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Real Estate Investing School Podcast
169. Secrets to Land Flipping Success with Clay Hepler
00:43:32
Welcome to the Real Estate Investing School podcast. In this episode, host Joe Jensen sits down with Clayton Hepler, a seasoned land investor with over 100 transactions under his belt. Clayton, the founder of Land Man, a leading podcast, community,...
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- [00:00]
A
So I was searching around and I said, hey, what was something that I could produce a lot of revenue like a house flipping or wholesaling business that I had a similar type of skill set in. And I stumbled upon land investing.
- [00:16]
B
Welcome to the Real Estate Investing School podcast. I'm your host, Joe Jensen. Today our guest is Clayton Hepler. Clayton is a seven figure land investor with over 100 transactions completed. His company buys, sells, and develops rural recreational land across the U.S. he's the founder of Landman, a leading podcast community and newsletter in the land investment world. Welcome to the show, Clayton. Glad to have you on.
- [00:46]
A
Great. Glad to be on, man.
- [00:49]
B
So, dude, I'm excited because what you do is a little more unique. I feel like everybody's house hacked or bought a rental property or ended up turning their primary into a rental when they moved, you know, and then they get a few more units. And, you know, that's pretty common for people to have had a couple rental properties. But. But to have, you know, flipping land and doing development and recreational land, you know, these are kind of niche stuff that not as many people have been exposed to. So I'm excited to learn one, how you got into that and just, you know, the cool parts about it, for sure.
- [01:21]
A
Yeah. I mean, and it's funny you mentioned house hacking. It's actually how I started, you know, and that's one of the ways that, you know, I got into real estate. The real estate bug for me was I listened to, you know, I was. This would have been probably four or five years at this point, and I was listening to entrepreneurial podcasts, right? Hey, you know, build your own business, go out on your own, build your own wealth, right? And stumbled upon grant cardone, bigger pockets and learned about the house hacking world. And I said, man, this would be an amazing way for me to get into real estate. And so I. Before that, I mean, to kind of give you even a little bit more context, I joined a mom and pop owner, owned a couple hundred units in my city. And I said, hey, I want to learn from this guy. I want to learn the business. And so I started learning the business through him because he had a property management company, he had everything in house. And then of course I caught the bug and say, hey, I wanted to start buying my own units. And so I started out with the house hack, right?
- [02:23]
B
And then, so wait, let's back up. I want to dive into that a little bit. So you find this guy. You said you joined them. Are you like an unpaid intern or you get a position there, or you just like, hey, can I be a fly on the wall? Or what did that look like?
- [02:36]
A
So before that, I was in my family business, which is chocolate. So, you know, buying like it's luxury. I say luxury. I mean, chocolate, it's not really luxury, but high end, fancy, like, nice stuff. Toffee. High end toffee. So, you know, like caramel, brown sugar toffee. And so we were doing like sales. I was doing sales and marketing for that business, cold calling people that owned local mom and pop stores and owned specialty shops. Maybe I call someone in Cincinnati, Ohio, and they own like six or seven specialty shops. And one day, I mean, I talked to some guy that owned all these specialty shops and I was like, man, how do you do this? Because I was like this young kid. You get unlimited hall passes when you're 19. You can just talk your way through things because they're like, oh, I see myself in this young kid, right? So this guy gave me the time of day and he started talking about real estate and talked about basically like, hey, man, I own all these commercial spots that have all my stores in them. And that's a real way to build wealth. And so I then, of course, like I said, did the bigger pockets thing listening to Grant Cardone, all these big gurus. And I realized shortly I wanted to get into real estate. But I wasn't. I didn't want to just go out on my own. And like most people say, hey, just go out and build your own wholesaling business or go out and build your own house flipping business, or go out and just buy your own rental properties. Yeah, I was like, I want to go and learn from someone. I want to work from someone. I want to bring my sales and marketing expertise to someone and help them build their business. And so I, through a mutual connection, found out, you know, hey, this guy has this real estate investment company which is kind of a small shop, and reached out to him, did like an informal interview at a coffee shop and then went to his office one day and he's like, you're hired. Right? You know, because I was just this young, young guy, and I was super enthusiastic and I was like, hey, man, I'll do whatever it takes. I'll take a low salary. I just really want to learn this business. And then from there, when I was in that business, I said, hey, I want to build this sales and marketing thing. I want to build this house flipping wholesaling company. But he had the capital, he had the expertise. And so I didn't I didn't go out and do it on my own. I went out and this guy funded the whole thing, Took, you know, majority of the profits. I had just a little sliver of profits. But I really learned and scaled this business. And we did about 75 flips and wholesales combined in our first year. And so that's sort of how I.
