was my first real estate purchase.
Clayton Hepler (11:16)
No way. When did you buy it? What year?
man, you... Okay.
Justin Piche (11:26)
So I lived in that house. ⁓ man,
Clayton Hepler (11:27)
How was the negotiation? How was the negotiation?
Justin Piche (11:29)
we went around, this is right after Hurricane Harvey had hit Houston, which flooded a ton of the city. And so we were in this lull where people were probably waiting for their insurance money and looking to move. And so we just went around low-balling everybody for like three months. Our poor agent, our poor agent, us, I thought we were just absurd. We unrealistic price expectations. were trying to, so we were like, you we're gonna buy a house that we can afford if one of us loses our salary no matter what.
Clayton Hepler (11:33)
Okay.
Justin Piche (11:55)
in a high cost area. So eventually the offers and the competing offers started coming in the market really heated up and so we ended up just we negotiated down a little bit from an asking price for a really nice house or like a nice small house in a nice neighborhood and and it wasn't much of a negotiation. Yeah it's like we put an offer at like 480 or something they were asking like 570.
And then they're like, well, have another offer that's coming in at 440 or 540. So you can either beat it or keep moving. And so we're like, all right, 448, let's go. Or 548, whatever.
Clayton Hepler (12:28)
You can either beat it,
you can either beat it or beat it.
Justin Piche (12:33)
Yeah, beat it or beat it, exactly. anyway, that was the, yeah.
Clayton Hepler (12:36)
Okay, so you got it. So where
from there, like when did you know it was a good time to get into real estate?
Justin Piche (12:45)
So I started working for Exxon Mobil. My wife worked for Chevron downtown and we just, I worked there for five years and towards the end. So we had my daughter, my first born in 2019, about six months before, seven months before COVID hit. And I was just commuting, driving a lot, you know, back and forth to a manufacturing plant for Exxon. And right about that time, COVID hit and we had this huge amount of time with our daughter. And it was amazing.
was like, my I don't have to commute. I can have breakfast with her and then like we get the nanny and then I can start working and I'm working from home. And it was fantastic. And then I started, was that's like also when I started listening to tons of podcasts, I started training for like a marathon and I was just listening to outrageous amounts of bigger pockets. So I started trying to wholesale houses at that time. I like, I'm gonna buy a flip. I'm gonna buy a burr. I'm I'm gonna wholesale and had a little bit of success, bought a couple of small rentals. I bought an Airbnb, big Airbnb. I bought
⁓ some like flip houses and sold them. But I was sending a lot of mail and it was I wasn't doing it right. And I know a lot more now than I did that. I wasn't really doing it right. I'd send ⁓ like a a like a three thousand piece mailer to the same list like six times to try to like keep getting people out of it because that's what people said to do on bigger pockets. They're like you got to hit the same list over and over again. And I was just having terrible results from that. At the same time a buddy of mine his name is Kyle.
Clayton Hepler (14:05)
Yeah. Yep. Yep. Yep.
Justin Piche (14:13)
Which we both know Kyle and and for the little plug for Kyle Kyle right now works for a company called the Investments lawyers. He's one of their attorneys and they put the investment lawyers are out of Seattle. They put together funds They're like they're they build funds for you and they're great. I've gone through them now I'm on my third one with them and they're great So if you if you need somebody to put together a fund Kyle Bryant the investment lawyers, they're not paying me to say this I just really appreciate what they do ⁓
Clayton Hepler (14:15)
Yeah.
Justin Piche (14:42)
Anyway, he was investing in land. And so we would talk about houses and land and houses and land. He was having a lot of success on his mail, way higher mail yields than I was. And for the same amount of profit, I might invest 150 K in a house to make, you know, 15 K profit or 20 K profit or something. He'd spend 15 K and make a 20 K profit. So it's just so much more attractive to me. So I just asked him, how do I get started in this? And he, at the time he was working with Clint Turner and learn land.
And so I went through Clint Turner's Learn Land program back in 2021. And that was right about the time my son was born. My son was born at the end of the month. So I started my land business as my second son was born. So this first six months of the land business, it was just me working full time for Exxon Mobil, full time in my land business, having a brand new son, another toddler and a wife that worked. And it was ridiculous. My wife would say that was the worst.
