Inside Our Q2 2026 Cash Flow Report

Episode 13: I'm pulling back the curtain on our Q2 2026 financials and showing exactly what happened inside our land investing business.

Instead of focusing only on revenue or profit, I explain why cash flow is the metric I care about most, how we account for owner-financed land deals, why our best month ever wasn't as simple as it looked, and what these numbers actually mean for running a real business.

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Transcript

SPEAKER_00 0:27

You're listening to the R.E. 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, my friends. Welcome to another episode of Leadership in Land. I am your host, Dave Denniston of Generation Family Properties and the Landon Conference. Well, today I am excited to report to you on Q2 2026 cash flow. The reason I do this particular report is I feel like so many gurus out there they like to talk numbers, but they really don't let you behind the curtain to be like, hey, here's what a real business looks like. Here's what cash flow actually happens to be. Because you know, you have the revenue, you have expenses, you have your balance sheet, and all of that is great. But um, and they tell a story, but they don't tell the whole story. So my attempt to do this every single quarter is to let you know, hey, here's what happened in my actual business. After everything was said and done, here's what we actually had cash uh coming in. Here was the amount of land that we bought. And so I'm excited to report to you on this quarter and letting you know what's what's happening behind the scenes with us, what happened in Q2, what's happening here to date, uh, how are we doing versus our our expectations and all that kind of stuff. So uh let me just just go ahead and and share my screen with you. So, what what we're looking at here, my friends, um those of you that are listening to this on audio, is this is a very simple spreadsheet that I keep. And those of you that listened to this before, forgive me just for rehashing some of these things. So um we're looking here right now at a year-to-date kind of tracker. I have it broken out by month. So January, February, March, April, May, and June are the rows of this spreadsheet. At the very bottom, I have a year-to-date total. I have columns, A was the date, B is revenue, C is expenses, D is land purchases and liens, E is EBIT, earnings before interest and taxes, and F net cash flow. So it's worth rehashing here. As we look at these kind of numbers, there are so many ways that investors can slice and dice. And I make some very specific um ways of going about this. Now, just to give you an example. So in Q2 in May 2026, you'll notice here on this this spreadsheet, we had our best month of the year. We had what I record as $498,618 in revenue for that month. Awesome month. Our best month of the year, maybe our best month ever. Now, here's what's interesting is as as you look at that number, it's like, wow, that's a great number. You could argue it actually should be higher. Let me explain. So we bought a subdivide in Wisconsin in February, and we got um ourselves $275,000 worth of equity. $100,000 came from one partner, another $200,000, $100 each from two of us, myself and my partner Eric. And um, and that included $25,000. So it was um a property we bought for $550,000. $75,000 of that was equity, $275 of that was owner financing that we got from the owner, right? So as we go to sell our first two lots, which one person bought them, which was awesome in May, which is why there's such a huge shift in the revenue that month. Well, we had to pay back by the contract a big chunk of that. So of our sale, the total we actually sold for was something like uh 450,000 bucks. But money was sent directly to the person we got the owner financing through, which was about, I want to say $250,000 or something like that. I'd have to double check the numbers, but it gives you a good idea. And so that $250,000 that didn't hit my bank account, I'm not actually counting as revenue. So one could argue that our revenue actually should be $250,000 higher, but I don't count it because it didn't actually hit our bank account. So this can happen when you have um uh hard money on something. So this has happened to us, where let's say we sell something for cash and um it was let's say $60,000, you add a $25,000 loan on it. Well, the total revenue might have been $60,000, but what hit our bank account was $35,000 in that example. So we're not booking something that didn't actually hit our bank account. Other people might treat that differently. And so my whole point being that the way that different investors track numbers, it can be really deceiving, whether it's revenue or expenses or something else. Um, for example, in our expenses, I'm including partner payouts. Now, some of that was return of basis. So in this Wisconsin property, for example, the month of May, we had expenses that were showing $305,000. Well, of that $305,000, which was our highest expenses, you can see year to date, we had our highest revenue, had our highest expenses, $140,000 of that came from partner payouts. And $70,000 of that got rolled into June because the other partner didn't uh have the money pulled out until then. And so this is where it gets funky, and this is why June didn't look like a great month for us, is because some of that partner money came out in June when the revenue was actually realized in May. And we didn't expense it in May because the money came out in June. So these are some of these weird little quirks that, as you look at anybody's numbers for one month or two months, it can be really hard to discern what's going on, which is why I like at the end of the day looking at cash flow, because this is the money to me that after everything is said and done, what you're actually saving or perhaps distributing to yourself on a monthly basis. So you can see for us in Q1, our revenue was um something like uh close to 700,000 bucks. Where in um Q2, it was well over a million bucks. And so we definitely had, whether you take numbers in or out or whatever, we certainly had a much, much better Q2 than we had in Q1, which I found in this business for us, seasonality, March, April, May are some of our best months because as as spring comes along, people get tax return money and the weather gets better, things just seem