Jon Jasniak | The Closers Podcast #4

Jon Jasnak did his first land deal in 2016 for $8,500. He quit his petroleum engineering job 18 months later. Now he's running multi-million dollar land subdivisions across Texas, owner financing 85% of his lots, and selling them out in 3–4 months using a Facebook Marketplace strategy most investors have never heard of.

In this episode, Jon pulls back the curtain on everything: how he raises private capital, structures equity partnerships, builds the infrastructure on major subdivides, screens buyers with RMLO, and why he deliberately charges less interest to make more money on note sales.

Plus — the full story of how he bought the town of Cornudas, Texas off Facebook Marketplace.

Transcript

SPEAKER_00 0:00

All right, guys, today I am pumped to be interviewing the man, the myth, the legend, the man that not only subdivides more land than you've ever heard of, but also owns a town in West Texas. One of the most humble guys I know, despite accomplishing more than any of us probably will in our 20s and 30s, Mr. John Jazniak is sitting down with us today. John, welcome to the Closers Podcast. Thank you for being here.

SPEAKER_01 0:23

AJ, thank you so much for having me, man. Excited to be here. Love the studio.

SPEAKER_00 0:27

Thanks, man. Appreciate it. This is gonna be a lot of fun today. I've obviously known you for uh for years now, and it's been fun watching you grow in your career as you've uh really doubled down on a lot of the bigger projects that you've been doing these past couple of years. Before we get into any of that though, man, um I want to go back to some of the earlier days, right? I know uh similar to me, you're a Midwestern boy from uh how you grew up, right? So talk to me about how you started up in Michigan and what brought you down to Texas Tech, where ultimately your your Texas beginnings began.

SPEAKER_01 1:00

Yeah, and there's haven't gone back since Wreckham Tech. Um, yeah, man, grew up in Michigan. Uh somehow figured out I wanted to go away to school at 18, thought petroleum engineering would be uh a cool thing to do because I was like, I can work offshore in the oil rigs, travel international, do all this crazy stuff. 18-year-old dreams, baby. Yeah, yeah, and make a bunch of money. Sure. Um, I think it was like the highest paying degree at the time, four-year degree at least. So I was like, let's go be a petroleum engineer. And so uh we thought that the best way to do that was to go to where there's actually oil. So Texas, Oklahoma, somewhere down south. Sure. Applied to a bunch of schools, fell in love with tech, gave me a bunch of money and a scholarship, um, moved out to Lubbock by myself at 18, didn't know anybody, started going to school, um, somehow got good grades and knocked out a four-year degree in petroleum engineering, and then I ended up in Houston out of school. Nice. Um, doing the corporate gig, right? Okay. Um, which, you know, kind of quickly found out that wasn't wasn't for me. I'll never forget my first performance review with uh my manager, Dylan. Great guy. Walk into the office. I felt like I was crushing it. I I think I was, and he's like, you know, John, uh it's a five-point scale, right? One through five. We never give out fives. Doesn't matter how good you've done, you've done amazing. So I'm gonna give you a four. Interesting. And so I'm sitting there and I'm like, you know, that kind of ticked me off, but then I started looking at like, okay, what's the difference between a three and a four, four and a five? You know, like the amount of bonus I was getting for that was only like incrementally, you know, three, four, five grand per point. So I'm like, I'm putting in all this extra time and effort in the corporate world, but for you know, an extra half hour to an hour a day, late nights, working with the team, grinding on the weekends, etc. Like I'm making another five to ten K a year. So you were hustling at this job. Oh, for sure. Like we we were doing like super in-depth business development stuff, which you hear me talk about like IRR running projections on land and stuff nowadays. Like a lot of it was from those days. Oh, nice. Running economic calculations, DPIs, uh IRR, and oil wells basically in projects. And so we were working, you know, long nights, weekends, analyzing hundred million dollar deals, trying to get it to the upper management team, etc. And so, yeah, there was a lot of hours and and time doing that. And then, you know, that first performance review came in. I was kind of already entrepreneurial by then. I was like, you know, what else can I be doing other than this corporate stuff? And so, but after that first uh performance review, it kind of really ticked me off, and I was like, okay, now it's really uh it motivated me a bunch. I'm like, it's time to start to figure something out, yeah. And then boom, is kind of when I really started my entrepreneurial journey, I would say. Um, and it wasn't even land at first. Oh, really? Yeah, I was uh I was trying to trade stocks as a penny stock trader. Classic. Yeah, yeah. Do you know dual monitor setup, journaling, tracking my trades, putting in hours and hours of time. Um, how much money did you lose? I I lost probably five to 10k. Um I was like getting to what I think was like just break-even profitable when I found out about land. Okay. And so I heard uh one of the OG gurus come on a podcast, started, you know, talking about passive income, land, flipping land, and uh ended up buying a course. And then I bought another course and uh dove in headfirst, probably only a couple weeks, just like studying material, watching videos, what is a deed, you know, paperwork, all that stuff. And then I decided to buy my first piece of land.

SPEAKER_00 4:43

Okay.

SPEAKER_01 4:43

Basically, just right off the bat. It was like maybe two, three, four weeks into like I found out about land, bought a couple courses. Probably within a month, I actually bought my first piece of land.

SPEAKER_00 4:52

Did you buy that just wholesale off another investor, or were you doing your own mail by that point?

SPEAKER_01 4:56

Yeah, yeah, just wholesale online. I found a 53-acre piece in Hudsmith County, Texas on landwatch.com. Okay. I think the dude was asking like 10 grand. Um, which is cheap as it is, but I got him down to I got him down to 8,500. What year is this? That would have been late 2016. I think the deed on that property is December 2016. Okay. So I bought that first property without an L without an LLC. It was just me personally. Um, Jazz Land didn't get set up until January of 2017. Okay. So I buy the first property, just says, you know, Jonathan Jazniak. You use your own cash on that too? Own cash. I had probably 20 or 30 grand in the bank from engineering. Yep. Um, so buy this piece of land, 8,500 bucks. It was already broken out into five 10.6 acre lots or so in the Gunsight Ranch in Hudspeth County. Yeah. If you're familiar with that at all. Um, just classic West Desert land, no, no power, no water, no nothing. And uh fired up Facebook Marketplace, started marketing to El Paso each 10-acre lot, sold them all, um combo of terms and cash within probably two months. And uh I think I walked away from that with about 17,000, so like doubled my money. Okay. And so I'm like, okay, now it's time to fire up the direct mail game. Nice. Which, of course, back then there was a lot less competition in direct mail.

SPEAKER_00 6:15

You could just 2017, I can't even imagine because I got in the game of 2020. So I remember it was easy back then. When I hear about you guys, it started pre-2019. I'm like, man, that's a different era.

SPEAKER_01 6:25

Yeah, probably probably so. It was, you know, send out two, three hundred mailers, get two or three deals with ease. Wild. Um, as you know, a lot different nowadays. So I was direct mail in West Texas, um, buying lots for 1,500, $2,500, owner financing them off for 10 or 20 G's. I think the first year I did close to 100 deals in 2017. Um, mostly owner finance, which nowadays 85% of our stuff is owner finance on the sales side. Um, but you know, close to 100 deals that would have been 2017. And I think I'd got my monthly revenue up to like 13,000, 14,000 a month on the land side, which pretty much matched my engineering. When you say monthly revenue, do you mean just from notes? Just from notes, yeah. Wow. So I think first year total revenue is probably 250, 300,000, um, including notes and you still working at this point? Yeah, I was still working. I didn't leave uh the engineering job until mid-2018. Uh so it would have been a year and a half doing land and engineering um together. And my monthly income had got to like 15 or 20,000 just from notes alone. Plus, I was, you know, doing some cash sales and whatnot. And I was like, it's time to just leave the corporate world. Didn't enjoy going into the office. Liked engineering. I was drilling oil wells. That was it was fun. Yeah. I was in West Texas at the time drilling oil wells. Um, but yeah, I'll never forget my dad was so pissed at me. He's like, you went to school for four years, you got this degree, you know, you're making 150,000 a year, whatever, and you're about to quit. And there was several phone calls where I'm we're just like yelling back and forth.

SPEAKER_00 8:00

Yeah. Are you and your dad pretty close? Yeah.

unknown 8:03

Yeah.

SPEAKER_01 8:03

And he you have siblings? Yeah, I have one younger brother.

SPEAKER_00 8:06

One younger. So you're the oldest. You were the first one to go through college and get the job. And then what's your dad's background? Is he more entrepreneurial, more W-2?

SPEAKER_01 8:12

What's no, no one in my family is entrepreneurial at all. I think I was maybe even the first one to graduate college. Oh wow. At least out of my immediate family. Um, so my dad's a firefighter.

SPEAKER_02 8:22

Okay.

SPEAKER_01 8:22

Um, was retired quite a while ago now. But um, yeah, he's very much you gotta go to school, you gotta get the good job.

