.png)
The Ground Game Podcast
Welcome to The Ground Game Podcast, where land investing meets real talk! Join your hosts, Justin and Clay, both 7-figure land investors and seasoned entrepreneurs, as they dive deep into the world of land investing, team building, and personal growth.
The Ground Game Podcast
Episode 42: Lessons from 5280 MASTERMIND, KPI Clarity & Scaling With A-Players
🎙️ Welcome Back to The Ground Game Podcast! 🎙️
In this episode, hosts Clay Hepler and Justin Piché share their insights from the recent 5280 Mastermind event in Denver, Colorado, focusing on the evolving landscape of land investing and the strategies needed to thrive in a competitive market.
Key Highlights
Personal Updates:
Clay and Justin kick off the episode with some light-hearted banter, reflecting on their experiences at the mastermind event. They discuss their recent successes, including securing 14 properties under contract and the excitement of navigating larger developments.
Scaling Challenges:
The hosts delve into the challenges land investors face, including cash flow management and the importance of understanding financials. They emphasize the need for clear KPIs and accountability to drive business growth and avoid common pitfalls.
Vendor Management:
Clay and Justin discuss the complexities of managing contractors and stakeholders, sharing insights on effective vendor relationships. They highlight the importance of planning for contingencies, drawing from personal experiences at the event.
Pipeline Overload:
The conversation shifts to the chaos of managing multiple deals simultaneously. Clay shares his experience of locking up 30 contracts in just two weeks and the strategies he implemented to streamline operations, including the use of checklists.
Founder Burnout:
Listeners will gain valuable insights into recognizing and overcoming founder burnout. Clay and Justin share their 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 leveraging technology to streamline operations. Clay and Justin encourage listeners to utilize data for informed decision-making, sharing their experiences with various CRM systems and the importance of a cohesive tech stack.
Learn about Justin’s 1:1 Coaching
Apply for private coaching with clay
Justin's Socials:
Clay's Socials:
Clayton Hepler (00:00)
Hello and welcome to another episode of the ground game podcast. This is your co-host, Clay Hepler.
Justin Piche (00:05)
And this is your other co-host, Justin piche and we're here to show you how to win the ground
Well, Clay, it's kind of early July. We are coming off of at least two weekends ago, the, guess, 5280 mastermind is what it have ended up being called the event Drew and Peter put on in Denver, Colorado or Arvada, Colorado, formerly the super cars and land event. But as we know.
the supercar place went out of business. They got sued apparently from maybe from people getting injured or crashing their cars or whatever. And we couldn't drive in supercars, but it ended up being, I thought a pretty, pretty good event, like a little more intimate kind of a lot of high level operators. And so I guess today we're just going to kind of talk a little bit about our takeaways from the event observations and banter a bit about how business is going and what we see coming.
Clayton Hepler (01:15)
Yeah, I think most significantly was when you go to a event like that, it really depends. You know, I think Drew did a decent job at bringing people of different skill sets together, but you know, you really get a feeling for the whole industry when there's like 50 people in there or, or at least our construction of the industry. so, you know, some of our takeaways, which we'll talk about here at the end, it's like, there's some really big stuff, right? That I was, that I took away that I was like, wow.
Doing this really well or I can improve on this and so we can kind of break down all that stuff You know, think to just kind of kick it off Maybe we talked about a business last month how things are going and Can I go from there?
Justin Piche (01:51)
Yeah.
Yeah, I guess I can start. we had a decent contracts month. We got 14 properties under contract in June, which is pretty good for us, especially going into the summer. We ran a little motivator for our closers and offered a bonus for if they exceeded a certain contract volume. And they came through and really pushed hard at the end of the month to get a bunch of contracts locked up for us. So that was fantastic.
making a lot of progress on some of my larger developments. We closed on our Burnett deal and got all of my clearing work done. This is a 40 lot, 150 acre lot split in Burnett County, Texas. And on the sales side, we had a lot of movement on sales side. I need to go in and calculate gross profit for the team. I don't know exactly what it was, but it was good. It was a good month for us. The team should be pretty happy with their commissions this month.
Clayton Hepler (02:47)
Brian was pumped dude when I talked to Brian he was like yo like we crushed it
Justin Piche (02:50)
Yeah, he's actually calling me
right now. Brian is calling me literally right now. I'll have to message him and make sure nothing's the matter.
Clayton Hepler (02:58)
So yeah, so, you know, while you're kind of handling that, I'll tell you a little bit about my month. you know, one of the core things is like, KPIs man, KPIs, KPIs, KPIs, and a couple of new things that we, put in our business is like every project, every initiative has a KPI. What I mean by that is this like,
The more I am in this business, the more I think of myself as like a clear allocator of the company's resources, right? Like that is the job of the CEO. Like most people are like, what do I actually do as a CEO? It's like you create the culture, right? You maintain the culture, you set priorities. Like what are the priorities of the company? What, what, what, like how do I get to Justin Piche's level, right? What are my priorities? Right. And then, the KPIs and the accountability
within those priorities, right? That's our, those are our core roles, right? And so I've been really thinking about a lot lately, like how do I, how do I prioritize better and most significantly, like when we do a project, a specific project, like how do we make sure that it's truly, truly focusing on the highest leverage point of the company? And so how I broke this down was, you know, every, every single initiative we have, we have a certain dollar number assigned to it. Like if, for example, we have,
my chief of staff is spending 40 hours on this. Like I take her cost per hour and I allocated for that and say, is this the best use of company resources? Is this going to get us closer to our goal? Right? Because guys, we are not in this business for vanity. We want to make money. Like we want to make profit. And so is this going to lead us to profit? So we broke it down to like Northstar, the KPIs that we're trying to go after. Like, so let's say for example, like we're trying to reduce our cash conversion cycle.
