471 Lots From One Deal?! Here's How Luis Did It

242: In this episode, I reconnected with Luis Melo, a high-volume land investor who blew my mind with what he's done since our last conversation in 2021. He's flipped land using double closings, assignments, and seller financing, without risking much of his own money.

(Show Notes: REtipster.com/242)

What's even more impressive is how he turned an 800-acre deal into 471 subdivided lots, built a team of 10 VAs, scaled into $12M+ deals, and why he's still using cold texting as his #1 acquisition channel.

If you're a land investor (or want to become one), this episode is a must-listen.

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Transcript

0:37

Hey everybody, how's it going? Welcome to the REtipster podcast. This is Seth Williams and you're listening to episode 242. So back in March of 2021, Jaren and I sat down with a land investor named Luis and that conversation always kind of stuck with me. He was regularly closing deals through assignments and double closings without tying up much of his own money. And at the time, He was running a high-volume land business, sending out thousands of offers, juggling dozens of contracts, and somehow managing to move deals quickly, often in 60 days or less. And he had a full-time work ethic that helped him push through a lot of rejection and uncertainty. And that was over four years ago. Since then, the land market has shifted in big ways. Interest rates, competition, and new technology have changed how this business works in a lot of markets. So I wanted to bring Luis back on the show to find out what's changed, what's working for him now, and what he's learned since then. So Luis, welcome back. How's it going? Good, man. Thanks, Seth, for having me. You know, we met in Colorado, which was amazing seeing all those investors and meeting you in person. You're much taller than what I thought. Yeah, I hear that a lot. Yeah. So, yeah, the land space has changed so much since 2021, since we spoke. I still love double closing assignment fees because it lets me try the market. I like to try the market. I'm a guy that like, even if I know the market, I like to try. I like to send it to my buyers. So that allows me the 60 days that I have under contract allows me to make sure it's a good deal or not. In my seven years, it's going to be seven years in February next year, flipping land. I have never lost money. I can count with one hand how many deals I made a thousand dollars or less, because they were not the greatest, but at least I didn't lose money because I made sure to try to sell it before I had to buy. And that's still my main goal for like 95% of my properties. 95% of your properties, you are either doing a double closing or assignment. Is that what you're saying or? I'm trying. Trying, okay. I'm trying because right now, it's not as easy to sell land as it was before. The whole thing with inflation, prices that are higher. So it's a little bit harder for you to get a contract signed with the seller. Right now, it's easier than the last year because I think a lot of people are broke. They don't have money. So they want to sell the land to you. But at the same time, your buyers don't have money set. So you're like, you have to advertise better. You have to get better photos and you have to keep grinding. You have to offer seller finance. So during that 60 days, I'm able to see if this is a good land or not. And there are things after you get it under contract that you get to know, right? Because I'm not doing my due diligence before because it's a waste of time, in my opinion. I'm doing my due diligence after that guy signed the contract with me. Let's say you go 60 days and you haven't sold the thing yet, but you've seen some interest. Like it's looking promising. or I don't know if you ever go 90 days on these contracts or if you ever push for further than that, but is there a point at which you decide it hasn't sold yet, but it's worth my time to actually buy this thing and take title and take the risk on it? How do you mentally go through that decision and decide whether to do that? There's a few ways that you can do on the buying side because you have the seller with you signing the contract. Like last week, I had a seller that I had it for 60 days and I couldn't sell the land. And I kept pushing him, kept pushing him. And I want an extension, I asked for him. And he's like, I'll give you an extension if you give me 1500 earnest money deposit. But in that meantime, that I was talking to him, trying to extend, and it was already extending, right? I mean, I was able to find a buyer. So I found a buyer and I secured myself$5,000 cash in my account because I held a little longer. So there's strategies. You can cancel, you can price drop, you can ask for extension. You know, you can tell them, Hey, listen, I'm not the best fit for your property because of this, but I can offer it on the MLS. I put it for sale. I specialize in land. would you be okay if I make five, $10,000 in this deal? And most of them were like, yeah, sure. I'll be okay with that as long as I get this property sold. So then I signed a new contract, which allows me to sell their property on the MLS and every single place. Because right now, before when we spoke in 2021, Seth, I could put every single property on Zillow. And Zillow was the best. For sell by owner, it was the best thing to sell land. But since then, you can't. You cannot post a property for sell by owner land on Zillow.com. So you have to own the property. And after you own the property, you have to use what I call brokerless MLS fee, right? You use a person to list the property, don't pay them a fee. And then it goes to MLS, Zillow, Redfin Trulia but that's after you have it in your name and So that's why a lot of times I'm buying the land too. But I know that when I was in 2021, I was cash on cash, right? Trying to get as much cash possible. So I didn't have the money to buy all the pieces of land that I had under contract. So the best option was to do double close. So that's how I like double close. And it's a little bit harder to sell the land. Like I said, right now, if you have an infill lot, like a perfect infill lot, they go fast. Like Arizona, Tennessee, Florida, Nevada, they go fast. But if you have a desert square, which I have some because I just got it for an amazing price, it's harder to sell. You have to offer seller finance, but still a good deal. So I just tried the market, Seth. And if the market's telling me that's a good thing and I review the data over and over again, I'm like, okay, I'm going to use my funds and I'm going to buy it. When you say that thing about the infill lots selling fast, Is that kind of dependent on the market? Or like, are you just saying they just always sell fast across the board no matter what? Always sell fast across the board. If you have water, electricity available, maybe sometimes sewer. But if there's the houses all around next to it, it's much easier to sell. Are you a licensed realtor? Still in California, yes. How big of a role does that play in your business that you do in California? I'm assuming you buy and sell land in California, right? Yes. Yes, I do. I like California a lot for land. I have a few escrows right now. I feel that I'm buying. I feel that I'm selling. So I still make good money, but I have to disclose that I'm a real estate agent to them. That's not a hard thing to do. You