Our Q1 2026 Cash Flow Report (Real Numbers)

Bonus episode: I break down what really happened in our land investing business during Q1. We brought in about $700K in revenue, but the cash flow tells a different story. Between buying land, paying off hard money loans, and deals taking longer to sell, this quarter showed how easy it is for profits to shrink.

I also walk through our numbers, strategy, and what we are changing going into Q2. From subdividing land to choosing between debt and equity, I share what is working and what is not. If you are a land investor or thinking about getting started, this is a real look at what it takes to build a profitable business.

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Transcript

SPEAKER_00 0:27

You're listening to the RE Tipster Podcast Network. Okay, so quick question for you. Have you heard of our school community? I just want to make sure to invite you to check that out. If you're listening to this episode, it's actually kind of old, to be honest with you. And so if you want our latest, if you want our greatest content, we're putting out, real conversations about leadership, decision making, building a land business that actually works in the real world, get inside our school community where you get access to the free leadership course, plus bonus episodes, discussions, and insights that honestly just don't make it onto the podcast. So if you're serious about this, you want to learn more about leadership, get in the community, check it out, leadershipinland.com or school.com slash leadership inland. All right, let's get in the episode. Hello friends, welcome back to another episode of Leadership in Land. I am your host, Dave Denniston of Generation Family Properties and the Land Unconference. So today, what I wanted to spend a little bit of time on was opening up the curtain, showing you behind our business. We've talked deals here recently. We've talked some of the projections and things that we were looking at in uh the prior year, but I wanted to share with you what happened the first three months of of the year for us, which I'll show the numbers here very, very shortly. If I was to sum up kind of how I felt about Q1, I would say things are going okay. You know, they're they're not certainly not gangbusters, they're certainly not horrible. It's it's okay. But with no further ado, let me share a little bit behind our numbers for this particular quarter. So let me share the broad overview first. So, first off, big thing, uh, we did not hit our quarterly goal bonus. Uh, every quarter, we're trying to shoot for an average of$50,000 a month cash flow, which basically what that needs to mean is that we're selling properties and we're selling them relatively quickly. Uh, as we look at this particular quarter, we have a lot of properties that we bought, some properties that we bought in 2024 that have just been hanging on, hanging on, hanging on, that we just need to sell. And we have other properties we bought in 2025, early 2025, where now hard money loans have been due. And we haven't sold them yet. We're we're holding on to some of these properties a year. And so we gotta we gotta pay some of those hard money loans. So, what's interesting as you look at some of our numbers here, January we had 182k of revenue, February 233, March 284. I mean, good good numbers for a lot of different people. You'll notice that the the actual cash flow was pretty steady, 22k positive in Jan, 24k positive in February, but even though we had our highest revenue month in March, we had the worst cash flow of the year. But every every month, cash flow is positive. Now, a few caveats here as you look at this particular list. So the revenue that I talked about is actual cash that comes into our bank account. This is not hypothetical revenue based on a note sale of what we think we might get. This is actual revenue. So if we got a$500 down payment, that's what we cat we call. We don't call a whole$4,500 sales price. We we call what actually came into our bank account as revenue. If we get partner dollars or hard money dollars, that doesn't count as revenue. Uh, those things get pushed into a different category. Um, expenses, this is um a category that includes payroll. So I pay myself$5,500 a month, plus we have a 401k, so there's a 401k match. Those things are all included as expenses. So certainly you could back out my compensation if you wanted to, of what I'm paying myself, including the 401k, which would bump this up by about another six grand a month, something like that. So if you want to do an apples to apples comparison, if you're looking at yourself and what that looks like. The other things that get included within the expenses would be if there's any marketing dollars, any partner payments go out there. So if we did an equity split with a partner, that money that we pay them goes out. Certainly commissions to our employees, property taxes that we pay, stuff like that, all gets thrown into that expense category. So it's it's all inclusive, the the cash that we had to do to operate the business. What doesn't get included in expenses are things like interest. So if you look at our expenses here, that was about um 112K, 156K, and 123K. And what what I get as a proxy, which is not an accounting measure, all right, the idea of earnings before interest and taxes, being that this is our our