Clayton Hepler (15:13)
Okay. Okay.
Justin Piche (15:37)
time in our lives. I'm confident of that. I was just not present, man. I just couldn't be there because you work a full-time job. Getting paid really well. mean, I was working an engineer with 10, 12 years of experience for a big oil company. And I just had no time. I basically worked until 4.35 or so with Exxon. And then I'd get off and play with the kids and talk to my wife for a little bit. And then
Clayton Hepler (15:39)
haha
Justin Piche (16:04)
Kids would go down for bed and I'd be at the computer building out my follow-up boss action plans and building out my, getting my data list prepared and texting and calling anybody who it wasn't too late to for negotiations and just grinding so hard for that first six months.
Clayton Hepler (16:19)
Yeah, yeah, yeah. And so I wanna fast forward, because I do believe some people have heard your story. ⁓ What do you think created your early success? Because so many investors, Justin, don't get off the ground. They just don't get there. Why were you different?
Justin Piche (16:36)
Yeah.
I was committed to losing money.
Clayton Hepler (16:46)
Okay.
Justin Piche (16:47)
And let me say that another way. I knew that there was a chance that things didn't work out great. Although I had seen a good friend of mine have a proof of concept, but I was committed to putting in nine months of marketing expenses and OpEx to the business. Like no matter what, I had already had that set aside and I was like, I'm going to spend 10 grand a month for nine months. And if I lose 90 grand and don't do a single deal, okay, I'll reevaluate and see how things are going. But
⁓ That's not what happened. had first mailer had a lot of success. And honestly, what happened, what ended up happening, this is obviously, it was a lot easier back then. My first mailer, I had five deals from. I sent 10,000 mailers, yeah, 10,000 pieces of mail to Western North Carolina. And it resulted in about 300K of gross profit from that first mailer. Now it didn't come in right away, right? It took six, nine months to fully realize all that gross profit. But that was the first, yeah, the first mailer.
Clayton Hepler (17:28)
Holy heck.
Dude, I can't imagine. I can't imagine.
Justin Piche (17:46)
I still remember, dude,
still remember sitting, this is January of 2022. I was at my Airbnb with some family. This is right before we did a big renovation to it. And I had my wife and my parents and some of my aunt and uncle. I remember sitting on the couch and this first property ever sold was in Ashe County, North Carolina.
It was 9.2 acres. had an easement to it. There was no like road access, but it had an easement. I bought it for 18,000. I sold it for 36,000 in about two months. And I still remember like getting the, you know, getting the call that the money's been wired and everything is closed and the money hit my account. And I'm just like, ⁓ my gosh. You know, like, Holy smokes. I did it. I did it. This, this money's in.
Clayton Hepler (18:36)
Yeah
Dude, I
can't imagine being in that, like, I remember Seth talking about he would send out 3,000 mailers and get five deals.
Justin Piche (18:50)
Yeah, I know. It was crazy. I think the other thing that helped is, you know, I have a lot of respect for the Learn Land program, what it was back then. It was one of the few kind of land education programs that was talking about how to systematize and build a business and not talking about doing desert squares. So like the first advice that I got in the land space was don't go after
Clayton Hepler (18:54)
It was crazy.
Justin Piche (19:18)
Desert squares, no money down. They'll have to quality properties that people want to buy. And yeah, they cost more. Yeah, you're gonna spend 30, 40, 50, $100,000 on these properties, but that's the market where you wanna be. You don't wanna be playing in this buy for 3000, sell for 7,000, buy for four, sell for 20, type ball game.
Clayton Hepler (19:34)
It's not scalable. It's not scalable.
Justin Piche (19:36)
It's a lot of work. Yeah, it's a ton of deals. The deal volume has to be so high and you're selling garbage land. It can work. It can work. But it just, I'm glad I didn't start there. I probably would have gotten burned out of doing too many transactions and not making serious money on it.