know, you just tell, just writing the contract. You don't have to tell them verbally, Hey, I'm an agent. No, it's in the contract. So if they want to read it, fine. If they don't want to read it, I still do deals here in California as a realtor. Last This year I did like two homes that I sold last year, another two. So that's why I keep my license because there's consistent cash coming from it, consistent commissions. But I don't hustle to get the deals. It's just people that know me, and I probably spend 2% of my time on that. My brother butter, it's vacant land. And to be honest with you, if you want to just be an investor, you do not need a license. You don't need to be a realtor. I would suggest people don't go that route because there's too many, super saturated, competitive. If you're not on top, you're not going to win. Do you ever list vacant lots for sale on behalf of other land investors? Or is it just like a house or two here and there when it comes up? A house or two. I don't do land because most people, when they come to me with vacant land to list, the price is too little. And I'm like, I'm not going to waste my time for that tiny commission. So I say no. So I was talking with Mason McDonald in episode 239. He became a licensed agent earlier this year. He had a lot of compelling reasons for why he did this. And it just clicked for me when I heard him explaining how he works that into his business. Because one of the ways he can go about this is you can kind of enter the conversation with the land investor cash low offer. But if they say no to that, he's got this backup. How about I list the property for you? Like I'll just list it as your realtor. And this is kind of based on the assumption that he's going after bigger deals. So not like cheap, into a lot, desert square type stuff, like very substantial deals. Have you ever thought about doing that? Like where you could intentionally go after bigger stuff with the back end idea of, hey, if they say no, I can just list the thing for them. I did. I actually listened to the podcast. I met him in Colorado. He was a nice guy. you're both there. I forgot about that. Yeah. He was super smart, but I have been in the business for way longer as a realtor than him. And I understand where he's coming from. You know, being a realtor, it's tough because you're representing someone else. And then if you get an offer that's a little bit lower or something like not creative, your sellers might say no, and all your time is wasted. So that's why I really don't want to focus on that because I I like the land. I like to buy it for myself, represent myself, and then sell it for myself. I don't want to represent someone else as a buyer or a seller because there is another layer of complexity, right? Let's say, Seth, you want to sell your land and you want $100,000. And I know that I cannot sell it for $100,000. So I'd rather not do that. I thought about, you know, Palos Altos where the fire happened in California to send letters to them and say, hey, I'm a specialized land investor. I know now they have land. And then I was just like, you know how many people were probably hitting those sellers? tons of it. I'm just going to be another number and I'm going to try to go out of my specialization to do something else. Let me just keep grinding, specialize on what I do and keep moving forward. So that's why I don't, I don't really do it. Do you ever like refer land deals as an agent to other realtors in other States to get a referral fee? Or is that another one of those things that you just kind of? You've like intentionally put your blinders on to focus on what you're good at. Blinders on, the thing that you put on the horse, go after land. I want to buy the land. You know, with the whole double closing assignment approach, with the longer days on market that a lot of people are seeing these days, how much has that messed with your business? What percentage of the time when you get a deal under contract, do you end up wasting your time? Because you can't get the thing sold. You just never should have gone after it in the first place. Is that a more common thing that happens now in this market? Yes, it's way more common. Why? Because you have to offer the seller a little bit more money. And then because you offered him more money, you can't make money on the deal. I still try to sell. I still try to market. I have photographers. But, you know, I'll be honest with you. Like, it's a very different market. And at least 25% of my signed contracts, I have to cancel and I don't make any money. But at the same time, I have a big team of employees and they're able to get it done everything with little of my attention. So on those deals that we lose money, that we don't make money, I don't have to be involved much. But of course, like I have been thinking about it. I have been implementing things that I'm like, I don't want to grab pieces of land that are not good unless I get it for like $1. A super deep discount, which happens sometimes. And I'm like, all right, if I'm buying it for this low, why not? I'm going to sell it eventually in a year, two years. And then property taxes are like $50 a year. Let's just buy it. I have the cash. So you mentioned, you know, years ago, selling through Zillow for sale by owner was like a really useful thing for you. But I think it's brokerless. Is that the way that you were getting property sold and it syncs with all the websites? So I use Jack at Brokerless. Jack is a very nice guy, but I have to own the property. So before when I have the contract with the seller, Seth, I can't use Zillow yet because I'm not the owner of the property. Unless there's a clause in there saying that I can list on them a less and I can find new buyers. And I have done that. There's one listing right now that I am under escrow that I'm probably going to make $6,000, but I'm going to help the seller because he couldn't sell the land. So I got the signed contract with him with the clause where I could put it on the MLS. I gave it to brokerless MLS fee. I paid their fee and then I listed on every single website. Finally found the buyer and we're going through the escrow right now. But if during that 60 days where I'm not the owner and I didn't have the signature on the MLS. So there's a few things that I do right now. Facebook, Facebook is the greatest for me right now. And you can put ads on Facebook. So you spend $200, $300 and you can get a buyer. The next one, it's like texting. You get the people that have just purchased something locally and you skip trace them. You use the Lend portal to get their information. You tell them, hey, I have this property for sale. Would you like to buy? And there's a couple other things like letters to adjacent owners, but we try to call. We try to call everyone because it's cheaper. And what else? So Facebook, oh, for self-science. I like to put for self-science in almost every single lot that I get under contract, Seth. So that's another strategy. I hired a photographer from Jonah's website. Not me personally, right? It's all in my system. After the contract signed, one of my VAs does all the due diligence. Another one does graphic photos. Another one hires photographer. And that photographer has to be able to put for self signs for me all around, not just in the property, in specific locations. And then I do emails for next door buyers. And that's about it. Yeah. And after I own it, that's