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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 41: 7 Brutal Roadblocks to Scaling Your Land Business
🎙️ Welcome Back to The Ground Game Podcast! 🎙️
In this episode, hosts Clay Hepler and Justin Piché dive into the critical roadblocks to scaling your land investing business.
Clay and Justin discuss the essential strategies needed to navigate the complexities of land investing and share personal stories that highlight the challenges and triumphs of their entrepreneurial journeys.
Key Highlights
Personal Updates:
Clay and Justin kick off the episode with some light-hearted banter, including Justin’s fresh haircut and Clay’s thoughts on staying aerodynamic in the business. They reflect on the joys and challenges of family life while balancing their entrepreneurial pursuits.
Scaling Challenges:
The hosts delve into the seven choke points that land investors face, from cash flow issues to investor relations. They emphasize the importance of understanding your financials and forecasting cash flow to avoid common pitfalls.
Vendor Management:
Clay and Justin discuss the complexities of juggling contractors and stakeholders, sharing insights on how to effectively manage vendor relationships to ensure project success. Justin shares a story about a challenging waterfront subdivision project and the importance of planning for contingencies.
Pipeline Overload:
The conversation shifts to the chaos that can arise from managing multiple deals simultaneously. Clay shares his experience of locking up 30 contracts in two weeks and the strategies he implemented to streamline operations, including creating pre- and post-submission checklists.
Founder Burnout:
Listeners will gain valuable insights into recognizing and overcoming founder burnout. Clay and Justin share their experiences and strategies for maintaining balance while driving business growth, emphasizing the importance of prioritization and self-reflection.
Tech and Data Management:
The episode wraps up with a discussion on the significance of tracking key performance indicators (KPIs) and integrating technology to streamline operations. Clay and Justin encourage listeners to leverage data for informed decision-making, sharing their experiences with various CRM systems and the importance of having a cohesive tech stack.
Personal Guarantee Limits:
Justin discusses the challenges of personal guarantee limits on loans as he s
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Justin Piche (00:00)
Welcome to the ground game podcast. This is your co-host, Justin Pache.
Clayton Hepler (00:03)
And this is your other co-host, Clay Hepler.
And we're here to teach you how to win the ground game.
Justin Piche (00:21)
Well, long time no see. In the time since we met earlier today, I got a haircut. I got lined up.
Clayton Hepler (00:28)
Dude, you look absolutely sharp right now.
Justin Piche (00:31)
I got, the guy was cutting my hair, he was really good, he like, told him fade up from zero and he's like, you want a skin fade? And I was like, don't, like to misheard him and I was like, yeah, fade it up. Anyway, he gave me a skin fade. So like the back of my head is smooth as a, that's smooth. Let's just say it's quite smooth. I haven't had a skin fade in a long time, so.
Clayton Hepler (00:44)
Ha ha ha
I've never had a skin fade.
Justin Piche (00:51)
It feels nice, cool. It's hot down here, so you know, I'm feeling a cooler.
Clayton Hepler (00:54)
Yeah, gotta, yep,
you gotta, it gotta be aerodynamic in this business, you know?
Justin Piche (00:58)
man. All right. Well, let's let's jump in. So for this topic, I was thinking about scaling a lot because that is a lot of folks goal. It was obviously my goal and I think it's important right to scale your business. If you want to build the life that you want to build that you can't keep it at as how it was the first several months that you started it because it's hard. It's hard. You're probably not making a lot of money. The first first few months you do this.
And in every land investor land development journey, I've identified seven choke points. These are seven that I have dealt with personally from your first cash crunch, which if you haven't experienced yet, it sucks. It will you will and and to the to the issues that I'm dealing with now, which are which are personal guarantee limits on large loans and large development loans. So we're going to talk about basically all of these.
different roadblocks that you might run into while scaling your business. This is not an all inclusive list. There's obviously more than this, but these are the ones we're going to talk about today. So let's jump in.
Clayton Hepler (01:59)
Yeah, yep.
You'll see that as we go through these that the problems get bigger, right? And so your, your, your dollar signs on the problems get bigger. So, I would say for the first one, which is lumpy cashflow and capital crunch, that was like my first, like 18 months to two years. just because of the fact I
didn't start with a lot of money. And so like, I was always kind of like trying to pull profit out of the business and live and it was tough, man. So I think that, you know, for me, it's having visibility in your, your finances, like forecasts is crucially important. And so that's, that's really what helped me get over this, like a lumpy cashflow. and
like understanding inputs in the system, right? Of course, like when we have inputs, we understand the outputs. so the key inputs to decrease, to mitigate your lumpy cashflow is understanding your cash conversion cycle. So when you could say, Hey, when I get a deal under contract and cash conversion cycles under contract to close on the sell side, not, not by the close, right? So you can project that out and be like,
rule of thumb. That's kind of like your rule of thumb. If you want to go even deeper, you can do like a cashflow forecast. But the way that I really started to do is I would do it. I'm measuring like I have a deals tab where I'm like every month we're updating what's our cash conversions cycle, what's our under contract or what's our buy side to sell side cycle so we can predict when's cash hitting the bank account. So depending on how, depending on how long that cycle is, it could be you buy a deal now and you're closing in January, dude, you're closing in February. So
Those are the two big things for me. I know you have kind of more of a story, but I wasn't as prepared as Justin was for this one.
