.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 66: How to separate yourself from the competition in land Flipping
Use Left/Right to seek, Home/End to jump to start or end. Hold shift to jump forward or backward.
🎙️ Welcome to The Ground Game Podcast! 🎙️
In this episode, co-hosts Clayton Hepler and Justin Piche explore the essential strategies for building a competitive moat in the land investing business. Join them as they share their insights on how to differentiate yourself in a saturated market and ensure long-term success.
Key Highlights:
- The Four Types of Moats: Clayton and Justin break down the critical components of establishing a moat—data, capital, branding, and operational excellence—and how each can give you a competitive edge.
- Real-World Case Studies: Hear about Clayton's recent deal in Williamson County, Tennessee, where he navigates the complexities of land development and the challenges of negotiating in a hot market.
- Focus Math for Success: Learn how to translate your big business goals into actionable daily tasks, ensuring you stay on track and accountable to your objectives.
- Market Insights: Gain a deeper understanding of current trends in land investing and how to adapt your strategies to stay ahead of the competition.
- Empowering Your Team: Discover the importance of building a strong team and fostering a culture of innovation and accountability to drive your business forward.
Whether you're a seasoned investor or just starting out, this episode is filled with actionable strategies and valuable insights to help you thrive in the competitive landscape of land investing.
Don't forget to subscribe, rate, and review the podcast! Your feedback is crucial in helping us improve and reach more listeners.
Learn about Justin’s 1:1 Coaching
Apply for private coaching with clay
Justin's Socials:
Clayton Hepler (00:00)
Hello and welcome to the number one podcast in the world.
(00:06)
Hahaha
Clayton Hepler (00:08)
The ground game, baby. We have your co-host, Clay Hepler.
(00:12)
This is Justin Piche and we're here to show you how to win the ground game.
I think we're a far cry from the number one podcast in the world, but maybe the number one valuable podcast in the world of high ⁓ potential business owner, land business developer niche, sub market of podcasts.
Clayton Hepler (00:44)
Yep. And our, in our 250 loyal listeners.
(00:47)
That's exactly right.
Well, Clay, how's your week been?
Clayton Hepler (00:56)
It's interesting, ⁓ How's my week been? It's been cold. It's been exceptionally cold. I woke up this morning, it was two degrees and it felt like negative 15.
(01:01)
Mmm.
Yeah, that's really cold.
Clayton Hepler (01:10)
It's actually like truly cold. man, weeks been cold. Business wise, we closed the deal by for 100 sell for like 550, which is absurd. Yeah, it's absurd. We bought it. We bought it. We bought it. It's listed right now for 550. It's in Thompson station, Virginia, or Tennessee.
(01:21)
What? Dude, that is an absurd deal. You closed it like money's in the bank? Bought it, all right. Wow, still.
Clayton Hepler (01:39)
⁓ and we just got a steel cause there was an easement. It's kind of a weird wonky deal. ⁓ but we found, we got the easement. We parked it for a five bedroom home and this is a Williamson County.
(01:52)
⁓ Williamson's great. I'm looking at a deal right now in Williamson County. What acreage, how many acres, and what side of the county?
Clayton Hepler (01:53)
is more.
Five, it's in Thompson Station.
(02:03)
Thompson Station. Where is that in relation to Franklin? Franklin's kind of Franklin's like the place. I'm looking at a deal right now. Actually, the investor brought me in Williamson County to do. Yeah, it's actually been really tough to negotiate with the seller because the seller does not want a like he doesn't want a long close. And obviously, like this is this is
Clayton Hepler (02:06)
No idea.
development deal.
(02:29)
I mean, this is a great just like topic of discussion for those of us who are trying to do improvements to properties. This is not a flip. I'm not buying this property for a flip. It's 15 acres in Williamson County. It's zoned RP one or RP five. Yeah, RP five, which is rural preservation five, meaning is a five acre minimum. The requirements are that each property has at least 200 feet of road frontage and is a five acre minimum. This property only has three hundred.
ish feet of road frontage and it's 15 acres. But in Williamson County, they have conservation development where if you allocate 50 % plus of the land to conservation easement, they'll allow you to stick to the same density requirements, but they adjust your road frontage requirements, your setback requirements, et cetera. So for this 15 acres, can theoretically get three home sites as long as I can find septic, you know.
park sites that work for the size of homes in the county. ⁓ I can put three home sites and instead of 200 feet of road frontage, can build them with or create them with 70 feet of road frontage, which meets my requirement because I only have 300. So I make them each about 100 feet of road frontage and make sure there's good soils on each of them. I can make each of the lots about a little over two and a half acres and have seven and a half acres worth of conservation land that only they are able to exclusively use.
It's not technically their buildable property, but it's still essentially theirs. It's like instead of buying a five acre property in Williamson County, you might buy a two and a half acre property with an additional seven and a half acres of like woods and Creek and recreation land that you share with your two neighbors. Yeah, we'll see. But I mean, the challenge, the challenge that I was kind of alluding to in the beginning is that it's a hot area. Williamson County is fantastic. South of it.
Clayton Hepler (04:13)
That's kind of cool.
insanely hot.