SPEAKER_00 8:29

So he worked 20, 30 years, got the pension type deal. Okay, so that was the that was the recipe for success in his generation. It was, yeah. Um, obviously times have changed, right? As you know. Um, but for him as a father, he's looking at you and saying, dude, you're 24 years old making triple probably what I ever made as a firefighter in Michigan, right? Um, you're an idiot. What are you doing? Did he know how much money you were making at that point? Like how private were you about what was going on in the lane business?

SPEAKER_01 8:55

I don't think anyone really knew how much money I was making, but they knew I was having success. They saw me doing a bunch of deals, posting on social media and that stuff. Um, but you know, I'm pretty transparent with the numbers. I guess I just never felt the need to really tell anyone or you know, say I was making two or three hundred G's or whatever, but um it just didn't make sense to engineer anymore. So I was like, screw this. Um quit the job, moved out of Midland, and uh have been doing LAN full time ever since. So it's been 10 years now.

SPEAKER_00 9:22

That's crazy. Close to 10 years. I'm curious, while you were still at your W-2 for like that year and a half, how did your performance reviews do as you came in the next? Because were those quarterly, or what was the cadence on those? Uh biannual. Biannual. Okay, so you probably had what, two or three more. Did you continue to stay at that four out of five, or what were your ratings?

SPEAKER_01 9:38

Threes and fours, yeah. Threes and fours, yeah. Yeah, I stopped pushing for the five after the first time around, if I'm being honest.

SPEAKER_00 9:46

Yeah, I mean, when your side business is making double your W-2's income, right? It becomes a lot harder to stay motivated to push for an extra $3,000 bonus, right?

SPEAKER_01 9:54

Yeah, and if I'm being honest, I probably got a little bit lucky because, you know, I had my own office with the door. Oh. So I can sit on my computer and work on some land during the day, which I certainly did, but also, you know, do the engineering stuff. Um, plus I was making a bunch of money both with the salary and stock and all that stuff. So I had the money to roll into land. I had a little bit of privacy during the day. I wasn't, you know, a dentist or a doctor or something. Like literally, you were, you know, seeing people or busy all day long. So I had time to kind of moonlight and do it on the side and grow it up to the point where I could just quit and do it full time.

SPEAKER_00 10:29

At this point, too, um, you know, I've again I've known you for years and you've never been a guy with like a very big team. I feel like you're one of the few people who um, you know, there's there's some guys, you and and Sleva, um, that like keep low overhead and that just have done good deals and you've kind of kept it that way for a long time. You've only hired, you know, onshore Americans that you trust at like decent salaries, you've not gone 25 VAs or anything too crazy like that, right? Did you keep uh your team at just you, even that that whole time while you were working at the W 2?

SPEAKER_01 11:01

Yeah, it was just me. I didn't make my first hire, which uh would have been Brian, my ops manager, until uh I think that would have been early 2022.

SPEAKER_00 11:10

And you still have him to this day, right?

SPEAKER_01 11:11

Yeah, yeah, I still have him to this day. So after I quit the engineering job, I it was still just me for three and a half years. Why? After I mean, I I never grew fast enough or had the bottleneck where I felt like I needed to hire someone. If I was doing it over, I probably would have hired sooner. Um, but I'm just you know me, I'm anti-VA. Like I think there's a lot that you can be doing as a real estate professional, especially like by yourself. Yeah. Um and you get a lot more done by yourself, you're a lot more productive, it's a lot more scalable by yourself, especially if you're trying to outsource things you don't know how to do, or it's too early. You kind of find yourself spinning your wheels, in my opinion, like managing VAs, managing part-time people. I was just very focused, and I mean, I I worked a lot, but I also had a lot of fun. I feel like 2019, I kind of traveled all over the country and all over the world to a certain extent. Um, but yeah, if I'm doing it over, I'd probably hire a little sooner, but I'm still not hiring VAs or like this. What role would you have hired and what pay band do you think that would have been? Uh probably the ops guy, like Brian. Like just uh I think the best hire for a real estate person is like a right-hand man who can do everything. And you know, I think eighty to a hundred is a good number for that to find someone eighty to a hundred thousand that to find someone that's really highly, highly qualified, knows what they're doing, can put in the time, and um is well compensated. So it's my opinion though. I'm the hiring expert.

SPEAKER_00 12:39

No, I'm I'm with you, man. I uh I think I used to be pretty heavy on the VA side, and I I think there's a time and a place for it. Uh, I think the reality is most business owners they do rush into hiring a little bit too soon. Yeah. Where, you know, you really shouldn't be hiring before you have a process defined, because then you don't know how to manage, and truthfully, you don't even know what good looks like, right? So I think so many people that you and I both know probably hire way too soon, bring on the VAs and don't even know if they're doing a good job. Half of them are working three jobs anyways, right? So there's there's some nuance there. Um, but I think the longer I'm in business, the more and more I respect the path that you took of like, oh dude, if you just actually work for a long time to build the business up so that you have the margin to pay for like actual good talent, you're gonna like your business a lot more, generally speaking, right? And I think there's something to be said about building a business where you're not running from anything, right? I think the reason you were able to work so long and and hard is like you're building your life that you enjoy, right? You're not trying to run away from working hard. Whereas I feel like a lot of people try to avoid work as a whole. So I'm curious, John, because you're somebody that didn't make excuses, just enjoys working, continues to like push and work hard despite probably having more than enough money to go chill in Thailand for a very long time if you wanted to. Uh, have you always had that work ethic, like sports in high school, stuff before that? Like what was your what was your attitude towards work and why do you think you've carried that into your adult years?

SPEAKER_01 14:07

Yeah, always always been highly motivated. I've always had just a motivation to be the most well respected person in my craft, whether that was sports, stock trading, now land. Like, I just want to be the best of the best and the most well respected. Um, my dad always told me growing up there's work and reward. So, like the harder you work, the more reward you're gonna get. So that was pretty much largely through sports, yeah, ingrained in me through um childhood, but um more so than that, I think I just have like a deep drive to be the most well respected, well known top of the craft of my space. It's less about money, less about like material things or lifestyle or anything like that. Like to me, it's just being the best of the best.

SPEAKER_00 14:52

Yeah. Why um why do you think that is? Like your dad instilled that in you. I think at a certain point, though, there comes multiple decisions in business, right? Like you have to decide. I mean, it's obviously it's an everyday discipline, right? But even beyond that, in business, there are these seasons where you're like, man, we just sold a big project, or maybe you got through a season where you had a bunch, or maybe it was a good season or a bad season. But oftentimes I find a lot of business owners that I talk to, you hit a season where you have to decide, do I keep my foot on the gas or not? Why do you feel like you continue to decide to keep pushing?

SPEAKER_01 15:27

Well, I think it's uh the motivation and all that personality stuff, I do think is largely genetic. Um I think that's just my genetic disposition is to have a motivation in this way. Now, some of it is nature versus nurture, like all that stuff is the way you're brought up, but a lot of it's genetic, so not everyone's gonna be the same. That's a good uh trait, I would say, good perk of the land business or real estate as a whole, is like you can have a lifestyle business, you just do a few deals per year, or you can go crazy hard and try to build like a massive company. But to your point, the land business in particular is very much a roller coaster, I feel like. So I'm sure you know this. Like it comes in waves and it goes in waves.

SPEAKER_00 16:08

Yeah.

SPEAKER_01 16:08

Um, like it seems like all your land sells at once, and then you stack up a bunch of inventory, then it all sells, you don't have any pipeline or projects in inventory, then it all hits at once. Um, and so it took me a little bit of time to realize that, but once I did, uh, I think having that awareness that, like, okay, things aren't happening right now, land isn't selling, I'm not finding the deals that I want, etc. If you keep pushing, it's guaranteed to get better, in my opinion. You hit the low of the roller coaster, which I feel like I hit here recently in this phase of my business, and now we're coming out of it. And it every time that's happened, we come out of it out of the low point.

SPEAKER_00 16:46

Yeah, yeah, that makes sense. That's cool. Uh on that note of genetics. Um, have you ever heard of the book The Hypomanic Edge? Never heard of that one. It's an interesting one, it's not one people talk about very often, but Patrick Bed David loves this book, and so I gave it a read. The the concept of the book, I think you'll find this interesting, is that um America genetically is this cesspool of immigrants, essentially, right? And um it's typically around 1% of a population that will actually leave their home country and move somewhere else. And so the United States of America is so unique in that the genetic pool is made up of all these people that left their homeland, right? And to be crazy enough to leave the country you came from, you're typically on the spectrum of mania on this hypomanic edge, which is the piece of this book. And it talked about a lot of our founding fathers and leaders, it studied people like uh Andrew Carnegie to, I think Columbus is in there, to it's just it's a fascinating book, but a lot of uh business leaders, a lot of um, you know, people that would be seen as pretty controversial in a lot of their decision making were on the edge of this mania. And so when you bring up genetics, it reminds me of this book, but it was an interesting one that basically said, Hey, America genetically is made up of crazy people that like working really hard because quite literally we had uh immigrants that decided to leave their their native countries and come here for a better opportunity.