Clayton Hepler (19:51)
Yeah, yeah. So you started to some success. You've made some key hires. If you were to have to replicate your success today, what would you do?
Justin Piche (20:07)
starting from ground zero.
Clayton Hepler (20:09)
Zero.
Justin Piche (20:11)
How much money do I have to start? Same amount that I had back then, 60K. The first thing I would do, first hires I would make would be outbound Lead gen I would not, if I only had 60K to make it or break it, and once I spend that 60K, if I don't have revenue coming back in, like I'm out, then the first thing I would do is hire a cold calling team. Two, three people.
Clayton Hepler (20:14)
You have 60k.
Justin Piche (20:40)
to hit the phones. I would be really diligent with data. I'd probably skimp on data and use something like Property Radar, which is one of the cheapest data platforms. You can pay $250 a month and get 25,000 exports. And then it's like a certain cost per above that. And so I'd start with that cheap, cheap data. I try to find somebody in the space that has a Versium account or can skip trace for me using their credits and skip trace for a reasonably low cost.
and hit the phones and I would be on, I would be the lead manager. I would be the closer. I'd be all over every single lead minimum qualification. Are you interested in selling? That's it. And I would handle everything else to start. That'd be like the first stage, first tires.
Clayton Hepler (21:26)
Yeah. And so that's, that's really interesting. So your story is you had the cash at the beginning. You had a relentless.
tenacity of I'm going to spend this money no matter what. Did you ever doubt yourself?
Justin Piche (21:42)
I think that because the first mailer hit so well, I had a lot of confidence. And that's not to say that it hasn't been rattled many times since then. I we've gotten to, I've gotten to points in my business where I only had 4K in my operating account. Like that's it. Like, and a team of 12 people and like, my gosh, if we push these closings any further, or if I can't sell these notes, or if I can't get this bank loan, like I'm.
I'm gonna not be able to pay my team type of of situation that has happened to me before in this business. And it is yeah, I was too pretty rattled. was was waking up in the middle of the night, 2am stressed about everything. And then at one point, I remember one night I woke up kind of around that time. And I literally could not go to sleep. just like sat straight up. like, my stomach is turning. I'm like worried about the money working out. And I built a I just
Clayton Hepler (22:14)
Right.
Justin Piche (22:40)
spent the next like three hours from like two to five a.m. building out a cash flow model and putting every single expense and every single ⁓ deal that we have on our contracts and the buy side and the sale side, every asset, every possible sale of a note or bank refinance or everything in there. And being able to lay that out visually, was the next day I was able to take action to get some liquidity back in the business like really quickly and make things work out. But yeah, man, there's been some there's been some doubts for sure.
Clayton Hepler (23:11)
⁓ At what point in your business was that is that your one your two?
Justin Piche (23:16)
That was beginning of kind of second year, kind of like maybe like 15 months into doing this. Now that's not to say like I didn't have a lot of assets because from the beginning my business model has always been buy lots, then sell them, have equity in lots and then sell them. And I didn't bring on any like even a deal funder or a partner or a JV for that first 18 months of the business. It was all
capital that I had reinvested from profits from other deals or initial capital that I was able to bring to the table from working for 10 years and my wife working for 10 years before we started the
Hey guys, this is Justin interrupting your podcast to say thank you for listening. I'm going a little bit deeper into my background.
and some of my beliefs about my business in this episode. So if you guys are getting some value, let us know with a comment below. We'd love to hear from you. Now back to your regularly scheduled programming.
the thing, I know.
Clayton Hepler (24:07)
Right, but it's still super stressful and you have people on the line
and you have, there are things that, you know, that you're like, man, like, I wanna make sure that I'm doing the right thing by these people, right? I have a responsibility to them, right? That's super important, man. So I completely understand where you're coming from.
Justin Piche (24:25)
Yeah.
Clayton Hepler (24:25)
you've had a couple of scary moments. What has been your most triumphant moment?