And we think that one of the things that we should do to reduce our cash conversion cycle is, streamline a certain. KPI sheet, right. and we think it's going to reduce it by this amount because of this reason, right? Cause we do everything because of like, we're, trying to achieve an outcome. and we're going to allocate this amount of money towards that, right. And money as in the salary of this employee. And so we started to break that down. And so every initiative we have, every project that we have, we're allocating a certain.
dollar per hour or whether it's a marketing budget, you know, Hey, I'm calling this amount of people this month and expect it to produce this amount of results. Right. So if we're going to bring it down and just be really tactical with our listeners, number one is. You gotta know your numbers, right? Like what's your P and L every month? Like, like how much money are you making? How much are you losing? What's your cost for your people? What's your, what are your KPIs? And from there, you can then build it out. Right. I'll give you another example of how we did this. So I realized that.
with my private coaching clients, 80 % of them, 75 % of them came from my land letter, right? Because they've seen how I've written, they're like, Hey, I like what this guy's saying. He's not just another person on the internet talking and trying to sell me something. And so we found that that is the most important metric to convert a potential client to a client. And so then we
engineered this entire system of like we want more people to get into our land letter because that's the highest converting way to do that but if we didn't have the contacts or we didn't look in and say how do we do this and the highest leverage point then we would have known that and here's how this applies one last thing this applies to your business because people want to hear Justin I talked about Justin of 14 contracts last night that's insanely impressive and
And they'll be like, well, what's he doing? He's doing cold calling. He's doing direct mail. He's doing this. He's doing that. And then you just take that without any context. And when you, when you add the revenue, the KPIs and your goals into this, gives you context for your business. So then you can make decisions based on that. That's why we listen to these podcasts because we want to know how to think better, but we learn how to think better by actually applying it. And what that looks like is doing stuff like this.
Justin Piche (06:50)
Yeah, have become like KPIs are a thing. They're so important, but they're one of the first things that I feel like a lot of visionary type entrepreneurs don't really pay much attention to me included. Right. When I, especially when I started the business.
It was all about just go, go, go, get the marketing out, get the deals negotiated. Who cares how much money I'm spending? I need to just get contracts, prove this concept and roll. And if you don't keep like things organized from the get-go, gets, really hard to go back and check out your KPIs. So we've been in the last say months redoing all of our KPI dashboards, transferring things from that are manually tracked on spreadsheets over to our Notion dashboard. We had a lot of progress and it's pretty.
exciting and fun now because I can go into my KPI dashboard, click on it and it pulls up and I can see daily, weekly, monthly, quarterly, annually, like metrics across everything that I care about. And then once you build out like kind of the base, are you doing your job? What is it? What are you getting done? KPI is then you add in kind of the more complex ones, which are more more along like the financial KPI is like return on ad spend. How much profit or potential profit am I? Am I?
getting into my pipeline based on the amount of marketing spend. And then you can start to see realized profit from those marketing channels over a specific period of time. And then you can make decisions as you scale. Like what marketing channel should I spend more time doing? Because I can see based on these KPIs how much money I'm making from each one individually. But without that data, you're just kind of flying blind. Like you said, you hear somebody doing cold calling or you hear somebody doing texting, you hear somebody doing direct mail or...
PPC or RVMs or whatever other marketing channels there are and you think, I need to add that in, I need to add that in without really understanding what your own metrics are and if you should actually just get better at what you're doing versus adding something new.
Clayton Hepler (08:41)
What's a KPI
man that you've recently started tracking, whether it's in your quarterly objectives, because I know you're doing quarterly, what are some big KPIs that you're focusing on this quarter?
Justin Piche (08:52)
Yeah, one is days in inventory for our sales. That's kind of one of the big ones that we keep a close eye on. We have a ton, I mean, we have a lot of properties in inventory. I think we've sold a ton this year, which has been fantastic. So we're down into like 70 or 65 or something like that, properties in inventory. But at one point we were over a hundred properties in inventory.
When you have that many properties in inventory and I could, I'm kind of speaking for Brian, Brian, my sales manager who you've met, who was at the event with us, he's freaking so good. He's so good, but he has so much to do. I mean, he got like five sales contracts locked up this week already. He's in like a bunch of other ones are up and he's negotiating back and forth, improving systems, managing the team, bringing all the new developments and listings online. And then he runs into, then there's issues, there's random, it's just so many things that he focuses on. And so.
when you have a hundred properties in inventory, you need to drop prices. Like you can't just keep your prices at what they are. Things aren't moving. You've got to do something different. And so days on it, focusing on keeping our days on inventory, getting that down below a hundred, not necessarily days from contract side. I'm talking to, we take title a hundred days from the moment we take title, getting all of that or getting the average below that has been a real big focus. And the only way, you know, we set that goal, that KPI, and then that KPI drives quarterly rocks.