- [05:20]
B
Like, I just talk about reps. It's like, man, you got so many reps in, even if you weren't making 90% of the money. It's like, now you know it, now you know it, now you know you've been through that process and it's not this weird, unknown, ethereal concept anymore. It's like, yeah, I get it. Like, it's very every day, literally every day process for you at that point.
- [05:41]
A
Yeah. And I think that that's a really great way to get started. It's not for anyone. Some people just want to jump in and they want to just hire a coach or a consultant and they just go in and that person helps them do the house hack. And then like you said, they slowly build their portfolio. But for me, I was like, hey, I want to do this. And I've always been a little bit risk averse in that way. And so I wanted to join this guy and so I joined him and that's sort of how I got my start. And then I bought that house hack shortly after.
- [06:11]
B
That's awesome. So, so you, you were, you were approaching this from the beginning with the mindset of building, being able to build a little business out of it.
- [06:22]
A
To be. Yeah, I mean, to be honest with you, I always thought like I wanted to build wealth in whatever way that took me. Sure I would do it. So I didn't have this vivid vision of five years. I want this X amount of real estate portfolio. But I did have an orientation around, hey, I wanted to have enough passive income that I could live the life of my dreams. And so whatever direction took me there, I was pretty open to. I love that. But I was like, I know that at the beginning I wanted to join this guy and, and learn the ropes.
- [07:00]
B
So you join him, you work with him for a year, you're doing marketing and stuff, building out some of that. You get a lot of exposure and a lot of experience. You go buy your own house hack. What happens after that? When do you pivot to like, maybe kind of doing your own thing? And how did that lead to land? Were these just traditional flips of like, like normal residential homes?
- [07:23]
A
Yep, yep. The ranch, the the brick ranch, three bed, one baths and, and Suburban, you know, the standard flip, right? Repost, gray LVP flooring, quartz countertops, shaker, white shaker. You know, we had the whole, that's the whole thing, right? So I mean, the pivot to land is a little, Takes a little bit of time, but sure. What happened was I, I was like, hey, I want to start buying rental properties, right? I want to start producing passive income. And, and the city that I live in, Joe, it's not like St. George, right? It's not like, you know, Salt Lake City. It's, it's old, It's Pittsburgh. And so it's old buildings, man. We're talking like built in 18, 1980. I'm sorry, 1890, 1900, 1910. And so the reason why we split is that I started buying properties on my own. And basically what happened was, hey, there's a conflict of interest here. And we went our separate ways really easily, like very, very amicably. But I, I said, hey, I needed to start buying my own real estate. And he was cool with it, right? It, it, it's. I'm still friends with the, with the guy that ran the whole show to this day, like dear friends with him.
- [08:30]
B
That's awesome.
- [08:32]
A
But that's what I ended up doing. So I started a burr. So I bought a bunch of rent, smaller multifamily properties, single family homes, and started to burr in, in Pittsburgh. And then about a year later, what I realized was the rental business is not as glamorous, especially when you don't own a critical mass of units. Like, I didn't own a critical mass because didn't have a ton of money, right. I had a partner on a lot of them, but didn't have a ton of money. And it's not as glamorous as people say it is, especially when you're building those types, buying those types of properties that, you know, you have the cast iron pipes or the terracotta sewer lines that cost 30,000, $40,000 to replace, or the box gutters or three tab shingles and rotting underneath. So long story short, you get to the point where you're like, man, this cash flow is great. I love this cash flow. But in reality, it's not as much as I think it is.
- [09:33]
B
Yeah, it's getting eaten up. It's kind of a headache. It's taking up a lot of my time and energy. When, once you, before you reach critical mass, you do reach headache, you know, where it's just so much that it's Annoying and it gets expensive. But yeah, it's a tricky spot, right?