(04:22)
South of Nashville, Franklin, Tennessee is just beautiful. Town is blowing up. This zoning is tough. You can't get higher density than one unit per per five acres. But with this type of development,
(04:33)
So you can't get higher density than one unit per five acres, but with this type of development, you can make properties that would otherwise not be able to be developed into three five acre tracks into three home sites. And one thing I can't figure out before I kind of go to the problem with negotiating that I'm gonna talk about is what exactly is the value of that two and a half acres plus seven and a half conservation you share with two neighbors versus just having five acres of your own property?
And I can see pluses for it. Like I can say, okay, well, I have less property to maintain and I get more property that I get to use for fun. And when I'm building a home anyway, like I'm not typically taking up all five of my acres if I'm building like a $2 million home in Williamson County, right? I'm probably building my home site and then I might have some woods, maybe I have a big yard, but it's not really.
not using all of it. So is it better to have the five or is it better to have the two and half plus the seven and a half you share with two neighbors? I don't know. I don't know. The market will decide. So the challenge with the seller is that because it's a hot area, he knows he's going to get an offer at some point. And he, I wanted to, pitched four months due diligence, 60 day close. Uh, because in order for me to feel confident closing on it, I need to get a high intensity soil map.
I've got to make sure I've got the perk sites for five to six bedroom houses, because that's what people build in Williamson County on this part of the county. They're big multi, know, multimillion dollar houses. I've got to make sure it's sloped. mean, Millison County, Williamson County is in Tennessee. There's a lot of sloped kind of mountainous areas, hilly, really hilly. So this property's got some slope to it. So, and there's a creek on it, a spring fed creek, which is great. It's a kind of an attractive thing to have on your property, but
Clayton Hepler (06:00)
Yes.
(06:23)
With creeks, there are setbacks. It's a hundred foot setback for a septic drain field, a reserve field, all that kind of stuff. So now I've got to figure it out before my earnest money goes hard, before I'm to close, really it's before I'm willing to close, I've got to make sure I can get my perk sites. I've got to make sure the setbacks from the creek allow enough room to get those perk sites. So the sole between the creek and, you know, a hundred feet past the creek and the road has to be able to be perked.
and it has to be in a specific area. I've also got to make sure that the driveways I build are less than 20 % grade and can be engineered cost effectively because that's another requirement. ⁓ So I've got to do all these things and he wanted to do like a 45 day close. And I'm just like, man, I totally get you want a normal kind of close. I just, can't do it. I gotta have these answers before I close. It's too much risk for me to take to buy this property, you know, right around market value.
⁓ without knowing these couple things. So I feel like I'm being really reasonable. I just sent him essentially a ⁓ kind of final timeline of, hey, he wants 75 day close. He said he's willing to do 75 day close. So I asked for 45 days due diligence, 30 day close. But that's a sprint when it comes to getting those studies done and doing a preliminary meeting with the county. Because that's the other thing. Like I'm not going to close if I meet with the county and I present kind of my plan to the county and they say, no way, Jose.
you're not doing that, well, I can't close. But I can't approach them yet until I have enough information to show them and prove to them, this is why I think this will work and is a good thing for this specific lot. So it's kind of a bit of a challenge negotiating with sellers in hot markets. We don't have a ton of leverage other than price and like hard money, how much money goes hard rather, how quickly. ⁓ So I'm trying to thread that needle right now in Williamson.
Clayton Hepler (08:12)
If you need
a, if you need a Perc Test guy in Williamson County or whatever, just let me know, survey or just let me know. My COO actually literally lives in Williamson County.
(08:23)
Yeah, that's great.
Clayton Hepler (08:24)
So you need any help, man? You just hit me up.
(08:28)
Yeah, I'll let you know. I'll let you know. So anyway, that's just an aside on Williamson County. For me, the last week, it's been good. It's been good. We had like, it was a lot of freeze prep, you know, because we had the winter storm that was coming all the way down into Texas. It like rained a ton right before temperatures plummeted, but the ground soaked it all up. We didn't get very much ice at all.
I didn't risk snow or ice up any of the power lines. I like even prepped. I bought a generator. I built my own generator plug because generator plugs were sold out everywhere in Houston. ⁓ had my panel wired up with like a, I did it the 240 breaker in the panel. I, instead of like a transfer switch, that kind of the simple way to do a portable generator to your panel. So I've got a 240 plug in my garage that I can plug the generator into swap, turn off main power and then
turn on the generator and then flip that breaker and then turn on selective loads to power. So kind of like powers at reverse through a 50 amp breaker in the panel. But I got it all set up and didn't need to use it. We didn't lose power. It's been cold though, not two degrees, but below freezing, which is for Houston, very cold.
Clayton Hepler (09:39)
That's crazy, man. I wouldn't have thought it. You guys were experienced all the way down there.
(09:45)
Yeah, yeah, mean everybody was prepped for it to be bad, but it wasn't. It wasn't that bad.
Oh, I guess I have one more, one more small update tomorrow. Tomorrow. I am closing the loan on my lot next door and I will finally have cash again to pay my taxes and other things that I need to pay. So I'm very excited about that. It's been a long arduous process. Any of you guys who are involved in this business totally understand where I'm coming from when you're juggling a million deals and you're looking at.
Clayton Hepler (09:53)
Go.
(10:16)
you know, hundreds of thousands of dollars of cash going in and out of your accounts every single week. ⁓ It can be really stressful. So balancing a lot of big cash flows all the time can be pretty stressful. it's nice to have a pocket of cash that's going to be available very, very soon.