Justin Piche (24:32)
They actually just having this year ⁓ most triumphant moment was just a really big ⁓ double close subdivide deal that me and ⁓ my partner Ben that's partner in a several deals completed where you know you do a lot of these deals and you get a lot of wins you know small ones you make 20k here you make 15k there you make 30k there but you're spending.
that money again on OpEx on team take maybe taking some out for your personal life. You put a lot of work and effort and energy into these lead flow systems and to hone your skills to be able to manage different deals getting creative and this deal and then I've been I know would say the same thing but this deal that we did this deal in Erath County and I've talked about in a previous podcast but essentially we bought this property for four point eight million dollars and
While we were under contract to buy it, we got a house on 11 acres under contract to sell for 1.25, a 95 acre piece to sell for 2.3 and another 110 acres to sell for like 2 or something like that. So we had we were buying for 4.8 and we had three closings that we lined up on the same day to sell for 5.7 and
So we basically double close those. We had to bring 50k to closing to help the seller pay off a note. We double close the house. The buyer for the 95 acres and the 110 did not want to, they didn't want to double close. And so we ended up negotiating with the seller to provide us zero down owner finance note on the balance that we owed them for one day for a fee. So we essentially bought it, owner financed, sold it the next day, released the lien.
for a fee, for a flat fee and netted from that first transaction 550K. And then we still had 63 acres remaining that we were marketing that we were gonna either sell in 20 acre tracks or 160. And then we had the same buyer of the 95 acres and the 110 come in and buy that 63 acres for 1.4 million like a month and a half later.
So was crazy. made, together made 550 and then had another 1.3, whatever. Only 50K.
Clayton Hepler (26:55)
Good.
but you have no money out of your pocket.
That's a life-changing deal for a lot of people.
Justin Piche (27:10)
Yeah,
yeah, it was incredible. But it felt like a culmination of years of effort, you know, and there are people that have had that kind of success or similar success on like a deal one or two. And honestly, I think that could be like the worst thing that happens to somebody. Right. Like it's a blessing. It's really good. But that those kind of deals are not. That's the best deal by a long shot that I've that I've that I've that I've involved in. Yeah. By a lot. Like no other deal that I've done.
Clayton Hepler (27:25)
Right.
It's extraordinary.
Justin Piche (27:38)
worked out that well that quickly.
Clayton Hepler (27:42)
But if you take a lot of shots on goal, right? You take a lot of shots on goal,
Justin Piche (27:42)
So that was kind of, yeah, that's what it takes. You take a lot of shots
on goal and every so often something like that might come up. I've talked about that on the last podcast. We talked about how much marketing we're doing, the opportunities that you're generating. The more marketing you're able to sustain and handle, the more opportunities you will see that can be like that or can just be really good deals. The less you do, the less of those opportunities you'll see.
Clayton Hepler (28:09)
That's right. So you've had this triumphant win. So if you were to attribute your success to one thing, what would that be?
Justin Piche (28:21)
⁓ Honestly, if this kind of sounds like what's your greatest strength or what do you, what do think you're the best at or why do you? Yeah. Well, I think, I think honestly, leadership, I think the way that I lead my team, the way that I empower them, the way that I'm able to get them bought in is probably the best, the most, the reason why my business has been so successful. I be in, be in,
Being in the Navy, given a lot of ownership and responsibility at 23 years old, multi hundred million dollar systems and 30 people working for me, it's kind of a tough world to get thrown into, but through it, there's no option for failure and there's certainly no option for leaving. When you're in the Navy, you are committed. You can't get out without going to prison, right? So you're in it no matter what and you can either grumble and...
be upset or you can learn everything you possibly can. And the thing that I learned in the Navy was servant leadership, serving your team, like being a leader through serving your team. And the example I like to talk about or like to think about is one of the things that I had a lot of control over as a junior officer in charge of a division of guys in the Navy was the amount of time that they spend with their families when we're in port but not deployed. Because when we're in port and not deployed,
There's so much work that has to happen on the submarine, just mountains of maintenance and testing and things. And all those guys come in so early and they start executing the work that they have for the day. And when that work that's scheduled for that day is done, they can go home. So if you are a junior officer who's late or not on top of the maintenance schedule or not making sure all the approvals that they need to get started are like in the queue, ready to go, then your guys are gonna have to wait.