when I put it on the Zillow, Redfin, Trulia. So there's even more people looking at it. I wish Zillow still had for sale by owner because it was like the best. A couple of questions on that. So you mentioned doing emails to the neighbors surrounding the property. Are you getting these email addresses just like skip tracing them through the land portal? Or like, is there a reliable way where you can actually get a good working email address or is it pretty hit or miss? Hit or miss, skip trace using the Lint portal where I get all the phone numbers and all the emails. So we try everything. You mentioned the photographer putting up the for sale sign on these properties. I'm assuming you don't send somebody out there to take the for sale sign down after it sells, right? You leave it up to the buyer to do that? Or how does that work? Yes, there's a few places that I still have for sale signs and I still get calls and I've asked people to remove it and they don't. but usually they just get blown away after some quite some time yeah. Just leave it up to nature to take care of it. Pretty much, man. I wonder if there's like a self-destruct button where you can just make the thing like blow up after you close on and just disappears. But it's a good thing that you still have for some areas because I'm still working on those areas. And it's good to have more buyers. If someone calls me, I'm like, I tell them, hey, I just sold that vacant lot. But I could add you to my buyers list. And if I have a new property in there, I'll text it to you right away. Interesting. So that's a good thing to build on your buyers list. Do you get a lot of potential buyers that way? Just by calling a bull for sale signs? A ton. A ton. Wow, man. And if they're not the one for this lot, I save their number. I have a special place where I have my buyers list for every single area that I work with. And then we hit them up once we have something new in there. So you mentioned you've got team members that help you out with various aspects of your business. How big is your team right now? 10 virtual assistants, full-time. Are they in the Philippines or where are they in the world? All of them are in the Philippines. And what's your primary marketing channel these days? Like, are you still texting or cold calling or like, what are your most effective ways that find motivated sellers these days? Right. Before, back in 2021, Seth, I was doing a lot of letters. I mean, I was doing 100,000 letters a year. Right now, I barely do 10,000 letters. But since I have 10 virtual assistants, like four of them are making calls and making offers. Another four of them is doing the initial call like, hey, how are you? And we have a simple questions about land to meet them. And then one person for texting, graphic photos, posts on land flip, Facebook, and another one for social media. So essentially, I have eight, nine people that are every single day hunting for deals, right? So I like to do the cold calling. I like to do the ringless voicemail and I like to do texting and texting works. This guy, he's texting at least 1200 people a day and we're trying to go even higher than that. And then if someone replies back, he sends it to one of the initial VAs to make a call and that person calls the person right away because I don't want to send offers via text. I don't want to have the conversation via text. I built something where my VAs call them right away if there's a text message. One VA communicates to the other one, hey, listen, call this person right now. And then they call. So that's how I get my deals. Emails, cold emails. We send emails every day. We send text messages every day. And then we call people every day. Is there one of those things that you think is most important? Like if you had to cut all of them except for one, what is your most effective marketing strategy? Texting. Texting is the best one because you get so many responses and you get responses right away but i would say don't just stay on texting use code calling also once that lead is a little bit warm once that lead has replied back to you and if you want to use texting if that's okay i have uh on my instagram smarter contact i have a link an affiliate link that you can go and sign up for them and i was using what's the launch control before but since I shipped to SmarterContact it's much much easier to send text messages to follow up a little bit more expensive like.$100 more expensive, but I get way more deals out of it. And at the same time, guys, I don't do the texting. I just give my guy the list. He uploads, he does the texting, and all of that is done by them, not me. So help me understand the cadence between the texting and the cold calling. I heard you right. You said do the cold calling once they're warmed up through the text, so once they've responded, does your sequence look like just cold text, cold text, cold text? And the only way they're ever going to get a call from anybody is if they respond to that text, then they will get like the typical first cold call outreach or something, or helping mentally understand what that sequence looks like. You're right. In some points where they reply back from the text message, we call them, but at the same time, because I have so many people, when I give them the list, they're trying to call every single person in that list. So there's no text, there's nothing. They're just trying to cold call them because texting is great. You get good response in texting too, but at the same time, you don't get like, not a lot of people reply back to texting. So I want my VAs when I have a good area to do every marginal possible thing to try to reach out to the unseller. I don't know how much you've looked at like your actual close rate, like the deals where we actually made money in the end, but I'm curious, like how often was a cold call required to get them there? Does it happen very often where like, all you ever do is text and then you do the follow-up call. But ultimately like that texting was really the most important part. I'm trying to just split hairs and figure out like, could you just cold call? Would that ultimately be more effective, do you think? I don't think more effective because cold calling, they have to do one call at a time, right? You have Mojo dialer, you have all those dialers, open phone. But with texting, you just blast 1,200 people at the same time. And then the ones that reply back to you, you jump on a call with them. And the cold call, you know, you've got to call and they're not going to answer. You've got to leave a voicemail and then you have to follow up three days and they don't answer again. Then you have to follow up again. You know, you mentioned you've got this big team. You know, relatively big, 10 people. How many of them do you personally have to manage and stay on top of? Or do you have like a team manager as one of those 10 people and they stay on top of them? Even having a single employee and making sure that they're staying on task and doing what they're supposed to do and not wasting time and that kind of thing. Like that takes a bit of work just to make sure that they're constantly in alignment with the company and doing what they're supposed to do. Is that a big job to manage 10 people? Like how do you make sure they're all continually working efficiently on the right things? That's a great question, man. And I had to learn through all those steps. So right now I