Clayton Hepler (10:36)
That's good, man. It's good to hear. ⁓ And I'm sure your kids are going to appreciate the heck out of the fact that you got that next door. You going to do your pool parties there?
(10:43)
Yeah, I mean, eventually I'll build a pool. Not yet. Right now it's just a nice yard. Big, like open yard with a trampoline and a little like, little some playground type equipment. Soccer goals set up, soccer balls in the yard, you know, that kind of thing.
Clayton Hepler (10:59)
That's cool, man. That's gonna be fun. That's what you guys do after dinner.
(11:03)
Yeah, kids are just jumping
on the trampoline. I mean, it's a little cold right now, honestly, to be out, ⁓ at least in Houston. For you guys, it would be welcome.
Clayton Hepler (11:11)
Yeah,
it's a t-shirt weather.
(11:14)
Yeah, no, not down here. Not down here. I
actually have a space heater on underneath my desk because we have pier and beam houses here in the Heights. so even though my floor underneath is insulated, air still gets under there and the floors get pretty cold. ⁓
Clayton Hepler (11:31)
Huh?
Well, I'm in the basement right now and I even have a space heater here because it just gets so cold even down here.
(11:37)
Yeah, so the last week we talked about the doer, the decider, the last one, the doer, the decider and the designer. That is doer, decider, designer framework for kind of how you want to be as a CEO and what level what level you're at and what level you're trying. You're trying to get to. And today, the main thing we're to talk about is how do you separate yourself from the conversation from the competition? Like, what is your moat? And there's a whole.
Clayton Hepler (11:45)
designer
(12:07)
bunch of different ways that you can kind of separate yourself. And we'll talk about and dive into those today. I mean, you don't want to be the same person sending the same letter that everybody else is, right? get your mailer copy from, I don't know, name, legacy land education platform that everybody has used in the past. And you pull it off their website and you just drop your company name in there and you send the same letter. I swear I I still to this day.
get a half a dozen letters a week that look exactly the same every week.
Clayton Hepler (12:43)
And they're all from Sanford, North Carolina.
(12:45)
Yeah, they're all from, yeah, it's like, yeah, they are. A lot of them are. They're all from like, yeah, they're all exactly the same. And I know that what those people did is they probably paid for something like a done for you mail service from one of the big old school legacy land education platforms that is nothing but an education platform, not really kind of like real operators anymore. And they just send the same thing out. And that's not a moat. That is how you blend in.
to everyone else. That's how you rely on pure luck to get your leads and get your deals. And that's not what we want to do, right? That's not what we want to do. It's a race to the bottom, right? The only thing that's going to separate you is price and then maybe responsiveness. Those are kind of the only two things you have when you're, when you're sitting in the same, the same mouth as everyone else.
Clayton Hepler (13:29)
Mm-hmm.
Yeah, I think that those gays are gone, right? I think everyone could feel it. You know, the days of the laziness, it's like being, you know, like, in ⁓ when you're 18 or 19 or 20 or whatever, and you're working out and you get the easy gains, you know, because like you can wake up and like get four hours of sleep and still gain muscle. Right? Those are the early the old days of land investing. And honestly, some of the biggest investors in educators in the space have left the space.
Some of the early educators have left the space, right? You know, as a result of, this business is not operating like it used to, right? And I think that's a lot of times because, you know, there's people that will go and get the easy pickings, and then when business gets hard, you pivot. And I think business, like after 1.5 to $2 million, $2.5 million a year, it requires a lot more skill.
(14:07)
Mm-hmm.
Clayton Hepler (14:34)
It's not just effort. And so I think the modes that we're talking about today allows you to build the skill that differentiates yourself at whatever level you are so that when you get to that level, it becomes easier to push through.
(14:49)
Yeah, I agree with that 100%. So the problem in this business that we've all kind of been feeling is a bit of over saturation in terms of sellers are getting a lot of offers from a lot of different people. I'm sure we can all just think back to the last week and say, mean, my, feedback did you get from your acquisitions managers? ⁓ I've gotten these offers. Like I've gotten all these other offers. Like you're giving me an offer at 60. I got an offer at 80. You know, that is a common.
That's a common kind of objection from sellers that we're dealing with. You know that that's because a lot of people are texting and mailing and cold calling, et cetera. So sellers are being reached out to a lot. ⁓ And what that does is it compresses margin. And frankly, like the way that my business adjusted last year is by starting to do double closing. Right. We didn't used to do that, but now we know that we're just not going to get there in a lot of deals and margins are a little compressed. And so in order to make money on
our marketing efforts, we've got to be able to take advantage of smaller margin deals through double closing. ⁓ There's a couple of modes that I thought, but when I was thinking over the topic for this episode, I was like, all right, what are some modes that I think people can implement and ones that I've like, I've tried to implement? And the first one I want to talk about is the data mode. This is back in episode 63, Clay talked about
how to find mechanically qualified parcels, right? Instead of just blasting out millions of, know, thousands of pieces of mail and texting to whoever and whatever, trying to get better mechanically qualified parcels on the front side. And that is seriously a moat. And maybe Clay, you wanna talk about how you do that, or at least what advantage it gives you for using data as a moat.