- [09:51]
A
And so you so the perfect. Like in, in the real estate investment world, when you're under 20 units, you can manage them easy. When you're between like 20 and 85, you can't be a headache, can't self manage them. And you got to hire a property management company, but they destroy you with fees. And so if you have maintenance overrides and you have a property management company that's managing your portfolio, all of a sudden it gets very expensive very quickly and your cash flow gets wiped out. So that plus my wife, what happened was my wife, the day before Thanksgiving in 2022, my wife got a call from her boss and she was the breadwinner at this time. She was making a good six figure salary and I was out there running around and buying rental properties and I said, hey, one day we'll get this cash flow. And she was really the breadwinner, if you will, in terms of bringing all the cash flow in. And so what happened was she got a call and her company went under. And so the reality hit, man. It was like, I need to start making money. I need to start bringing in real active income. Because that next year we had a wedding coming up. We had to pay for our life. We bought an Airbnb in Colorado that was draining five figures some months out of our bank account. It got really ugly really quickly. And I said I needed to find a way to make money. What happened at that point is I had the skillset in the wholesaling and house flipping. And this Airbnb that I talked about earlier was, was we thought we were going to eventually move there. It was in Colorado. We were like, hey, we're going to move to Colorado and we're going to live in Colorado and we're going to live in this Airbnb, right? For the time being, we're going to finish up our business here in Pennsylvania and then eventually move there after our wedding. Well, I thought then I had to build a remote enabled business. The business had to be remote because I was going to be in Colorado and I couldn't be flipping houses or wholesaling, which a lot of people do this now. But I just didn't have an idle limiting mindset around it or I just didn't think it was possible. So I was searching around and I said, hey, what was something that I could produce a lot of revenue like a house flipping or a wholesaling business that I had a similar type of skillset in And I stumbled upon land investing. And I said, man, I've never heard of anyone talk about land investing. There's not at RIAS. People aren't talking about it on podcasts. There's no YouTube channels about land. What is land investing? And so I deep dove into it and I realized it's this massive blue ocean. It's much less competition than house flipping or wholesaling and a lot more opportunity. And so I took some courses and I went all in. Like, very shortly after my wife and I had that conversation earlier in the fall. I was flirting with it a little bit. I had heard about it, right. I had. I had sort of done the initial research, but I really went all in after that. My wife called me and her company went under.
- [12:54]
B
Yeah, so what, what is it then? So kind of catch us up to speed of what you discovered as you dove into that world, you know, in a nutshell, and then we'll dive in it deeper. But what, what is it that you do? Is it. What is land, you know, flipping?
- [13:09]
A
So. Right. So what we do in land investing is the exact same thing that people do in house flipping. I find underpriced off market, rural, recreational land, just like someone finds underpriced off market and houses in metro areas, rural areas, it doesn't matter. And I look at these properties and we get them for good prices, we add value to them and we make the difference. Right. And so we are flipping land just like someone flips houses, except the competition is less and the profits are greater.
- [13:44]
B
What are you doing to add value, like adding utilities, stuff like that, road access. What kind of value add are you doing?
- [13:51]
A
So it's every single property, just like a house is different, Right. So you might go into a house and you might say, hey, this house needs a new bathroom here and we could add a half bath here. So I can increase the ARV by 50,000. And also I can put in a new hardwood floors because the neighborhood says that I know hardwood floors are going to get me a great return in a new kitchen. But sometimes you're like, hey, man, I could just wholetail this thing. I can put some paint in, I can sell it as is. I just make this thing look better. We do the same exact thing with land. So sometimes we'll clear out a home site, make it beautiful, park that property so that we can put a septic tank there or drill a well. Sometimes we subdivide the property into smaller parcels so we can have fewer parcels and we can sell them for higher because they're more accessible to people. Right. A two acre parcel is easier to buy for the majority of buyers than a. It's easier than a 50 acre parcel. And so we could subdivide it out and create these little farm lets or little 2 acre or 5 acre postage stamps that someone's really going to want to have moving out of the big city. So we can do a variety of different things to add value to this land. It's really what the market requires. And Joe, you can go all the way up to. I have this parcel close to a major city or in a major city and I'm going to develop a warehouse on it or a self storage facility or a. Whatever, whatever you want to develop on it. A theme park. And that's the power of land. Right. So we're building the muscle as a land investor to find these parcels and then we could take it from whatever it is, the raw dirt, and we could take it all the way to a massive development or we could just sell it as is, make it a little bit more attractive and find a buyer.