earnings. If you take revenue, subtract expenses, that gives us a number. Now, what this doesn't include are things like interest. It doesn't include the payments we make on hard money loans if we're paying principal. It doesn't include if we've gotten a partner to fund a property that we bought. Those things are not included. We also do not include property purchases, which essentially are assets, right? So if we're buying an asset, yes, that impacts cash flow, but that doesn't impact our actual earnings. It impacts our earnings hypothetically when you actually sell a property, right? You get positive or or negative. So, but all at the end of the day, to me, cash flow is king, which is why after you subtract all of that stuff, whether you've bought property, whether you've spent money on staff, whether you've paid interest, whatever that is, the cash flow number to me is the true thing. Revenue is good to track, expenses are good to track. What you've bought in land is all good to track. But to me, what gives your business value is what you bring home at the end of the day. So that's why for us, we had about$52,000 of positive cash flow in this quarter, which um we did do a distribution a couple of times. I think we distributed out most of that uh money to me and my partner. Um, something else interesting here as you look at this, obviously we had some purchases. So in February, one of the things that we did put about 200K within our first major minor split. So we did a subdivide in Dora County, Wisconsin. All in was about 300k we had to put in. We also got about 275K in owner financing. Uh what we had an equity partner that put in 100K, whereas within my partner and myself, we put in 200K. So 575 total purchase price, which we think we could sell within a year, year and a half, all four of those lots, which we hope could generate 900,000 to a million dollars of revenue. So we we really achieved one of our major goals in Q1, which one of the rocks was let's get a subdivide purchased. So that's awesome. And so uh that large amount of money was for that. And then obviously we had some other purchases. We bought another uh$16,000 worth of land in January, another$20,000 worth of land in March. So a total of$235k went into land in Q1. So if we continued that, you know, that would be about uh a million dollars, a little shy of a million dollars in purchases, which um reality is we could do more. Now that's just cash out of our pockets. I wasn't including what the partner brought, I wasn't including the owner financing. So technically we could increase those numbers a little bit, but what I'm tracking here is just cash out of our actual pockets. So that's um that's what happened in uh Q1. So total revenue 700k at just about total expenses, or those core expenses about 390K, total land bought about 235 K. What I call the e-bit number was about 310K, with actual cash flow to us of about$52,000 for the whole quarter, or about$17,000 a month. So not shabby. You know, it's it's okay. We're doing all right. We'd be doing great if we had$50,000 a quarter. We'd be doing great and on track of our goals if we averaged what were we hoping to average per month revenue? About$333,000 a month revenue, which would have been about a million dollars in Q1. So we fell short. We really fell short of our goals. And right this minute, I I see some possibilities that could get us there in Q2, but we really need some of our bigger properties to sell. We need one of our um Arizona Agland to sell, we need our main property to sell, we need some Idaho properties we have, which is a total of 500 grand right there to sell. If we could sell one of um the minor splits that we have, there's very good reason to think, if not to in Q2, since they're now on market, that it could happen. Some of the the other stuff that I personally headed up was messy title. So I made hundreds of phone calls every month, about 661 calls I made personally, cold calling different people to try and acquire houses. And guess what? We did acquire one, which is on market. Partnered with my good buddy Ajay Sharma. Shout out to Ajay, who helped navigate through that process. As a matter of fact, we have a messy title deal as well, which is a possibility that we could end up selling it maybe this quarter as well. But frankly, I count on that for next quarter. What's what's happening there is should when that property sells, Ajay put up the money uh for that. So we'll get 50% of whatever the profit is on it, which all in we're all in for about 25k. It's on the market for 100k. We thought it was gonna sell for 120. So we did have to lower expectations a little bit because the house was messier and uglier than originally thought. But there is some interest in it and some possibilities. So we'll see what happens. But that would be additional cash flow, which literally cost us nothing. So I'm hoping, you know, we get 25 to 35,000 from that sale in this quarter. So uh hopefully we can do it again and get another major acquisition in Messi title, as well as we're planning on enroaching in enrolling in a coaching program. And so we're looking at something that's gonna cost$15,000 up front. And then we'd we'd have to split proceeds 50-50 of deals, which I'd want help with trying to figure out okay, what's all the paperwork? Is this a good deal, bad deal? Going through that kind of stuff that I've been