And so the quarterly rocks that go along with that are putting processes in place to get reviews on each of the kind of stale inventory. We have to determine what constitutes stale inventory, how many offers per week or how many inquiries per week below which that inventory is considered stale. We need to drop the price and then setting processes and tasks in place to get those things dropped, those prices dropped so we can continue to get more interest on the properties and move them.
That's probably one of the bigger ones is days in inventory that we're looking at.
Clayton Hepler (10:44)
Yeah, that's a big one, man. I we're definitely looking at that too. And I think that was a theme. Like what we took away was like, everyone's like, dude, 2025 was a hard year. And dude, was like, that was my like, 2024, 2044 was a hard year. And I was like, dang, like, I like tripled my business in 2024. Right? ⁓
Justin Piche (10:57)
2024, yeah, 2024 hard year.
I think,
you know, one thing, one thing that stood out to me about the conference was a lot of folks talking about like the slowness of sales and slowness of the market. And before the conference actually had a call with a friend of mine who's an investor, he's got a big business, pretty big business. And he shared with me that he had not had a sales contract, Dispo contract signed in 45 days, nothing. And I looked at ours and we had like,
20 something contracts, sales contracts in the last 45 days. And I asked him, you know, like, what are you doing for Dispo? Like, what is your Dispo team? What's your Dispo process? And it was kind of what I think is pretty standard in our business nowadays is going to realtors and brokers to list every property, not having any in-house sales, not having any kind of in-house process for it, just going directly to brokers. And that's the sole source of sales. And it made me really appreciate my Dispo team.
I mean, I already appreciate them, but there's so much work and expertise that goes into finding buyers for properties that are far above and beyond what a typical broker will do that I think has been kind of, don't know when to call it our like superpower, but it's certainly the way that we've been able to keep our days in inventory down and revenue flowing back into the business.
Clayton Hepler (12:26)
I think one thing that I would add to that for your department in particular is like being able to make autonomous decisions is critical to move quickly. And Brian basically has to go ahead to do anything pretty much. ⁓ and that's the power cause he's built up the decision muscle. He's been able to dent the car, but not break it over time. You know, try things, maybe not get as much money sometimes, maybe get more other times.
Justin Piche (12:38)
Yeah, he does. He does.
Clayton Hepler (12:52)
and I find that the consistency with private clients and people in general in this business is like, they don't hire people better than them. Brian's better than you at displaying properties. That's amazing. That's amazing. That's the, that's what you want. Like literally that's the mark of a good, a good business owner. Like you hire people that are better than you. Right. And so a lot of times people fall down, included, right. I made many mistakes is that we hire someone, try to train them.
Justin Piche (13:02)
For sure, not even a question.
Clayton Hepler (13:21)
But the reality is in a lot of cases, you want to bring someone on who's just way better than you, like way, way better than you at certain roles and pay up man, because it's going to be a differentiator, right? It's going to be the differentiator. So, you know, you might say, Hey, I want to spin off this Dispo department, right? You could hire a coach or you could bring someone onto your team. can bring someone on your team to help you with building it out and you give them a percentage of the upside.
Like Brian does and Brian's gonna do well, man. Brian's gonna do well this year. You know what I mean? And and but he deserves it
Justin Piche (13:58)
Yeah, no, I agree. It's that's probably like that one of the harder things for folks who are newer in their business that have only have a few VAs, you know, that's they've kind of hired overseas folks for lower skilled work and they still hold on to all of the decision making power across their entire business. And I think I think like the limiting mindset or limiting the belief a lot of times stems from the consistency of their business. And it's like this catch 22 that people fall into.
You don't see all of the profit potential that you could create. And so you feel like you don't have enough to offer a high value employee. You don't want to strain your OPEX by paying too much salary to somebody when you may not be able to support it. But you need that person to get to the level of income to or level of revenue for your business to actually employ them. It's like this this tough place to be and
When I have faced those situations, I've always kind of just sucked it up, paid the money, got the good person, and it's just worked out really well. mean, these people, when you have a really high quality person that takes ownership and their compensation is dependent on their performance and the performance of the business, if you get the right person, they're going to grow it. It's in their best interest. Like they're going to make more money when they grow the business. And so they come on and they put their all into it and it's the differentiator.
Clayton Hepler (15:24)
So here's a question. If a listener listens to say, dude, like I'm listening to these guys and I have someone in a position that I'm overpaying because it's a VA, I'm overpaying them for this position, but I want to bring on a killer like Brian. I want to bring on a killer like an acquisition manager. I don't know how to go through that conversation with them, right?
I know that they're, I, they're good, but they're not great. I mean, great. How do you approach that conversation?
Justin Piche (15:56)
like, like, maybe rephrase it so that you have somebody on your team already, you're overpaying them.
