Episode 69: How do you prioritize the things that move your business forward?

🎙️ Welcome Back to The Ground Game Podcast! 🎙️

In this episode, hosts Clayton Hepler and Justin Piché engage in a lively discussion about the latest developments in their real estate journeys, the importance of project prioritization, and the challenges of balancing work with family life. With a blend of personal anecdotes and professional insights, they provide listeners with actionable strategies for navigating the complexities of land investing.

Key Highlights

Personal Updates:
Clayton and Justin kick off the episode with some light-hearted banter, sharing updates on their lives. Justin is just days away from welcoming his fourth child, while Clayton shares his excitement about interviewing potential acquisition managers and recounts a fascinating evening spent with a Warhammer enthusiast, highlighting the unexpected connections that can arise in the real estate world.

Prioritizing Projects as a CEO:
The hosts delve into the critical topic of project prioritization, introducing the "loading dock" analogy to illustrate how to effectively manage multiple tasks without overwhelming your capacity. They emphasize the importance of focusing on revenue-generating activities and how to structure projects to maximize growth.

Streamlining Operations:
Justin discusses his current focus on automating repetitive tasks within his business, aiming to free up his team to concentrate on high-leverage activities that drive revenue. Clayton shares his efforts to refine the underwriting process for larger transactions, ensuring his team is equipped to handle more complex deals.

Navigating Regulatory Challenges:
The conversation shifts to the complexities of land development, with insights into how regulatory hurdles can impact project timelines and profitability. Clayton and Justin share their experiences with recent projects, emphasizing the need for adaptability in a changing market.

Balancing Work and Family Life:
As Justin prepares for the arrival of his new baby, he reflects on the challenges of managing a growing business while being present for his family. The hosts discuss the importance of finding balance and supporting one another through life’s transitions, especially during busy times.

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Transcript

Clayton Hepler (00:00)
Welcome to another episode of the ground game podcast. This is your co host Clay Hepler.

Justin Piche (00:06)
This is your other co-host, Justin Piche, and we're here to show you how to win the ground game.

Clay, good Friday afternoon. How are you doing?

Clayton Hepler (00:27)
⁓ I'm doing great man. I'm doing great Got some got some opinionated thoughts to come at your heart today And but

Justin Piche (00:36)
⁓ I'm looking.

What's been going on? Give me some life updates.

Clayton Hepler (00:43)
Dude, I'll tell

you something crazy, okay? So, I've been looking for an acquisition manager and I have some really, really freaking amazing candidates. I'm super pumped. Actually, after this call, I have another interview. And one of the people, I was texting a lot of my contacts, right? So I text this contact, I hadn't spoken to him in year. He used to be a broker in ⁓ Pittsburgh.

when I was buying apartment buildings. And so I connected with him and he's like, man, I live in the town that I moved to, this small town. And so we met up, we met up last night, okay? So we had dinner, ⁓ we had dinner and it was great. And he's like, hey, do you wanna play pool? Wanna play pool? And I was like, yeah, sure man. Like, I love to play pool. So we go to this place. So he lives in this, on this house.

in this house that's in a kind of a 450 acre farm. And so there's this family, very wealthy family, that owns this farm. And one of the guys that owns it is a younger guy, probably in his 40s, and he is a international commodity ⁓ trader. in a very, he basically trades commodities between ⁓ countries, as I understand it.

Right? So basically, so if you want to take something from a ruby, right, to a yen, and you want to trade metal in that way, whatever, that's how you talk to this guy. He's like a broker. So we go to this, we go to this barn last night, and we walk in, and in front of us is this huge pool table. And on the pool table is a 25

by 15.

⁓ City like a miniature city right, but it's a medieval city and I'm like, what the heck is this? it's this medieval city with these with these like cathedrals and ⁓ Castles and I'm like, what the heck is this and This guy is a freaking warhammer player. Have you ever heard about warhammer, bro? bro,

Justin Piche (03:05)
my gosh, dude, yes, I used to do it when I was a kid. This is nerdy

for sure, but I had the little figurines, we painted them. had, ⁓ man, yeah.

Clayton Hepler (03:15)
Dude.

Dude, had he had 20 10 foot by four foot wide glass cases of these figurines with like like star like ships Samurai Dude, it was nuts It was nuts. I've never even seen I was like that. I've heard of warhammer, of course, but like

crazy and I'm like this guy probably has three million dollars of these Warhammer figurines.

Justin Piche (03:54)
Yeah, dude, that's nuts. That's nuts. I mean, hey, you know what? If you're super wealthy, you can afford to have your hobbies, passions, et cetera.

Clayton Hepler (04:03)
Dude, what's the deal with Warhammer? it like, do each of characters have like certain like health points and like, how does it work?