They might have to wait till lunch before they can actually get in to get permission to do their maintenance. Their maintenance takes seven, eight, nine, 10 hours. And they're getting to going home at 8 PM, 9 PM, 10 PM as we're gearing up for a deployment where they're going to leave their families for four months. So the best way that I could serve my team was getting in early, making sure all the maintenance was set up, talking with the officer who was going to approve the maintenance that day and getting a point, getting schedules in for my guys to get in there like as quickly as possible. They could start first thing in the morning, be done by three, four, go home, see their families.
And it was awesome. mean, like the morale and the divisions, so much better than divisions that weren't, that didn't have that kind of tenacity to get their maintenance done quickly. And that lesson has stuck with me to this day. Like your job as a leader is to break down the barriers for your team and empower them to be successful. Your success is a direct, a direct result of the success of your team.
Clayton Hepler (31:15)
And if you were to sum up or point to the actual inputs that you do, let's try to operationalize good leadership. I feel like it's just like a soft skill that's really hard to like quantify. How would you quantify it so that someone can listen to this podcast and say, maybe I'm not as good as leader that I want to be, but like Justin can help me out.
Justin Piche (31:40)
feel like quantifying is kind of a tough thing. There's a couple pieces to it, right? There's obviously empathy and being able to put yourself in other people's shoes and understand kind of from their perspective. There's a bias towards good intent. Maybe that's a way of saying it where ⁓ when you have altercated, this is kind of more of an interpersonal relationship skill, soft skill, but when you're having, when you have an interaction with somebody,
Having a bias that you both are working towards the same goal or towards a positive outcome can help not misunderstand things that other people say and can give you the demeanor, obviously, of being someone cooperative and somebody that's helpful as opposed to somebody that's harsh or negative or whatever. I celebrate the wins. I give praise to the team. I do it publicly ⁓ when people do well or do good work. ⁓
aligning incentives and goals. That's a big piece of, I think, being a good leader. And that can come down to compensation. That can come down to the way, little rewards you give to your team, being fair and having good judgment. That's another kind of big component is when issues arise or personnel issues, ⁓ we are very fair. I try to be super fair with the team, understanding of their position ⁓ and also holding really high standards.
and making it very clear what those standards are and getting commitment and buy-in from the team that they will meet those standards. Those are kind of some of things.
Clayton Hepler (33:15)
When you say it, yeah,
you know, I really like that and I think that ⁓ sharing the wealth is something that I've heard you talk about quite a lot. How do you think about incentive alignment in the global and the state side workforce? I think this is a part of why you've been successful.
Justin Piche (33:35)
Yeah.
I mean, the reason why you go and hire global talent is because you can get highly skilled people for a much lower cost and operational costs to your business.
You don't need to compensate that global talent with the same set of incentives that you would compensate U.S. talent. mean, frankly, the labor is worth something different because of the cost of living and because of, you know, an immeasurable number of factors, but primarily the cost of living, how much it costs to live in the country that you live in. So the incentives for overseas employees are a percentage of gross profits and they're split.
between them based on their salaries or their percentage of the total overseas salary. That's like a standard commission that the company pays them. the alignment there is that the company makes more money, they make more money, period. And that piece of their compensation is not tied to individual performance necessarily. It's not tied to them performing better than their peers or anything. It fosters this culture of we are all working together.
to get these deals done. It's not anyone's fault, it's all of our responsibilities to move things forward and not drop the ball. At the end of the year though, there is a performance component. So we go through a full employee evaluation from the managers up to the department level, up to my level, and it's a huge thing of how we give our year end bonus and year end compensation. And that is at my discretion of how much it is, but that is the tool that I generally use to reward the highest performers.
Clayton Hepler (35:13)
So it's a year end thing and they're all aware of it? Okay, okay. When you started out, did you have the same type of posture around creating incentives as you do now and if so, what changed?
Justin Piche (35:17)
Yes.