Justin Piche (03:50)
Well, this was we sometimes trade off topics. I kind of worked on this one. That's why I'm a little more prepared, but we've got stories to tell. So I wanted to kind of provide a relatable story to each of these each of these milestones from my own business. And so for me, this the cash I had a little more money to work with on the front end. And so I was able to kind of blow through some of these these issues. know, lumpy cash flow wasn't a huge issue because I had hundreds of thousands of dollars of capital to pull into deals and then the capital crunch of
Do I have enough money to buy these deals that didn't really hit me for about a year into my business. And I was not the most disciplined with tracking ins and outs, right? Inputs and outputs. What am I spending money on? And when, when is money coming back in? Because for the first year, it just had always, there's always, there'd always been enough capital to, to deploy into properties. And so it was about a year in, I had
I had over $100,000 sitting in the account. That was plenty to buy the deals that we were going to buy. I wasn't really paying attention to my credit card bills and when they were due and my payroll and when that was coming out. And then I had a bunch of properties that were supposed to close that were going to replenish any shortfall before we were buying a few properties. Anyway, long story short, this happens to everybody. Closing's got pushed on the sales side.
So, you know, I'm planning on 80,000, $90,000 of capital plus profit coming back in to buy some more deals. It doesn't happen. It gets delayed for some reason or another. I got to pay these credit card bills that I had front loaded that I had to pay off. And all of a sudden I'm sitting there with literally $4,000 in my account. Like that's it. Got a team of 12. I've got, I've got more than a million dollars of property in inventory. I've got a bunch of
profit that's about to come in because these properties are under contract, but no cash, no cash. Anyway, it's it's sucked. I was like panicked. I was I was waking up in the middle of the night like 2 a.m. with my brain running of just like what are the scenarios? How is this? So one of the things you mentioned was looking out and forecasting cash flow. So that's the first time that I did this, which is which was create a 13 week cash flow model.
Clayton Hepler (05:45)
man.
Justin Piche (06:05)
and look at all the accounts, look at all the ins, look at all the outs, add some conservatism to lot sales and when that revenue and capital was going to be returned. And it allowed me to see where I was going to go negative, where the holes were and where I was going to be good to go. But by mapping that out, it let me see what levers I had to pull in my business to get cash released more quickly.
And that was the difference maker, I think, is because we had all these mortgages. I hadn't sold any mortgages up to that point. We had all these mortgages that were seasoned and ready to sell. So that was kind of the first lever. I was very bankable at the time. I didn't have a lot of debt and I a lot of income and assets. And so was able to cash out refi properties. And then for this particular deal, none of that really would have worked, right? I was closing a deal about a week and I had four grand in the account.
And none of those, you can't sell a note really that fast. You can't get a cash out refi that fast. Those things aren't going to happen. So I ended up, that was the first time I partnered with somebody on a, on a deal, brought in a friend. actually my brother-in-law to come in on the deal. I gave great economics and he funded, he funded the deal and we made a good, a lot of money. So it, anyway, actually that's the story.
Clayton Hepler (07:16)
Yeah.
Yeah, that's a great, that's dude. That's great story to kind of give feedback on. It's a, that's tough. And especially when you're full time in this, you know, it's like, what do you do? You know, you gotta, you gotta find solutions. That's it. You know, Justin could have, it could have ended you.
Right. Theoretically, you had to scale down the team and scale it back up, right? You had to fire everyone and scale it back up. Like you're not, you know, you, you just shut everything off and then you're delayed for another month or two or three. Right. Good thing you had the actual.
Justin Piche (07:44)
Yeah, I mean, had I had had a
couple other levers before that would have been the next lever for me would have been using credit cards. I had a lot of business credit lines that I could have tapped into to pay op ex and expenses for a period of time. But that's not you know that I don't recommend that to people who are new and don't have a kind of proven track record because you can find yourself in a really big hole. You can
a lot of money on credit cards, not see results from it. And then now you got 50, 60, 70 K due and no income to pay it off. It's like, get dangerous. I was at a point where I had, mean, I had a lot of inventory. I had a lot of things under contract to sell. It just was more of a timing cash crunch because I didn't pay enough attention to it. And that, did not happen again. That has not happened again. That was, that was scary enough to me that I was like, this is needs to be a focus. You know, cash is not just
It's not just king, it's literally survival.
Clayton Hepler (08:35)
That's right. That's right. That's right.
Justin Piche (08:37)
So the next the next kind of roadblock to scaling I want to talk about is investor relations and capital raising friction. And this probably hit you earlier because you started with less money and like you needed to get people in on your deals early for me. Obviously it took you know, took a year before I needed to use other people's money, you know, but this can really stall people and a lot of people don't realize or don't think about
bringing opportunities this way. A lot of people think when you ask somebody who is in your life, who has what better capitalized than you to invest in a deal, they feel like they're asking for a favor. It's like, Clay, I need, I need to borrow money from you. And that is not what's happening. What is happening is that you are providing an opportunity for investment. Yeah, that has a risk of loss, but ideally as an astute investor, you investor, you've mitigated that.
that risk and you're presenting a really good opportunity to somebody and compensating them fairly and probably even more than fair for your first few because you may not have a proven track record with this person who may be funding your deal, but you're presenting an opportunity to people. And if you are able to switch your mindset to recognize that you're providing opportunities for solid returns,
backed by an asset, hard asset that truly does have a bottom value that will not go to zero.
That opens up a lot of doors, just having that confidence to know. What was your experience like for the first investors and
Clayton Hepler (10:02)
That's right.
Well, yeah.