Justin Piche (04:09)
No, it's like it's like

it's a strategy game. It's like you you yeah, you have like an army. I mean, it's been dude or talking like I was a kid. I was probably like 10, you know, and we had this mall near where I grew up in Katie, Texas called Katie Mills Mall and in Katie Mills Mall. They had like a store that was built all around this. They sold all the figurines. They had like game tables in it. They would host events you go and the most of the people that were in it are like, you know, mid 20s type of.

Clayton Hepler (04:19)
Okay.

Justin Piche (04:39)
people that live with their mom. And if I'm offending anyone, I'm so sorry. But that was my perception as a kid. And so my parents didn't let me go and play in any of these tournaments. But we certainly liked collecting the figurines. And my mom would help us paint them. And we'd file them down, because most of them are plastic or pewter. And so they didn't come with edges, because they're made in a mold. And you glue them together with super glue, and you paint them. And so we made our own.

Clayton Hepler (04:41)
Yeah.

Justin Piche (05:06)
It was just like a fun thing to do, honestly. But it's a game, it's like a competitive game. You build your army, you bring your army, and then you fight against somebody else, and you roll dice, and you make troop movements, you have like different, like the characters have different, like, I don't know, amounts of attack and damage and all that kind of stuff. So.

Clayton Hepler (05:25)
Dude,

is, this guy had to be three, four, five million dollars of Warhammer stuff. It was crazy. Look at this, $80 for a tank.

Justin Piche (05:38)
Yeah, that's nuts.

Yeah, yeah, I remember all that stuff. We had tanks, had crazy, and I just remember spending so much time like putting them together and painting them. So funny to think back on that.

Clayton Hepler (05:54)
⁓

So that's what's new. That just absolutely blew my mind. ⁓ So talk to me, man. Talk to me about what's going on with you.

Justin Piche (05:58)
Yeah, that's nuts.

⁓ man, well, we're going to have this kid soon. You know, we're we're T minus four days from due date. So any day now I will be a father of four. So that's exciting. That's new. We're looking forward to that. And ⁓ otherwise, man, I just been going deep in a eye in the business. Just been as the as the kids call it these days, vibe coding.

automations, replacing things and focused really heavy on like, do I remove all of the minutiae, the day to day, the type, like the stuff that has to be done but doesn't actually drive revenue. It's like stuff you need to make decisions but it's not stuff that's like bringing money into your account, you know? It's not like anything that's not customer facing. I'm essentially building out systems to automate right now.

Clayton Hepler (06:56)
Love that. Love that. Which brings me to the topic today and you didn't even, you didn't even promote it.

Justin Piche (07:01)
I just perfectly segueed

you in. I mean, guess there's a couple other things going on. We're working on our next deal right now, me and Ben and Trey. it's a 506B, so there's no public raise solicitation. But we're working on that deal kind of bringing into the final stages, which is exciting. No, no. It. So Burn It. I'm going to give you some project updates. Burn It, our first kind of fund.

Clayton Hepler (07:04)
Gosh.

This is Burn It, right? This is Burn It.

Justin Piche (07:31)
syndication, whatever you want to call it that we raised. are three weeks out from the road being complete and final plot. So we've held this for almost nine, 10 months. got behind for a very bunch of reasons as projects typically, you know, that happens on a lot of projects. Unfortunately, we got tied up in like an administrative regulatory government bureaucracy delay that was a little bit out of our control and then some weather delays.

We are shooting for end of March, final plot approved, ready to sell for that development. For Spokane, we've started moving lots. I've already signed three deeds to sell our first three of 43 lots. We've sold one. One of them is closing on the 11th one of them is closing on the 15th of March. So that's awesome. It's been great to have good interest. All the offers so far have been, or all the signed offers are... ⁓

Clayton Hepler (08:06)
Okay.

Justin Piche (08:28)
10 to 20, well, 20 to $23,000 more than what I underwrote them to. each of the, some of the lots I under, yeah, so we're getting, we're getting more money for some of these lots than we had, we had underwritten, which is always, always good. And then the Bastrop deal, the Bastrop deal is the one we're working on right now. And that one is moving along, man. It's exciting. We've already got our preliminary submitted to the county. We got comments back. We submitted our rebuttal comments. We've got the water picture sorted out. We've got the power situation sorted out.

Clayton Hepler (08:35)
baby. man. Nice.

Justin Piche (08:58)
We just got our geotech back for our road, which changed the road. So this is something maybe, and this is something maybe I'll just comment on this before we jump to the exciting topic that I still don't know, but that you're going to talk about here. But this is, this is something that is really hard when you're doing infrastructure on developments. Uh, you have to underwrite a deal before having a vast majority of the information. So you have to make best assumptions on a ton of things.

Clayton Hepler (09:26)
That's right.

Justin Piche (09:27)
And you try to be conservative, but there's like a limit to how conservative you can be. Otherwise you can just kill your own deal by being too conservative and making sure the numbers don't work out. Right. So we'd already had many roads either built or quoted on other projects. And so we did a really similar bid quote for this project and it called for subgrade stabilization, eight, 10 inches, whatever, eight inches of base, three inches of asphalt.