- [15:44]
B
That's cool, man. Do you guys ever hold on to any of them for your own portfolio?
- [15:49]
A
Yeah, so not yet. Right. So there's an opportunity cost to that. Right. Because it's not producing cash flow. There's no real tax benefits. That's called land banking. So a lot of very wealthy people will do that outside of major metro areas. I didn't start this business with a loan from my family. Right. So I got to keep flipping to keep the lights on and then my profits. Because land is such a high income tax tax income business because it's all short term capital gains which flow to your income. We buy, we buy sticks and bricks. We buy commercial properties so that we can use bonus depreciation in taxes to reduce our overall income.
- [16:31]
B
So you, you're saying for tax purposes because. Yeah, if we talk about like real estate in general, it's like what are the benefits of real estate? You got your cash flow, then you got your appreciation and you've got the tax benefits and all the, you know, these multiple ways of making money. Not all that applies to the dirt. You know, you don't really get appreciation the same. You, you get some kind of. But it's not the same and you don't get the tax, there's none of the depreciation, you know what I mean? Cause you can't depreciate dirt. And so yeah, you're missing out on certain aspects of real estate in general. So you guys found A way to compensate for that.
- [17:04]
A
And let me just bust a miss here. Farmland on Average appreciates, you know, 5x more than homes historically in America. So, you know, homes, homes is like 2%, maybe 2.5%, depending on the area in aggregate nationally, and farmlands like 9 to 11%. So I mean, the, the appreciation of farmland is like more than the appreciation of the stock market.
- [17:32]
B
So that's one thing specifically though, right? So you're talking about like, like hundreds of acres of land that's actually being farmed for like a certain, you know, produce. But is that what you're talking about with farmland?
- [17:46]
A
Yeah, yeah. So I don't know the statistics. That's outside of my wheelhouse with actual rural recreational land. There's never really been a study, to my knowledge of like the, the appreciation because it's like so diverse. Land is so diverse. But I mean, it probably appreciates. It probably doesn't appreciate most rural land to the extent that it does. And houses, but I don't really know. Honestly, I don't know.
- [18:13]
B
That's interesting. And you know, and I bought some empty lots, just like these random lots and stuff like that that I'll rent out the dirt on. And I've, I've wondered, you know, if the value of that land would go up that much. And it probably does. I mean, probably. You know, obviously it depends on the area. It's so local and everything like that. But you definitely don't get the tax write offs and that can be a detriment.
- [18:38]
A
Yeah, that's exactly right. The plan to go back to your original question is produce the income. Land flipping is a very high tax endeavor. And then reduce the total income, minimize and mitigate the taxes by investing in commercial real estate and then use that to pay for my life. That is the playbook. And then get to that point as soon as possible.
- [19:08]
B
That's awesome. So you guys are buying some portfolio stuff for the tax write offs primarily?
- [19:15]
A
Yep. And I mean, to be fair, that's the long term plan. I am at this point investing a lot of money back into the business.
- [19:24]
B
Sure.
- [19:25]
A
And so at one point when I have the ability to write a 2, $3 million check, that's when I think it'll be worth it to buy these much bigger buildings. That's what I'd rather do because less headache, one roof, et cetera, all the benefits of larger real estate. But at this point I'm just reinvesting, Joe, back into my land flipping business and I'm having to pay the piper.
- [19:48]
B
I love It. So tell me, you talk about recreational land. So you're not just buying random empty lots to build a house on, you're doing recreational land. Dive into that for us.
- [19:59]
A
So there are three main types of land essentially that I think of three types of categories. There's the infill lots that you see in your cities. Right. And infill lots are anything. It could be a quarter acre, 8,000 square feet, 7,000 square foot lot, or it could be a large 20 acre infill lot in the middle of Las Vegas. Right. That's a regular urban infill lot. Then the other category is a rural infill lot. So imagine you're driving down in Moab, Utah, and you look in Moab and Moab is on a big city, but there's a subdivision that was created there years ago, and you have these rural infill lots, these smaller lots. Maybe they're a quarter acre or an acre or two acres, and those are specifically designed for houses. Right. And so that's the context of the rural infill. Or in a crossroad in Moab, that's a commercial lot, that's an infill. The rural recreational is the blanket. That's outside of that. Right. I consider recreational to be anything that is outside of the quote unquote, infills. And recreational could be something that's hunting land, it could be fishing land, it could be farming land. That. That's what I put underneath the recreational. Right. Even though it maybe is not technically that. This is just how I think about it. And you can have just homesteads out there. So the recreational and that you have a residential type of feel like a 20 acre parcel or 50 acre parcel, that's a residential type of parcel, that's another recreational parcel. So anything that's bigger than the regular info lots that's out in a more rural area, like, like imagine driving an hour and a half outside of St. George or an hour, an hour outside of St. George and all that land that you see, that would. That would be considered in this case, recreational land.