Clayton Hepler (16:01)
So
you have a disposition manager. Let's give an example of if you found Brian, right? You have a disposition manager that is good, but not like native US killer like Brian, right?
You know you need that because your dispo is like your friend. It's sitting for 45 days And you say I have to replace this person How do you know how to replace that person? Because I'm sure a lot of our listeners know that they're listening to this and they're saying you know what these guys are right I have people that are good not great and I need great because my business is struggling
Justin Piche (16:39)
Man, it's hard. It's hard, especially when you've built up like a trust and you care for that person. What I guess what I've always done is, you we've talked about this and how to hire before is the person that you start with in Dispo may not be your killer sales manager, your Dispo manager who's crushing it and getting contracts left and right sign to get rid of your properties. It may be the person that's getting your listings done and can.
tee up negotiations for you can find a realtor that type of thing. I've basically just scaled to a point where I needed the higher level person and was able to keep the person who was good and condense their role so that they are great at their new kid, their new role. You know I mean? Like they may not, they may be good at the high level negotiations and sales, but they may be great at listing and organization and getting tasks done.
And if you can kind of create their role to be that so that they're great at it and bring in somebody above who's great at a higher level task, that's kind of my preferred way. If you need to just cut them and hire somebody else, then you just gotta hire the better person, you know? And it just, is what it is. There's no, there's no, it's a bandaid that you have to rip off. You want an A player.
Clayton Hepler (17:53)
There's
no one greater than the business.
Justin Piche (17:57)
Yeah, there's yeah, exactly. And it's such a hard, mean, I don't envy anybody in that position. I've been in that position multiple times and over the course of this business. And I don't envy you if you're sitting there with a B player and you need an A. My hope is that you can right size, know, get it, want it capacity to do it. You can find somebody, you can find a role, define a role for that person where they get it, they want it, and they have the high capacity to do it. And for the tasks that they don't have the capacity to do, you can bring somebody else in.
that can handle that. That's my hope. Especially if they're a good loyal employee, you know.
Clayton Hepler (18:26)
Yeah, I think a lot of a
Justin Piche (18:30)
Hey guys, this is Justin interrupting your podcast. Say thanks for listening. and I are going into takeaways from the 5280 Mastermind in Denver. If you're getting value from this podcast, please stop right now. Click the follow button, leave us a comment. We really appreciate it. Back to your regularly scheduled programming.
Clayton Hepler (18:47)
lot of times a big problem is like this person is paid relative at the level that You know the let's say the manager role, but they need to be more of an associate role So you need it you right?
Justin Piche (19:02)
You know, and I've done this.
I just had to recently do this and it really freaking, it really sucked. And maybe I'll give you kind of the story. I hired a VA, this is a VA, to be a closer years ago. And the closing skills weren't there, but the organization and like the ability to handle lead volume and stuff was still there, but the ability to close wasn't. And so I've been able to keep this person in various roles where she performed.
adequately and well, but she was always getting paid higher than market. And it got to a point where even where we were growing the marketing channel that she was in charge of beyond her capacity to do it. And her salary was twice what a typical role for that position would be. And so we, you know, had to kind of basically renegotiate her salary, told her that, you know, we need to move her into a different role. And because of that new role, we had to reduce the salary.
And it was hard. Like I did not want to do it. And I probably deleted a lot. I definitely deleted a lot longer than I should have. I did not want to do it, but it was the right thing for the business. Right. It was just the right thing for the business. And that was the communication. Like I really want to just try hard not to make sure she didn't see it as a personal thing. It wasn't personal. There's nothing personal about it. And. You know, we didn't drop her all the way to like what a normal salary for the position she's in. We valued her years of service or dedication.
the work that she has done. So she's still up at a higher pay band than I would normally have in that role. But it was a really hard conversation. It's not easy. It sucks.
Clayton Hepler (20:34)
I mean again like they're hard conversations and then the harder conversations are you know, hey, we're bleeding cash right an extra thousand dollars two thousand dollars whatever it is for a lot of a lot of people is like huge men's tutes so Yeah, I would say that I would say that yeah, that's That's a really hard conversation, but we but you need to have it so, you know that that brings me to again like
Justin Piche (20:49)
Yeah.
Clayton Hepler (21:01)
One of the things I said at the beginning of the podcast was like, what's the general feeling and what is the general feeling Justin that you got by talking to a bunch of people? I mean you and I stuck to each other. So we just, you know, we were chilling there. We were chilling there. We're a good time in the back.
Justin Piche (21:09)
Yeah.
So I think the highlight of the, or like the kind of main theme of the event that I took away, Sumner Healy was the one who said this and you were there too. You heard it. He was up there. He's kind of given his spiel or his, his kind of background about his business and how he scaled it. It super interesting to hear his story. But he, he said, we're entering what I, what he's calling the skill era. You can see I'm wearing the
my land insight shirt that I got from the conference right now, Repin. But yeah, he said it was this, it's the skill area. And him and Justin Sleva both shared some information at the conference regarding the number of investors that are in the space. And both of them said that they see evidence that people are exiting the space. Over the last four years, there's been an influx
of investors into the land investing space. It's been seen as greener pastures. There's been a lower level of professionalism. It's been easier to get deals than wholesaling, than, you know, house flipping, whatever commercial type stuff. And so people have come into the space. There's been a lot of people that have come into the space. And in the last maybe two-ish years, it's become harder and harder and harder to get deals done.