And so but that's not that's you don't know what your pavement cross section is going to be until you have a geotechnical report done. So we finally got our geotech finally got out there, did the report, got it back. And he calls for a different roadway design. He calls for 12 inches of upgrade instead of eight inches. So that's that's literally 33 percent more crushed rock as this as the as the road base. And then but only a two inch paving layer instead of three inch.

So that cuts down the asphalt cost by one third. And asphalt is of the road, and this particular road is the highest cost item. So it's actually kind of a wash. Our road base is gonna be more expensive, but our paving layer is going to be less expensive. So our costs have increased on the base and other things about the road by probably 170, 180 K, but our paving layer has dropped by 200 something K. So it ends up being a wash. great. It was great news to get that report. And the reason why I bring this up is because I was working on

another deal in Fort Bend, which you know about. And I think so. But we there's been we've hit so many snags. The biggest snag was we're planning for an asphalt road that goes through the middle of the property to cut into five. There's like five, six acres and then down to like some threes and twos. And I made the same underwriting. I put in the same underwriting numbers for my other roads that I've had bid.

Clayton Hepler (11:00)
Is that gonna work?

Justin Piche (11:26)
Then we put out this road to bid and the cost came in three over three times as expensive as I under wrote for So I was like what the heck? Well Turns out the soil types in Fort Bend are what's called gumbo clay and gumbo clay has like a super high water retention and expansion

Clayton Hepler (11:34)
my gosh.

Justin Piche (11:48)
And when a road has a really when the dirt underneath has this high expansion and it gets like when it gets waterlogged, it expands like crazy. And then when it it dries out, it shrinks like crazy. You can't do a typical road base crushed rock. So the road, the only feasible road for asphalt that we were getting quoted was essentially 12 inches thick asphalt. So essentially a paving layer, they call it black base, but it's really just asphalt that's 12 inches thick with a 10 inch stabilized clay subgrade. So you take like lime and

whatever other chemicals and mix it in, the subgrade really hard already. And then you put a foot of asphalt over it. And so that killed the deal as we were moving forward. so it was actually great because I ended up meeting the seller. We met out, he lives out in Fort Bend County. we met out there and we met in Sugarland, which is like an hour-ish south of where I live and talked it out. We ended up renegotiating the price.

down about 400 K from what the original offer was. And then we negotiated splitting the property in two because without building a road, the only way we can do it is the southern portion of the lot, which is 69 acres. can split into 10 acre plus tracks. And instead of building an asphalt road, we can build kind of like a stabilized gravel road that's sufficient, but it's not to county specs, but it'll be enough for people to like have a good road to get access to their properties. but the, it has to be an exempt subdivision to do that. And then on the Northern 48,

we're gonna do no roads flag lots for some flag lots, but there's a restriction on the flag can only be 200 feet. And so that makes the layout really challenging. And so we're gonna buy the Northern lot bank financed, and then we're gonna owner finance the Southern lot and take it down the whole thing. it's like kind of, it's yeah, creative deal structure. We're on like the lender side right now trying to get lined up lending for it. ⁓ But.

Clayton Hepler (13:35)
That's super creative.

Justin Piche (13:44)
Bringing it down that way also brings the cost down substantially. So I think the whole total project cost for the northern portion is maybe like 400K of investor capital or my capital to do it versus before it was going to be like a $1.3, $1.4 million raise.

Clayton Hepler (13:58)
Wow, yeah.

OK. OK. ⁓

Justin Piche (14:03)
So anyway,

you're just quick word on underwriting and soil types and how that impacts your road costs for those of you who are interested in doing horizontal.

Clayton Hepler (14:13)
Yeah, yeah, was actually looking at a deal today and Someone brought it to me. It's a smaller lot. It was about 36 acres and Diera Horton was directly south of it and they want to go horizontal and I'm just I usually try to stay away from horizontal stuff, right? I try to just keep it. Hey, can we entitle this thing? Can we sell it a paper? like I don't want I don't want the risk of going horizontal because there's a lot of risk as as you're pointing out right now, so

Justin Piche (14:40)
Yeah. ⁓

And it's not and real quick, it's not just like the risk because once you have everything like established and ready to go, it's not like it's not that much risk anymore. Right. You've already figured out what you need to build, how much it's going to cost. You've gotten hard bids from from a GC, whatever. The challenge is getting from what you know now about the property, which is essentially nothing to having approved plans, engineered roads, all that costs like 200 grand. Like you're going to have you have to spend so much money to get it to that point.

Clayton Hepler (14:43)
Even

Yes.