- [22:01]
B
Cool. That's awesome. And are you buying all over the country or you just have specific markets that you're buying in?
- [22:11]
A
So as my business has matured, we have changed the markets that we target. Sure. Because unlike houses that are constantly trading and there might be a million houses in a metro area or 500,000, which can keep you busy for the rest of your life in a county, there only might be 2,000 parcels. So you have to have more markets. You actually work in or general areas, in my opinion, to build a scalable business. And so we work in different markets for different purposes. So if we're doing a certain type of flip or a certain approach to, hey, we want to do this type of property in this market versus a subdivide versus if we're going after a development or entitlement deal, there's going to be really different markets. But we tend to stay in a couple of different states because we just like the fundamentals of the states. All the states is states that you would guess, right? Because they're landlord friendly, because they're business friendly. And so we tend to target those states.
- [23:23]
B
That's cool. That's awesome. So the main goal, though, is to flip it. You buy it, you value at it, you sell it, and you're making money off that and then eventually be able to do more of the building your own portfolio and long hold this stuff. Now, you mentioned in your bio that you've done over 100 Landos, but also 65 multifamily doors. Were those flips as well or those holds or what was the multifamily stuff?
- [23:48]
A
Those are holds. Yeah, those are all holds. And many of those I still own to this day. And those are just sort of the. The residue of what I was discussing earlier and that when we were originally burning those multifamily properties, those are the residue of that. That initial bur process. A lot of buildings that I wish I didn't have because they're older buildings, but eventually I'll 1031 them into something else.
- [24:17]
B
Cool. Yeah, I mean, that's a. That's a quite a large portfolio to have, you know, that many units. So that's awesome. But yeah, like I say, it's. It's never as sexy and cool as it sounds on the surface, but that, that's part of the game, you know?
- [24:32]
A
You're so right. And one of the things that I found is when I got into this business, right, it's like, okay, perfect example, if you're hiking, right? I'm sure you do a lot of hiking. You know where you are. There's this thing in hiking called false peaks. Okay? So when you're hiking up a mountain and you're like, I'm almost to the top of this mountain, and you see that little peak, and you're like, oh, that must be the peak. And so you're hiking, hiking, hiking. And then you, at the end, you start to really move faster and faster and faster and you book up to the rest and then you're like, oh no, there's another peak up there and this is not actually the peak. And then you go out to the top of that peak and you're like, oh no, that's the actual peak.
- [25:16]
B
I just couldn't see it from where I was at before.
- [25:18]
A
Exactly, exactly. And so what happens is I felt that when I got into real estate, the narrative was this false peak. The narrative of real estate investing and business in general is it is so easy. It was low interest rates, deals were easy to come by, competition was low. And a lot of these people that were talking about real estate investing in general didn't have a lot of experience with different market cycles. They didn't have a lot of experience with different competition. They were bright eye and bushy tailed and everything that they did went right.
- [25:58]
B
Right.
- [25:58]
A
So the narrative was this false peak. But if you were to tell me, Joe, hey Clay, we're going to hit this hike and there's going to be like four or five different false peaks. But after that fifth false peak, you'll see that, you'll see the peak. Right. And I'll be like, okay, So I know that this is going to be hard.
- [26:18]
B
Yeah.
- [26:19]
A
And I know that this is going to take a lot of effort. So I set myself up mentally to prepare for that. But when I got into real estate investing and what most people do when they get into real estate investing, they're looking at that first false peak and they're saying, that is my goal, that's my destination, that's what I need to do in order to be successful. And when they realize it requires 2, 3, 4, 5 more false peaks, then it starts to say, those are the tired out landlords. There's reason why tired landlords. Right. And so that's what I always say. It's like it's a lot harder than you think it is and it requires a lot more business acumen, sales and operational expertise. But it's still worth it. Right. You just got to do the extra due diligence, you got to work extra hard, harder than you think you will and set the right expectations of it is really difficult. But that doesn't mean it's not worth it.