Clayton Hepler (16:36)
Yeah, so let's just give the hypothetical example of your cost per deal is $5,000. Right. And let's say your cost per lead is, I don't know, $330 or $40. Right. You're using outbound messaging, outbound texting. So imagine a scenario in which your cost per lead was $700, but your cost per deal is $2,100. You'd be like, well, it takes me three deals to get
or three leads to get a deal, but your aggregate cost per deal is down. What would that tell you? That would indicate that you have a better level of targeting. The people that reach out to you are higher qualified. Even though it costs more money to get the right people, your cost per deal is lower, and that's what you care about. We care about ROAS. We care about people that are raising their hand, and when they do, that they're actually qualified.
So taken to the hypothetical extreme, as someone that understands exactly who they're targeting, and they're very good at data stacking and finding the right person, can spend more money to acquire the lead than anyone else can, and they make more money per lead. So I think that the land investor of tomorrow does spend a lot of time in understanding what they're exactly looking for, because over time,
you know, markets become more efficient. And how you become more efficient to beat the more efficient market is your targeting becomes more precise, right? Because if you knew the exact wording to use the exact person that you're targeting, if you knew that there are 25 parcels that meet your development goals, and they're all owned by 65 year old white males that grew up in a Cali, Florida,
then you would hit them with a very specific message. And you would have a higher response rate as a result of that, right? So that's the data mode. We're doing some interesting stuff there. ⁓ Some of the stuff were very early on, so we haven't gotten the results back yet. So I don't feel at liberty to share, because I'll share it, and it's like, it didn't work. Right?
(18:57)
And then it'll fail miserably. Yeah, yeah. I get
it. I get it.
Clayton Hepler (19:01)
So maybe in the future I can share, but we're doing some really interesting stuff with data. ⁓ if you, one last thing here, if you know that your targeting is the constraint.
then all of your discretionary resources should go towards the constraint. They should go towards solving the constraint, everything. That means even pulling other people from different departments and attacking a specific constraint. So let's just say that you have a team that your core constraint is getting leads and you want to build out a ⁓ cold calling team in order to get leads. You believe that that's the best way to get leads.
You know, theoretically, you would hire as many cold callers as you possibly can do to solve that specific constraint if you had the right data. So if this is something that you want to build, you want to build out a moat, you want to hire the right people, analysts, higher level thinkers, strategists, in order to truly build a data moat to find and target the right people.
(20:15)
Yeah, I mean, there's a couple of other ways, you know, to have a data mode. But I think the main thing that you what I heard you say is like you're driving down your cost port per deal. That's the like metric that actually matters. And I agree with that. You know, a lot of us think about how much does it cost to get a lead? That's a metric that we look at, like how much money are we spending to get what we would consider like a reasonably qualified lead? And then what's our close rate? And those numbers together gets you to your
kind of cost per deal, right? Multiply the number of dollars it costs you to get a lead by the number of leads it takes to get a contract or get a deal rather done. then you arrive at the same number. I think what Clay is saying is that it takes a lot more people to handle more leads. And so if your cost per lead is really low, but your cost per deal is really high, you're spending a lot of time, money and resources in the middle on leads that don't actually convert into deals.
And that's not really a great moat. I mean, it's a place where a lot of us end up is it's pretty easy to send out massive amounts of marketing, right? It's easy to send out a ton of marketing and then, you know, deal with the leads that come in. And one of the ways that we're kind of changing a little bit from last year to this year is that we're getting a little more targeted on data. And then we're also paying a lot of attention to what type of marketing goes to what type of seller, what type of person and how our messaging in that marketing.
appeals to that person. Like what Clay is talking about. If you know who your or seller is, then you can target a message more appropriately towards them. And the goal obviously of all that, we're in the middle of it. So it's our, can't tell you the results of how this targeting is working better than our kind of shotgun approach of just sending the same marketing to everybody at a huge volume and managing those leads. But the theory is that we will generate lower volumes of leads, but the quality of those leads will be higher.
and the cost to do a deal will be lower because we won't have as much overhead in the middle of just dealing with so many leads at a minimum. ⁓ Anyway, yeah, it's a good one to have. I highly recommend not doing spray and pray and just sending a bunch of marketing out to whatever data source you feel like. ⁓
Clayton Hepler (22:30)
How about when
you're starting out, Justin?
(22:33)
I mean, when you're starting out, that's the best time to be niche. Like to get down into a really specific list because you typically don't have a high budget. You don't have a bunch of extra money to throw around. It's typically just you. You only have a limited amount of bandwidth to deal with leads. It's like, why would you send out really broad marketing? You should spend a whole lot more of your time, energy, effort getting a stacked
like nuanced list that you higher quality on average because you don't need to send out as much as much volume as somebody who's got a 20 person team to get this, you know, enough leads to keep keep your business rolling. You can spend way more time on higher quality individual leads and then work those leads harder to get good deals. I think that's kind of my my opinion. When you're starting.
Hey guys, this is Justin interrupting your podcast. Thanks for listening. Today we are talking about the four motes that we've identified to help separate you from the competition. If you're getting value from this podcast, please leave a comment. Click auto download on Apple podcasts. We really appreciate it. And now back to your regularly scheduled programming.
Clayton Hepler (23:40)
yeah it's it's hard to think about like stacking lists like because even the land space it's like stacking lists there's not a lot of delinquent probate things like that demographic right like
(23:49)
Yeah, I mean the way I think, yeah.