Justin Piche (15:12)
And like, that's the thing with this Bastrop deal and actually like all of our deals is, you know, I'm in them, we're in them, the team is in them for hundreds of thousands of dollars before we can even 100 % know it's gonna move forward. And that's where the risk of these larger deals comes in that scares a lot of people off and it should. You know, I'm probably about to lose about 60 ish K on an entitlement deal, but it costs that much just to get it to even pitch to builders and then the builder interest wasn't there, you know, so it is what it is. I got.

200 plus K into my La Plata, purgatory development that we're working on. And that one's still chugging along, but it's a lot of money to put into a project and not know if it's gonna work or not.

Clayton Hepler (15:52)
Correct. Correct. But it's like investing in a bunch of like small, you know, VC firms, invest 200, know, 150, and they have one or two that really hit, right? Like if you have the capital, that's how you really make a really good living. here's what I want to talk about today. And the reason why is because I've gotten off a couple of calls with people

⁓ in the deal engine and in general lately about I just don't know what to do, Clay. I just don't know what to do. I some guy was talking to me about, hey, I want to, you know, I should just do a direct mail or I need to do this or I need to do that. And so I think it would be really helpful for the listeners to kind of talk through how I think about and how you think about as a CEO, what we should do.

Because the world's changing, the market's changing, everything is changing. And what we do as CEOs at different levels is dramatically different. I think there's a couple of systems that I can share with the audience that I think will be incredibly helpful in terms of ⁓ framing. ⁓ This is what you can do at every level in terms of free, low cost tools of how to to organize your work better, especially as a CEO with all the stuff that's pulling in your different direction.

And then we could talk about how we think about at different levels what you should focus on and then what we're focusing on in our business currently. I think those would all be really helpful. So people can say, Hey, at these guys level like this, what are they doing? I always like to want like, people talk about stuff in theory on podcasts, and it's like, well, what are these guys, what are they actually doing? And why I want I want us to kind of talk through why does this actually matter? Okay. So here's the low no cost rule that I think is super helpful. And what I actually

Justin Piche (17:32)
Yeah.

Yeah, let's go.

Clayton Hepler (17:51)
want to share with Justin you might have a different thing. I heard about this originally from ⁓ the author, Cal Newport, right Cal Newport wrote a book, which is Deep Work, which is a famous book that he wrote. He wrote slow productivity. He wrote ⁓ a couple other very, very famous books. He's a professor, I believe at Wharton. I know he's a professor at Georgetown computer science professor, very, very, very well known guy, digital minimalism. That's one of the books he wrote. ⁓

New York Times best seller, Megabex best seller. And in his book, Slow Productivity, which is kind of like interesting that now like this book's coming out, right, Justin? Because it's like, I feel like I have to go faster right now because AI is moving so quickly, right? Like I can't just take a breath. And listening to a lot of his podcasts about focusing on deep work, he talks about this system that is a push-pull system, right? So imagine you have a loading bay, right? And this is how I think about

This is not an analogy that he has, but this is one that I thought of. When you are a CEO, you have limited resources. Everyone has limited resources, right? And this is kind of the way I think about it. It's kind of like constraint theory, Justin. It's kind of like his way of doing it, right? So imagine you have a loading dock, okay? So you have a loading dock, and the loading dock can only do, it can only manage a certain amount of pounds of...

Any one time if you put too much on it it falls it breaks right it just falls through right so what I see a lot of people doing is they'll put something on the loading dock they'll put a Project on the loading dock they'll put another project on loading dock to put another project on loading dock to put a brother project and all of a sudden the loading dock just collapses it's not effective there's there's they have the inoptimal amount of

things, projects that they're focusing on, right? And so if you have a certain amount, there's an optimal amount of projects, right? Scientifically there is. And so what Cal Newport talks about is three projects at any one time. So he is a pooling metric of, I'm going to focus on three core things, whether that's, I got to hire an acquisition manager, whether that's, hey, want to fix this specific thing in my transactions department, Jess, and I knew you talking about that the other week, just disposition department.

I'm just gonna focus on Dispo. Because if you were doing Dispo and acquisitions and this at one time, it'd be like, you're not effective. You're not as effective as you could be. Or I'm gonna do this other thing, right? So he thinks about it as, no matter what, if people give me ⁓ other things on my plate, I only have three core things at any one time, three core projects. Now the duration of those projects could be shorter, they could be exceptionally long, they could be six months, man, they could be

12 months, whatever it is, it could be two years. But at any one point he has three horizons of focus, three projects that he focuses on. That could also fall underneath the umbrella, the greater umbrella of ⁓ theory of constraints, which is what's the one thing that's constraining my system? So you could have one thing at one time, but what's super helpful for me as a visual guide, this might not be helpful for you, is I like to think about it like a loading dock. I can't load anything else on that dock. ⁓

Justin Piche (21:10)
And so you've removed

the things that are sitting there. Yeah.