Some of that is because of the increased competition. More people are marketing to the same areas that you're marketing and are securing some of those lower hanging fruit that you would otherwise have gotten as a contract yourself. But it's still hard, even without that. And so people are not finding a lot of success at these small scale, right? People are coming into the space thinking, hey, I can spend 5K a month. I can spend 10K a month in marketing and team and systems and create a consistent business. But a lot of people are finding it's hard to do that nowadays.
It's not consistent enough. A couple bad deals, a couple bad months, I have no more money left and I'm out. And so that was interesting because, I think maybe what's causing that is that a lot of the operators, people in that room, us and a lot of other people that weren't in that space are growing their businesses and becoming more efficient and more just.
It's just we're operating at a higher level. We're operating at a higher level. It takes a lot more skill now to run this business than it did a few years ago.
I feel like it's a trend that I personally noticed because, you know, maintaining my business the same over time results in lower and lower contract conversions, profit margins. And so it's something that we just have to get better at every aspect of the business every day, scale the marketing, scale the team to continue to produce the financial results that I'm desiring and that my goals are.
And I feel like everybody's feeling that. And so the folks that are falling out of this industry are the folks that aren't able to do that. And it's not to say that you can't get lucky and do a couple of good deals and make a good side income for yourself, but it's gonna be harder and harder to do that, I think, as this industry continues to mature.
Clayton Hepler (24:13)
Yeah, I mean, it's like wholesaling, right? Like, look, I would, I would agree with that. think there was a lot of sentiment in there. Like people are, you know, there's this like mob mentality of things aren't working. And it's so funny. All my clients, like their businesses are working every single one of them. So I hear everyone talk about this and I'm like, wait, why is it that all my clients are like doing really well? Like every single one of them it's like, well, there's a consistency there. It's not about me.
It's about the fact that you just track your deals. You track your systems, you keep consistent, you have accountability about your team members and your results and you build a business. And so I hear, I heard that a lot. it's getting harder or whatever. It's like, yeah, you didn't expect that. Right. It's kind of like, it's kind like going to work out and be like, man, that was hard. You're like, you didn't expect that. or like running a marathon and being like,
Justin Piche (24:56)
Yeah.
Clayton Hepler (25:05)
Wow, that was difficult. And I think that people have maybe a misconstrued thoughts about business, right? It's not going to be as hard as it is. Dude, it's going to be hard, man. It's going be hard. Now, you can make it a lot less hard on yourself by tracking KPIs, having visibility, hiring the right people. But dude, this is like a gift that we have.
We're in an amazing, amazing country that gives us a gift that one year we can double, triple, quadruple our income. Dude, my wife has friends in Germany. And even though Germany's an incredible country, they can't do that. They just cannot accelerate. can't change the trajectory of their family. And so every time I hear someone say that, I'm like, dude.
We have such an amazing opportunity here. I love that it gets harder because that means that the lower hanging fruit, they get kicked out. None of my clients are having problems. mean, everyone has problems, we're everyone's growing. I'm growing. You're growing. The people that you want to be around are growing. And so what's the commonality? It's intensity. It's it's it's perseverance. It's focus. And we have this amazing country that gives us these amazing opportunities.
And if we just say, man, it's getting harder, you know, let's focus on gratitude. Right. What like, right. Like, I don't know. I don't know. That just always rubs me the wrong way because there's, we have so much amazing opportunity here. And you know, it's still the pastors are still green. The pastors are still green. Any asset class, you just got to be a pro. You know, one of the things we were talking about before is like, you can't be a rookie anymore. Good.
Justin Piche (26:27)
Yeah. What are you going to do about it? What are you going to do?
Clayton Hepler (26:50)
Good it's like have you ever seen the videos of of the NBA in like 1950 there's like videos about an NBA 1950 they're like Airballing it, you know, they're they're so unathletic and then you look at today You're like guys like jump like dunking from the three-point line and are the people saying oh, it's so hard today It's like no like I still have a dream. I want to do this. I still have a dream I want to change the trajectory of my family. I still have a dream that I wanted
And so we have a gift guys, have this gift in this land business, it's an amazing business. so that's my approach to what everyone else was saying.
Justin Piche (27:28)
Yeah, it definitely made me really grateful for my team and the quality of folks that I have, you know, working with me.
Let's see what is another takeaway that I had or observation I had from the event is how many different ways people I always knew this but it's just to see it when people talk about their businesses how many different ways people run their different their businesses. We've got guys doing big numbers nothing but mail all they do is mail 50 60 70,000 letters a month blind offers primarily and they're doing really well. We've got guys doing nothing but text.