So, so I, I found a, a really great funding partner and I worked with them for a year and a half, like on, on almost all my deals. Um, you know, it's the standard land funding partner, which I think is an amazing way to get started. Uh, and you know, they served as a due diligence coach. They served as a consultant, the coach in general, and I learned so much from them and they made a lot of money because of it, like a lot of money because of it. And so it's a standard 60 40, 50 50 split.
on all of our deals. And that's how I scaled it. You know, I didn't really have any investor relations because, know, especially early on, there's so many things that can go wrong. So many things that can go right, but so many things that can go wrong. And so I was like, I want to lean on this person's expertise to help fund, help me with funding a deal. Right. and dude, that, that proved to be an excellent, excellent choice, excellent choice, because it really helped me compress that learning.
and so I never had a capital problem. could underwrite consistently. think a huge problem for scale for people is they're, trying to put together a bunch of different variables at one time. They're trying to scale their marketing team, scale their sales team, get better data, systematize their processes, get better financials. And you have so many variables that you're trying to fix. You don't fix any of them. And so I think one of the reasons why I was able to scale quickly was because
I had a consistent, this is what this person gives me. These are the equity splits. So I knew going into it. It's like when I was in the household selling business, you know, was like 70 % of ARV, you know, I do my two in 12, two in 14, two points of closing 14 plus an appraisal fee, whatever, for hard money loans, I knew that for every deal. So I just baked it in. So it was so much easier for me to underwrite deals. And so the capital raising friction was dramatically reduced because I had one reliable person that helped me scale my business.
that helped consult that helped me miss landmines. And also that was, you know, the consistent cash that I, that I never really needed any cash for.
Justin Piche (12:10)
Yeah, yeah, I mean, it took out a huge piece of challenge and friction in your business because you found a good partner, good lender partner to work with. Yeah, I mean, similar to you being able to scale very quickly because I had capital and, you know, to maybe to my detriment and at this set part of my business, because I didn't I wasn't forced into using a funder or raising money from anybody. And so I was able to just basically
underwrite deals myself and make all the decisions without having getting much pushback really from anybody. But it also didn't sharpen my skills on being able to pitch deals and being able to sell myself to investors until later on in my business. I mean, the story for this one is really the deal from before.
last minute, like three days before brother-in-law agreed to fund 45k. I already had 5k like in the deal. So it was a total of a $50,000 raise and this deal had a ton of hair. Had a survey. There was an access issue. was the access issue was not really clear. It was a very complex. I posted it. This is like one of my banger Twitter threads or whatever that I posted a year or two ago.
Clayton Hepler (13:18)
Oh yeah,
you can't- yeah yeah yeah yeah yeah yeah
Justin Piche (13:19)
Yeah, I
told this story, a guy with a gun and chasing down the contractor and da da da da da to pay 12,500 for the easement in the end after filing a lawsuit and just like crazy back and forth. But in the end, my brother-in-law made 20 grand. He invested 45 grand, he made 20 grand, I made 72 grand and it took about six, seven months. I learned a lot. mean, that was a deal where I just learned a lot about how the process works for complex and access issue deals.
Obviously worth a lot to do that deal, but I wanted to give them good terms. was like, you know, 40 % return on your cash is what I'm going to target. Here's my conservative. I think we're going to sell for 150 at the low end, 40 % return on cash. You get X amount of profit and we ended up selling it for 170. When it was all said and done, plus a 12,500 easement. So was really, I guess like one 58 or one 57 five. So.
Clayton Hepler (14:12)
It's a solid deal, And you know, you the hardest deals are the ones you actually learned from. So.
Justin Piche (14:17)
That's true, that's true. All right, the next big roadblock, and everybody was gonna run into this. If you ever start doing deals where you're getting contractors and surveyors and engineers and the county and stuff involved, you're gonna run into this. Vendor and stakeholder juggling. And I'm gonna maybe start this one off with a story, because this is a good one. And I'm curious to know kind of where your mind jumps to your biggest struggle with vendors stakeholder management.
So in end of 2022 is when I really started focusing on larger subdivides. I joined the Casual Fridays guys, Mastermind, Justin Sleva and Adam Southie and was just looking for big subdivides with a group of other land investors who were all looking for big subdivides. And the first two I found were on market. They were great. They were great deals. I was able to raise the money just from those guys, the land investors and a couple of family and friends.
and so the second one that I did, they were one month after each other. two, was a waterfront subdivision near Birmingham, Alabama on Logan Martin Lake. I ended up splitting the property to 25 lots. I actually just sold the last lot like few weeks ago. So we're closed out of that subdivide now, which is fantastic. Produced a hundred plus percent return for all my investors. And I made a good bit of money and it was, it was great, but it was not without its challenges. Obviously you have to hire. I had to do a bunch of.
clearing work on this property. The waterfront portion is kind of a road that curved and there I was able to cut six lots that all had lakefront about you know 300 to 400 feet or so or maybe something like that of waterfront edge each but the whole kind of flats area was just scrub trees. Think like 10 to 15 foot tall thick as all get out you can even walk through it type trees. It was about
30 ish acres total of just covered in trees. So I hired a contractor to come out and clear the whole lake frontage to open up water views, get some home sites out there so people could actually see, you know, what they were going to be working with. And I hired a great contractor. He was great. I went out and met him at the property. Really likable guy, older gentleman, been in the business for a long time.
But over the next couple of months of clearing work, I just kept getting like updates of less progress than I was expecting and big invoices. And we got to the point where we only halfway done and the budget was 250 and I already spent like 150, 170, something like that. I was like three quarters through the budget with only half of the work done. And I was just super frustrated. I kind of kept calling him, kind of trying to figure out what's going on. And then he was kind of avoiding me. And then I finally got a call from him and he's like, Hey, Justin,
I'm going to let you know we're done working on your job. I am going to sell all of my equipment. He's got a ton of equipment. This guy does huge jobs all around. I'm going to go to sell all my equipment at auction and just close down my business. I was like, what is going on? He's like, I just can't hire good people. My guys keep breaking my equipment. They're not trained. They don't show up for work on time and I'm just done dealing with this. I apologize that we can't complete the job, you know, but it is what it is. Good luck.