Clayton Hepler (21:12)
Exactly until you pulled

it through so that so that's the no cost low cost tool that I've used and how I do it is a cam band board So I have a cam band board that I have all my projects in underneath the projects I have tasks that are associated with the projects Okay, and then and then when I'm done with it, I complete all the tasks. I move it off It's done then it can pull something else on and load on so I'm loving your thoughts on that man. If you have anything that you the you use like that

Justin Piche (21:39)
Yeah.

Hey guys, this Justin interrupting our podcast. Say thanks for listening. Clay and I are talking about loading docs. No, but in all seriousness, how do you prioritize the things that move your business forward? If you're getting value out of this podcast, please stop. Leave a review, set your downloads on automatic. That stuff helps us get higher in the rankings and helps us come back every week to produce valuable content for you guys. ⁓ now back to your regularly scheduled programming.

I mean, I really like that, that analogy. I, I feel that all the time. There's so many things that I'm working concurrently and, and so you stop and you think about it. You're like, okay, would it be better for me to make a little progress on a lot of things slowly over time? Or would it be better for me to make a lot of progress on a few core things that are going to move it forward, finish them, and then move on to the next one. And it also makes me think of kind of like, this is not how, what I subscribe to, but

the debt snowball analogy. I think maybe it's like a debt like a Dave Ramsey thing. I'm not a damn Dave Ramsey follower by any stretch of the imagination guys, but he does he talks about, if you're trying to pay off your debt, you know, pay off the smallest debt first, like get a win and then then put all that plus your other debt payments into the next one and the next one and the next one. ⁓ And that that that analogy probably works better for the projects you're working on like get some wins have a short term project that you know, you can accomplish you can get a win.

Clayton Hepler (22:37)
Okay.

Justin Piche (23:05)
get that feeling good and focus a lot of energy on that one thing and another thing and another thing, but you don't do too much at once. Otherwise, you're just gonna make a very little amount of progress for a long time on a lot of things. And like the impact of one of those projects you're working on can be realized sooner if you just divert more attention to it. ⁓ And also like it feels incredibly overwhelming to have a hundred things to do. It doesn't feel so overwhelming when you have one, two, three core things you're focused on.

Clayton Hepler (23:35)
And then the things that nest underneath it, right? That's the, that's kind of the interesting thing, right? Cause like, once you start to have, these are my three outcomes, which is an outcome could be, this is the gross profit by this date. The outcome could be, I need to hire this person by the state. That doesn't mean you can't have tasks underneath. got to do this, this, this, and this. But once you start to think in that way, tasks ⁓ nest underneath these projects.

And if you have a task that's like, someone asked me to do this, but it doesn't nest underneath the projects that you're trying to complete in order to hit your goals, revenue cures all. So as a CEO, revenue producing activities most of the time is what we need to focus on, right? And so 99 % of the time. And so that's how I think about, are these projects actually driving revenue? Because at any level, the projects that you're completing could be, this project could be a $50,000 project, it could be...

$250,000 project, could be a quarter million dollar, three quarter million dollar project, it could be a two million dollar, whatever it is, at that point that becomes the priority. So everything else becomes, with that in mind, if you're thinking, hey, this is a bet that's going to produce X amount of additional gross profit, because we're in business, right? Then it even becomes more clear, right? So you can literally stack rank, even though this might feel more urgent, the more important thing as a business owner right now is producing

outcomes that are greater than what I'm currently producing. So that's kind of one way I think about it.

Justin Piche (25:03)
Yeah, no, I think that's a great way of prioritizing projects. There's just the monetary side and then there's also the ⁓ just busy work side that I like to like, maybe a better way of saying that is one of the other core jobs of a CEO other than driving revenue, driving growth is making things easier on your team. And so if you have expectations of your

Clayton Hepler (25:28)
Mm-hmm. Mm-hmm.

Justin Piche (25:30)
sales department or your acquisitions department to produce X Y Z metrics. Yet they have their inundated by chores that they need to do that you want to see. Maybe it's KPIs, maybe it's tracking things, it's manual processes like freeing up your team's time as well to think about bigger problems and to think about revenue growth items is another thing that you can leverage.

That's just super powerful. And that's, that's, mean, that's where my personal core focus is right now. How do I remove the minutia, the day-to-day tasks, the things that can be automated from my team so that they can focus on the things that are way more important for them to be focusing their time on, like talking to leads, closing deals, figuring out new ways to generate leads, how to optimize our existing leads. How do we pull more out of the marketing that we're doing? How do we, how do we get buyers over the edge more frequently to buy properties, right?

Those are are things that help the business and bring money in. ⁓ And but it starts with, you know, replacing all that minutia with with automations, better processes or cutting it down if it's totally unnecessary. Anyway.

Clayton Hepler (26:42)
I love that dude. And just a helpful thing when then I'd love to kind of move on to, what are we focusing on is, is ⁓ you think about like as a CEO, I need to invest like obviously I'm hiring people to fulfill a task right in this case. This person closes, you know, what do I pay them? Right. And the, we, we all, can conceptualize relatively well that if I, if I'm hiring someone that is at a higher pay grade, usually they have more skills.