- [27:14]
B
Yeah, no, I think that's a good analogy and a good way to look at, because it can definitely be a lot more than people expect. And so to not be blindsided can, can be helpful, you know, but for some people, if they knew what it was really going to take, they wouldn't have started. So sometimes a little ignorance can get you get you on the right path.
- [27:34]
A
That's actually a really good point. Yeah. I mean, I don't know if I would have. I probably would have done it, but, man, I would. The naivete that I had was probably healthy for me at the beginning.
- [27:48]
B
Yeah. So let me ask this. I like to ask these four questions to basically every guest that comes on. The first one is if you had to start your real estate journey over completely, but you know what you know now, so you still have the experience and knowledge, just none of the portfolio or capital or whatever, you know, what would you do different? What would be your first, second, or maybe third move if you were starting all over, knowing what you know now?
- [28:14]
A
Yeah, I would not get into multifamily. I would literally as fast as I possibly could get into land flipping.
- [28:22]
B
Love it. And how would you do that? So someone's listening to this and they're like, well, I'll just do that. What's the first second step?
- [28:32]
A
I mean, so I. When I got into multifamily, I bought it. I bought a course. When I got into land, I bought a course. Anything that I've done, I'm in part of Masterminds. I believe in education, I would buy a course. Because if someone's actually successful and it's really hard to tell, right? It's really hard to tell. People do a good job at making sure that they are. They project the right image. But, like.
- [28:56]
B
And sometimes it's the ones who have, like, the least, like, credibility that are the best marketers, though, and so they look the best. And some guy who's, like, amazing, has all the experience in the world, but he's like a shitty marketer. He has, like. People think he's. No, he's not even any good. Yeah, it can be tricky online to decipher, you know, who you should believe and give money to.
- [29:19]
A
Exactly, exactly. And. And also when you're studying the person that you want to emulate, you also want to study, what do they do? Like, what value is this person going to add to my life? Now, here's what I mean by that. When you follow someone that talks about this is how you invest in multifamily, they might be an analytical person, they might be a spreadsheet person that just crushes spreadsheets. And when you actually need someone who's more of a killer, a salesperson, because that's the type of process that you need, because that's the bent that you are. Right. That's really important because there are so many coaches in any industry, but you want to align to this person is more like me so that I can take their proven process and apply it to my life. But I've spent money on so many different coaches and I've always gotten value out of everyone. Now have a lot of been a lot of them left a lot to be desired. Yeah, but, but that, but still, I've gotten benefit from them. The, the last thing I would add to that is make sure that whomever you coach with, if you're coaching, they have a community that's a part of them. And not like some bullshit woo woo community, but like a community that this person is actually actively involved in. Because information is everywhere now. And the real, the real separator is that people around you in the community that you're in are doing the same thing and they're investing in the same thing that you're investing in. And so you can build relationships with these people and they can help you on the way up. So that would be one other thing that I would say for that.
- [31:05]
B
I love that. Find some sort of mentor training program. Find a community that you can rise with. I think that's perfect first step for not just for land flipping, but virtually anything you want to do. That's going to be a good foundation to get going. I love that. Second question, Clay. What? Is there a specific book or podcast that's been really pivotal to you? And is there any ones that you would recommend, people checking out or courses, if you have a specific course that you want to recommend?
- [31:43]
A
Well, I'll not be a selfish person and recommend my own course. There's a book, it's called the 8020 principle by Richard Koch. Okay, so this book, I originally heard about it and basically this guy talks about, I mean, everyone probably knows about the 8020 principle, but he was one of the first guys that really made it popular. So it's a book that has an actual legacy to it. But I mean, in an age of infinite information, the people that rise are the people that are able to prioritize the right things. And so the 8020 principle of whatever business you're in, for example, in land, it's two things. You got to be good at market selection, you got to be good at sales. If you suck at everything else, literally everything else, and you're good at those two things, you will make seven figures if you're a good enough salesperson. But people want to make it so that they make their mailer fancy or their logo fancy, or they have all these like cool CRMs. It's like, dude, that doesn't actually matter. So 80 20, any 8020 by Richard Koch.