I'm like, my God, I have other people's money. got a $600,000 bank loan that I'm paying interest on. The lots aren't ready to sell yet. And so obviously hit the phones, called a bunch of different contractors and excavation companies. Thank the Lord, I was able to find one local who was looking for a bridge project. Like they had a huge project, huge subdivision project starting two months and it was just a
lull where they had four machines and operators that just weren't being worked. And so they jumped on the job. They offered a pretty fair rate about the same as what the other guy was offering for the amount of work and they were able to knock it out in the next six-ish weeks. I ended up going about 50 % over budget. But what saved me is contingency. I had raised a contingency upfront and then I also was able to sell some of the lots that weren't being worked on. And so I was able to hold a little bit of the
income and revenue from those lots back rather than releasing it to the bank or to my investors to cover any additional shortfall. I mean, long story short, it worked out great. I was projecting slightly better returns from the investors, but they still earned over 100 % return on their capital and a little bit over two years. I think like for anybody who hasn't run into this roadblock, but definitely will, you've got to plan for contingency.
You can't underwrite a deal with super thin cost estimates on all of your improvement work. Like you will have a time when something happens and it costs a lot more. And the last thing you want is have to go to your investors and say, hey guys, I need to do a capital call. I need to call additional capital. We need more money to get this done. You want to have that plan from the get-go and you got to realize there's levers, right? There's levers that you can pull even in an individual deal sense about how you distribute profit, how you distribute capital, how you pay your loan back.
It always makes sense to hold some of that not distribute immediately everything so that you have cash reserve kind of in that business operating account to handle any of these random things that are going to thrown at you.
Clayton Hepler (19:29)
Yeah. mean, I have stories, but like, I think that that puts it home. So I have nothing to add.
Justin Piche (19:38)
All right, let's talk about number four. I'll let you take this one first, because I know this happens and you've got a good system. this one can hit you kind of, it usually doesn't hit you until you're really breaking in the contracts, but pipeline overload and just chaos inside your business.
Clayton Hepler (19:52)
Yeah
Yeah, I'm experiencing that right now actually. So it's super timely. We've locked up. We've locked up probably 30 contract over the last two weeks, like an insane, insane amount, which is why I emailed you this morning. So 30 contracts in like two weeks and our, my transaction coordinator is absolutely overwhelmed.
Justin Piche (20:06)
Holy smokes, that's insane.
Yeah, I know, I replied to you. Man, that's nuts. That's a lot of contracts.
Yeah.
Clayton Hepler (20:29)
And so, you know, I had to do firefighter mode and figure out what are some things that we can do very quickly in order to like make sure, cause as land investors, we're closing on 60 % of the deals, maybe 70, right? And so there are the 30%, the 20%, the 40 % of the deals that were not actually closing. So how do we know quickly so we don't spend our time on deals that are not good?
So I thought today of creating this, this is in real time guys, but thought today of creating this pre-submission checklist and then a post-submission checklist. So pre-submission is all the information that our Dispo team needs to make a decision very quickly. And then there's one part of that checklist which is essentially, this is a 100 % confidence in our value.
or not 100 % confidence in our value. Cause a lot of times the problem is we might not have confidence in our value. We comped it, but we need to talk to a real estate broker. We do it after the fact. And so that's the pipeline overload that we're implementing. And my team is already like super happy about it. We'll see how it plays out, but that's, that's what we're doing currently. How about you?
Justin Piche (21:42)
guys, this is Justin interrupting your podcast. Just say thanks for listening. and I are going through seven huge roadblocks that stand in your way of scaling your business. And we're talking about how we bulldozed through them. And in some cases are still bulldozing through. So if you're getting value from this podcast, leave a review, let us know what you think. We'd to put out content that you want to hear. So back to your regularly scheduled programming.
Yeah, I we've had a couple of periods of this. And I mean, like right now we have 70 properties under contract to purchase or sell, which is me. I don't know if that's the highest we've ever had, but it's, up there. We're, we've got a lot of things and actually we just got four under contract today to today and yesterday to sell. So I think we actually have more, maybe 74 under total under contract. So 74 deals in transactions right now. And that doesn't include
the major developments that I'm working on. Those are just the ones that are in house on the team. And the train, our transaction coordinator, when we, when I hired her, she was one of the, she's actually the longest standing employee on my team. hired her back in February of 2022. And when we started, there wasn't a full scope of transaction coordination work to do, right? We had a few properties under contract, a few properties we were working to sell. And so she held multiple, she wore multiple hats. She did transaction coordination. She did due diligence.
She did kind of preliminary marketing drone work and like maybe some property descriptions and getting things ready for the sales team to list. And a lot of those responsibilities stuck with her even as we continued to scale and she got better at her job and she was able to handle more. But we got to a point where just the sheer level of communications of the transaction coordinator to buyers, sellers, title companies, realtors is taking up and coordinating closings and getting closing documents lined out and reviewed and
title commitments and everything in the folder, verifying earnest money. There's just so many different components to the job. She just couldn't handle it all. And it wasn't not her fault. She's exceptional, like truly exceptional. We just, a business, as a leader, as the CEO, I didn't really look and say, has the scope of this role grown beyond a person's ability to actually do it?
And so the sales team who is selling and marketing to dispo our properties kept getting frustrated because a lot of the items that were owned were direct inputs into sales, but they would kind of get delayed or get missed because of the sheer volume of transactions. And so the first thing we did when this became a big issue was take responsibilities and put them in the correct department. And this is something I think every business leader, a business owner has to do at some point. And you even have to do it for yourself, right? When you hire
a department head or somebody else who's going to take over responsibilities from you, you've got to sometimes reassess roles and narrow the scope when the volume of work inside of that scope grows. And that's just something I delayed too long. So it just led to a bunch of chaos. It led to missed earnest money. We weren't making decisions fast enough. And so we were losing a lot of earnest money by cancel contracts after earnest money went hard. We weren't getting our marketing material quick enough. so
We'd wait too long to start to market to sell properties and especially ones that we had flagged as double closed or like not gonna purchase but let's see if we can find a buyer for it, which wasn't very often back then but still like lost opportunity by not having that marketing material available. And then one other thing and this is I emailed you about which I thought was really a good, I mean I don't know why I didn't think about this. For the longest time up until about four or five months ago.