They're more in demand skills are worth more. And so I'm investing more of my business capital into this person, which will produce a higher result. Right. And so, um, if you think about that, like if you think about, Hey, if you could hire someone that is a $250,000 a year employee, uh, most of the time, most land investors don't have that in their business, but if you could hire someone for that, you'd like, dude, that's amazing. Like that's like, that person is going to be a killer. They're going to be an executive level thinker. They're going to take ownership. You, the way I think about it and I

always found this helpful is if I'm doing a project, if I'm doing a task or, most recently I've been thinking this way as well is, is this a 50, 100, 200, $500 task? And like you said, if I remove this from my team members, ⁓ plate, is this going to produce excess capacity? Right? Do I need this person to think strategically? And if they do think strategically,

What is that going to produce from an output, from a business perspective? Because for example, if you have a VA who is a texter and they're trying to think strategically, it's like you're paying them $5 an hour. So it's hard for a $5 an hour person to, and I'm being very plain and I hope this doesn't offend anyone, but $5 an hour person to think in $500 an hour tasks. The same exact thing happens to most business owners at the beginning.

They're doing $5 an hour tasks so they never have enough time to think of $500 an hour tasks or $1,000 an hour tasks, right? So that's really how I conceptualize it.

Justin Piche (28:45)
Yeah, I think that's a framework. We're thinking about it.

Clayton Hepler (28:48)
So

the question now is, okay, so now we've set the table with how do you prioritize important tasks? ⁓ How, Justin, at different levels, where you were, how were you thinking about prioritizing tasks? And then where are you at now? Like, what are your two to three big projects that you're trying to wrap your arms around?

That was a big sigh.

Justin Piche (29:17)
No, I'm just thinking back to four

and a half years ago when I started doing this. Like, what was I focused on? I mean, at first I was just, you know, as like the only person in the business, I was just focused on the outputs. Get the mail out, call the people back, negotiate the contract, and then it would just be moving from task to task to task, right? You get a contract, okay, what's the next task I have to do on that contract? I got to open up title. I got to get my earnest money deposit. I got to get my drone ordered.

I gotta do this, I gotta do that. And so it's just endless tasks that I was doing, right? And then you start hiring a few people and then you stop thinking necessarily about all those individual tasks because you've now delegated those to people who are performing them. And then it's like, okay, well how do I get for leads? How do I expand my leads? What other marketing channels can I go into? How do those marketing channels perform? But you're still doing all the setups. So it's like, okay, I gotta get my...

my launch control subscription or smarter contact or whatever subscription set up and then I got to get my lists in the right format and I got to get them get them uploaded to the tool and then I can get my agent who's texting to you know to send out those texts and then we got to set up the automations to get the leads into the CRM and then we've got to make sure we're following up with the so you're thinking about those types of problems and then those pretty much get handled or you get the right person in that can think about those types of problems and then it's like, okay, well.

How do I get enough money to do these deals? Where are my investors? Like how much am I paying them? How do I get bank loans? How do I do more volume? How do I do bigger deals? And then you solve those problems generally. And then you move into the next thing, which is, okay, well, how do I do bigger deals? How do I make more money on a single deal? What does it look like to add skills to my tool belt? So then you're learning and you're trying things and you're growing in that way. And then you do that and then you run into another problem and it just keeps on getting bigger and bigger and bigger. And so we talked maybe a year ago.

Clayton Hepler (31:04)
Yep.

Justin Piche (31:08)
I don't know about about like the challenges, the biggest challenge I was facing. And at the time it was running into limits on ⁓ personal lendability. So to get loans and guarantee loans for projects, I was hitting a wall because I as a business owner who does real estate, I have a lot of real estate debt because I buy a lot of properties with leverage so that I can make much higher returns on my money. ⁓ You know, rather than doing one million dollar deal with cash that you can do five

million dollar deals with 200k a pop type of type of an idea. And so then, you know, I started trying capital partners with Ben and Trey and that was incredible and has been incredible. And now we're knocking on the door of 10 plus million dollars of debt guaranteed by us. And now we're now we're sitting there thinking, OK, well, can we do together even more projects? Like, when do we collectively run out of debt that we can comfortably get from banks? So the next stage is how do I get

attractive non recourse debt to do bigger projects because you either add up all these kind of small to medium projects with a million, two million, four million, ⁓ dollars of debt. And a lot of folks listening will be like, that's a huge project. And it is it is, you know, but your idea of huge project shifts as you do more and more of these. So now it's like, OK, if I was going to do a 20 million or a 50 million dollar project, which I'm other than the Durango deal, I really don't have anything else like that.

Clayton Hepler (32:25)
Right.