have two managers and they pretty much do everything in the business besides making an offer. I'm actually teaching them how to make offers. So they're right now evaluating properties for myself and then they put in the system and I double check to make sure it's good. So I think in the next two months, they're going to be able to run the whole system. And they teach the new employees. They go after the new employees. They check screenshots of the new employees. they listen to the calls of the new employees they trained the new people so i barely i have to train the people that i have more contact with is the the four ones that they're making offers because they're like hey this person wants two thousand dollars more can you do it the new ones that are just calling they're managing everything i still do regular meetings with every single person aligned. We see mistakes. We tell them to fix this. But essentially, these two managers, they take care of everything. How many different states or markets are you working in right now? Wow. I'm working in a lot of states and I'm always trying new ones. From out of my head, I think I'm working at least 10 states. Arizona, Texas, Nevada, Colorado, Florida. Hawaii, I was doing some deals in Hawaii. So there's a ton. Mississippi, I think I tried Mississippi right now, Alabama, North Carolina. I'm looking at some in New York. So I'm always trying every... Single place where I see that there is demand. Are you working in any states where they have outlawed wholesaling, which I know actually wholesaling is defined differently depending on which state you're talking about. But some states have said if you do anything that even smells like a wholesale deal, double closing, assigning a contract, anything like that, it's not allowed. Others will say you can't assign a deal, but you can double close if you want. Are there any states you're working in where that has become an issue? Because I know this has been a growing problem, I guess, over the past several years? Or has it not really affected the places where you're working? I primarily try not to go to those states. I like to go to the ones where they're going to be open arms for my deals. Like Tennessee was one also that I'm starting to get more deals in Tennessee. So I'd rather not try my luck. But at the same time, if you're flipping, in my opinion, if you're flipping one, two, three lots in there a year, right, because you have so many other areas, they're not going to come after you, I think. So if I have a property there that I have the option to do it, I would do it myself. Because I don't think, unless you're making a million dollars. If you're making $20,000, $30,000, I don't think people would be able to catch you. I've got a map on retipster.com I can link to in the show notes that outlines the states where this is an issue, where some form of wholesaling has been outlawed. Yeah, the whole issue of whether or not they catch you, I never really want to speculate on that. I mean, you're probably right, but it could be. And who knows what would ever trigger it or tip them off. So it's one of those things where I think most people who are regularly doing some form of assignments, like that's their main business. They've just kind of decided not that state anymore, because this is not a good practice to be constantly doing things that violate the state law. But it sounds like that's none of the states you're working in are quite like that. I actually use your map. So I use your website a lot. So, yeah, I know there is where to go and I check in there before if I want to go to a new state. I think I heard you say you're getting into like subdividing now, right? Or you've been doing subdividing. When and why did you decide to start making this shift? I was actually browsing YouTube and I found this guy, John Jazdiak, right? We saw him in Denver, Colorado in the land meeting. So I was looking at it and he was doing subdivisions. And I was like, what is this? I had no clue what a subdivision was before I talked to this guy. I was in business for what? It was end of 2023. So I was in business for about five years. Yeah, five years. And I did not know about subdivisions. And then I just started following him and I saw him doing all these big subdivisions. I'm like, oh, I want to do it. So I found an area in Texas and then I started, I mailed letters and I started my cold calling everything. The thing, Seth, is people started to call back and like, I'm interested in selling my land, but I had no clue on what to do with those properties. I had no clue on how much I could offer, how could I break them down into smaller pieces, what kind of road I would need to have. Like, I didn't know anything. So I signed up on his course. I chose to spend money on my education. And I'm still on his line course, on his mastermind, where we get together twice a month to talk about subdivisions and deals. So essentially, it was this. I tried before. I was like, I don't know what to do. Hired him. And then in 2024, we would have calls every Friday. So it was like every single Friday. And I would bring tons of deals. Like, John, let's take a look at this deal. Let's take a look at the next one, next one, next one. Finally, I got this one behind me under contract. That's a huge subdivision in Texas. So because I chose to spend money on learning, I was able to get it done. And I'll tell you what, land subdivision for me is the next mine gold. Land subdivision to me is the next mine gold. There's so much money to be made in self-divisions that are, like, exploding, so it was a combination of, like, massive outbound reach. Massive offers education with them with him and other students every single week that led me to the subdivision game in all the subdivisions you've been doing have they all been in texas or have they been in the other states you're working as well so i have completed two subdivisions one in texas where i purchased 800 acres and is split into 471 vacant lots wow and then one yeah and then it's massive in this photo right here you cannot even see like 10 of the land that we have and then i did another one a minor subdivision in colorado because i had the tools right i i knew what to do kind of it was different regulation but it was a perfect property it was a corner lot with a lot of road frontage so i did like one acre i split into four parcels so two completed subdivisions, and we can talk more about them if you want. This huge one you're talking about in Texas, the 400 parcels or however many acres that was, that sounds very different from a assignment double closing type of transaction. I'm assuming you took title to this thing, So like, how did you do that? If that's not normally what you do, like, did you get the financing from somewhere? Is this all your cash you put into it? Are you partnering with somebody or how'd you take down such a big deal? It was so much cash. I didn't have that money, not even clothes. So essentially, I got the contract with the seller for 200 acres initially for a million dollars, 1.1 million dollars. I posted in the group, right? On John Jasniak group that I'm like, hey, I got another contract. Let's review this with me. And like someone else from the course, Jack Knapp, which is my partner right now on a few other things. He was like, hey, Luis, I want to buy this contract from you. Right. He wanted to buy the contract. I'm like, hey, listen, I don't want to sell