We've worked in a bunch of different markets. We just find local title companies and then whatever market we're in, which is great because you're working with somebody who's there. They're usually close to the seller. So the seller can go in live and sign stuff. But when you've got 70 plus deals at title and you're using 35 or 40 different title companies to do all of that, that's a lot of different people to email, to touch base with, to check in on. And then somebody doesn't respect, it's just a lot of coordination.
Clayton Hepler (25:12)
That's right.
Justin Piche (25:35)
And so we did is we went to a national, we went to Fidelity and there's other ones, Stuart Title is another one. There's several of these large underwriters, First American, that you can work with directly. And so we got assigned a rep who is our rep for all of our contracts. And it may not be the most cost effective, but it is certainly the fastest and the easiest. When I submit a contract to Fidelity, we have a title commitment back two days, three days, which is one of the key.
factors that I need to see if I'm going to move forward with the property or not, or spend any more money or time or energy into it. Which is nuts. mean, we go to a local.
Clayton Hepler (26:10)
That's, that is,
that is nuts,
Justin Piche (26:13)
We go to a local title company or a local attorney and we're usually not getting title commitments back sometimes for more than a month. Sometimes they don't even open up the title and get the title commitment until like two weeks before closing is scheduled. And so every communication we would ever have with the title company would say in the initial email, we need the title work back as soon as possible. We will pay for the abstract fee ahead of time or whatever we need to do to get this because this is a key decision making making step on if we're going to spend more money on due diligence or not.
The worst thing and this has happened to me many times is you get a property under contract. You don't get title work back for a long period of time, but you have to do certain due diligence steps, especially when you have to do a survey or if it's a subdivision you do you want to get your your boundary survey set up. You might spend five six seven thousand dollars getting a survey just to find out you can't get clean title. What happens that's money is gone. I mean you paid the survey or did the work you've got to pay them period and so by getting the title commitment and
Clayton Hepler (27:02)
That's right. That's right.
Justin Piche (27:12)
two to three days we're able to evaluate the exceptions, we're able to ask questions and make a call on if title is clean for us to move forward with our other due diligence fees. I mean the best thing is just having one point person where my transaction coordinator can have a weekly standing meeting with this person, go through all of our outstanding contracts, everything that's, it's great. So that will help you. I'm confident with all these deals that you have. And if you're listening and you've got, you're dealing with these issues, reach out to a national. I'm happy to make an introduction but.
I think you guys can probably just find your local Fidelity or Stuart Tidal or some of these other large companies and just give them a call and see what they can offer you.
Clayton Hepler (27:46)
Yeah, man, you this is why you hang around smarter guys than you, you know, they teach it. They teach you stuff. That's incredible. Yeah. So we were experiencing that tons of overlook. Again, this is the exact reason why you listen to podcasts, you connect with coaches. Everyone has insights, man. Everyone has insights. I Socrates was the person that said that everyone is my master in a certain way. And so it always keeping open, always asking questions is a key. And that's how you actually
you know, burst through overload and chaos and problems. You first look at yourself, say hey, how do I as a CEO solve this problem? Sometimes you need to look beyond yourself and say maybe I have an expert that's closer to the problem. Maybe I have a disposition manager, transaction coordinator, a salesperson that's closer, a comper that's closer to this problem than I am, that will give me insight. And then you can go outward, man. You can go to a coach, you can go to a friend, you can go to acquaintance, you can go to a mastermind group, you can go to YouTube, you can go to podcast to solve your problems.
but those are the biggest thing in the business. that just, that little insight could make a massive difference in their business. So, man, I love that. So one thing that you said, and I think this is just a skill as a business owner is to switch items that are owned. So when you were, could you give an example of how you switch the TC quote unquote
previous items that were owned versus the Dispo and Admin.
Justin Piche (29:12)
Yeah, yeah, absolutely. So before before kind of this change, it happened eight, nine months ago, something like that. The transaction coordinator owned everything from the moment we get it under contract on the acquisition side. So from that moment, opening up title, ordering initial due diligence, and we use parcel review just to get a quick printout of all this information about the property so that we don't have to go find all this stuff. Who's the electric company? Who's the water company? You know, whatever, all that kind of stuff. And then drone work.
getting the drone material, ordering the drone photos, giving feedback for the drone pilot on where the property lines are wrong or right or what things they put on the shot wrong or right, whatever. And then also just all the communications with the buyer, any seller, the title company, any realtor we are involved with, lining up the closing documents, et cetera. So the core functional TC role, which is really closing, think buyer, seller, title company, all that,
stays with the TC. The due diligence also stays with the TC because it's a quick thing. So she runs that and gets it off to title.
So the core TC responsibilities, think buyer, seller, title company, realtor, attorney, type communications, NDD, stayed with my transaction coordinator, but everything related to marketing, everything related to marketing and sales moved over to the sales department. And in hindsight, it's like, why were we doing this so long? And the answer was, we just didn't have a big sales team. It was one more thing to add to the sales team as a part of their process.
the TC had bandwidth at one point to handle that and handle it well. It's just as the scaled that failed to be the case. And so we needed to move it off. And frankly, it makes way more sense for marketing and drone work and everything to sit with sales. I mean, they're the ones who are selling the property. They're the ones who have the vested interest in following up with those photos, getting the listings created and making sure the drone material is right and correct before we're ready to before we listen and sell a property. So I mean, it's a very logical choice. I don't know why we didn't see it sooner, but
Sometimes it takes pain to see what you need to do.