SPEAKER_01 18:04

No, it makes it makes sense, and um, you know, a lot of business is psychology, so that's something that I like to study a lot, you know, the big five hexaco, stuff like that, just personality traits. And um, I think, yeah, what I've found out or come to the conclusion is just yeah, so much genetics are involved, and so I think a lot of people are not aware of that, honestly. So they're like, you know, I want to have a business that's this way, I want to work, you know, 12 hours a day, but really their disposition should be they should have a lifestyle business, they should be doing 20 deals a year, yeah, traveling around and and having fun. Now, for someone like me, that's not the case. I would actually much rather be in Fort Worth, Texas, just grinding away and building business. Like, to me, that's actually more exciting and fun than like traveling to Thailand or you know, Mexico or whatever. Sure.

SPEAKER_00 18:51

So yeah, I think it's uh Ben Franklin quote that I'm gonna butcher just a little bit, but he says um it's something to the effect of like the two hardest things. I again I'm butchering this, you probably heard this before, but it's like the two hardest things in the world are diamonds and like to know oneself, right? Sure. To like truthfully know yourself. Because I think you're right. I think a lot of entrepreneurs they convince themselves, I want to grind, I want to work super hard, but in reality, they're like either lazy or they have a predisposition to just wanting that lifestyle business, which truthfully there's nothing wrong with. Just admit it to yourself, right? Like, don't create this logical fallacy that you're one way or another. In the same sense, you shouldn't convince yourself that you want a lifestyle business if you're somebody that just enjoys working and doing it and being the best at your craft, right? So um let's transition though, because I want to really start to dive into your business. Uh, I know we're we're talking background, and this is um super interesting because I think it it your business is a reflection of who you are, your work ethic, and the decisions you've made that have gotten you here, which are more often than not pretty unique compared to most people. So will you break down what? Let's just start with what does a typical deal look like for you and your business today?

SPEAKER_01 19:59

Let's start there. Today, we don't do any flips, it's only large development projects. I won't touch anything anymore that's under probably a $500,000 purchase price, and even that is kind of on the low end for me. Um, usually a million dollar plus purchase. You're probably putting $500 to a million plus, depending on the land and improvements. So, you know, you're all in at guaranteed over a million, probably. Um, and then we look to double our money on subdividing and doing horizontal developments, water, power, roads, and then selling off lots to people who want to move outside the city, all outside the city limits, all in Texas. But you know, I don't put like an acreage metric on it on the buy side because you could buy, you know, 40-acre piece of land at 15k an acre, like it probably hits the buy box, or you know, maybe it's a hundred acres at 5k an acre. Sure. Um, but yeah, I mean it's got it's probably bare minimum 500k nowadays. We're doing one right now, it's a six hundred thousand dollar purchase. Um, just got done drilling water wells. I almost didn't do that one just because it's too small, but it's in a market that we love. It's hopefully gonna be easy. Yeah, and uh you've already got some buyers probably in your buyers list. I think so, yeah. I think Brian's got a spreadsheet of 40 or 50 people that he's gonna go up and stop. Highly qualified, yeah.

SPEAKER_00 21:17

Yeah, okay, that makes sense. So you're doing big uh you know, big tracts. The idea is cut them up, add roads, add utilities, some infrastructure, and then you're selling them mostly on underfinance, right? I think I heard you say earlier 85% of your sales at this point are underfinance.

SPEAKER_01 21:32

Yep, 85% is uh the historic number over the last year or two.

SPEAKER_00 21:36

Okay, can you walk us through your um like the deal structuring from a capital perspective? Let's pretend um you know I'm putting together a deal. Are you raising a hundred percent of the capital for acquisition? Is it some mix of your own money plus investor money? Um are you getting financing on some of this stuff as you acquire it? Like what is what is your capital structure look like?

SPEAKER_01 21:58

Yeah, so I will answer. Answer that, but first I want to mention um obviously these are all subdivides, and so the craze nowadays I think is subdividing sure, yeah, especially from the flippers perspective. So next step up to graduate um is to subdivide a piece of land, and um that's obviously what we do nowadays. I've transitioned to your uh answer your question before this. Most of my deals nowadays are major subdivisions. Okay. So we're going through a platting process, working with the county. Sometimes it's hard, sometimes it's easier, a lot of times it's very challenging. Um I think there's three types of subdivides. The minor subdivide, which we know as a long road front, probably already utilities there. It's perfect. You're just cutting it up, you're surveying it.

SPEAKER_00 22:40

A little survey, yeah.

SPEAKER_01 22:42

A little survey, you're probably exempt from a platting perspective, you're ready to go. The second is the major subdivide. You're having to go through a platting process. We're outside of city limits, so you're working with the county. You're having to build roads, you're having to do a groundwater study or get a water line in there, you're having to do power, um, build the roads up to county spec, which could be paved, could be gravel, depends. We get hit with turn lanes sometimes. I'm working through my first one of those with Text Dot, Department of Transportation. Gotta love them. So there's just so many different things that go into this drainage studies, engineering, and we're really into the weeds and kind of bog down on, I guess, three of those right now. And then you got one that's kind of in between there, which I think is a great sweet spot for a lot of people. Call it like a gray area where you're like plaid exempt from a large perspective, but you're still building a road and running power. You build the road, run power, but you're still not having to go through a platting process. Um, because you know, you probably got a piece of parcel or a piece of land, a parcel that's shaped in a way where you don't have road access, you've got to get a road back there. You're not gonna sell land without access. I mean, in Texas, you technically could, if you're plaid exempt, sell landlocked or dry piece of land, but way too many people did.

SPEAKER_00 23:47

Yeah, some of these regulations have come in.

SPEAKER_01 23:50

Way too many people did, and although you could still do it nowadays, I would never recommend it because first thing customers can ask is like, okay, how am I, you know, my how am I getting there? How do I get there? Yeah. Can I go see it? Like, can I walk it? And you're like, oh, well, it turns out there's no road to get back there. You have to walk back there. Um so you know, largely nowadays I've transitioned to business here recently to focus mainly on major subdivides just because I think it's the most scalable. Minor subdivides, it's it's scalable, but um not to the extent that I want, um, which we're talking hundreds of millions is kind of the goal. Okay. And uh, you know, the minor stuff, you could probably do tens of millions, um, especially if you're building roads and doing like the gray area type stuff. But as you know, man, these minor subdivide candidates, these parcels are fine becoming a lot harder to find. Totally. Because you got people like you and everyone else who are direct mail cold calling, like, I want the mile-long road frontage with no flood zone, and I can just survey it up.

SPEAKER_00 24:43

And all these tools have made it so much easier, right? With uh land insights and land portal and all that stuff. You can start to filter it, AI is grabbing the you know, estimated road frontage as it's doing a bird's eye view. So it's getting even easier to target this stuff.

SPEAKER_01 24:55

Definitely. Um, but to your point, when you find it, like, how are you gonna buy it from the capital side? Yeah. Um, so really I have two arms that I deal with right now. One is largely just myself, Jazz Land, and other entities purchasing land with debt. Okay. So I either have private money people andor seller financing. Okay. These sellers are not gonna want to sell or finance. So I bring in the private money. They'll come in with a million, million and a half, eighty to ninety percent LTV. Okay. And then I'm coming in with 10 or 20% of my own capital. TSM skin in the game. I have skin in the game, I'm buying it, and then it's usually me paying for improvements.

SPEAKER_00 25:35

Am I allowed to ask what you offer your debt investors typically on returns?

SPEAKER_01 25:38

Sure, yeah, 16 to 18 percent.

SPEAKER_00 25:40

Okay, so if people are listening and they're interested in investing in a project, are you taking investors pretty consistently?

SPEAKER_01 25:45

Yeah, I got a group of probably three to five folks I work with, but um people who are highly qualified and have money and want to build a relationship, yeah, I'm all for it.

SPEAKER_00 25:54

Okay, great. And we'll we'll plug ways to get a hold of you at the end of this, obviously. But um that makes sense. You're using a lot of debt, interest between 16 and 18% coming in with 10 to 20 percent down. What about capital improvements? Is that part of the debt structure?

SPEAKER_01 26:06

Is that no, that's usually just squarely on me. Okay. So if I gotta build a $300,000 road or do a water study or whatever, I'm paying for that just out of my own pocket.

SPEAKER_00 26:15

Okay, nice. And then what's your um what's your typical timeline from uh I guess let's start with how long are your due diligence periods when you're buying the property, and then let's talk about the life cycle of the deal after that.