Yeah, no, I do. The only thing that's really changed is how it's calculated. When I first started the business, I gave the overseas team basically $100 per contract closed. Every time we sold a deal, they would each get $100. But then the team grew, right? And then we had like 10 or 12 or whatever people. And so now I'm giving out $1,200 each and every time we close a deal. And some of those deals were small. Like we weren't targeting small deals, but...
Clayton Hepler (35:38)
Okay.
Justin Piche (36:00)
Maybe we'd buy something for 20K and we misjudged it and we ended up selling it for 27 and we netted out after all of it like 6K and then I'm paying 1200 or 1300 or 1500 or whatever it is out in commissions. We were just making very little money on those deals. Conversely, we'd have a deal where made 80K and I'd pay out a tiny little bit. And so I changed it to a percentage of gross profit. So it doesn't de-incentivize or incentivize us to do a bigger or smaller deal. It's the same percentage of each of those gross profit deals.
⁓ So that's really the only kind of thing that's changed, they've always, team, anybody who's joined my team has always enjoyed a commission based on how the company does.
Clayton Hepler (36:38)
So let's
just play this out, Justin. You don't have to tell us kinda how you think about yours internally, because I know that those are private numbers. But if someone comes to you and says, hey man, I wanna start to incentivize my team financially with a percentage of the profit, right? How are you thinking about...
You might have someone has an executive assistant, they have a data scrubber, they have a lead manager, they have an acquisition manager, who's US based. How are you thinking about creating that incentive structure? And how do you roll it out to your team?
Justin Piche (37:12)
think you want to target a percentage of compensation rather than a percentage of gross profit and changing that percentage of gross profit to target a percentage of compensation. And so I'll say that a different way. If somebody is making $1200 a month at your company and you have a small team, you're really efficient. let's say you have your your I'll just give you my numbers. Minus 3 % of gross profit gets distributed to the team to the overseas team as ⁓ as a commission each month.
Clayton Hepler (37:27)
Okay.
Justin Piche (37:42)
And so if I have a really small team, I'm really good. I'm super good, super small team, but I'm doing 100K gross profit months, let's just say. And somebody's making 1200, let's say I have three employees for numbers sake, let's say my total salary base is $3,000, I have three employees. If I target three percent and I'm having $100,000 gross profit months each month, then I'm gonna be bonusing my team a whole extra month salary every month.
I think that's probably a little too much for commissions for your overseas team. So I try to target 30, 20, 30 % of a salary as a commission and just adjust the gross profit commission based on that. And the other thing is, don't, and my team will probably listen to this, and if they do, you probably already know this. I don't love base pay increases. What I love is commission increases. I love being able to pay more commission because the company is more profitable.
and having that drive their salary increase is that the company becomes more profitable for a certain amount of ⁓ overseas salaries.
Clayton Hepler (38:51)
So that's a really interesting thought. So if you're thinking about building this ⁓ for an admin person, you saying so the three people would be like two lead managers and a caller? Or what if it's an admin, like a transaction coordinator? How does a transaction coordinator admin get compensated? Is it the same exact way?
Justin Piche (39:08)
Same,
same way. Yeah, same way.
Clayton Hepler (39:12)
Do you have project-based compensation if someone's implementing an entire project or do you just focus on profitability-based?
Justin Piche (39:17)
I do,
I do for, so there's certain, there's certain roles at the company that do have project-based commissions, but not, like there's, yeah, it's, it's interesting, right? Cause a lot of people think about compensating only their acquisitions teams with the commissions and not like the, the kind of service aspect or the operation, the, the non lead facing aspects of their business. But I think about it differently because it's
Just to me, it's just as important in the closing process and getting a deal done at the transaction coordinator is highly organized and highly skilled and making sure that everything is all the paperwork is getting signed on time and the wires are there on time and we're extending on time and there's communication with the sellers because you could have great negotiators that lock up all these incredible contracts and you could have a terrible transaction coordinator that doesn't communicate at all. And then two and a half months later, they all of sudden say, hey, we're ready to close. And the seller is like, I thought you guys were gone.
I've already tried to sell it to somebody else and you you need that good level of service throughout the whole business. so I don't want to like, yeah, I just want them all to feel like they own a piece of the profits and they do. They own a piece of the profits. Everybody does.