We're talking 20, 25,000 texts per day, team of four texters, some acquisitions managers, all double close. know, 30 % of contracts they get actually make it to a wholesale fee and they're crushing it. And then you got people doing big developments and funds and that's all they're focused on doing really well. There's just so many different avenues. There aren't very many people that are doing kind of everything, which I thought.
was odd. It's like most of the folks that were talking, I know if you felt this way, they're focused primarily on one type of thing. Either one type of marketing channel, one type of deal type, they're not really focused on everything. What are your thoughts on that?
Clayton Hepler (28:43)
I mean it makes sense right You know, think that simplicity is important You know you can but I think you ladder it up, you know what I mean like There's like entrepreneurial capacity. There's like organizational capacity there's like people capacity, so, you know if I asked Elon Musk to build a land
right. Right. And so a lot of times we have to look at ourselves and say, we are probably our biggest bottleneck organizational capacity is like, you know, type of organization, organization do we actually have? How are we set up? Um, and you know, someone that has, could do subdivides. can do this. It can do that. Like it's a very different company. Um, then if you're just flipping dirt or doing desert squares or whatever,
Justin Piche (29:06)
Ha
Clayton Hepler (29:32)
Like think about BlackRock, dude, like BlackRock owns like 50 different asset classes. They're just one company, but they have a bunch of different, they might own 150 different asset classes. And people are like, BlackRock should stop. They should just focus on one thing. You're like, they're just really good investors. So it really depends on your organizational capacity. I think you can do a lot provided you're like really good at what you like executing.
And then obviously like the people on your team are like critically important to that. And I find that most land investors don't have a lot of all stars on their team because they don't have big enough businesses to bring in a lot of all stars. and so yeah, that's, that's a key part of it.
Justin Piche (30:13)
Yeah, we.
Clayton Hepler (30:14)
What do you think about
that? like.
What think?
Justin Piche (30:17)
I mean, we do a bunch of different stuff. I'm not like super focused on one type of deal or marketing channel or anything. kind of am somebody who does everything. But it's worked for me. And I think because of the kind of latter approach, right, I started with one type of deal and then kind of moved up to another type and then moved up to another type and have established processes to get those things done without myself being involved and being the bottleneck.
which is why I think we've been successful, but.
What was your specific question, Clay?
I don't think I answered it.
Clayton Hepler (30:48)
was just kind of asking you like about how you, what you think about it. And I think, you know, you're kind of similar to like what I was saying, which is your organization can like manage different levels of complexity. And you very logically laddered up. love this about you, man. You've like really like an engineer been like, okay, so now I can hire a project manager who can manage my subdivides and now I'm doing entitlement stuff. And so I like very logically laddered up, which, know, that's just a good.
Justin Piche (30:58)
Yeah.
Clayton Hepler (31:16)
think it's a good way of doing it. You don't have to do it that way. You can just go in and do one way or the other, but, yeah.
Yeah, that's what I would I would I don't really have anything else to add for that but I mean other some other stuff that I learned from the
the mastermind is there's just so much power and being around people I guess mastermind but like there's I love I get the competitive energy like I love it I was like let's go like I'm gonna let's tear the roof off right being around the right amount of people I
Justin Piche (31:34)
Yeah.
I know.
Definitely fires you up, fires you up
to see what other people are doing and be like, I want to do it too. Reinvigorates me for sure. And I, you know, on that note, I've thought about this a couple of times over the last couple of days because my kids are out of school. My wife is not working anymore, finally retired from work, which is fantastic. Huge win for us. And, but there's, and we're moving into our new house and there's just like all this stuff.
that's going on. And so I'm being pulled in a bunch of different directions. And at the end of the day, like right now, it's probably, it's like, family is downstairs. They would love for me to come down and kind of hang with them. I know my wife's gonna definitely want some quality time. I want that too. But there's too much work to do on some days. And so it needs to be kind of, it cuts into time sometimes. But I have thought this twice over the last week. Like if I was a young, single person, I don't know if I'd stop working.
I think I would just be like, because I enjoy it so much and I get so much value out of solving problems and moving things along and building. It's probably a really good forcing function for me to have a family that requires that I want to spend a lot of my quality time with and take a break from work. But I don't know, it's just being in the room full of entrepreneurs was like, I want to just keep building. I said, can I have that feeling?
Clayton Hepler (32:59)
Yeah, dude.
It's hard. It's very hard to build those boundaries. I know we've spoken about in the past with like a podcast, like, what are your boundaries? Like, when do you stop working at night? It depends on the you know, your wife and your significant other, like what they what they really want and what you want in the relationship and stuff like that. But you know, it just really depends. ⁓ know, so
Justin Piche (33:23)
Yeah, I've
got a couple of anecdotes to share on some deals if you're interested in hearing.
Clayton Hepler (33:28)
I would love
to hear, yeah, what's going on,
Justin Piche (33:31)
All right, so we talked about this one of the last couple of episodes of like the basically like the big kind of hang ups that people reach in their business at different scale levels. And the last one I had talked about was kind of the personal guarantees for loans and running into your ability to secure debt for projects. So that's what I talked about is that that's the one that I'm running into right now is that I have too many deals, a lot of which require debt.