The way I kind of think about it is like is more by marketing channel at a minimum. Like there's like a there's a base minimum of filtering that we want to do for just general outreach. know lowest cost mark. I think your lowest cost marketing channel. There's something we want to be true. Maybe it's the size of the property. Maybe it's how long the person has owned it. Maybe it's where they're located in relation to the property. Those are all good things to filter on or the value of the property. The size.
When I say filter on size, typically what I really mean is what's the value of the property? I don't want to be targeting $10,000 parcels. So I have to pick a minimum acreage size in that county or that zip code or whatever to target. So I'm not getting a bunch of leads that are asking for 10 grand that I can sell for 15 or something like that. I don't want those. All So there's this base level of filtering that you do. And then think about your most expensive marketing channel. Maybe it's mail. Mail is pretty expensive. You don't want to send mail to
this just general pool limited filtering. It would be much better to send mail to very targeted, very specific lists of people, either higher dollar properties, or maybe there's characteristics about that person that make them more likely to sell. Maybe you're able to, because mail is so much more expensive and you're sending lower quantities of it than your other general marketing, maybe you're able to ⁓ go into find kind of tax delinquent lists or specifically out of state owners that have owned it for X number of years and kind of get these smaller niche
factors that make it more likely for people to sell into a mailer campaign and kind of the other moat I would say that goes along with data is actually had knowing what it says and tracking it and measuring it and looking at it and reviewing it because things that I know about what we did last year like where we marketed to what counties what states what zip codes what age of people that actually responded to us like those are all factors that I can use now in the future to make a more curated list. I can tell you that we're
I don't know, call it six times more likely to get a contract signed by somebody over the age of 65 as we are to getting a contract signed by somebody under the age of 45. Like that's probably not a real number, but it's somewhere in that range. And I can look at my data and know that number. And now when I'm going forward with 2020 and 2026 and I want to send mail, maybe I just cut out everybody under 45. I pull their age from skip tracing.
And it doesn't cost me very much to pull all the ages and it saves me 60 plus cents per mailer that I send. I just don't send any because I didn't have any success in 2025 or 2024 mailing to those people. I think little things like that can help build a moat because it helps drive your your ROAS down your cost per deal down your cost per lead down. And those are good things for your business.
Clayton Hepler (26:39)
Yep, I agree with you completely. I like the age thing. think demographics do play a big role. So the next thing is the capital mode, which I know you were talking about cash flow. And so I'd love to hear kind of what ⁓ your thoughts are on that.
(26:54)
Yeah,
I mean, this is a huge, this is a huge one, right? And we can think about it a couple of ways. The first way is your ability to actually get a deal done. And the second way is the ability for you to keep the profit in your deal. Those are kind of the two main things I think of when I think of a capital mode. It is all of our responsibility as business owners to drive down the costs of things in our business. And oftentimes, especially for newer investors ⁓ or smaller investors that maybe don't have
a proven track record, your cost of capital is one of the highest expenses of your entire business. Yeah, you send marketing, yeah, you might pay a couple employees, but if you're doing a deal where there's $100,000 of profit and you can't fund it and you've to work with a funder, that deal really costs you 50K in capital expense. If you split it, let's say, if it's, whatever your terms are, that deal may cost you $50,000 in capital to do the deal. And, ⁓
people who have access to cheaper money have higher margins. so a moat could be, ⁓ you know, obviously getting, having your own capital, you know, being lendable in some way, ⁓ using friends and family or people that trust you to help you, to help guarantee loans so that you can access institutional capital or bank capital rather to close deals and hang on to more of your margin on each deal. ⁓
Clayton Hepler (27:58)
That's right.
(28:22)
So that's one aspect of it. The second is just your ability to close deals in the first place. ⁓ Many a deal have blown up because a land investor was not able to find a buyer in time. They didn't have the capital to close. They got the property under contract attempting to do a double close or an assignment or whatever, a wholesale of some kind, and they weren't able to get the deal done. And they might have had this deal super deep. know, we still
do a lot of pre-marketing on deals we intend to close. Even though we have enough margin to do a full buy it and then sell it, we still do some pre-marketing to try to shorten the time that money is out until money comes back in. ⁓ But because we have capital, because I have a fund that is able to fund, because I have lending relationships and banks and just capital to invest, if we get to the point we don't find a buyer, I don't have to let the deal die. I don't have to let the deal die because I can close it.
I don't have to find a deal funder and split, you know, split it 50-50 with. And those are moats that help my business be more profitable than somebody who didn't have access to as much capital or as much ability to get a loan, et cetera. That's a ⁓ solid moat. What else on capital are you thinking?
Clayton Hepler (29:37)
I actually think that what you have said is I don't know if I would add anything to it because you know when you start the business you rely on equity once you have a track record you raise debt once you have debt you realize that equity is the only way to actually scale because scaling with debt is insanely risky like pure debt so that's the
I would use that as a framework for people getting started use equity until I use equity maybe your first year or so year to 18 months, then get cheaper cash capital, then go back to equity as you scale. ⁓ So the next one I would say the next mode is the brand mode, right? And you know, you can have brand as in social media, right? You're putting your putting content out there, which I think everyone should do to be honest with you.
Although it's interesting that now that AI is so prevalent, I feel like the quality of content has dropped significantly.