- [32:56]
B
I love that. And especially like you were talking about nowadays, like there's information out there, there's so much noise, there's so much busyness that can take up your time and energy and thoughts that it's like you need to focus on that 20% of the things that actually lead to 80% of the results because there's just so much distraction. You could just spend all day spending 80% of your time and getting 20% of the results. There's so much work for such little. Because there's just so much noise.
- [33:26]
A
Work does not equal output. People mistake work for output. Work doesn't matter. What matters is what are you actually producing?
- [33:36]
B
100%. Um, let me ask you this one. So what, what's been one of the most expensive or even just interesting mistakes, so called mistakes, you know, we can learn from anything. But what's been one of the most expensive or interesting mistakes you've, you've made in real estate?
- [33:53]
A
Yeah, I mean it's expensive and it's not interesting whatsoever. I wish it didn't happen, but I bought an Airbnb in Colorado in a town called Grand Lake, Colorado and bought it, depreciated it, put multiple six figures of money into it, sold it for the exact same number two years later. And it was the most stressful experience ever because it was in a remote, isolated town. I had no idea what I was doing. I had people steal $5,000 worth of camping gear from me there. I had to spend so much money on repairs, I had to spend so much money on Capex and it put me back significantly, psychologically and also financial. Like multiple six figures back, which is crippling when you're trying to start a business.
- [34:52]
B
Yeah. And it's funny because, you know, the Airbnb stuff can look so sexy. And, and the biggest caveat I give people is like, it is a business. You can go make money, but it's not real estate. It plays in the real estate world, but it's its own hospitality business that is competitive. You need to know what you're doing. There's, there's a lot of nuance and specialty to it. It's not like flipping a house or owning a long haul rental where you can kind of not honestly know that much, but, but if you know the basics, you're going to swing it. You know, short term rentals, it's an industry, it's a business in and of itself, but it's not always treated that way. And then you see stuff like that happen.
- [35:37]
A
Yeah, I fell victim to the siren song of this is easy. You can do it. Yeah.
- [35:45]
B
I mean, hey, look, look, you're going to go make $400 a month cash flow if you buy a long hold, just go make $10,000 a month cash flow by doing an Airbnb. You just got to put a little more money into it. No big deal. Not, not quite. Not quite. It's much, much more competitive and cutthroat and with a lot more variables for, for error. And again, that is, I'm not saying people don't do it. There's guys that are killing it. But you need to treat it like a real business and learn what you're doing as opposed to it's a higher ray or higher risk in a lot of ways because there is so much, like I say, a lot of times they're more expensive places. You're furnishing it, you're buying camping equipment, you're doing a lot. You pour a lot more into it than like for instance, you know, land flipping. You buy something, you know, you're not pouring, you know, all this stuff and the stuff that can just be taken, you might put what, a road or you know, some utilities or something like that. But it's, that's just going to add value no matter what people do to the land.
- [36:45]
A
Yep, completely, completely agree with that.
- [36:48]
B
But I love one of the things you said earlier, you talked about when you do find your mentor, find someone that like thinks like you, right? Like find someone that is if they're analytical or if they're more this way, you know, find some of that way that you can click with because you think the same way and same thing with risk tolerance and takeover. Some people want higher risk and higher reward and it turns them on, it's exciting and it's just, you know, they, maybe they want that Some people want a lot more lower risk, just more of a sure thing, you know, and it's whatever is good for you and clicks with you. Find a way to do it, you know, effectively and safely. There's not a right or wrong way. Like say find, find someone that matches your style and roll with that.
- [37:29]
A
Yeah, absolutely. Like you like the person who is the best course creating marketer does not mean that they're the best course creator or best educator. And also some people want to scale. I want to build a, you know, multiple eight figure land flipping business or I want to do, you know, this massive, multiple billion dollar real estate investment empire. If that's not you, you don't have to pretend it's you. And people want to pretend that it's them. And that's perfectly okay. Sometimes it's okay to make $500,000 to a million dollars and work 30 hours a week so you can be with your family, so you can be interrupted in a podcast with your 5 year old and be able to be intentional with this person. And that's like a beautiful thing. But people are obsessed with this. I need to scale and I need to go big and I need to do this thing. And if that's right for you, then absolutely do it. But you got to figure out what are you actually trying to do. And then you pick the course, the person that's going to get you there. Because this is a vessel for your own personal wealth accumulation. If you need to make a lot of money fast, you got to flip. If you want to build long term wealth and retire in 10 years, buy some rental properties. And so you got to understand not, not, not every nail. If you, if you have a hammer, every nail looks like, or everything looks like a nail. But you got to know that you got to use different tools to get to your outcomes.