SPEAKER_01 26:29

Okay. Um before we do that, I must mention the second arm of this is the equity side. Yes, so like these large deals, um, you know, buy for three million, five million, whatever, you got a million dollars of improvements, two million dollars. We're doing one with a four hundred thousand dollar water line right now. I have um yeah, that's nuts. I have equity uh partners that I work with on that. So basically what that looks like is little to no money out of my pocket. Okay. They're coming in with all the capital, they're getting paid out first, then split profit 50-50. Okay. I'm doing all the work. Full ops, sales, everything. They're just getting a check. That's pretty passive for them then. Yeah, it's very passive. It's a lot of work on mine, and especially um on these major subdivides these projects, which just can get super in the weeds. Like, oh yeah. Um, so yeah, it's a lot of work, but the payoff is at the at the end when we hopefully sell out, sell all the notes or get a bunch of cash sales, whatever.

SPEAKER_00 27:24

Am I allowed to ask what has IRR looked like on your equity partners in in past projects? For them? Yeah.

SPEAKER_01 27:30

Um, I don't think I've made that calculation. They would know more than me, but I think it it's gotta be well over 50. It might even be over 100%.

SPEAKER_00 27:39

That's nuts, man. Yeah. Especially at that level of capital deployment, right? Like when um I I always ask people, hey, if somebody wrote you a blank check for a hundred million bucks, you know, how fast could you double it? And it's always like, uh, I probably wouldn't be able to do that very quickly on my current skill set. It sounds like you might be getting pretty close to that with the projects you guys are doing, but it's a skill to deploy capital efficiently, and I don't think people understand that necessarily. So when you start getting into that multiple seven-figure range, that's a pretty unique offering that I don't think a lot of people can can really figure out. Yeah. Very technical thing to do, is my point.

SPEAKER_01 28:13

A hundred mil would be a lot. I don't even know that I would know what to do with that right now, but you know, five to ten is a lot more manageable. But okay, you know, we had uh one project last year was 76 lots, 415 acres that we had bought for two million bucks, put 500k into it with the equity partner. So we're 2.5 all in. All those lots sold in three or four months. You're kidding. Um, yeah, so it was just home run. Um, I think the total exit on that deal, the exit number was like 5.6, 5.7. So you know you're looking turning 2.5 into call it 5.7 in six months, um, which is you know over a double. They're getting 50% of the profit. I'm getting 50% of the profit. They're getting their capital back first, which highly affects the IRR number. So yeah. When you shake that all up, you know, what does it turn out to be? But it's it's high. It's fat. Yeah. Yeah.

SPEAKER_00 29:10

We should turn jazz lands into fat margins LLC, is whatever they call it. But no, that's that's great, man. That's a great uh get a DBA filed later. Let's go. Fat margins LLC that margins land. Fat margins land. I like that. I'll invest, man. Let's go. But um, okay, so I want to stay focused on um as people are listening and they're particularly interested in, you know, how would I even begin to replicate something like that? Now, obviously, doing the deals at three to five million, it took you 10 years to learn your craft, right? That's not something that I want a newbie off the street necessarily trying to execute. You can lose a lot of money very quickly if you don't know what you're doing, right? So, for folks that are um a little bit newer, could you maybe break down what you're doing from let's start with just an acquisitions perspective. Where are you finding a lot of your deals? Is it mostly broker relationships at this point? Because I know you've done both off and on-market deals.

SPEAKER_01 30:08

Yeah, so 90% of my deals are just found on market. Okay. On the MLS, I wouldn't even call it like broker or realtor relations. It's you're just looking for them yourself. Literally, me, just land.com, realtor.com, Zillow, just I'm in there every single day looking for deals. I know highly focused areas where I want to work, and I'm just looking for deals every single day in those areas. And I'm making offers at, you know, anywhere from 50 to 80 percent of what it's listed at, and I'm getting a bunch of no's for sure, but I'm also getting a bunch of yeses. Yeah. Um, which, you know, some of these projects we can afford to pay pretty much close to asking price just because it's in a great area with great regulations, it's got water, you know, whatever it is, so you can afford to overpay in a sense. Yeah. So I would say it's basically on all on market, a little bit of broker relations here and there where I get past, like, I guess you'd call them pocket listings or things that haven't quite hit the market. Um, and then you know, because the stuff we got going on on social media and everything, from time to time, people reach out to me and be like, hey, you interested in this piece, or you know, I get someone like you. Hey, I found a piece of land in XYZ area. Are you interested? Yeah. Um, so it's probably five to ten percent. Okay.

SPEAKER_00 31:21

Nice. Um, I want to pivot and talk about the dispositions because I think most land investors, and again, most people aren't running the same model as you, right? But I do think your dispo is um kind of like the creative madness to why you're able to do this so effectively. Because most land investors, particularly land flippers, right, that are playing like a wholesale arbitrage game. They either get stuck holding the bag, they're spending a lot of money on marketing on the front end, right? Which you're axing by doing on-market stuff. In the middle, they have a bunch of VAs or employees, so they've got more consistent overhead. And then on the dispo, they're throwing it up on the MLS and hoping for a cash or bank offer. Um, the model's wildly different than what you do, right? Your dispositions, though, is truthfully how you've been able to speed up your cash conversion cycle and turn what most investors would be scared of of like, dude, 76 lots. Like, I get scared of a six lot on easy subdivide sometimes. We did uh we did a 12 lot subdivide in Oklahoma that I wasn't sure how quick we'd move. We ended up being able to move it in four months, which is a story for another day, but that's good. It was actually pretty sick and a really cool. It was an on-market uh wholesale deal we did. We like got permission to subdivide it while it was on market and permission to list it while it was on market with another agent and wholesaled all the lots under this 120-day period we had. It was sick. So we did a getting scrappy. We did a double closing on six of the 12 lots in one day, and then we had all the other six buyers lined up over the next 45 days basically. So we only had to bring 100 grand to the closing table and then ended up netting close to 200 on it, which was pretty fun.

SPEAKER_01 33:00

Well, it's a good time frame. Uh, four months for me. If I don't sell it all in six months, I start to get real nervous. I got in cheap six months or less, in my opinion.

SPEAKER_00 33:09

So let's talk about your dispositions then, because I know you've put a lot of firepower behind it. Um, I know some of that has been buyers lists that you built up, but a lot of it is your little recipe on, you know, Facebook marketplace and boosted ads. Can you break down what your dispositions look like on those bigger subdivide deals? Yeah. And don't miss the owner financing component as well, because I think it's essential to this.

SPEAKER_01 33:29

Yeah, yeah. And I think the advantage that I obviously have is I'm working in set dedicated areas. It's a completely different approach than like a flipper model who's working all over the country that buyers list built up. They're not able to geo-target consistently on the dispo side. So it's 95% of my sales come from Facebook. Okay. We spend over six figures a year on Facebook ads. I don't know if it'll be this year, might be 200,000. I don't know. It's been over 100,000 the last couple years. Um, it's geo-targeted to wherever we are working. We work pretty much all over Texas now, but there's really maybe three pockets that we work, and so we're just always geo-targeting those areas. When we get a project that comes online, we make a marketplace posting on it. We offer owner financing is pretty much our upfront sales strategy. Okay. So I'm not advertising cash usually, it's advertised as owner finance with a cash price. And um, so it's geo-targeted, upfront. We have buyers lists built up from both lead forms, which we're running on the back end on Facebook. Okay. Running anywhere from three to four dollars per lead. Wow. Which is really good. Um, depends on the market, obviously. And uh some of that stuff is pre-qualified questions, so even better um that that cost is where it's at.

SPEAKER_00 34:48

And um when you say pre-qualified questions, you mean in that lead form you're asking?

SPEAKER_01 34:52

Yeah, we do I have two things that I ask. I think it's have you owned land before? Yes or no? And then we qualify based on uh the monthly budget. So it's like $500 a month, thousand a month, fifteen hundred a month, or greater than fifteen hundred a month, like select you know what's your monthly budget for land. Yeah. Um, so those are kind of two pre-qualified questions. I'm sure there's probably better ones out there that people can think of or whatever, but um that way you're not just getting, you know, crappy leads, um, in my opinion. Because if I didn't have those, that especially if you're running a lead for him, Houston or Austin, you're gonna get all kinds of junk in there. Yeah, DFW will probably be running a dollar or two dollars per lead, but it's gonna be you know, Joe Smoth, who is never gonna buy a piece of land. Right. Um, so yeah, it's all geo-targeted up front. Facebook marketplace is number one, Facebook business page um is number two. We run both of those. Um Marketplace always performs better. It's just the algorithm, two different algorithms, the business page versus the marketplace side um that you got to keep in mind. And then, you know, we have not only a built-up CRM list basically in Facebook from all of our geo-targeted marketplace postings to wherever we're gonna be. Oh, like a warm audience, basically. Yeah, that we can always go back to those folks because we never delete our marketplace listing, so therefore we always keep the archive messages. And then we also have high-level running on the back end where we're collecting leads, whether it's from land.com, the lead forms, people hit me up. We got I think it's up to like 12,000 people now. Wow. Um, which is honestly not that big. If you ask me, I I gotta get that to like 50 to 100k. Okay. I think that's the goal in the next year or two. Um so that all that combined is what allows us to sell this land so quick because if we sell out of a project in that area, like 76 lots, like they're all sold, we still got people hitting us up, like, hey, do you have a lot out here? Do you have a lot? No, but you're gonna go on the list, or you know, we're gonna hit you up when we get the next one, and we will get another one out there because that's one of the areas that we are always working. Yeah. So just back to the well of buyers, basically. Easy, man.