(30:40)
Yeah, I agree with that. I agree with that.
Clayton Hepler (30:43)
So there's more content, but it's worse.
(30:48)
I agree with that because it's so much easier to get, you know, and not not let's just take a step back. This is even for people that, you know, did create original solid content, but then like used AI to like, you know, change that content into a Twitter thread or something, which I am guilty of having done written something out and been like, all right now help me turn this into like a, you know, a thread like it like because it's hard to do it. But but what it but it always.
Clayton Hepler (31:10)
Right. Yep.
(31:16)
does something a little weird or a little off that I know it's AI and it just it does detract from the from the quality. If I'm writing it myself, even though it might be raw, it might not have as many good hooks and things. But when you're reading it, it feels like a real person wrote it versus when you're reading a lot of the content that's out there now, despite being really good information and still consuming a lot of it myself. I can tell that AI enhanced it or, you know, optimized it for social media or whatever. it but something has been taken away from.
Clayton Hepler (31:17)
Yes.
Yeah, when I think about brand mode, I think about execution advantage. So, you know, if you're offering on a deal and you're in a bidding war with another investor, if you have a higher certainty of close, then you have the ability to close a deal at maybe even a lower price. You you think about the largest institutions in the world that are investing in real estate in general. You know, the black, you have no
concern that Blackstone's gonna close. Right, and so if you take that to the hypothetical extreme, for us, if you have a credibility packet which we share with sellers, have testimonies which we share with sellers, we increase our probability of closing deals.
(32:29)
Yeah, 100%.
Clayton Hepler (32:31)
And that's, that's when I think about Mo to think about that for raising capital, for closing deals, for going into larger deals. And that's, that's it.
(32:40)
Yeah, I, when I think about brand mode for your business, there's a couple of things I think of first. think of like something like this, like we are putting out our knowledge to the ether, to the internet, to, you guys, to podcast, podcast listeners, to other land investors. And that adds a bit of credibility. And I mean, maybe I'm biased, but I think that's justified because we are doing this every single day and working on hard problems and sharing, you know, our, wins and our failures and the things we discover with everybody. Uh, and that leads to people trusting you.
because you're sharing something really valuable with them and that leads to relationships which may lead to partnerships or deals or whatever. So like that's one aspect of the brand mode. When it comes to finding deals, it is hard. It is a hard thing to do. You can send out a lot of marketing and strike out, right? If you don't have other, if you don't have solid mode, solid data, et cetera. And even if you do have solid data, you can get really unlucky. I mean, how many people have sent a 10, 15, 20,000 piece mailer and gotten nothing from it? I have.
And do I think that was because I had bad? No, I had a pretty good letter. It worked in many, many other counties. It just, I just missed, you I just missed and threw a 10,000, whatever dollars and it happens, right? It happens. Uh, so finding deals is hard. And if people are bringing you deals, obviously that makes it a little bit easier as a marketing channel to do deals. So that that's one way having a brand in the space and like people knowing you, right? Our friend, Ajay Sharma. Awesome too. Ajay. He is.
and the most outgoing, like epically, like ⁓ public kind of outgoing person in this space that I know. And I can tell you, probably gets a lot of clients from that, right? Because he builds relationships. He makes you feel like you're his friend, even when you're just watching his videos. I am his friend and he is a good friend and he makes you feel that way in person too. ⁓ But that's like, that's a, that's a competitive advantage to him and his business is that brand and him and the way he says and how he puts, puts information and content out there for people.
And then kind of the other aspect is the trust aspect. And what I'm thinking of specifically is my friend Josiah Ronco, our friend Josiah, he has one of the best websites out there. His exceptional like videography, his mail pieces kind of all point back to that website and it builds a huge level of trust with potential sellers because of how good it is. That is a moat. It's a competitive advantage, right? My first website when I started this business was called ScoutLandOffers.
And it might even be let's see if it's still up land offers calm. I don't even know if it's still up I probably still pay for the domain. We'll see it's gonna come up while I'm talking here on the thing. It was a it was ⁓ a Kind of website was kind of like a carrot, you know, it was like an optimized it wasn't carrot But it was something else, but it was kind of like an optimized ⁓ like Land investor landing page type thing, you know, we buy land for cash now connection timed out. It's not it's not up anymore. I don't know what happened to it, but
Clayton Hepler (35:24)
Yeah.
Yeah.
(35:37)
⁓ It was not a competitive advantage. It was the same thing that everybody else did. It was an easy button. It's like get this big website like created. It's kind of an SEO type thing, but it blends in to everybody else's website. There's nothing distinguishing about it. So if a seller gets my mail piece and they go to scoutlandoffers.com, it's going to look like every other website from every other mail piece or household sale or whatever they ever got. There's nothing there. There's no trust. There's no brand identity. There's no personal pictures. There's no there's nothing that
distinguishes you and makes them want to get, you go with you versus somebody else. It's similar to your bland cookie cutter taken off of the whatever website, you know, whatever land, land education platform website. It's the same type of concept. So that's a huge, that's a huge way your brand can help you build trust is by building something unique that people remember. That's a little more personal. That's, that's trustworthy. So.
That's how I think about the brand.