the contract. I want to do the whole subdivision. So he got together and I was like, listen, since I don't have much experience in the subdivision, how about if I bring you in? Because he had done other subdivisions prior to that and we do it together. And that's how I was able to leverage my time, expertise, his time, expertise, and money. Because if I were to do it myself, could I have done? Yes, but it will take me way longer. And Jack was the guy that brought two other investors to put all the money for the deal. So they put $1.1 million. And then we went to Texas. We saw the piece of land. We met the seller, me and Jack and his dad, because his dad is a partner too. And I was like, I went back to the seller and I told him, hey, I know that you have another 600 acres of land. I want to buy it all. Can we do the deal? Took a little hustle, like two weeks back and forth. And we decided on, he decided to sell us 800 acres in total. So that was another layer of like, all right, we need more money. And we told our partners, hey, now we need $3.4 million in total. And they were like, let's do it. We got it done. So those two people, they brought all the money to the table to get the deal done. Me and Jack and Rich, we did all the work on getting the lots sold, subdivision, water study, road variance, road building, electricity, and all of that. So we're like, we have, we're four owners on that piece of land. So each one of us owns 25%. So have you sold all the lots? Like, is it totally gone? No. So we're doing phases because there's too much land. We don't want to oversaturate the market, Seth. We sold phase one and phase two in about six months. We sold about a hundred lots in six months. It was super fast. And then now we're selling phase three. Phase three, we have sold probably half. So about 45% of the lots have been sold out of 471. But again, we don't put everything on the market. We do in phases where we split the costs on roads. We don't have to have all the costs up front and everything else. We're still selling right now. We keep selling at least five a week. The water study and having sufficient water, that's all set for all of these parcels? Because that's a huge deal in Texas, right? It's a huge deal. So you have to do a water study. And that water study has to show that you have capability to do how many lots you desire, right? So for this piece of land, we're like so lucky that the water flow and the aqua fair underneath was so good that... There was enough water to do all those vacant lots. And every single person that drills a well in there, they hit water. Like sometimes at even 50 feet below the surface. So it's very shallow, usually 75 feet, very shallow. And the gallons per minute, the worst one that we have found, it's 10 gallons per minute. That doesn't sound that bad. No, it's not bad at all. You need at least like two or three. Two is good still. I mean, that sounds like the water itself is probably what makes that whole thing such a gold mine, right? Because that big question mark isn't really a question mark for you. I mean, is that a big part of why they sell so quickly? Yeah, big time. That's why they sold so quickly. And right now, behind me, I have phase three here. And that consists of about 150 lots. And you can see how many were sold. And this is not even updated. So there's a bunch more that were sold in there. And you might have already mentioned this. Maybe I missed it. But like, what was the all-in acquisition price for all of this land? And then what is the total gross exit price that you're going to be like, how much money are you going to make on this thing? Is what I'm asking. Man, it changed my life. My wife was able to quit her job because of this subdivision. So we purchased for about $3.4 million. 3.2. And then initially we spent only $200,000 with the cutting the roads and surveyor, water tests and everything else. We paid off the debt, the $3.4 million was initially in seven months of selling the land. Seven months. Crazy, right? And we sold 90% of those lots on seller finance. So easy math. Seth, give me $3,000 down and pay me for five years at a 9.9% interest rate. And then we bundle all those notes together and we sold to note buyers. And then we got the cash in our hands and we paid off the debt. Nice. So right now we're like profit. So every single owner has the option to like, hey, I want to keep the note to myself. I want to sell the note. So right now I have seven notes, seven receivable notes from this project. It's about $5,000 a month for five years. And then so far I have made personally over $600,000 in cash. So far, there's more coming, right? Oh, there's way more to come. We sold like not even 50% of the inventory. That's incredible, man. This is the first year that I'm going to break ground on a million dollars gross profit. I'm like, I've been dreaming about this day for so long, for so long, and it's so hard to get it with only flips. You know, I've been able to be very comfortable in my life with flips, but now I have a lot of cash in my bank account. I invest in other people's deal. I can buy my deal, not suffer. I can like, we can go on trips. We can go, I don't have the stress of having money because of this subdivision. And then on top of that, once we sell all of this land, when we finish this job, which I don't know how long it's going to take, like another year, another two years, you know, we're not stressed about it because we're just making money on it. So our exit strategy, we think we're going to do at least $12 million in gross sell. You mentioned you paid off all the debt in the first seven months, I think. So when you say debt, does that mean you got like a bank loan or like, is this debt to the two money partners who basically extended a loan to you guys? Or like, what do you mean when you say debt? How did you finance the purchase of this thing? Now you're going to learn that I made a mistake and that cost me $250,000 in lost profit. So essentially when I came up to these two investors, me and Jack, we're like, hey, we want to bring you in. And the money that you put in, we're giving you 50% of the profit, right? So essentially like the debt, it was going to be a debt, but tied up to their profit. But I let them deal with the contract, Seth. I was so busy at the time, so happy that I was like, no, you handle the contract, right? And what happens was in the contract, there was nothing to say about that they were going to give us the money and get 50%. It was. That plus on the on top of it they added interest on their money so we were borrowing the money from them paying them interest plus points plus they were getting the uh profit on the deal our butts were on fire let's sell as fast as we can you know and and it was it's hard to to raise money it's really hard so that was my mistake set of not doing the contract so those people the two ones. And I'm grateful to them. And they were able to help me. They were so easygoing. But at the same time, they got 50% of the profit plus $500,000 more than me and the other guy because they added this layer of leveraging their money and making more of it. I don't blame them. They were smart. They were super smart. But in my mind, when I brought them the deal, I was like, hey, I'm giving you 50% of the deal because you're going to put all the money and you're not going to charge us for extra for that money. But they did. At the same time, I was kicking