And because of the way banks underwrite businesses, which is taking your last three years of tax returns, averaging your income and saying, Hey, this is your global cashflow. And when your business scales really quickly, like mine has, or like generally folks who have been successful in this industry, do who are successful in this industry, how their business scales. You are always like lagging. Your apparent income to a bank is always lagging behind what your true ability to repay debt is. And so it's really all kind of come to a head. have a.
that big Burnett development project, which I am a PG on a $2.8 million loan. And so now the banks look at that contingent liability and say, Justin, like, I don't see how your cashflow can support further debt, even though I know it can because of what we're making this year, but they can't see that. Right. And so I've had to get started to get more creative with some of these developments that I am working on. And one of them is a deal that we've had to go under contract for too long, probably like seven, seven months or so.
We had under contract for a million dollars, started to pursue this 190 acres in central Texas. had a, the original thought was kind of a 10 acre exempt subdivide, but this particular county has additional requirements on top of the statewide exemptions. So they won't let us do what we had initially planned on doing. They have additional requirements. And the water situation is such that,
though there's a local water utility provider, but the offsite improvements are too high to make the project viable. So we renegotiated the deal to drop it down to 800K with the seller. And instead of doing 10 of nine ish, 10 acre lots, we're just going to do three larger tracks, 30 plus acres. And I think the price per acre force appreciation is, is substantial enough to make the deal worth it. But I've hit my personal guarantee debt limit. And so I can't get a loan on this land anymore. And so.
One of the things I talked to some folks about at the conference was a little bit more detail on joint venturing with landowners. And it's not something I've had a ton of success with offering landowners in the past. Like, hey, let's combine forces. You'll get this much money. I'll do these improvements. We'll sell it for this much money and we'll split the profit this way. It's not really something that I've had a ton of success delivering. But now it's a necessity on some of these deals where I don't have other partners that have really strong financials to help PG the loan. And so
I went to my team on Monday and I basically laid out a plan for kind of a capital waterfall, guaranteeing a certain amount of money for the seller and us having certain amount of money go hard every so often such that they would feel like, hey, we're getting money from this. there's not like we're getting a benefit from this. And then a negotiation to split profits above a certain spot 50 50. And then if we hit another milestone, then 70 30 in our favor. And the team delivered the offer.
And I had no hope. I thought for sure I'm going to lose my 11K in earnest. They're not going to want to deal with us anymore because we've delayed this closing so long. we found out a lot of things over the months that have made this original vision not viable. But we've gotten really good feedback. We laid it out with a clear waterfall. We have created a calculator for them that shows, hey, if we sell for this much, this is what we think we're going to sell for.
This is how much money you make. It's quite a bit more than what we're offering. And if we sell for even this much, this is how much money you make. And here's how much money we make. It's like super transparent, exactly how much we're each gonna make based on certain sales estimates. And it was really well received. And so I'm pretty excited about it, because I didn't wanna A, lose the earnest money and B, it's a good deal. Like I wanna do the deal. I just can't secure the debt right now. And so I think we're gonna start probably pushing that a little bit harder, right? Because we can offer more than, you know,
Clayton Hepler (37:39)
in on your
on market stuff or on your off market stuff.
Justin Piche (37:42)
Well, this was this actually was a listed property that we contacted off market like we didn't find it on the market and contact. We contacted them, but they had just listed with a realtor just listed it with a realtor. So I guess it's kind of weird. It is an on market deal. It was technically, but it can be applied to any I think any any type of deal and the way we're going to structure it is really like a novation contract. So really similar to innovation where we're going to put in capital to get the survey done.
to maybe do some driveways, some slight improvements. We're gonna market and sell the property. We're not gonna wholesale it. We're gonna basically close the property and some percentage of the profits are gonna go to them and then the rest are gonna go to us.
Clayton Hepler (38:26)
And are they going to do it?
Justin Piche (38:28)
Yeah, I think so. I mean, we haven't gotten the contract, the amendment signed yet, but my, my ops manager just had a couple of conversations over the last two days with them and they really, they really liked the idea and, you know, they want to close sooner, obviously who doesn't, but we propose that this is actually probably the best way to get your money faster. Cause we can break this up into manageable chunks for people. That's not going to be having a million dollar price tag. and it's, honestly, it's the only way we were able to get it done. And we have this expertise. So the big,
Clayton Hepler (38:55)
Yeah.
Justin Piche (38:56)
I mean, it doesn't work. It's not going to work with everybody. But the big kind of hold up for this seller specifically is that they're in August. They have a payment coming due of $20,000 or something like that for their property that they didn't. They wanted to sell before then so that they wouldn't have to come out of pocket for that. But we already have 11 K in earnest and we're going to put additional every three months. We're going do an additional 5K hard earnest money deposit. And so we just said, hey, we will pay that cost. It'll be earnest money. It will release it to you from escrow.
That way you have the cash to pay this so you don't have to worry about coming out of pocket for this cost. But we have this contract that we're gonna work to sell these lots over the next year.
Clayton Hepler (39:32)
So what is your projected
profit on that deal and how did you guys find it? Can you walk me through the deal specs for it?