SPEAKER_00 36:56

That's great. So can you break down the owner finance terms that you're offering people typically? Because I think you you do pretty low down payments and pretty middle of the way interest rates, if I remember correctly.

SPEAKER_01 37:07

Well, the down payment thing is something that I've pivoted. Oh, really? Yeah. So it traditionally was call it two and a half percent or less down, which on the rural stuff, you know, one, two, three thousand an acre disposition, that's fine. But like the more expensive, major subdivide, highly qualified stuff that you're trying to scale and sell those notes and work with investors, like no one's gonna want to buy a note that has 1% down payment unless you got like a year or two.

SPEAKER_00 37:36

I was gonna say of no seasoning too, yeah.

SPEAKER_01 37:38

Um, so that's been pivoted seven and a half to ten percent down. Okay. That's kind of what I'm going for now.

SPEAKER_00 37:43

And what's your average price point on a lot you're selling?

SPEAKER_01 37:45

100k. 100k. Call it 100.

SPEAKER_00 37:47

It's like seven to ten grand down typically.

SPEAKER_01 37:49

Yeah. And I keep my notes to ten years or less. Okay. Um, because I like to sell a lot of notes, and so therefore, the discount rate is less if I can get it over a shorter period of time. Um, interest rate's seven percent always. And funny enough, I was just having a conversation with a note buyer yesterday. Okay, and we had the whole interest rate discussion, and um, it's a thing that a lot of people, even the savvy people, don't understand because they're you know immediately, well, you're not charging nine to ten percent interest. No. Um, and so I like to segregate it into a uh just off the top, a low and a high interest. Like you're never gonna charge two or three percent interest on a note because no one's gonna be incentivized to pay you off. Right. You're also not gonna charge 12, 13, 14% interest just because it's too high. Most people are just gonna think you're a scam. Yeah. And not gonna want to do anything with it. So you're left somewhere in the middle, call it six to ten percent. Yep. Um, is what you're gonna be charging on an owner finance note. Um, I like seven because it's on the lower side and it still incentivizes people to pay you off early. And kind of my philosophy on it is you know, like the note buyer yesterday, why aren't you charging 10%? Well, if you had a hundred thousand dollar note at seven percent, it's like eleven fifty per month over ten years. Okay, if I charge ten percent on that, it bumps up to like thirteen fifty or something per month. What is the two things that are most important to a buyer to get into a deal on the land side? Monthly payments, monthly payment and down payment. Down payment, right? So the down payments fixed, it's gonna be you know seven to ten percent, whatever. So when I raise that interest rate, I have effectively just priced a whole bunch of people out of the land. But my philosophy, instead of raising the interest rate, if I wanted to charge $1,300 per month, I would keep the interest rate at seven. I would just raise the principal.

SPEAKER_00 39:36

Yeah.

SPEAKER_01 39:37

And keep it at seven. And then when you go to sell the note to the note buyer at the end, it's gonna work out to be the same. Whether you're charging whatever works out to be $110,000 at 7% when they discount it to get their yield, right? It's gonna come down to 75 or whatever it is. Okay. Or if you're charging $100,000 at 10%, they're gonna discount it and it's gonna come down to 75 or whatever it is. Yeah. Um, so it all works out to be the same at the end. I would prefer a higher principal, less interest, as opposed to higher interest, less principal. Makes my balance sheet look better, makes my notes receivable look better. Um, I think you can make the argument maybe you get yourself in a jam, like, okay, uh, maybe the equity, if the no buyer is you know looking for a certain amount of equity and you have these inflated principal values because you're charging lower interest, maybe that could get you into a jam.

SPEAKER_00 40:23

But seems like it hasn't been a bottleneck for you yet.

SPEAKER_01 40:25

Yeah, that hasn't hasn't been a problem for me yet. If that really becomes a problem at scale, then yeah, I would pivot and just charge maybe nine percent interest. But I don't I don't think that's gonna become an issue.

SPEAKER_00 40:33

I think if it did, it would just be like the discount rate might just be a little bit different too, right? Yeah. So the economics will shake out how they shake out, and you can pivot whatever you need to do. But I think what you've done is effectively said, hey, I want to make sure I consistently offer a product that has a big buyer pool. So rather than me just like giving myself a pat on the back because I, you know, got a family to pay me 13%, why don't I accrue a bunch of notes, accumulate all these notes that are such an asset from a bankability perspective and are actually saleable on the back end, right? So you've reverse engineered the avatar and the buyer pool to make sure that your dispositions aren't bottleneck.

SPEAKER_01 41:16

Yeah, it's very true. And what I recommend to anyone and everyone is you gotta have a loan calculator in your phone. Like I use mine every single day, and I could just spit off numbers and I know these things like the back of my hand. Yeah. Most people don't do owner finance to begin with, but if they do, they don't understand their numbers. Like there is a great loan calculator for iPhone that I have where you literally set the input, and so when you adjust the interest, it will automatically adjust the principal. So it's just running goal seek, like you know, Excel formula in the back end. You got to get familiar with that, man. You can't just be, you know, oh, how much am I gonna sell this note for? You know, what interest am I gonna charge? Like, I immediately know when I get into a project, like, okay, I'm gonna assume that I'm gonna offload these notes on the back end to an investor for a 16 yield to them. So like I would have already calculated on the loan calculator what my exit price is per acre on a 16% yield to the investor, probably an 18% yield because what happens if I can't get 16 and the market softens or whatever, and then you know, probably more aggressive 14 or 15. So like I know all these things going into the project, like how much am I gonna exit the land for, how much can I expect to sell a note for, what my notes are gonna look like on a monthly basis? It's gonna be a thousand a month, twelve hundred a month for the customer, like all those different things are known up front before I even get into a project.

SPEAKER_00 42:34

What um what has typically been the timeline for you from a seasoning perspective before you've sold your portfolios? Six months. That's not bad. Yeah. And obviously you're receiving cash flow along the way too, right? Yeah, and sometimes sometimes quicker.

SPEAKER_01 42:46

I mean, it depends on the piece of land, but three to six months.

SPEAKER_00 42:49

Okay. Have you ever kept I mean, I'm I know you've held a bunch of your notes. Have you ever tried to borrow against those effectively?

SPEAKER_01 42:56

Yeah. Um, I haven't gotten to that point yet, but we've we've had discussions. Yeah, I've gotten close, but I've never done it. They call it at least one word for it is hypothecation.

SPEAKER_00 43:05

Oh, yeah.

SPEAKER_01 43:06

Um, and so yeah, borrowing against the notes, obviously not a taxable event. Right. You're getting debt on on that note portfolio. Um, I know a guy who uh at least he told me he closed on a three million dollar hypothecation on an investor friend of mine. So it is possible there are banks that will do it. I don't think you're gonna be able to find a private money guy who will do it. You might, but that's more of a bankable thing. You're talking with banks.

SPEAKER_00 43:32

Yeah, yeah. That makes sense. Okay. Um, so we talked acquisition, we talked disposition. We haven't really talked about what your team looks like today. So could we break down? We talked a little bit about Brian, your right hand man, who's your ops guy, also your sheriff, if I remember right. Or maybe yeah, okay. We'll get into that later. Okay. We'll get into that later. Uh, what's the rest of your team makeup look like?

SPEAKER_01 43:55

So it's me, obviously, then it's Brian, operations manager, then I have Mason who's my Sales manager. Okay. He's largely in charge of just disposition sales. We all still do sales, though. Me, Brian, and Mason kind of all always tackle sales. Me less so nowadays. Um, I used to be in Facebook Messenger, you know, every day answering people. I still do that from time to time, but I'm not as big a fan of doing that nowadays. Um that's more of a Mason job, and then secondarily Brian. Um so it's those three, and then I have an attorney who's I mean, uh, I think my legal team it has gotten to the point where it's a powerhouse. Like we've challenged a lot of different counties, uh, especially in that plat exempt thing. Oh, really? Um, we're deep in the weeds on on one right now that I won't talk about because it's about to escalate, and I've been told not to talk about it, but we are about to try and hammer um uh a couple of these counties and kind of just try and uh hold their feet to the fire. And so I think I pay probably uh it'll be more this year because I'm already, I think, 25 or 30,000 in attorney fees just on this one project. But historically it's been 80 to 100,000 a year in attorney fees, uh fractional CFO, bookkeeper, obviously. So it's us three, me, Brian Mason, fractional CFO.

SPEAKER_00 45:11

If you want to think about the bookkeeping in your business, dude.