myself in the butt so bad in the beginning. I was like, man, how come I made that mistake? And later on, I was just like, you know what? Forget about it. Forget about it. You're not going to make that mistake again. And let's just go through with it. And I can tell you that, you know, I have a new project that these two people, again, they're funding for us. There's another $2.4 million right now that we're in escrow. We're buying right now 194 acres in Texas that we brought them in. And essentially, we told them, hey, this is what we need for the money. And we agreed to give them again 50%. There's four partners, the same partners as before. And then we added a little bit of interest on their money and points. But it was way below the previous one. Because I'll be honest with you again, it's super hard to raise money. So you have to give more equity than what do you think, especially $2.4 million, right? So we had to give them 50% and we gave them a little bit of interest on their money. But usually we're able to pay off the debt in six to eight months. So it's not going to be that bad. You know, they're going to make a little bit more, but not as much that would break the deal. It's really interesting what you're going through, because on one hand, it sounds like these money partners are kind of double dipping in that they're getting interest and equity on the deal. However, when I say double dipping, I'm just comparing that to the established standard and norm that exists in most land funding deals these days. It's not like there's anything morally wrong about that. That's just most funders don't expect both equity and interest. You're kind of either doing one or the other. These guys, I guess, were smart enough to get both. But it's a really interesting dynamic. I've experienced this myself. I know many others who have had the same dilemma when they're partnering with somebody in some way shape or form and eventually there comes this point of frustration where it's like man i'm doing more work than this other guy or they're getting the better end of the deal and i am and it's not fair and uh. I don't know that there's any way around that. I feel like no matter what, you can't possibly know all of the different dynamics of what is going to happen throughout the life cycle of that deal. Like maybe you'll end up working more. Maybe they'll end up taking up more risk. I mean, you just don't know until the thing is done. But I know earlier this year, I was hanging out with Buck Rizvi and he said something interesting that kind of stuck with me. And Buck, I might misquote you, but it was something like when you're doing a business partnership, like don't be afraid to give the other guy the better end of the deal. That could serve you really well in the future. Maybe in this particular case, you'll come out a little behind, but it's like it could lead to more opportunities that you otherwise wouldn't have. And ultimately, at the end of the day, like you're saying, Luis, a win is a win. Don't be complaining about making a million dollars or however much you're going to end up making in this deal. It's still a huge plus and it's easy to kick yourself. But at the same time, it's like as long as you're not totally getting raked over the coals and, you know, losing money hand over fist, like you're still coming out ahead. That's something to be thankful for, for sure. Absolutely. I agree with you, Seth, on every single thing you just said. At the same time, they brought in a lot of money into the deal and I don't know how hard they had to work to get all that money, right? So I have to give them credit and I'm not mad at them. I'm mad at myself that I didn't do the check, that I didn't tell them clearly enough that, hey, this is how I work. Can we do this or not? I made the mistake. It's not them and at the same time. If I have a deal and people need money from me, do you think I'm going to try to do the same thing? Yes, I would try because it's so much money to be invested that I'll tell my investor if I'm lending the money, hey, listen, I'm going to charge you interest and profit to it. So I learned from it. I learned from it. And we're making so much money on this project that I cannot complain to them. And again, they're giving us more money in the next one. They're giving us another$2.4 million. And it was so easy to get because they understand the land so well. But they added the complexity of like interest rate, double dip. Like as you said, double dip. So I'm okay with it. You know, I have to make peace with myself. And it's just a deal that changed my entire life. I'm happy that they made more money because now they can give us more money. But at the same time, I'm smarter. I'm not going to just accept whatever they throw at me. I'm going to counter and I'm going to look for more funders. So that's what I do. I chase everything. I do massive action. But this guy's, like you said, they're getting a better deal. But I don't know how hard they worked to get that money to invest in our property. And there's a risk, right? We try to avoid all the risk. We did a bunch of due diligence before. We submitted to the county commissioner to make sure they were going to approve us. But before we had the land under our name, we could not get it approved. We got the green light. Yes, it's going to get approved. But imagine if they changed their mind after. So they were risking $3.4 million and now another $2.4 million, right? So I understand their side. I do. It's a lot of money to put on the line, especially for land, which banks won't even touch. and that should tell you something if banks won't even touch this stuff in most situations anyway. I am wondering if you wanted to reverse engineer this deal we're talking about, could you? Or how much of this deal was kind of just luck? Like it would be hard to find the same kind of thing repeatedly over and over again. It's not luck, man. It's not. It's just luck. It's what people say when they don't do enough work. I'm doing that deal again, not because of luck, because I keep hustling. I keep working. I keep sending letters. I keep sending offers. I keep talking to sellers. Right now, I have this other one under contract, right? 194 acres. So it's another subdivision. And then I have another one that I'm doing myself primarily with one more investor and I'm putting all the money myself. It's 160 acres. And it's another one that I'm going to make millions of dollars. And I'm able to do it in the same area that I did this one. But because I keep hustling, I keep going after. So it's not luck at all. Do these other deals also have an amazing aquifer underneath it? And are they also going to sell at the same rate? And do you also have the same money partners that are given the same amount of money? And like, is it really the same? I guess what I'm trying to get at is I hear you. the smarts and the knowledge and the hustle and all this stuff has everything to do with being able to make this happen. But like you can hustle really hard and fail too. Like sometimes there is luck involved. Maybe it's the market too. I mean, that could also be an issue. Maybe the market was just red hot when you needed it to be. But do you think you will be able to repeatedly do this same kind of thing again and again? And how would you replicate it? Like if I want to go out and do this right now, what would you tell me to do? What's my process? Get some education