Clayton Hepler (31:16)
Yeah, yeah,
yeah. 1000 % man. Yeah, I would I would completely agree and we experienced that personally in in pipeline overload and chaos. So yeah, I have nothing to add there.
Justin Piche (31:30)
All right, this next one, I'm sure you'll have something to add on ⁓ this next one. And we've talked about this before. This is the founder burnout trap. This is a huge roadblock to scaling. And the reason it's a huge roadblock to scaling is because you have to look deep inside yourself and determine for yourself what kind of a business you want to run and what you want your life to look like. And you have to make conscious decisions.
Clayton Hepler (31:32)
Hahaha
Justin Piche (31:59)
that help you get there. And a lot of people get to this burnout trap spot and it's so overwhelming that they think it's, they see it as not worth continuing. But that's not, I don't think that's the best answer. I think there's ways to work around it. And so let's just start there. And is there a point in your business where you hit this wall, this founder burnout trap? What was it like and what did you do to overcome it?
Clayton Hepler (32:21)
Yes, I've been thinking about this a lot lately. I'm actually building out like an operating system for this. Like how do you become a land, an architect, not a you architect your ideal business, you would not be doing all the stuff that you're doing most of the time. Most people build prisons and they call it a business, right? They say, I'm making more money.
They really build prisons because they have problems with balancing the things that they must do as founders solve the biggest problems with the things that they like to do with the things that the business needs. Right. And so the people have a hard time balancing those things. so they become the bottleneck because they can't they don't they're so in the business. And so
You have to reflect and say, Hey, you know, where am I spending my time? And it's as easy as tracking your time or, know, if you want to go a little more expensive, you bring on someone, a, a coach, a friend to say, dude, I need to, need accountability and I need someone to help me see what I'm not seeing, the inputs that I'm not seeing. And so you, you, you, you look at everything. You stare nakedly at what are the things that I'm actually doing that are leading to my burnout.
Sometimes man, like I felt like burnout before and I've just been like, I'm to give myself 15 to 20 minutes just write down all the biggest problems and it goes away. Because sometimes we need to get those things down on paper so we can see them and say, it's actually not that big of a deal. Tactically, I think kind of very sequential. It's like time audit. What am I doing? What am I spending my time on? That's not working, right? Write this stuff down that really is, you know, that's causing me the most amount of anxiety. And then if I'm like, man, I'm still not there.
What I like to do is I like to allocate a time to these tasks, right? So when we see something like it's unclear, we say, I have this task, this task, this task, or all these things that making me feel like I have burnout. And we're like, this is gonna take me so much time, but you get 10 minutes into it you end up being like, this is not gonna take that much time. But if we attribute time to whatever the output is,
then it becomes easier for us to say, like I can get through this. Like I can manage this. But because we don't, we don't focus the clarity on it. I found this to be effective for me. Right. And so yes, I'm, I'm, I'm working a lot now and I'm loving any minute of it. And someone could say, Hey, you're, feeling burnout. If you're going to work as hard as this person is working, but it's like, no, like burnout is,
It's when the founder doesn't know what to prioritize and they feel the anxiety of lack of prioritization and they need to bring clarity to the activities that just said, or some other person's insight or other ways that they do is they go and take a rest, right? I think rest is important, I've, know, Seneca who is an amazing Stoic philosopher says, you know, the man, the person that takes all their problems and worries
With them carries them on vacations. They carry them to the Senate. They carry them to the bath house They carry them back home to them. They have to resolve the problems internally So a lot of times we think we need the rest we need the vacation and I'm all about vacations I'm all about them But a lot of times it's the internal thing the internal dialogue the internal narrative the focusing on the things that are actually gonna pull that out and give you what you need Versus saying I need to escape and do this do this thing that to manage my burnout
Justin Piche (35:47)
Man, that was a great answer. I think one thing that to just expand is that people have different thresholds for it too. But I like what you said where you said it's the anxiety of not knowing what to prioritize and probably a lot of the feeling of not getting traction and moving forward at the same time. Like a lot of inputs, not understanding what to prioritize and not seeing progress all combined into one terrible period of time.
Because I think back to the beginning when I started my business, I was working 18 hour days, like every single day, full time job, business full time, like new baby. It was insane. It was insane. My wife would call it a horrible, I mean, certainly a horrible time in our life and our marriage. We've talked about this before, but I didn't feel burnout. I felt excited about the problems I was solving and the business I was building. There was no burnout for me. Yeah, I was working like a dog, but I was so excited about it that it wasn't burnout.
and kind of for me, the biggest time that I've, I've felt this was, so last year I went to Europe for six weeks, which we've talked about and it was fantastic. It was a period of rest. worked about half days every day and start working about 8 p.m. in Europe. So it'll be like 1 p.m. Central work until about five or six. Central and go to bed late, but I had all day to hang with my family all day to explore. And it really was great for me and my family because they didn't.
They got just uninterrupted time with me all day long. And then I would just spend the evenings, most evenings working. I'd sell the weekends off to spend with my wife, but it was great. It was amazing. It was incredible. the business was fine. I mean, things worked great. I was doing a lot of coaching. So I really wasn't spending much time at all thinking about the business. I was just mainly helping other people, coaching, and on vacation. And I got back and immediately I'm just like, man.
Look at all these things we need to get better at. We need to do this better and do that better. And so I just started working like a ton. And I told my wife, I'm like, this is a push season, honey. This is a push season. We're going to be, I'm going be working a little more. And I just kept on feeling like the bottleneck. That was, that was my kind of burnout feeling is like when I am the bottleneck and I have too many things to do and not enough time to do it. And I feel that frustration of trying to figure out every single day, what is the most
the biggest fire that I need to put out today and never feeling like I'm really making progress because the fires are piling up faster than I'm able to put them out. That was a burnout moment for me. And it was really around project management, right? Cause we had been, we'd done subdivides. We had really been focusing heavily on maximizing every subdivide opportunity. And so we had 12 of them active in the pipeline and every month we were getting one or two more of them under contract. And I was the project manager.