SPEAKER_01 45:15

Um and then uh the attorney, and uh from a land perspective, that's pretty much it. So it's three full-time employees, including myself, then three, you know, consultants or 1099s or whatever you want to call them, or um, you know, not full-time people.

SPEAKER_00 45:31

Yeah. Uh I want to go back to because um this question popped into my head. When you're selling your notes, are you just working on platforms like Paper Stack or where are you going to find these note buyers?

SPEAKER_01 45:41

So I will use Paper Stack, yeah, but a lot of it's been just relationships I've developed over the last five years or so.

SPEAKER_00 45:47

And do you offer any kind of guarantees to people that buy the portfolio? Like if you have a buyer or uh buyer that defaults or anything, like you'll buy back the note or anything like that.

SPEAKER_01 45:55

So you don't want to get into that with a recourse. Um you should always be selling notes uh with no recourse, not only because you don't want to be responsible for repaying the investor, um, but also I think there is maybe a little bit of legal ramification there. The note sale, I think, should be no recourse. But with that being said, um, we do offer the option to help them resell the land, which we just got done doing with um a note guy I've been working for, uh working with a couple years now. We resold a piece of land for him for more than he bought, you know, the note for. So he got a he got a yield bump.

SPEAKER_00 46:30

Yeah, no kidding.

SPEAKER_01 46:31

You know, knock on wood, we don't have many of those, but um, when they do default like that and they need the land resold, we will do it for them. We'll just get it resold.

SPEAKER_00 46:40

What are you doing to screen your buyers outside of just down payment and interest rate? Are you guys getting uh what is it, RMLO, uh, any of that stuff, credit checks? What are you doing there?

SPEAKER_01 46:50

So it's a great question and good point because again, I've uh basically probably a year ago I decided to make a whole business transition where we're gonna attack these major subdivides, we're gonna go for massive scale. In order to do that correctly, you're gonna need RMLO, you need higher down payments, you're gonna need a no-buyer network, all these different things. So, yeah, nowadays um every big project that we do will be RMLO. Wow. Um you pass that expense on to the buyer is do you pay for that? That is something that I have a different mindset on. Like I I don't pass it on to them in the sense that like it's on the closing statement. Okay, but it is baked into the cost of the land. Okay. So that's kind of how I pass it on, so to speak. But like I'm a huge proponent of like no fees, no closing fees, like make it super easy. Yeah, I I'll just charge them a higher down payment. Like I'll do 11,000 instead of 10,000 if I really need to. That makes sense. Um, but yeah, all the stuff on the major subdivides now is RMLO. We'll still do, you know, a non-RMLO deal from time to time. Something came back in the inventory and you get it resold on the project. But yeah, it's all credit check, RMLO, cross the T's, dot the I's on the bigger stuff nowadays. Yeah.

SPEAKER_00 48:00

What's like uh, you know, lifetime to date? What's been your favorite project that you've been able to dive into? Is there a fun story on one of these that you've done?

SPEAKER_01 48:11

Oh, for sure. The Jazz Acres development I did out in West Texas.

SPEAKER_00 48:14

Surprised you're not wearing your coat.

SPEAKER_01 48:15

Yeah, yeah, the plaid jacket coat. Um, that was the project that would have been early 2022 that kind of just took my business to the next level. I was able to buy a $1.5 million piece of land with seller financing. It was $200,000 down, $1.25 over 10 years to the seller.

SPEAKER_00 48:33

Um amortized over 10 years or was there a balloon?

SPEAKER_01 48:36

Amortized a straight amortized, worked it so they could give partial releases, I could subdivide it, sell it off, do everything I needed to do. I think the gross on that was about 5.5. Whoa. Um, I think I put 500,000 into it just in roads. Okay. Just in roads. Just in roads, and that was really all that was needed. It was probably 50,000 in surveying and drainage study and whatever. So it was probably 515 in improvements. Water. Um, water that was before you needed a groundwater study in Texas. So it was just we we did 10 test holes on that property before I bought it. Found water in every single one that was up to customers to drill from there. But I think that one was 75 or 80 lots as well, close to the other one. It was 465 acres, all out. It was like 5.5 million. I ended up selling out of that thing. I think it was two and a half, three years, just all the notes and everything. So I made three and a half million bucks on that over the course of call it two years. Um don't hate that. Yeah. And that was just it was such a huge stretch for me at the at the at that time. Like 2022, it was basically, you know, call it 700,000, like out of pocket. That was like all I had, was just all on this one deal.

SPEAKER_00 49:49

Yeah.

SPEAKER_01 49:49

Um, and I was super nervous, obviously, because of the size of it. It was my first million dollar deal. Nice. And um, it was a broker owner. Really? Um, I'll never forget I was on the phone with him. I was thinking about backing out of the deal, ended up not doing it, and he was just going to bad for me. Like, you know, if you want to roll the dice on this, you need another option, like I'll get it for you.

SPEAKER_00 50:10

Okay.

SPEAKER_01 50:10

Um, but funny enough, up front, when I was first negotiating that, he was like, didn't think this piece of land was developable, if that's a word. Like he's like, I'm a broker owner. If I could have developed this land, I would have. Interesting. He's like, but if you want to go for it, you can go for it.

SPEAKER_00 50:27

And um that doesn't necessarily give you the confidence to spend some money on it, right?

SPEAKER_01 50:31

Yeah, so I I I ended up almost backing out of that deal multiple times. Um, but somehow uh went through with it, and yeah, I guess the rest is history, the plaits up on my wall in the office and that's awesome. Jacket on it, obviously, and everything. So yeah. Yeah.

SPEAKER_00 50:46

That's fantastic. I'm curious, and I don't I don't know if I should ask this or not, but I kind of have to. It's like that like back of the mind question. Are you ever nervous about marketplace changing radically in some way that doesn't allow you to sell the way that you want to do it? Facebook, you're talking about it. Yeah, yeah, yeah. Facebook marketplace. Because that's a lot of your dispo right now. I mean, it's been multiple years that you've been doing it, and nothing crazy's happened, but it sounds like that's a pretty pivotal piece of the business right now, right?

SPEAKER_01 51:14

Yeah, I wouldn't say it's a big fear of mine because I know if something happens, I'll figure something out. That's fair. Pivoting and adapting. Um I'll run TikTok Marketplace ads. Yeah.

SPEAKER_00 51:22

Offer of, I don't know.

SPEAKER_01 51:24

TikTok, PPC, something. There's a way. Um but you know, I I think the bigger fear actually is like getting banned or something from Facebook or like something happened to like your accounts or business or something like that. But you know, Facebook is such a big company that I I always say though, like that's why you should be building your own internal database in a CRM because Facebook could go away, TikTok could go away, anything could happen. Um, but you know, it's not really it's not a big fear of mine. Okay.

SPEAKER_00 51:53

So that's cool. Well, let's transition, man. I think your business is fascinating, and I could ask you a thousand more questions on it, but I feel like we can't uh we can't not talk about pretty major detail about you. That's hard to miss these days. Um guys, if you don't follow John on Instagram, I highly recommend you do. It's very entertaining, all the things that you've been up to these past couple years, man. Um, what's your handle? Is it just John Jazniak? Yeah, perfect. So it's your name. But you bought a freaking town in West Texas, man. Did you find that on Facebook Marketplace? I did, yeah. That's insane. Tell tell them tell me about that story.

SPEAKER_01 52:25

Yeah, so uh that would have been early to mid 2022. Okay. Um people started sending me this posting of Cornudis, Texas for sale.

SPEAKER_00 52:34

And um When you say people like uh other investors or people like had you on their radar or yeah, other investors, friends, like it kept Hey, this is funny, this is for sale.

SPEAKER_01 52:43

Yeah, and I kept popping them on my feed because it had like thousands of likes and like you know, hundreds and hundreds of comments. Kept kept seeing this thing, and I was like, uh I think it was maybe Brian or someone who was like, You should buy this, and I was like, dude, it's in the middle of nowhere, like it's eight hours from Fort Worth. Like, yeah, I don't think so. Um, I think it was still for sale in December of 2022. And I told my dad, I was like, you know, let's go out there and look at this thing, it'll be like a fun Yeah, fun little road trip, yeah. Yeah, so we left early in the morning, it's eight and a half hours there. We get there, and uh, we do the whole tour with the owner who that was a separate crazy story in and of itself. Then um we ended up just driving eight and a half hours back the same day. It was just like a day-long trip. Sure.

SPEAKER_00 53:26

How long were you out there then? A couple hours?

SPEAKER_01 53:28

Yeah, an hour or two. Okay. Uh we drove around the property, threatened to kill me multiple times. I was like, Can I get a sample? The owner threatened to kill you? Yeah, the previous owner. Um can I get a sample of the water? He's like, You can try, but I'll I'll shoot you. Um, so I pretty much it was like sight unseen.

SPEAKER_00 53:44

What? What was his issue?