Clayton Hepler (36:35)
Yeah, I love that.
think that, you know, branding, branding is ⁓ do something, keep your promises that you say you're going to do. Hey, I'm going to do this. You keep those promises over time. You associate brand of that and also who you pair with. Right. So you and I are paired together in the ground game podcast and people, when they think of us, ⁓ they, they, or when they think of one of you, if they're in the land space, they probably think of both of us because we're on this podcast together.
our brands are very similar. both operators where people know us as that sort of thing. But we're also brand together. Same thing with your partnership with Ben, right? That is a brand pairing, right? that, know, Justin and I, ⁓ obviously in the comments, I usually win the comments and the ratings and reviews, but that's neither here nor there. No, but I think that, you know, who you choose to associate yourself with as well, that accounts for your team members as well. ⁓
(37:09)
Mm-hmm.
Clayton Hepler (37:28)
And it's just a lot like who is Justin Piche? Like who does he represent? And people will say that Justin is this person and they say that about me as well. So I think the fourth mode I want to move on to the fourth note is the operational mode. Now it's really interesting. I think this one is the one that land investors can get the best bang for your buck on. Now I forget where the strategy
or where I heard about this strategy, think it's like Harvard Business School top three competitive market strategies, right? So the first strategy that gives you a competitive advantage over ⁓ anyone that you're choosing to be in the market with is customer intimacy. If you have a very high understanding of who your customers are, think about Lululemon, right, Justin? Lululemon's no 30-year-old
to 50 year old white women, like the back of their hand, man, they know what they want. You know, suburban white women, right? You know, another another brand is maybe I don't know, Tiffany, right? Tiffany has real like customer intimacy, they know that the people that buy the Tiffany ring once the branding of you know, legacy, whatever. So customer intimacy is a competitive advantage. Now for us, we're kind of talking about customer intimacy.
Does that really apply to land? Kind of, maybe, not really. It's not really that helpful. And the number two thing that gives you a strategic competitive advantage is product innovation. Like think about Tesla. Tesla made the EV, the electronic car, cool. They made it so that it was approachable. They made it that was fancy. They made it that it felt like a prestige image. Number three is operational excellence. Operational excellence is having internal processes, IP,
that gives you alpha in your business, right? This is why people pay people for coaching. This is why people pay people for being a part of a community or program. This is also why Amazon has certain things that they do internally that is different than potentially ⁓ another company, right? Or the difference between Apple and Samsung, right? If you're putting those
those phones together. Operational excellence, I think is one thing that is a controllable variable. So at every level in the land business, you can have excellence in the front end, the marketing, the sales, the transactions, coordination, the disposition, the capital management, the P &L, the financials, the KPIs, all those things. And operational excellence is something that you learn from within your business. You can pull it from without and learn it from within. It allows you to decrease your costs to acquire customers over time.
It allows you to increase your profit ⁓ over time. It allows you to increase margins because you're more efficient with fewer people. It allows you to implement new and innovative technologies so that your operation runs faster and smoother. ⁓ And so I love the operations mode. I think it's the mode that is most applicable to everyone. It allows you as a land investor to increase margins over time, even when an industry becomes more competitive.
⁓ So I'm a big proponent of the operations mode.
(40:53)
Yeah. Well, I think that was really well said. I agree with everything that you said. This is like the area where you can you can improve kind of 1 % everywhere and just be significantly better as a business. And we all know where or at least we should we have a feeling maybe we don't know because we are not tracking the data. We have a feeling of where kind of the waste and the operational slack is in our organizations. know, what are the things about all these motes?
Is that is really hard to establish a moat. If you're a doer. If you were in the doer stage and you're doing everything, it is really hard to focus on these motes and building them and establishing them and tweaking them and building new ones and expanding them, etc. You know, the decider has some time to start thinking about it, but it's really the designer whose time is freed up to focus on these things.
It's just a little tie back to the last episode.
The yeah.
Clayton Hepler (41:58)
could not agree more. ⁓ And that doesn't mean you can't still do, by the way. Don't take what we're saying and say, I can't. Well, so then ⁓ I'll scale out of my business and I'm making 50K a month. It's like, well, not yet, right? But being able to have that time to yourself to really think or to listen and understand the ⁓ operational excellence comes from understanding what the problems are in your business, for example.
And that requires reflection. But your operational excellence could be bit different than Justin's or mine. Right? It could be you're really good at some certain thing. It could be you're really good at these types of mobile home packages, right? Which I think that's all the rave this year, right? So that's just interesting, right? I think that's super interesting. Yeah.
(42:51)
The last thing I want to talk about on this podcast before we kind of wrap it up is landing the plane from episode 62. We talked about focus math, focus math being a solution to knowing what you need to do every single day to make sure you're seeing the results. Right. It's hard to set a goal. It's easy to set a goal and say like, I want to make a million dollars. OK, that's easy. You set the goal. Goal is set. Great. How are you going to do it? Well, you might say I need to I need to get
I need to get 30 contracts of this amount. Great. You kind of broken it down to another level. Focus math is bringing that level down to what do you need to do every single day? What is your output? What is your operational output that you need to do every single day to get to that goal?
And I'm gonna kinda just maybe talk through a little, an example of just mailers. Let's just say mailers. So the way I would do this, and I do this, this is a part of my every year's planning, is I say, okay, how many contracts or deals, well how many deals do I wanna get? How much money do I wanna make from this year? How much gross profit do I want my company to make? How many deals is that?