to open up, which which is great. And so we saw that seasonality happen again this year. Every single month, month over month, things were better in Q2 than they were in Q1. Just for example, January with 182,000 of Rev, April was 288, February 233, May was 498. Well, I guess I lied. June was worse than March in terms of that. Um, so overall, uh a gangbuster Q2 for us. One of the things that I set for my leadership team is uh basically a form of profit sharing based on our cash flow. So our goal every quarter is to average a monthly cash flow of $50,000 a month or higher. And I set different tiers. So $50,000 is tier one, $65,000 is tier two, $80,000 is tier three, which ends up being higher and higher bonuses. So if we have a one big blowout quarter, as we had a wonderful quarter in Q2, there was some big fat bonuses that that got paid to um our leadership team. Those that are are salaried and not myself uh or or uh Eric, my business partner, but those those of us that are working for us. So we really are trying to align people around that goal, keep them informed around that goal so that they are on the same page with us. And so they they unlocked tier two of uh of that bonus, which was great. Uh, and you can see Q1, we didn't get it. We only averaged about $17,000 a month, which uh was far, far short of our goal, whereas Q2, hey, we exceeded it. And Q3, as I look going into this quarter, we had some hard money type loans, um, credit lines we had to pay. I'll probably talk more about that in Q3, but it's really gonna be a big challenge to hit that goal. But maybe revenue-wise, uh, could be possible. Um, so I'll be excited to share Q3 uh with you. I thought maybe it might be helpful to go over as well some may in particular, in terms of what was in here, what happened, what did the month look like. Um, so for us being a business that we have a lot of owner financing, we have a lot of medium-sized type sales, you can see pretty much here from row seven and up, those that that was the revenue that we actually received in the month of May. That a single deposit was more than 10,000 bucks, which the vast majority of these would have been medium-sized sales of some sort. So you can see we had 16,000, 18, 20, 24, and the big guy, right? The $217,000 that actually hit uh our uh revenue. And then we have a bunch of small stuff. So uh you'll notice here uh deposit from someone that wired money. You'll see Stripe. So currently, right now in our business, we take down payments through Moonclerk, which integrates with Stripe. And we've done that forever. It's a really easy website integration thing for us, very easy to change and um give refunds and stuff like that. So we really have enjoyed using Stripe over the years, but as we moved um to systems, you'll notice this other one, EMS here. These are credit card payments that happen through TerraNotes. Now, not only do we have that, so you'll see Stripe, you'll see EMS, you'll see on here um TerraNotes as well. So this was someone that paid um ACH through TerraNotes. We have um this one here, it says GinFam Properties. This is coming from Zimple money. So part of our deal, as you look at these different things, we can see lots and lots and lots of smaller deposits: 1,000 here, 2,000 here, 3,000 there, that certainly all add up um in the month of May. It takes a lot of accounting work with the terms portfolio we have, because what happens as you have a deposit like this 4,300 bucks, guess what? It's probably not one deposit. There's probably one or two or three things. There are some credit card fees that happen. And so this unbundling process of the credit card things is a big pain in the butt. And so, as I talk about going forward, wanting to simplify things for our team, part of that is hey, is if we have ideally larger deposits, but less of them, that saves a lot of bookkeeping headache on a go forward basis. If we have more ACH payments, then we have credit card payments. That saves us money on a credit card fee on a go forward basis. Now, that's that's kind of, and you can see here it just goes on and on, and there's literally 165 rows worth of deposits in our bank account. And then expenses, you can see there's a whole bunch of these too. We have just rows and rows and rows of various expense things. I'm including on here wire fees, for example. Bank fees, $10 here. There's simple file when we file things online ourselves for self-closings that's showing up. We have various um VAs that we pay and payroll-related things and partners that we pay, which uh a lot of these things um you'll see checks of $1800, $1900. So a lot of those are property taxes or paying this or paying that. At the very, very bottom, you then we have uh various one-timey things. You can see our credit card bill was like $18,000, which of course that aggregates a lot of different things. Here um was a hard money loan payoff, here was equity being returned. Again, lots and lots of payroll-related stuff, lots of checks, lots of things going on. So, altogether, if you look at one month in our business, you're talking 281 rows worth of activity in one freaking month. So it's a lot to keep track of, it's a lot of plates to be spinning. And uh, I'm grateful for having a lot of help because it's certainly not something I would do myself. And this is part of the reason when you look at a terms type style business, the idea of quote unquote passive income sounds great, but the reality is there's a lot of work and time involved when you think about property tax payments, bounce payments, default, uh, the all the deposits and the bookkeeping work involved with all of that. It's a lot of stuff to keep track of. And at this particular stage for me in the business, hey, we built up a great base. Now let's make life a little more simpler in a lot of ways, in terms of some of this financial activity, the number of properties we have on inventory, uh, things like that. So I hope this is helpful for you. Give some insight into my business, how we're thinking about it, how we think about uh our finances and cash flow, how we're doing on our goals. So I hope just like us, you had a great Q2. I'd love to hear from you. How are you tracking your financials? How are you thinking about, you know, what are the bottom line things that you really are focusing on in your business? Let us know. Love to hear from you. Take care. Bye bye.