Justin Piche (32:34)
At what point is it just unreasonable for anyone to personally guarantee that debt? I mean, think about how much income and net worth somebody would have to be to guarantee a $25 million loan. Like it's just too much. So at some point it switches over from recourse debt to non-recourse debt. And so that's the next bridge that I've got to figure out. Me and my partners have to figure out how to cross if we want to keep doing larger and bigger deals.

Clayton Hepler (32:44)
Yeah.

Are there is there non recourse for four because usually I mean in the ⁓ commercial space non recourse can get above a million bucks you can get non recourse

Justin Piche (33:00)
Ahem.

Yeah, yeah. Land and land development is hard. It's easier to do a multifamily with non recourse debt because it's a cash flowing asset. There's an income statement. And so the lender can underwrite the income from the property as funds that can pay the debt obligation. But when you have a land development that is not producing revenue until you sell lots, the bank doesn't see revenue from that property. And they have to use some amount of income to underwrite

Clayton Hepler (33:15)
Sure.

Justin Piche (33:36)
debt obligation, you've got to meet a certain DSCR threshold, usually 1.25 for global DSCR for the partners. And so it's a challenge. at some point, lenders will slip over and realize that they can no longer ask for personal guarantees on big loans. so they hit you with higher, you'll have higher interest rates. You might have stricter loan covenants. You may have to hold longer periods of

⁓ interest in escrow. So like escrowing interest upfront when you buy a property, things like that. ⁓ So we're exploring some of those options right now.

Clayton Hepler (34:13)
Dude, that's super exciting. so one thing that I found helpful, and this was reflective for me, but like, if you're not going up the ladder of the type of projects that you're engaging in, in terms of the impact, the financial impact on your business, this is a for profit business, we're not talking about being a dad or being a husband or being a wife or whatever.

But for a business, which is for profit, if your projects do not produce ⁓ returns in excess of what you were doing last year, three months ago, six months ago, whatever, you're not growing actually. Your business is not growing. And you can literally look at the projects that you're doing. If you're doing the same stuff that you were doing last year at this time, then I can guarantee your income is the same. I can guarantee it. ⁓

And so that, you're saying, man, I'm looking at non-records. That's big, that's really big. One of the things we're super excited about is we have a project that we bought for, we won our contract for 75 and we are gonna be putting on seven mobile homes and we're gonna sell it for 1.7, 1.8. And it's gonna be a big, big, big, big check for us. So we're doing straight up, this is a guy that.

doesn't say he doesn't like horizontal development. just said that. want to say people are going to listen to this podcast and be like, dude, you're right. Right. So we're built.

Justin Piche (35:39)
Yeah, you're such a hypocrite. No, no.

Let's clarify. Horizontal development is not always the preferred way to go. I agree. a certain scale, above a certain scale, it is really hard to do. And you start competing with really big players that have a lot more money, have institutional money behind them, and it's just challenging.

Clayton Hepler (36:03)
Correct. So for this one, it's like, know, so we're like, okay, so like, how do we project management? How do you project manage this? How do we cut this up so that we sell these lots in a way? How do we build the wells out? We're gonna build wells, we're gonna do something, we're gonna install all these mobiles. And so we're like, okay, we're gonna make a half a million bucks on this, maybe more, in less than eight months. We think we'll be able to leave the project in less than eight months, which is great. ⁓ And so, okay, how do we do more of these?

Normally, Justin, would have been a buy for 75 sell for 160. And we're like, no, man, let's add, so we're adding almost a 10x multiple, an 8x multiple on our capital, right? Obviously, we got to get the right lender relationships. There's a lot more complexity, but we can add eight to 10 times more profit to our bottom line net just by doing this.

And so those are different projects. So, hey, do we get our dealer's license? Like, how do we do this? We have other projects that we're getting. Do we do this on our other sub-devices that we have? ⁓ So we can squeeze out additional cash flow. So those are examples. So ⁓ besides the adjustment, besides the...

the non-recourse, anything else that you're kind of focusing on day to day that's your project, I'm happy to share mine. ⁓

Justin Piche (37:25)
Yeah, I I've already

kind of talked about it a bunch, like, you know, we've talked about OpenClaw a little bit. I was really excited when it first rolled out and it is really exciting. There's a ton of different ones that are rolling out like similar to it. Claude released their co-work in January and that's an incredible tool that I've been been using a ton. And if you guys, I mean, everything's changing so fast. know, ChatGPT just released their latest model today.

or yesterday or whatever it is. Things are happening so fast in the AI space. It feels like whiplash every time something new comes out. It's like, that tool better? Should I switch to that? But right now I'm pretty happy with using Claude, Co-Work to accomplish a lot of things that I'm working on. ⁓ Like, man, the amount of money savings you can have with these tools is incredible. It just is incredible. Things that you would have to hire an attorney or a CPA or whatever for that would take you weeks.

of back and forth to finish and develop. can manage. If you can think critically, if you understand what the end product is, you're supposed to get out of it, and you can prompt this thing, you can have it build some incredible stuff for you. And so I'm spending a lot of time working in these AI tools to enhance my company's systems. And a lot ⁓ of the tasks we do are just manual and repetitive. And we have a team of people that are doing other things, but also working on these repetitive tasks.