I was the guy who got the surveys. I was the guy who did the clearing work. I was the guy that talked to the county engineer and oversaw all of it and raised money from it. It's just everything. And so when I hired my project manager, which I've talked about before, how life changing of a hire that was that freed up literally 20 hours of my week. got half, well, maybe a little less than half of my working time totally back to prioritize the things in my life that are really important to me. Like
spending time with my kids in the late, kind of early to late afternoon. Instead of working till seven a night, I take off at 430 instead. That's the time I chose to take back. And just have more time to think strategically about growth in the business and not be so overwhelmed with the fires you had to put out that you can't lift your head above water to see where you're going, right? You're just, when you're in the trenches, when you're down low, you can't see above the grass.
You just gotta keep hacking away, hacking away. It's not until you can stand up and look around where it's like, that's where I'm trying to go. that's the path I need to take.
Clayton Hepler (39:32)
Yeah, man, I, it's interesting that there's, there's just like really reflective moments that we have when we're not doing the thing that we're like working. And so I get my most insights when I'm walking around with my son and looking on, on Saturday and like going to the playground with him, right. Walking into town and going to the playground with them and, being at rest, being like thinking and being present.
Not when I'm sitting here and I mean, obviously, good insights on this podcast, of course, but when I'm working in the day to day, you don't have that. And so that is actually super beneficial, right? If you're purely in the grind season now, I totally get it. The way that you you you actually get to your destination faster. A lot of times, my opinion is you do take that time off to reset. Like I said, the prioritization. I had so many insights this past Saturday, I was like,
Beaming I was like this is amazing and I'm spending time with my son while while I'm doing this man Like I'm fully present with them things just come up and so so having that that that ability to prioritize removes the blanket of anxiety that just Fall it falls over us when we are in the quote-unquote burnout situation. So That's all I got for that man
Justin Piche (40:45)
All right, let's move on to the next one. This is, and I know you have a lot of thoughts on this one. This is tech and data silos. And maybe another way of saying that is incongruent data. You don't know what you're doing. You don't understand your business. I, when I see this, think kind of KPIs, follow ups, lead flow, pipeline management, how your systems talk to each other. How do you see all the information you need to see in your business?
And maybe just like a quick aside is this is something I have dealt with. I feel like multiple times. I've tried multiple iterations of software stack, dashboards, KPI reporting, and I just was always frustrated with kind of the out of the box solutions. And it made me feel unfocused, right? Because you're not going to improve what you don't measure. I mean, you're exceptional at KPIs, at tracking. I've seen your KPI dashboards. They're special.
Like you really know what's going on deep. So what led you to develop that and really focus so heavily on KPIs and did you ever deal with this data silo, not understanding what's going on in your business issue?
I imagine yes, because otherwise why would you be so motivated to get it going?
Clayton Hepler (41:52)
my gosh. my gosh. Dude,
dude, dude, dude. I mean, like, I still feel like I'm not there, right? I feel, I still feel like I can have, you know, data is alpha. It is alpha. And the more I learn, the more I grow, the more I expand, the more I realize that the most important gold mine of information is already within my business. And so the better I track data,
the better decisions I can make. so, the first year, year and a half, two years, I was flying like blind. I was like, what is going on? I have no idea. I think I'm making money. Obviously I'm making money, right? And that's the feeling, right? And for my...
Justin Piche (42:36)
Ha ha ha ha.
Clayton Hepler (42:41)
background like you're know, you're you're the engineer, right? You're you know, you could kind of see how the systems work together. I'm not I'm not that's all I that's all my bed. And so it was a a Herculean feat to get this down in. And we're still actually working on it right now. We got some really interesting, exciting stuff that I'm going to be unveiling in the next month, month or two about my back end. But dude, we have been dialing in on this because it gives us the right
data to make decisions off of. It goes down to what are the right KPIs? And then after you figure out the right KPIs, what's the right time period to track those KPIs? You might hear someone in a wholesaling business say, hey, I track my cost per deal, cost per lead. And they track it on a weekly basis or a monthly basis or whatever. And I'm like, well, that's not enough context for me in my business because...
We, cash conversion cycles are longer. So our KPI should be over longer periods of time. Cause that more accurately reflects ROAS that more accurately reflects cost per deal, because if we have a longer period of time in which it takes money to go out and in not to say that every deal like we, you get the home run deals, right? That sell quickly. But if you have the longer period of times that all your KPIs need to reflect the actual reality of your business, you wouldn't in track, you know,
on a tech platform, right? You would track different things than in our business. In a lumber business, know, trees take 20 years to grow. You think they're tracking their cash conversion cycles or different KPIs. And so time periods, specific, your specific business informs those. And so, yeah, I've done a lot of thinking around what are the right periods of time to track KPIs over? What does that teach us? And the question that
that I always ask is this, is this making, is this KPI lead me to making a decision? Sometimes we like to track things that we feel good we want status updates, which I messaged all my team members this week. like, do not come to a one-on-one with a status update. I don't care about a status update. I want to know what your blockers are. I want to know what your challenges are. I want to know how we're moving towards our goals. I don't want status updates. That's not what one-on-ones are for. KPI's aren't for status updates.
in that way. They're not like, don't want to be informed of what's going on. I want to know what the key things that drive decisions. Right? So, so that that's how I frame the KPIs and then kind of the whole system around it is CRM project management system. And then the, the, the glue that brings everything together is happier, make whatever. so yeah, yeah, that's, that's it.