from someone that's doing the subdivision process, because it's not easy as buy and sell land. And the second one, yeah, I'm still trying to get more subdivisions in this area and other areas in Texas. So my focus, it's subdivisions in Texas too. Like I'm starting to do more and more of that. And I'm starting to focus more and more on of those of course on this uh on not on all the projects you're able you're going to be able to make as much money i'm going to make on this this huge project but still they're super profitable and they're like now they're less work because i know what to do and they're like the margins are amazing we're talking about amazing numbers i can share about one i'm buying right now that's 160 acres and by the time this is going to air it's going to be closed because we're closing next week. So that one, I'm buying it for $650,000 and I'm using my money for it. I'm not using any other investor money. I'm borrowing half on just interest and points, but not giving equity. Not that I like I did before. And then I brought someone else, Jack and Rich Knapp, to help me with the subdivision because it's like a lot of moving parts. It's a lot of moving parts. But on this case, I'm 75% owner and they are 25% owner because I'm putting all the money. I brought the contract. I was able to negotiate with the seller. I was talking to that seller for seven months. My assistant has spent at least 100 hours with that guy on the phone. For him to sign this contract. And on that one, my exit strategy is we're going to grow sell of about $4 million. So that one, worst case scenario, I'm going to be out of $650,000 plus improvements, roll, and another $200,000 on top of it. I see that I'm going to make at least $2.5 million. Wow, man, it's incredible. That's why I love deals so much right now because I see the money is coming back. And I'm like, as you were talking about, can you do this over and over again? Yes, you can. You just have to hustle. You just have to go after these sellers, you know, and talk to thousands of them. And you get one signing the contract. I tell you. So looking back, what would 2021 Luis do differently if he knew what you know now? Subdivisions. I would have started in subdivisions. I would have paid someone to teach me the whole subdivision game. Why do you mess around with little deals at all anymore? Is it because they kind of just pay the bills in the meantime while the big subdivisions are being worked on? Is it like a diversification strategy here? Because I built a system for that. So it requires minimum of my time to do those deals. And they're done by all my VAs. So I still like to have deals that are coming and going on a regular basis because I'm getting cash, I'm getting notes. At the same time, I'm trying to not flip as many and focus more on subdivisions. But I already have those things in my CRM. All the leads are in my CRM. All the follow-up that we keep following up, keep following up is in the CRM. So I don't see why I would just delete them from there and waste the time that I worked on them before. And I'll tell you something else. You never know when the next flip is going to be the one that you're going to make $50,000. You're going to make $60,000. A lot of them you make $10,000, $5,000, $20,000, but there's a few that you can make a buck. Like I did one this year in Texas, a double close. I made $50,000. And then I did another one in Arizona that I purchased the land for $40,000. And then I had architect reviewing the plans because it was like a one acre, perfect location, was zoned for 12 units. I sold that land for $120,000. And my cost was $45,000 buy-in, 45, and then 15 with the architect. And then I made $60,000 on it. So it was just because it was a flip. So how can I just say no to that? That's amazing, man. You got a great thing going. It was a good thing too. I'm down one in Arizona because the guy gave me two offers, the buyer. I'll give you $105,000 cash, or I will give you $60,000 down and $60,000 in three years at a 3% interest. So I chose the three years because I can defer my tax. I can do so many things with that. So every single month, I think I get $2,300 in my bank account for the next two and a half years. So it was just from a regular flip. The seller needed to pay his IRS tax. He told me on the phone, I need to pay this. I'm like, I'll buy it. I bought it right away. I did not try to double close. I was like the mindset, let's buy it. With all this money that's going to be coming in and that has come in, have you thought of any ways to like retain this wealth? Like put the money into a commercial property or something that's going to keep throwing off money and hold equity for years to come? Or I don't know if you thought that far ahead, but does that ever enter your mind? Yes, I have been thinking about it. I'm going to have to pay a lot of tax this year. You know, this year is going to be the first year that I'm making a lot of money. And but the thing is, I looked at houses. I haven't looked at commercial yet because I think the prices are still too high. But I get such a good return on my pieces of land that I flip. There's way better than like 7% return on the rental. And then you have all these tenants and you have to talk to them and you have to. I don't want that hustle because I just want, again, to specialize in flipping land. Let's make as much money as possible. I'll pay the IRS whatever I have to pay. I'll deduct whatever I have to deduct. But let's make as much as possible. Let's get my ROI high. And I'm building wealth because I'm holding properties now. So I have about $300,000 in properties that I'm just sitting out there that I'm not trying to sell. And then I have another $500,000 of my money in inventory of other properties that I purchased and still I'm trying to sell them. Yesterday, I was reviewing every single property. So I have about 50 vacant lots for sale. 40 of them I own. So I was dropping the price on every single one of them by like $1,000, $2,000 to get it sold. But I'm so grateful that I don't have to struggle like I did before in the beginning where I had to sell every single thing that I had in my name so I could pay the next bill. So I'm grateful for that. And at the same time, I am building wealth. Right now, that's the stage where I'm like, yes, it's time to focus on the next strategy. but I don't see anything better than land. I like deals, Seth. I really like deals. It's not an uncommon dilemma. What I hear you saying is what I've heard many people say. My only rebuttal to that is if you don't move the money to something else at some point, you better really enjoy peddling in this hamster wheel forever because you will be. If you don't put your money into something that throws off cash in a passive way and preferably gives you some big old tax breaks, then that's great if you love land. but like it's always going to keep going. That's the problem with land. I was like, you're right. Like it is pretty darn hard to find anything legal. That's going to give you the same kind of return that land does. Again, it's a hamster wheel. Like you got to keep going. And if there ever comes a day when you want to stop doing that, you better have some other plan B where you can at least slowly start moving money to more of a permanent tax shelter, passive income, which is totally going to have lame returns. Don't get me wrong, but like, and maybe this is just my mentality. Like