Clayton Hepler (40:18)
That's right. That's right.
And as your company scales, have you thought about how you're gonna change and incentivize new profit centers for your team? Or are you like, hey, no, I want it always to be this type of thing, because I think it creates alpha.
Justin Piche (40:45)
Yeah, I haven't really thought about how I should change it or if I should change it. ⁓ Right now it's working out pretty well. People feel generally well compensated and they can see the fruits of their productivity by us having a really profitable month and then getting big fat commission checks. As long as the business model is still working kind of this way, I don't see a need to change it. The only kind of difference, or only thing that's kind of different is
There are personally, I'm involved in as the GP of development deals. And if the development deals don't come through the business in any way, shape or form, then the team isn't, it's not included in scout land group. So it's not, it's not a piece of the commissions because there's no team that's touched it. But what we are, we are doing is if my sales, you know, my dispositions team is actively working to market and sell properties that were, that I'm developing in other entities.
Clayton Hepler (41:28)
That makes sense.
Justin Piche (41:41)
then there is a commission component that comes into the team because we're using my team's resources to sell properties.
Clayton Hepler (41:51)
What belief did you have to remove in order to get your business to where it is currently from where you started?
Justin Piche (42:02)
giving up control and the actual belief that other people can do the job almost as well or just as well or better than you can. I think that was the hardest first belief and it's like something I feel like I knew like it's not like I didn't know that but it's different when it is hitting your pocketbook or your perceived OPEX costs and how much money and your run rate and all those type of things when you're when you're a business owner and you have
Clayton Hepler (42:05)
Okay.
Justin Piche (42:31)
$50,000 in your checking account and that's all the cash you have to operate. Adding another 2K a month to pay somebody else to do something can feel really stressful. It's like, man, I went from five months of run rate to four months of runway. Like, what if we're not successful? It's a lot of money to pay somebody out of my book. understanding that you need that person in place to grow your revenue.
And to spend your time, we just talked about this a lot on the last podcast, to spend your time doing the things that are gonna drive more of it. That was a hard belief to kind of throw away and adopt an entirely different belief, which is hire good people, invest in them, and you will see growth in your business. Assuming a ton of other things, you're a good leader, you have the systems and processes in place, you can train them and set their expectations right. There's a whole bunch of other things that go into that. But if you have all that other stuff, getting the right person in the right seat is going to grow your business.
Clayton Hepler (43:26)
What is the number one thing that is preventing you from taking your business to the next level?
Justin Piche (43:33)
Time? I don't know. That's a great question. I feel like I am taking my business to the next level, but I will say something that I am personally struggling with right now is especially getting involved in a lot of larger development deals with large loans that are still below the point at which require personal guarantees.
that is starting to become really challenging.
when you are, when you are guaranteeing massive loans, like the banks, and this is something I've been dealing with for a year now, but now, now it's coming to fruition. We just closed on a big, me and Ben actually just closed on a Texas development ⁓ in Burnett County. And there's a $2.8 million loan that we've, we've personally guaranteed along with another, another partner. And
The development company that we started the fund, the SBV, we have raised 12 months of interest reserve. And the development is not going to take 12 months. It's going probably take three to four months to build the roads and everything. All the while, we can start marketing and selling these lots. There's doubt in my mind that we are going to not actually have to use all that interest reserve because we're going to start selling some of these properties and being able to use the proceeds to either hold an account and pay some of the loan and release some of the bank loan that's going to reduce our interest payments, et cetera.
But because I'm a personal guarantor on that loan, the bank sees that and that inhibits my ability to get other loans. Because they say, okay, well, this is a contingent liability. Like if this development company that has all this interest already there in cash and all this inventory that you're working to sell doesn't sell and then you default in the loan, well, then we're gonna have to come to you. And so they see that and that impacts your ability to get more and more loans. And I don't want to have to slow down and not,
generate these opportunities and work on these deals, but without partners that are able to guarantee loans, it's going to be hard to continue to scale those deals. when you're running a GP, if you build up net worth and assets and cash flow into the GP, your GP can start to guarantee without needing personal guarantees from you or from other people. You can use the GP entity itself to do the guarantees, but it takes a while to get up to that size.