SPEAKER_01 53:47

Was he just like crazy? His name's Jeff. Um, if you if you know him at all or know know of him, um he's just an interesting guy, man. Okay. He's it's just it's it's crazy.

SPEAKER_00 53:59

Um much love, Jeff.

SPEAKER_01 54:00

Yeah. I'll never forget. I was driving around in this truck. We're out at uh driving out back the property. I was like, can I get out and take a video of you know whatever we're looking at? Can I get a video of this? He's nope. There's plenty of videos online. Stay in the truck. I'm like, what? Okay, buddy.

SPEAKER_00 54:15

How old is this guy? Give me like a picture of what he looks like. Um mid-40s, I think, probably. Okay, um, just a good old boy.

SPEAKER_01 54:22

Uh kind of a brash personality, like uh heavier set guy, mid mid to late 40s, like no BS, just straight to the point. Sure. No filter. Um did you find how did he end up owning the town? Like, what was his background? So the famous owner of it, Mae Carson, um, she passed in 2018, 2019. That was back when people really liked Cornudas and it was like a staple, right? Yeah, yeah. But even her uh Miss May, she was known to be like just a firecracker, like feisty lady. Unfortunately, I never got to meet her, but um, from the stories and stuff, I hear you either loved her or you hated her. A lot of people loved her. I think most people loved her, but you know, she was very she has strong personality. Yeah, exactly. And so she passed, and it got uh passed down to her grandson, Jeff. Okay. And he lived out there with uh his mom, May's daughter, and they were he lived on the property as well as for the most part, yeah. Um he would travel back and forth to wherever he was going, similar like I do Fort Worth. But their family was always out there, they were running it. Um it just slowly degraded um over time.

SPEAKER_00 55:29

So poor management, essentially.

SPEAKER_01 55:31

Yeah, um, one of these days, maybe Jeff will hear this. I would love to get you back out to Cornitas and do a walk around and podcast and you show you everything and we've done and like to have a couple words with you and see what you think about the leaking water tank you left me and all the other stuff. Um but yeah, it just kind of degraded down to nothing. Okay. Maybe a hundred, maybe two hundred dollars on a weekend on a day, which is just absolutely nothing.

SPEAKER_00 55:57

Pretty great revenue, right? Nice passive income.

SPEAKER_01 56:00

Yeah, I don't know how they were making a living at a certain point. I mean, the ceilings were crackling and crusting off, and it was just a complete mess. Um, and I like I said, pretty much had to buy it site unseen. Wow. Just because he wouldn't let me get a water sample, he wouldn't let me do, you know, XYZ. It had a bunch of back taxes on it when I bought it, so those had to be taken care of. He was in trouble with with that. And so, I mean, it was the most challenging real estate transaction I've ever done. I was told he made the title agent cry uh as part of the closing. Um, but it got done at the end of the day. And it sure it took a lot of convincing because he thought it was just gonna be walk down to the Hudspeth County clerk's office and do a handshake and get a cashier's check. That's how it started.

SPEAKER_00 56:44

Well, man, when you inherit something from old grandma, like I don't know, man.

SPEAKER_01 56:47

I'm like, dude, there's back taxes on the property, there's who knows what on the property. Like, we're obviously going through a title company. Yeah.

SPEAKER_00 56:54

Um and it is is, and this is a stupid question to somebody that's never bought a town before. Uh, is like is it just a legal description on the deed, same as any other property, or yeah, the legal description on a deed you'll see 28.3 acres or whatever it is.

SPEAKER_01 57:07

Sure. And then there's just all the improvements. It's unincorporated, so it's just a piece of land with a bunch of improvements. Capital steam motel, gift shop, a few mobile homes now, RV park, gas station, a little gas pump, a few other buildings, storage shed, bunch of equipment. Chopped wood. Yeah, wood. I mean, he left everything, man. When he when he left, like he literally left. He took maybe like a couple things we wish we we we could have had, like this beautiful island in the main house, like piece of furniture, but like literally couches, pictures, documents. When I walked into the cafe for the first time, um literally all the food was still in the fridge and everything, just molded. Like it was everything was still running, but it was just all moldy and it was just left. Like it just left. And we had to, yeah, we had to clean everything out and just put it all back together.

SPEAKER_00 57:55

So let's go back, man. Help me understand why you decided to buy it. Like what was what was the decision in your brain as to like, yes, John, this is a good use of time. Because like you were crushing it in your business, you know what I mean? It's not like you needed another project in your life, but but you decided to take it on. What was uh what was your thought back then?

SPEAKER_01 58:17

I think at the time I was uh very much obsessed with trying to grow the personal brand and the coaching side.

SPEAKER_00 58:23

Okay.

SPEAKER_01 58:24

And so I thought being a town owner would greatly accelerate and and help that. Um did it? It did, but I would say probably not as much as I would have hoped, um, at least from like the education business. Um, but from the personal branding side, yeah, I think it actually did. Like Instagram's taken off, YouTube, all these different things, and then uh as a halo effect, it's I think had a great ability to help me raise money, you know, bring investors out, okay, hang out with friends and family, meet new people. Like I've met and done a bunch of cool things. All my friends and family have been out to core new display.

SPEAKER_00 59:00

I see I saw the landhouse guys were out there a couple weeks ago.

SPEAKER_01 59:03

Ryland and the landhouse guys were out there, whoop their butt in the pool, turn it off. There you go. Shout out.

SPEAKER_00 59:07

My guy Nick Staley was there too, right?

SPEAKER_01 59:09

Uh yeah. Yeah, okay, cool. Yeah. Um, and so, you know, it's just been a bunch of fun with friends and family, and I've learned everything from plumbing to concrete to roofing. Like pretty much have done all that. Um, personally myself. I obviously have employees and people who have done it, but like I've every project, big project we've done, like I've gotten in there, you know, poured concrete, worked on roofs, like swung hammers, saws, you know, laid concrete, whatever it is.

SPEAKER_00 59:38

Makes you wish uh mesquite tree was the worst thing about a project you're doing, right?

SPEAKER_01 59:43

Yeah, exactly. Um so yeah, now we're over a million dollars into it, and I think we're finally turning the corner and seeing decent growth here. Wow. In the beginning of 2026, um, I'm pretty sure. It'll be decently profitable.

SPEAKER_00 1:00:02

Okay. And I feel like it's starting to become, and correct me if I'm wrong here, but I mean it's kind of a piece of the branding now, and there's a piece of you that like identifies with it and is proud of the turnaround that you've been able to do the past couple of years, right?

SPEAKER_01 1:00:15

Yeah, definitely. And you know, Hudspeth was where I did my first land deal. Yeah, that's where I did.

SPEAKER_00 1:00:19

So it's almost symbolic in a way.

SPEAKER_01 1:00:20

Yeah, it's where I did my first subdivision, it was actually two miles from Cornudis. Um, so I love that part of Texas, and it's not something that I really ever plan on selling. Now, if someone walked up to me today and said, I'll give you $50 million for Cornudis, I'd probably consider it. But um, yeah, it's a property that I kind of plan on holding for hopefully generations, and you know, really we'll see how it grows up and what it does. But like yesterday was Thursday, and we had a $2,900 Thursday, which was a record for us. That's awesome, man. You take out short-term rentals, it was like a $2,000 Thursday. So like now the weekdays are like starting to become thousand dollar days, the weekends are starting to become two thousand dollar days. Our break-even point, I think we calculated, was like $14,000, $1,450-ish per day. Okay. So when you shake all that out, that's what we need to hit averaged daily to become profitable, which you know, when they were running it, I don't know that they ever had a thousand dollar day. Sure. Jeff left his point of sale signed in. Oh, he did. On a square monitor. So you were able to look at it. Yeah, we walked in and like their biggest day was, you know, like a few hundred bucks or something on a Saturday. So I don't think Cornudas has really done this level of business or revenue or this level of attention, maybe when May was there attention-wise, but throughout the history of the property. Um so we'll just I guess goal is to keep pushing and see what happens.

SPEAKER_00 1:01:40

That's great, man. What's the um what's been the biggest driver in the change? I mean, there's not really one thing, right? But like in terms of turning around Cornudas, what would you say is the biggest thing you've had to really rejig?

SPEAKER_01 1:01:56

Yeah, that's a great question. I guess that I've never even really thought about. I would say it's I would say it's the cafe, um, certainly, because that's the main driver, but the gift shop. Really? Gift shop, surprisingly, um, and they had told me this when I bought it. They're like, you're gonna be, you know, surprised the gift shop's gonna be the best thing you got. And I was like, no. When you say gift shop, it's like Cornudas themed stuff. Some, yeah, but we sell everything from Cornudas themed stuff, a lot of southwestern themed stuff, so like hoodies, ponchos, hats, shot glasses, you know, uh all the way down to like we have, I don't know, some crazy figurines and wood toys and everything. I want to be want to get Pokemon cards out there.

SPEAKER_00 1:02:35

Heck yeah.