through with Ajay in in Q1 here for our first. So if we can get one or two deals under our belt in Q2, that could really help give us momentum to end the year well. And as we get that proof of concept, then the the next thing that we're gonna be doing is hiring people, with the first one being an acquisitions manager. I hate making those code calls. I really do not enjoy it, but I'm willing to do it in order to help us get to the goal. So we're gonna be looking at that, spending some money on marketing. We've done a little bit of mailing here and there, but my list is getting bigger and bigger and bigger for people to contact, which will then help, of course, our our acquisition manager who ends up tackling this. So hopefully by the end of this quarter, we're really moving strong on that, going into Q3, which then the messy title portion hopefully gets bigger and bigger and bigger. And hopefully we land another subdivide this quarter or an entitlement project of some sort, uh, which then gives us more and more momentum going into the rest of the year. So I'm hopeful, uh, and we'll see, we'll see what happens. Now I want to show you uh a little bit on March, which was our highest revenue month. If you take a look at um how this was dispersed in terms of revenue, we had a$40,000 cash sale here, a$33,000 cash sale, cash sale, and we had a down payment for about$10,000. So those four sales made up$26, uh,$58,000, about close to$100,000 came from cash sales from medium-sized properties, as we like to call them. So what was great month, obviously, for cash sales, we have even more potentially in April that could be coming through, going with what we see seasonally, March, April, May being some of our strongest months of the year. And then June, July, um, August kind of not being as good, and then ramping up again, September, October, maybe November time frame. So we're we're charging forward with that. Now you notice one of the categories that I have here was debt servicing. So while we had great revenue, I also paid off$123,000 in debt, whether it was principal or interest, which most of that being principal. As a matter of fact, most of these sales we just talked about, guess what, had to pay off uh some hard money loans. Um, one of the other things that you'll notice here that uh we did, uh we put about$17,000 into tax liens. So one of the things that I do as ways to acquire property, at least in the past, is I've acquired a lot of tax liens. And so what happens is um as you move to foreclosure, you end up having to um get trued up on maybe future um property taxes that that need to get paid, as well as potentially if you didn't uh endorse every single year, you might have endorsements you have to make up plus the foreclosure costs. So that was a big cash flow expense as well in the month of March. Plus, we had about$29,000 of property purchases and about$13,000 positive coming in from partners. So we put a lot of money into land purchases, tax liens, and then debt servicing related stuff last month. Otherwise, cash flow would have been awesome. So obviously, if we we just shut down most everything, you know, we'd have incredible cash flow. You know, let's just say we didn't buy land or liens. Well, that would be about 46,000 more dollars in cash flow that we would have in our pockets. So every day is is different, every day is is uh interesting. As I mentioned earlier with debt servicing particular category, we did have to pay off some hard money loans that came due. I think that was about 50 grand out of the 122 were ones that had come due. And I could have chosen to keep on on paying interest, but given that we haven't sold them within a year, I don't want bad money to uh good money to chase bad money in the future. So took the pain, which again, that cash flow could have been that much better if I didn't pay that off. But we have that policy as something hits a year or very close to a year, let's pay those suckers off. So I'm hopeful as we go forward that those kinds of things aren't going to be a major issue for the business. And this is certainly that classic argument of do you use your own money? Do you use equity from partners? Do you use debt servicing? As I crunched the numbers in this most recent quarter, honestly, it was about a break-even either way. If we had had an equity partner, we would have paid about the same on those cash sales as we did with debt servicing based on the property. We thought it would sell for$55,000, but we actually sold it for$40,000. If we had sold it$55,000 or$50,000 or$45,000, we would have much further ahead on debt. But in this current environment we're in right now, where margins have, at least for us, you know, have gotten relatively thinner, it's definitely a break-even in a lot of cases. Certainly, if we make a mistake on a property, then um that debt servicing component has hurt us and will hurt us with some of those properties that that um you'll hear Cameron and I talking about in a in a future podcast. So that, my friends, is what's happened for us in Q1. I'd love to hear what's happening for you and Q2, Q1. How are things setting up for you in Q2? What are you seeing in the business? What lessons are you learning along the way? I'd love to hear from you. Make a comment in our school community or send me an email, dave at genfamland.com. Appreciate you. Talk to you later. Bye bye.