Unless you just have a lot of assets and net worth yourself ahead of time, it's hard. And that's kind of a little bit of a challenge. I'd say banks lending to me could be my kind of biggest thing that's slowing me down or making me a little bit cautious of continuing to scale these large scale developments.
Clayton Hepler (46:15)
Net worth is, know, with unlike multifamily, right? Or other, you know, real estate asset classes that have cash flows that the banks can underwrite. You know, that's, that's hard. You're right. And they don't care about the track record at that point. They just, they're like, Hey, do you have the ability to carry this loan?
Justin Piche (46:23)
Hash-lo.
Track record is a part of it, right? That's the thing that gets you, that starts the conversation, but that's not the limiting factor. Once you have a track record, that's not the limiting factor. The limiting factor is probably gonna be the, so there's a couple of different options, obviously, know, finding private money, different types of loans, hard money, things like that to get some of these developments, but they don't look quite as attractive in most cases when you're you know, two, three points up front and 13, 14 % interest.
Clayton Hepler (46:40)
Right, right of course.
Justin Piche (47:06)
They look a whole lot more attractive when you're paying a 1 % origination fee and you're at 8.75 % interest only over a period of time. But we'll get over it. I mean, we do have a couple of these deals. The banks were lower risk because we've closed out loans with them and they've seen how we work on developments to investors were lower risk as well. So it makes it easier to raise LP capital. And you build up that worth in the GP that can then guarantee loans so that your PG's aren't as necessary.
Clayton Hepler (47:37)
Justin, I one last question ⁓ for this podcast. I appreciate your vulnerability and ⁓ listeners have learned a lot about you and so have I. What drives you right now?
Justin Piche (47:52)
I love challenges. I'm the type of person that just wants to do hard things. And so anything that seems like it's hard to do, I don't know, I really enjoy pursuing those things. It could be something physical like a marathon or 75 hard or like...
or business related. I think I love thinking about financing, finances, notes, these funds, deals. I love producing good returns for people. it just these doing this type of business gives me a ton of exposure to both leadership, scaling a team, doing a lot of deals, dealing with with fighting fires essentially in the business every single day. And then also allows me to think about more complex financial ⁓
Financial things, models, bank lending, LP. It's just really interesting and fun. And I love creating value for people. I love the idea that there's not this pie, it's not a pizza. And if somebody takes a slice, that means there's less for everybody else. Like you can actually create value and economic growth in the world by doing something. And when you take a property, call it 500 acres, and you split it up into 20 lots.
You are actually creating economic value, you're creating a more valuable product that somebody else will then buy and use. And like, I love that you can do that. That's a possible, and that's a lot of what we do. It's just create value, seemingly out of thin air from a piece of land that exists by ⁓ doing some creative deals.
Clayton Hepler (49:39)
Growth challenge, testimonial, testimony. We talked about scaling. We talked about leadership. Man, this is a great podcast, Justin.
Justin Piche (49:54)
Thanks for interviewing me, Clay. Appreciate it,
Clayton Hepler (49:57)
Thanks for bringing it all man. ⁓ If the listeners like this podcast more than they like mine, could... ⁓
Justin Piche (50:08)
Don't
say anything.
Clayton Hepler (50:10)
⁓ No, I'm just kidding guys ⁓ Please rate review and subscribe at the end of the podcast as we know this is the gentleman's agreement or gentle woman's agreement if you're a woman ⁓ and the lady agreement, I'm sorry and Leave us a comment below. Let us know what you kind of learned from this ⁓ You know Justin and I are out here giving this content out We really enjoy doing this but the way that we know that it's being received
If you rate review and subscribe so we can continue to bring this no cost zero cost Value to you guys every single week as always the show notes down below if you want to get a hold of Justin and I There's tons of stuff for you guys to leave things for you guys to check out you can reach out to Justin us And I personally as well at any point until next week. We'll see you later
Justin Piche (51:04)
See you next week.