- [38:59]
B
Man, you nailed it. And I've been experiencing this with some of my students lately, is if you don't know what you're trying to accomplish, real estate's a really tricky one to do it in. Cause there's. Real estate is so customizable. Like you said, you can do it small, you can do it passive, you can do it active, you can do it big, you can. It's so you can tweak it and design it to accomplish whatever you want. But if you don't know what your end goal is, if you don't know what you're really trying to do, it's a lot of shiny object syndrome, a lot of distraction and a lot of false peaks and a lot of like, what are you, where are you going with it all? And it's hard to get the momentum and attraction if you don't really know what you're trying to accomplish with it, you know, especially if it's passive versus active and how many years you want to be in it. And you know, scale. What does scale mean? You know, is that 10 units? Is that a hundred units? Is it a thousand? Is it ten thousand? You know, there's so many levels to that. If you know what you're trying to do, it's going to help a lot in getting the focus to actually do.
- [40:01]
A
It, Yeah, that's exactly right. In, you know, you're in the coach, you're coaching. And I'm sure that you say that the most important thing before we have a conversation is you know where you want to go.
- [40:16]
B
Yeah.
- [40:17]
A
Because advice is tailored differently in a person's circumstance based on where they want to go. If someone says, I want to get to that location. Right. And you say, I just want to go there, and you don't really know the vessel, or you don't really have exact clarity on what it is, the person could say, well, you could take a plane, you could take a boat, you could walk, you could bike, you could drive a car, you can get on a train. There are so many vessels, and if you don't have clarity on the vessel that you want to use and the, in the place that you want to go, it's going to be very difficult in order to be successful. And this is why people burn out. This is why people can't, can't get to their goals because they don't have ruthless clarity on what they're looking for.
- [41:03]
B
Yeah. If you're sitting there trying to build a boat and a plane and a car and all you need is the car, it's a lot easier to go. Cool. I don't need a boat. I just saved all that time and energy and bandwidth not worrying about a boat now. I don't need a plan. All I need is a car. Doesn't need off road. Okay. I don't even need an off road car. It doesn't need a four wheel drive. Okay? Boom, boom. It's just like you start eliminating, eliminating, eliminating. Like all I need is a van that's big enough to fit what I need to get to this location. All on paved roads. And it's like that eliminates all the small cars. Like it just like it narrows everything down. And then life gets. It gets pretty simple. Once you've narrowed everything out, there's not really that many options left. You're like, oh, well, I'll do this or that, I guess. And then you just roll with one.
- [41:50]
A
Dude, that's a, that's a amazing point.
- [41:53]
B
I love it, man. Let me ask you this, and then we'll let you get going. If you were to encapsulate why you love real estate into you, one word, maybe a short phrase, what would that be?
- [42:05]
A
The reason why I love real estate is because it provides the opportunity for me to provide for my family, for my loved ones, and for my future.
- [42:19]
B
I love it, man. I love it. I appreciate your time. Clay, if people do want to follow you or learn more from you or get, you know, partner with you, whatever, you you've got a lot of value that you add in so many ways. What's the best way for them to do that?
- [42:35]
A
I mean, you can reach me at Land Man IO if you're interested in learning about how to build a six figure land flipping business. If you're interested in connecting with me on social media, I'm Clay Hepler on every social LinkedIn, Twitter, Instagram, I'm not on TikTok. And then also if you go to any of my socials, I have a land flipping newsletter that talks about everything land investment and would be a good place to check out more and learn a little bit more about land investing. If you want to check it out before you jump in.
- [43:12]
B
Love it. Clay, thanks so much for your time. Thanks for sharing your story and insight with us. We really appreciate it.
- [43:17]
A
Dude, it was great to jam. Thanks for having me.
- [43:20]
B
This is Joe Jensen signing off for the Real Estate Investing School podcast, reminding you to get clear and get going.