Justin Piche (45:16)
Yeah, that's a great answer. I agree. I've always told the team from the very beginning is like, don't, track the data that helps us make decisions. We don't care about random little things. That's not to say it's not important to track outputs of team members. That's a totally different kind of thing. Like I care about the amount of time my team is dialing, my co-callers are dialing and talking to people per day. And I care about the number of lines of data they get through.
But those aren't necessarily the decision-making KPIs. Those are output-based and those are, is my team doing their job? And those are important to track, but they're not what make the decisions. The important ones are what you make decisions off of. I thought that was, that was well said. I mean, I started with PipeDrive. That was my CRM, which is a great CRM, think. But, you know, I just picked it randomly. I was just like, I'm going to go with this, this one. You know, why not? Why not? And I used OpenPhone for my phone system when I started.
Clayton Hepler (46:05)
Yeah, yeah, yeah.
Justin Piche (46:11)
I track KPIs and Excel spreadsheets manually. We use Google Drive for doc storage. had virtually no dispositions in sales side CRM whatsoever. And it just got frustrating. It was like, we get these deal cards and we had no real good communication follow-up sequence that we had in native in any software that we were using. The pipe drive, had a lot of capability, not, it didn't have.
integrated communications, I found to be really challenging, dialing when we would receive calls from mailers, this is early on, we had mailers, when we would receive calls from mailers, every time we answered the call, we'd be asking the person, I'm like, thanks for calling, what's your name? What was your letter reference number? What property are you talking about? And it was just so unprofessional. like, I'm calling you, you don't know what my property is, you need to ask me for a reference number. It's like, no, no, no, we need to have their information so that when they call,
We know who they are and what property they are. So the biggest switch was I started using Follow-Up Boss on the sales side, which was great, because now I had Dispo numbers, I could track all my communications with all of our sellers, and I saw how powerful it was for automated action plans and follow-up, that we moved all of our acquisitions, phone system, communications, email tracking, text tracking, everything over to Follow-Up Boss. It became our kind of source of truth. And that was super powerful.
because we were able to upload more than million lines of data and have all of the people's information in there. So anytime we get a call from somebody, we know who it is, what property we called them about, every communication anybody on our team has ever had with them. It makes lead handoff better. And then the follow-up sequences are amazing. So when we get a new lead come in through a stage or whatever, we're able to just really never let anybody drop. And that was the key kind of breakdown. And then the pipeline management was still a challenge.
because I really didn't like having segmented CRMs for acquisitions and sales. So it's like you bring something in, you get it under contract, you buy it, it's an inventory, and then you kind of sell it, and you have a different series of contacts and people that are communicating on it. The sales team needs different information than the acquisitions team. And it became kind of disjointed. We were manually recreating cards and mirroring them over on the sales side with different information on different CRM. And it was just like, So we switched to Notion and have...
spent the last eight months really building out a really custom Notion CRM that's fully integrated from, you know, lead pushed all the way through dispositions, project manage, everything in between financial dashboards. It's not the best at everything. we've, we've discussed this before. Like Notion is not the best project management tool out there, but it's adequate for our purposes. It's pretty good. It's not the best.
pipeline CRM in the world, but it's really good. It can display a lot of information and give you a lot of insights. It's not the best KPI, but it's really good. And having one single tool to view the entire business through has been a game changer for us. It's been really, really spectacular. And like you said, I have so many freaking zaps. I'm at like 60,000 zaps a month or something like that going off. It's crazy how many zaps we have. I saw somebody flex on X about how many, I think it was John Matzner.
You know, do you know who is? We're seeing him, like the guy who attacks Nick Huber and all those other guys who, anyway, he was like flexing on his zaps and he's like, oh, the company's zaps we had last month, it was like 30,000. I was just like, man, that's a lot, but what does that make me with my zaps? I got you.
Clayton Hepler (49:18)
Yeah, yeah,
Yeah, yeah, yeah, yeah,
I got you, I got you, I got you, I got you.
You're the godfather, you're the godfather of zaps.
Justin Piche (49:37)
we're nearing the end, but I wanted to talk about one more. And this is the roadblock that I'm currently running into. And this is personal guarantee limits on loans. This is not something I had to deal with before because I had income in excess, cashflow in excess of any of the loans I was getting. Even on middle range, know, three, four, five, $600,000 loans for development properties.
Clayton Hepler (49:37)
Go.
Justin Piche (50:00)
But now I'm working on multi-million dollar deals and getting multi-million dollar loans and I am not able anymore to personally guarantee large loans. the thing I want to talk to people about is as you scale and you start doing this, you need to focus on getting partners with strong balance sheets and income that can help support your development. Find somebody who has run a business, who has a lot of income that also wants to partner and help you raise money and run.
kind of a GP to do these larger deals. And it's frustrating sometimes, but you can form some pretty good partnerships about it. The thing that I think people don't understand a lot of times is when you run a business and you don't have W-2 income, the bank is going to take basically three years of prior tax returns, average your income, and then say that's your global cashflow and that's what you can use to pay down the loan. And so when you're scaling really quickly,
Your three years ago was a fraction of what it is this year. And it's just really hard, right? You can't show what you're doing today. Even though you may have a ton of cashflow today, you may be raking it in 200K a month, whatever it is. The bank doesn't see that. They see when you were back at 10K a month and they say, okay, well, that's a big portion of his income. And then then they see when you were a 30K a month, they're like, okay, so he's making 15K a month, even though now today you might be making 100K a month. It's just, it's really challenging. So I'm going to land the plane there. I know we got it. We got to run here.
Clayton Hepler (51:18)
Yeah guys as always When you leave your review, which we expect everyone to leave you just put clay is I appreciate claims insights on this podcast Justin was decent too So Justin I can settle the debate once and for all We have a running tally no guys. So you know Justin I come on every week and we we play full out
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