SPEAKER_01 1:02:37

But yeah, the gift shop has been surprisingly um the best thing, and I've kind of ramped it up here, and we've slowly expanded over the last four months. It's doing anywhere from $10,000 to $15,000 a month now just on the gift shop. That's cool. Um, so gift shop and cafe are the main driver. My next thing I need to get live, which might be the thing that really pops off, is the short-term rentals. Okay. We got a motel and like some really cool short-term rentals where the landhouse guys were staying. Yeah. That house with the pool table and everything. If we can actually get that rented out and cash flowing, that might be the biggest economic driver.

SPEAKER_00 1:03:11

Who's your uh who's like your traffic? Like who's coming through Cornudas? What's what's bringing people to you right now?

SPEAKER_01 1:03:18

Yeah, so it's on U.S. Highway 62180, which is I guess the second major highway in Hudspeth County. You got I-10 to the south, 62180 on the north, it connects El Paso to Carlsbad, runs through the Guadalupe Mountain National Park. So the main traffic is El Paso. It's only 50 minutes away to Wow, that's pretty close. Yeah, to the east side of El Paso is 50 minutes to like the heart of El Paso is an hour, hour and 15. Okay. So most traffic is El Paso. Um, and then secondarily, it's just travelers running from uh New Mexico or Texas all the way out to Arizona and California. We get people all the time because that's kind of a route you take going out to either Phoenix or all the way out to like San Diego or wherever in California, you either take I-10 or 62 and 80. So kind of my goal is to take Cornudas and make it a spot where okay, if we're going west or east, we want to go this way instead of on I-10, so we can go through Cornudas is kind of my next goal, I think.

SPEAKER_00 1:04:13

Okay. I'm curious if you could uh if you could go back and talk to John in 2022, would you tell him what was what would you tell him to yeah, like what would if you could go back basically, like what would your advice be to 2022, John, on the acquisition of Cornudas?

SPEAKER_01 1:04:29

I would say it's gonna be way harder and take way longer and more money than you thought. We literally walked in there uh with a small team in February of 23 and thought we were gonna clean it up in like two months and just be making a bunch of money. Like I was like, I'm gonna be making 40,000 a month this year, like in 2023, and uh 40,000, 50,000 a month. The cafe is gonna be flowing, and we're like, we're gonna clean all this up, it's gonna be ready to go. A lot of optimism. Yeah, and it was literally almost a year and a half shut down, just working. New roof in the cafe, refinishing the kitchen, new equipment, cleaning it up, 20, 30 trailer loads of trash out of the property, like redoing everything, water lines, water tanks. Um, so it was way harder and way more money than I thought. Okay. Um, I actually thought it was gonna be easy, but I think it'll pay off in the end.

SPEAKER_00 1:05:24

I think a lot of us think things are gonna be easier than they are until we get into them, but it's kind of a kind of a beauty of life, right? I think it's also a testament to the fact that if you are willing to solve problems, there's usually a way to figure it out. And I think the people that have that mindset are the ones that win. Right. Yeah. Business is just solving problems. I mean, if you're a problem solver, you can make money. 100%. So um let's start to transition into um the final couple of questions of this episode here. Um, you know, I think first I would ask, uh, you know, in in your life, who would you say was Maybe one of the most impactful people to you. Um could have been old Marky Mark. No, I'm just kidding. Or uh a mentor, your dad. Was there somebody that was particularly impactful to who you are today?

SPEAKER_01 1:06:11

Um, yeah, I would say probably my mom and dad, obviously, um had a pretty uh I would say pretty good childhood, pretty um straight and narrow, you know, um hard work, do good in school, all that stuff. From a business perspective, um I'd say yeah, I probably had one or two mentors, um, a mentor of mine, Mike, who bought my first note and helped me on all the creative finance stuff. Um, but if I'm looking back on it, honestly, I think was maybe my experience is going away from college or to college, just figuring it out on my own.

SPEAKER_00 1:06:47

Yeah.

SPEAKER_01 1:06:47

Um confidence that comes from that, right? Yeah, just like being thrown out there and like, okay, now you're just by yourself living life, you know, cook your own food, do your own laundry, meet friends, figure out school. Like that whole experience was, I think, probably um one that just really comes to mind. Okay.

SPEAKER_00 1:07:07

Yeah, that's cool. Uh, in terms of uh are you a reader? You like books? If you could recommend one book to the audience, what would it be and why?

SPEAKER_01 1:07:16

Um I guess it would depend on like for your need or use, but from a business perspective, I would say Thinking Fast and Slow by Daniel Kahnman. That's a good one. Um is one of my favorites. And then I think just to toss another one in there is like maybe the Hexico book um by I think it's Kibium and Lee.

SPEAKER_00 1:07:37

Okay, I've not read that one, I'll check it out.

SPEAKER_01 1:07:39

Yeah, just you if you're in business, you gotta study psychology and and personality. And you could also get like the big five books and stuff like that, but you gotta study psychology and personality if you want to be in business. Plus, that relates to you know, personal relationships, friends, family, all that stuff.

SPEAKER_00 1:07:53

Yeah, what do you think is the biggest difference between uh especially I'm gonna take a step back with your coaching background? You've seen a lot of folks that have probably told you they're gonna do a bunch in business. Yeah. And you've seen most of them not do anything, right? Uh, what do you think is the big difference between the people that I mean do and don't, the winners and losers?

SPEAKER_01 1:08:15

I mean, I think there's a few probably. One, some people struggle taking action and just overanalyze. Um, two, a lot of people are not problem solvers. Okay. Like they hit a problem and they just give up because they either think they can't or don't want to solve it or whatever. So those are a a few big ones. And then of course, like confidence or just you know, like self-confidence. Like, there's so many times you know this, like you pick up the phone, you get told no, you're trying to negotiate a deal, you get cursed out, F off, whatever. Um, and if you let that get you down, which a lot of people do, especially if you're a new business owner, yeah. Um, then you're kind of screwed. Like, because I think it's very hard if people don't have success right away, like they're starting a land business or any business, a town, if you don't have success right away, it's very hard to keep pushing. I agree. Unless you've run other businesses, but most people who enter this space, this is likely their first business.

SPEAKER_00 1:09:09

Yeah, totally. Um, as we close out here, John. Last question would be just if you could leave the audience with one piece of advice, right? Life, business, whatever, what would it be?

SPEAKER_01 1:09:23

As deep. Um I would say you have to figure out what you want to do in life or business. And in order to do that, you're gonna need to get out there and probably try a bunch of things until you do that. And I would recommend just trying as many things as possible, even if you're failing. Whether it's, you know, even if you're just starting a land business, you might not know if you want to subdivide, if you want to flip, if you want to entitle, do mobile home parks, whatever. But you got to try a bunch of things, and then once you figure it out, you have to have a hyper focus, like too much shiny uh shiny object syndrome. Me, I'm hyper focused on subdividing land. If I were to get thrown off into mobile home parks or like the distressed property stuff, like all these different things are great avenues to make money.

SPEAKER_02 1:10:15

Right.

SPEAKER_01 1:10:15

I'm not disputing that, but if I lose focus on what I'm doing, then it's gonna just be become harder to achieve what I want to achieve. So, like, try a bunch of things. You need to figure out what you want to do in life andor business, could be as drilled down as land or as broad as life, and then once you figure it out, you got to double down F hyper focus and not have shiny object syndrome.

SPEAKER_00 1:10:36

Man, John, what I've always appreciated about you is you're such a no fluff guy. Like, despite, you know, the the big Instagram and you're buying a town, we didn't even talk about the Lan Vow, you know. Um, and you you're you're really, really good at the um the attention game, right? But when you sit down and and like really get to chat with you, you're such a no-fluff. Here's the real meat. Um, you almost have a disdain for BSers that I've seen over the years of like, don't BS me or else I don't really want to talk to you, right? Yeah, definitely. So I I've always really appreciated your your candor and your ability to uh despite knowing most people won't take action, still be willing to share so much in the world between all the free presentations I've seen you give, both online, in person, at Ria's, whatever it is, man. So I just I appreciate who you are and your authenticity, man. Thank you so much for for coming on and being uh being real and raw this past hour and a half. Um if people are interested in either partnering with you to maybe give you some capital, work with you, send you a deal, what's the best way for them to reach out?

SPEAKER_01 1:11:40

Well, first off, greatly appreciate you having me and thanks for inviting me to the office and just hanging out and being a friend, being flexible, figuring out uh when to do this, how to do this, and yeah, just being you. Um if you want to find me anywhere in social media at John Jazniak, first name, last name, YouTube, Instagram, Facebook company, main company is jazzland, jazzland.com, john jazniak.com. Um I got a bunch of stuff out there, free stuff, mostly YouTube, Instagram, not selling anything, it's all free. Edutainment is my favorite thing to do, keep them entertained while educating. Yeah. And I guess that's the goal. Sweet. John, it was an honor to have you on, my friend. Thank you for being here. Yeah, man. Thanks for having me.