I'm like laser focused on removing as much of the manual work that is done in the business as possible so that every single one of those people who's with the company can focus on other things, expand what they're working on to focus on other things that drive revenue rather than these tasks. That's my biggest project that I'm focusing on right now is like removing burdens from the team.

Clayton Hepler (39:11)
Love that, love that. So for me, for me, I kind of top three is at the top of the list, it's finding another AM for our team, like finding and building out, we're refining some of our ⁓ offering and sales process ⁓ to, you know, our minimum quota for an AM is about 300K a month. And so how do we set our sales process up so we can get that, you know, so that our, AM that we have, doing.

Justin Piche (39:39)
They have, yeah, they

can do it. They can achieve that.

Clayton Hepler (39:41)
300k

⁓ and then we're then the next thing is Refining our our underwriting process to underwrite more ⁓ More transactions that are kind of bigger transactions whether it's mobile developments like that I'm talking about or regular subdivides ⁓ in some majors and so I'm training my ⁓ Current underwriter and he has people underneath him. So having that one point of contact so he can be just as good as I am

at underwriting these larger deals and probably better than me because I don't even enjoy doing that. And so he's gonna be coming in and I'm teaching him. That's a huge project for me, right? Again, that's skill set, right? Increasing capacity of team. ⁓ And then the last thing is building out our funnel for...

Justin Piche (40:27)
Yep.

Clayton Hepler (40:33)
The land man deal engine and the like enhancing the funnel for the land man deal engine and then our and then our funding Funnel so those are two or that's like one of the same and but those are our three things that they're all revenue producing Right every single one of those we think is hey This is a one to three million dollar per year Project if I get it, right so spending a lot of my time almost all of my time on focusing on specifically those projects

Justin Piche (41:00)
Yeah, that's good. I mean, I think those are all good things to focus on.

Clayton Hepler (41:05)
I'm glad I got the 10 out of 10 man from you. That's good. Nice.

Justin Piche (41:07)
Yeah.

I was going to be, it's going to be interesting. You know, I, one of the things that, that I've been thinking about obviously is as this new baby comes, like how, how do I be there to support my family and pick up slack that's going to need to be picked up? Right. My, my wife is going to have a new, we are going to have a new baby. And that, that changes things. We've done it three times before. So like, we, kind of understand the, the,

the playbook, so to speak. But we've never had three kids on top of having a baby before. And when we had our first kid, I was working a W-2 job. And so it was pretty easy. You take some leave, you spend time with family, and you go back to work, and somebody else covers you. With the second kid, it was a similar situation, except for I had started the business. So every spare moment, I was focused on doing all the minutiae tasks of just getting letters

with the second kid, it was similar except for I was starting the business. And so I was doing all of those all the minutiae, right? I was getting the data. I was getting the letters out. I was responding to leads that were coming in. I was negotiating with people getting contracts and just like figuring it out. They essentially building the plane while we were trying to take off. And then with our third kid, I think I was just like

in a, I don't want to call it like a lull, but things were like really smooth in the business. And I wasn't necessarily like super focused on like growing, growing, growing. had a good team set up. were producing consistent leads, consistent deal flow. And so I could, it felt like it was okay to take a little bit of backseat, work a little bit less and really be there. But now I don't feel that way. Now I feel like I've continued to scale the business. I've continued to take on more and more projects, big projects with

big investors and lots of other people's money that we're managing. And I feel a lot more pressure now to just push through, but I know that my family needs me more too. I'm wrestling with what is it going to look like in the next couple of days or week? By the next time we meet, I will probably have a fourth child. What does it look like to keep things rolling and keep progress, but also be there for the family? So that's something I'm personally...

wrestling with little bit right now.

Clayton Hepler (43:20)
Praying for the safe delivery,

Justin Piche (43:22)
Yeah,

I appreciate that. You too. ⁓

Clayton Hepler (43:26)
⁓ Well guys we appreciate it at the end at the end of every ground game podcast we have one request which is ⁓ Please rate review and subscribe leave a comment. Let us know that you are enjoying what we're doing This is for the love of the game This is for the love of the ground game, right? And just I love doing it every week and just adding value to a community It's given so much to us and the way that we really receive it back and the benefit that we get is you guys rate giving us some some love

to let us know, this is a really good podcast, and so it can get us up in the rankings relative to other land podcasts. Because we're coming for blood. We're coming for blood. We want to be with the top. Just kidding. ⁓ Thank you so much, guys. And as always, Justin, anything to sign off with, brother?

Justin Piche (44:03)
You ⁓

No, man. That's it. I appreciate it. We'll see you guys next week.