You know, I pick an average ⁓ gross profit, either what we did last year plus some, it all's, that's gonna define what type of properties we're going to target. What is the value of the properties we're gonna target? And I say, maybe I want, let's say it's $25,000 gross profit average for like a generic flip or double close. That's what we're targeting. I wanna make a million dollars. So how many of those deals do I need to make a million dollars? I need, my gosh, I'm gonna do math on live podcasts. We're gonna cut out all this part, but.
four into 100 times 10, 40. I need 40 deals at 25,000 gross profit to hit my goals. Great, okay. Well, how many contracts does it take me to get a deal? Well, we're closing 65-ish percent of the contracts that we get. So I need to say, okay, well, 40 divided by .65 equals X number of contracts I need to get. Let's call it 50. That's not the right math, but for ease, let's call it 50. I need 50 contracts to do
to do 40 deals this year. Okay, well how many leads do I need to get a contract? Well let's look at our numbers. Let's look at our conversion numbers. Let's look at how many leads we generated, how many contracts we generated, et cetera. Now we back, let's say it takes us 20 leads to get a contract. So to get 50 contracts, I need 20 times 50. All right, well how many pieces of outbound mail, how many mailers do I need to send to get 20 leads that come in?
I don't know, like I gotta do the math. This is hard math to do in the spot without a calculator. I need to do X number of mail. Maybe it's I need to send 10,000 mailers, let's just say, to get 20 leads, to get one contract. Let's just say those are the numbers. Okay, that's great. Now I know that I need to get 10,000 mailers out to get that one contract. Now, how many mailers do need to send this week to get that? Maybe that's, maybe if my goal is 50 contracts.
divided by, divide that by 12. Let's say need eight contracts, let's say four contracts a month to hit that target, which is close, a little bit less, but four contracts a month. So that means I need to send out 40,000 mailers a month to hit that target. So how many mailers do need to send out every week? How much mail do I have to prep this week to go out? And then I need to hold myself accountable to actually achieving that metric every single day. If I am tracking out as a KPI, I'm looking every week during my level 10 and I'm saying, did we send out 10,000 mailers this week?
Yes or no, you either did it or you didn't. And that's the thing that you are relentlessly focusing on as well as obviously everything else in the process. But that's the number you really need to achieve. You don't need to achieve the world. You just need to make sure 10,000 mailers go out to quality data. That's it. That's really all you got to do. You don't need to focus on million dollars. You don't need to focus on those 50 contracts, those 40 deals. You need to focus on getting those 10,000 mailers out a week. That's it.
Clayton Hepler (46:56)
Yep.
(46:57)
And that's kind of the way Focus Math works. You can use that for any different marketing channel, any kind of thing that you need to do in your business. Break it down to what is the step you need to take today, every single day, and make sure it happens to get to that end result.
Clayton Hepler (47:14)
I have nothing to add Justin. I think that was great. ⁓ I think that, you know, we just talked about four modes. We talked about operational excellence, data, branding, talked about capital. This is a lot of information. I think that if you take away from this podcast episode, you know, one, one moat that you want to focus on, right? One core moat that allows you to thrive over the next quarter. Then you can start to layer on other things. Cause you could say, well, I could do all these a little bit of everything, or you could do one really well.
And so I'd recommend that. The one thing for us is we're focusing on operational excellence. This is the thing that we're focusing on this quarter. We're focusing on getting better at development opportunities in general, right? You because you lock up some good development deals. ⁓ Man, it ends up being a really, really profitable ⁓ quarter if you get some good deals together, but you have to be able to execute them. And that's the key part.
All right, so that's one thing that we're really focusing on. Value chain from marketing to under contract, getting that better and more operationally efficient. How about you, Justin?
(48:22)
Yeah, I would say that for us operational efficiency is our biggest focus. So I think about all the actions like the team is making across sales and marketing and admin and TC and everything we're doing. ⁓ It's all about making our processes simpler with less friction. ⁓ How do we identify on market opportunities and get offers out faster?
Get better visibility to our existing inventory so that we can make faster decisions for price drops versus not price drops versus You remarketing or whatever it is with our inventory. How do we not get I mean I tell you we've been doing this for years and we still and despite my sales manager being exceptional He's just got a lot of inventory and a lot of properties to keep track of we will miss Marketing things properly. We'll have a property that we spent a hundred grand on for
couple months and find out we forgot to get an MLS listing made for it. You know, we haven't marketed everywhere. We're getting leads on it. It's we forgot to put the MLS listing up or we we didn't mark that task completed and we're doing a review of price shop and we realize it's not up on the MLS and that's not always our fault, right? Maybe we sent the email. Maybe we sent the mark the email or the task for somebody else to this, you know, whose responsibility is to get that done but not having the dashboard to view it all to make sure they're all done ⁓ leads to to misses when you have 100 plus pieces of inventory, right?
So making sure that those loops are closed. that's a lot of the focus this year, this quarter really.
Clayton Hepler (49:55)
Love it dude. Well guys, you know the end of the podcast episode. If you got any benefit from this gentleman's agreement, leave us a little rate review, subscribe, keep the ground game on the ground level of the land business here.
(50:09)
That was quick thinking. ⁓
Clayton Hepler (50:11)
And
we'll see you guys next week Justin anything else my man
(50:15)
That's
it. We'll see you guys next