I have the farmer's mentality. I'm not a hunter. Like I don't love the thrill of the chase, like a lot of land investors do, is more of a necessary evil to get the huge influx of the cash to then put it into something that I can treat more like a farm. But anyway, just something to think about. And in terms of the thought of talking to tenants and all that stuff, there are totally ways around that in the commercial realm, especially if you do a triple net lease and that kind of thing where you have zero maintenance taxes, insurance, all that stuff, zero talking to tenants, like they do all that stuff. So maybe we're thinking about that too oh i am thinking about it you know i'm like like you said the hunter i i like deals I like the game of like getting contracts signed in my desk I like the game of selling to someone else with this property in Texas I already helped over 170 families to have a home so as you see in the photo right now this is when we're building the roads and then we have more photos right now on how the subdivision looks like um. So I understand and I'm going to be there. I'm going to purchase some different assets. But for now, I still think there's a lot of money to be made. I don't want to have my money tied up in a house. And then if I get this next $2 million subdivision, I don't want to use, keep using other people's money. I want to use my money, right? So I can get 100% of the profit. So that's why I'm like, let's just keep cash right now in the bank account because I'm going to have to use it for my next subdivision in my mindset because I'm working on it. And you can see in the photo how many houses you see right there. All these lots are sold. There's a ton of houses. So I'm able to help. And then I have notes. I have $15,000 in receivables every single month coming into my bank account. So I have the passive cash flow, right? It doesn't mean that's forever, but I still have it. I'm with you. I mean, you make totally valid points. And I think as long as you want to stay active in it, yeah, do it. Like you will make way better money. I want to stay active for, I don't know how long, of course, but I'm like, I'm just loving it because there's so much money coming out of it that I'm like, let's work at least seven hours every single day, you know, and then let's get it done. That's awesome that you love it. Has there ever been a time in the evolution of your land business where you didn't love it? Like, have you ever had dark times where like things weren't going well? And if so, like what was going wrong? I think what was going wrong was me trying to do something else, me trying to be a realtor. Me trying to focus on seller finance deals, me trying to look at commercial properties, me sending letters to houses. So I think that's when I got a little sidetrack, And there were times too, when you're like, you're not motivated as much because you're not making, you keep like the hamster wheel, like you said, you keep cash, cash, cash, cash, and then you don't have money saved in your bank account. But I kept doing it. I struggled a little bit, you know, it wasn't easy. I thought it was going to be so easy. So it wasn't easy. Like two years ago, I was making good money, but I didn't have any saved money in my bank account because I have a different lifestyle and we spend a lot of money in our lifestyle. So that was stressful. And I lost instead of like focusing more, I think for a month or two, I was not doing the good job that I know that I can do. But I was just doing it right. I kept doing it, kept doing it, kept doing it that I saw the light out of the tunnel. And now because cash is coming in. Things are amazing. I just wake up and I love to come to work because I know that I'm going to make money. Tell me about the technology you're using right now. Do you have like a favorite piece of software or what's working for you? AI, it's been great for, you know, Callan Faulkner, right? I met her in Denver. So it was good. The network in Denver was amazing. I was able to meet all this kind of cool people, you know, you in person. So she opened my mind. She's like, if you're not using AI, you're losing it. So I've been using perplexity, Claude, you know, not just to write emails, but for descriptions, we're creating projects where when we have a property under contract, we spit it out, the location and it will give us the county phone number, the water companies, the electricity. So we're building stuff in there. Where it's got, it makes our life much easier. And I love AI for like the simple fact of double checking everything. Right. So the other day I was like, Hey, what are the best areas where land is moving fast and gave me the details. And then I just went there and checked if it was correct or not. So AI, I like to ask about Trump too, is his policies good or what's going on right now in the economy, Texas State Law 332. So I was like, summarize this law for myself because it's changing the subdivision game. So it's summarized for me. I asked questions. So it's pretty much like for myself, it's a Google search, 10x better or 100x better because it can communicate, can write proposals, you can write nice emails. Yeah. No, I hear you, man. Create automations. AI is an incredible thing. I'm using it every day and I love it. It's a little scary to see just how new it is. And it's like, on one hand, it's very empowering how fast you can get stuff done. On the other hand, it's like, it has already changed and will continue to change so much about the way we live our lives and do business. And I am nervously watching to see how this will change things. I think mostly it's good, But I'm curious to see any downsides that will continue to come out as things start to evolve. We'll see. Yeah, I love AI, man. I think we have to try to use AI as much as possible. Luis, totally appreciate you hanging out with me for a bit here and getting the update on your life and your business and what's working. If people want to find out what's going on with you or connect with you, talk more, anything like that. Is there anything you want to share? Yeah, I think my main channel is Instagram. It's LandmanLuis. So it's super easy. Landman Louise. It was before Louise Land Coach. I just changed that a few days ago. And, you know, I'm teaching people. I have a few students right now and they're doing the job that I tell them. So I gave the students my course for only three thousand dollars. And on that course, I break down everything that I do from A to Z, from how to download the data, which softwares to use, Which CRM I use, which texting I use, how to do it, how to market a property, how to find local photographers So that is something that I'm very passionate about. At the same time I'm so busy with these deals as I was telling you right now I have too many on my plate right now that I have not been able to focus as much on the coaching But I have a guy right now that Tice, Tice is doing amazing. He's he bought my course and Two months ago, and he already has like five properties on their contract. So, you know, it goes to show that the system is there, just up to the person to do the job and to try the market. Again, Luis, awesome to hear about what's been going on with you. If people want to check out the show notes for this episode, just go to retipster.com forward slash 242. Luis, thanks again. And to all the listeners out there, we will talk to you next time.