Justin Piche (39:38)
Yeah, it's 89 acres in Texas. The purchase price is $7,500 an acre, right about $800,000. 10 acre lots are going for between $25,000 and $30,000 an acre. But we're going to do three 30-ish, 30 to 40 acre lots. And the price breaker for those is somewhere between $12,000 and $15,000. So on paper at $12,000.
thousand an acre that's like a 12 to 1.2 million dollar sales against an eight hundred thousand dollar purchase with some closing costs and stuff in there. So there's about a hundred and three hundred and fifty K or so of total profit that we will split with the seller. And what we're doing is we're setting we're setting eleven K an acre as the fifty fifty split. So eleven K seventy five hundred to eleven K any profit above their eight hundred K kind of guarantee is fifty fifty.
And then above that, above 11K, it goes to 70.30. So if we sell for 12, then that incremental $90,000 that we may make gets split 70 to us, 30 % to them. If we do it for 13, same thing, 14, 15.
So we might make 150 to 200 K on the deal.
Clayton Hepler (40:50)
And what's your cash outlay? Nothing.
Justin Piche (40:52)
Cash Outlay is survey and marketing and maybe some improvements. Plus, and earnest, and earnest, and earnest.
Clayton Hepler (40:56)
What's your one? Okay, how long do think
it's gonna take for you guys to sell?
Justin Piche (41:01)
12 months probably. So our total cash outlay will probably be somewhere around like 35 to 40K is my guess to make 200 profit.
Clayton Hepler (41:12)
That's awesome. And you're splitting it with another partner.
Justin Piche (41:15)
No, this is this is just our company.
Clayton Hepler (41:17)
Okay, so you guys source this. Okay, got it. That's a good deal, man. I mean, what are you gonna say? Like that's a 400 X return. That's sick.
Justin Piche (41:25)
Yeah. And
if anybody's listening and thinks about, know, this is a strategy that I think is just all too often not utilized. You know, we put things in boxes and we say, we got to buy it or we got to wholesale it. But working with a seller is a great way to, it's just hard to find them, frankly. So I'm sure if you haven't tried it, you know, try it, but it's, it's a hard way. It's hard. It's a hard negotiation because they have to trust you. You know, they have to trust you. You got to build up a lot of trust for somebody to
Clayton Hepler (41:51)
Yeah.
Justin Piche (41:54)
willingly go do this thing. And you got to protect their downside. And the way we're protecting their downside is by saying, we're going to improve your property at our cost. We're going to give you hard, earnest money the whole time. So we can't just walk away with nothing. Like we will lose if we walk away. You'll get all that money and you'll still have your entire property. And we'll pay you first. We won't take profits until the end.
Clayton Hepler (42:13)
It's a good deal. It's a good deal. Justin, anything else before we sign off here? I know we're coming to the end of our time together. Anything else?
Justin Piche (42:23)
Man, I'm having a whole host of trouble with another bank loan on a bigger project. Maybe just a quick comment. This is not because of the partner's ability to PG the loan. We've got our team is able to PG the 3.3 point five million dollar loan. But they show I'm running into is banks that don't have room on their balance sheets for a land development loan.
Clayton Hepler (42:30)
Sure.
Justin Piche (42:46)
Right. So banks, especially local banks or smaller regional banks, they issue loans and they issue loans on different asset types and they have kind of bank charters that determine, how, how weighted do they want to be in one type of loan versus another type of loan? And so I just keep running into the issue of this is a third bank. I just got the call yesterday. My heart dropped, right? Cause I only have, I don't even have two months left to close this deal. We're going towards underwriting, getting things done. But the chief credit officer says, Hey, we don't have room for, for the, for
another three million of this type of loan so we can't issue it. And so I've run it down. This is a good deal. Spokane. The deal actually works at 50 % loan to cost 13 % interest and three points up front. So it works for a hard money loan. And so now I'm kind of just exploring all options. Now I've started to reach out to all the hard money lenders. I know my network and posted on X for, more hard money lenders or more other private money that people might know.
It's just interesting having to kind of go through this, you it's such a quality product with such a low loan to loan to value after development value that it seems crazy that a bank wouldn't want to do this. But it just goes to show you that even when you have a sick deal and strong financials or the partners do, it's still not easy to debt.
Clayton Hepler (44:00)
Yeah, man, well, I can't say I've done the three million dollar loan yet, so I'll say, yeah. I'll cross that. I got it. Yeah. Cool, man. Well, hey, as a listeners know, gentlemen's agreement, bunch of people at the 52, 28 mastermind, I freaking pinned them to the wall and said, Yo, are you following? Are you reviewing? Are you subscribing? You really get a lot of benefit from this.
Justin Piche (44:08)
It's not for the faint-hearted. It's not for the...
Clayton Hepler (44:29)
Specifically if you leave my name in the comments for the review Yeah, and and so I hope you're getting benefit out of this we kind of did a little riff here on this podcast if you like these types of Formats, let us know if you like more stuff tactical stuff. Let us know. We appreciate you guys listening and as always we'll see you next week
Justin Piche (44:32)
Clay, yeah, comment Clay is the best. Thank you.
See you next week.