Latest / Carson's Corner: Entrepreneurship & Investing / Turning Raw Land Into Returns: Without the 5-Year Wait | Brandon Cobb

Transcript

Turning Raw Land Into Returns: Without the 5-Year Wait | Brandon Cobb · Carson's Corner: Entrepreneurship & Investing

• 0:00
  SPEAKER_02: 50 acre farm is worth a lot less than a 200 home community.
• 0:05
  SPEAKER_02: Yeah, right?
• 0:06
  SPEAKER_02: When it's approved for 200 homes, you got a lot of equity baked into it.
• 0:10
  SPEAKER_01: Today's guest is Brandon Cobb, founder of HBG Capital and creator of the land development accelerator, who turns land into communities.
• 0:17
  SPEAKER_02: When people hear the word development, they kind of get the wrong idea.
• 0:19
  SPEAKER_02: They think they need lots of money.
• 0:21
  SPEAKER_02: They think that they need to have the construction background.
• 0:23
  SPEAKER_02: And it's just not true.
• 0:25
  SPEAKER_02: There's actually three phases of development.
• 0:27
  SPEAKER_00: And the one that we work with most people on is the first phase, which is one of the biggest benefits is not only like the instructor on the land, but I think kind of leveraging your expertise.
• 0:37
  SPEAKER_00: Because most people don't understand coming in that it's hard to raise capital, but when they're able to kind of leverage your expertise and stuff like that, doesn't that make it easier?
• 0:46
  SPEAKER_02: There are so many risks, and I've figured them all out because and I'm sure there's more that I haven't even figured out yet because I've made all the mistakes.
• 0:52
  SPEAKER_02: There's so many things that can that can go wrong if you haven't done one of these before, and that's why we started the program is we we know what all those risks are at every turn, and we can make sure to mitigate those.
• 1:04
  SPEAKER_00: So when you talk about development, are you actually building the build to rent or building the homes?
• 1:09
  SPEAKER_00: And what do you mean by that?
• 1:10
  SPEAKER_02: I developed the entire 20 acres, so it was a farm, and we put the roads, the utilities, the infrastructure in.
• 1:18
  SPEAKER_02: Okay.
• 1:18
  SPEAKER_02: Basically created an entire neighborhood with no homes, and we're selling the lots to the builder to build the homes on.
• 1:24
  SPEAKER_00: What does it look like uh joining your accelerator program?
• 1:29
  SPEAKER_00: I mean, what's the biggest benefit?
• 1:31
  SPEAKER_00: Yeah.
• 1:31
  SPEAKER_03: So welcome to the Carson's Quarter.
• 1:37
  SPEAKER_00: All right, I'm sitting here with Mr.
• 1:38
  SPEAKER_00: Brandon Cobb.
• 1:39
  SPEAKER_00: He is involved in land development here in the Nashville area and kind of looking to um educate folks on everything he does.
• 1:48
  SPEAKER_00: So, Brandon, how you doing?
• 1:50
  SPEAKER_00: I'm fantastic.
• 1:51
  SPEAKER_00: How are you doing?
• 1:52
  SPEAKER_00: Pretty good.
• 1:54
  SPEAKER_00: Welcome uh to Carson's Corner.
• 1:57
  SPEAKER_00: I'm excited to be here.
• 1:58
  SPEAKER_00: Thanks for having me.
• 2:00
  SPEAKER_00: Yeah.
• 2:01
  SPEAKER_00: So let's just get right into what you do.
• 2:04
  SPEAKER_00: You're doing uh land development in the Nashville area.
• 2:08
  SPEAKER_00: Um you have an accelerator program where you um bring in, I guess, partners into your mastermind program and kind of teach them the rope.
• 2:18
  SPEAKER_00: You're a mentor, I I guess is a good way to put it.
• 2:21
  SPEAKER_02: You know, it's funny.
• 2:22
  SPEAKER_02: A lot of people say, well, so what do you do?
• 2:24
  SPEAKER_02: And I'm like, well, I do land development, right?
• 2:28
  SPEAKER_02: So I invent new communities and sell them to like national home builders.
• 2:31
  SPEAKER_02: Um I've got a private equity company that raises the capital, right?
• 2:35
  SPEAKER_02: A lot of people don't realize that's like a separate company.
• 2:37
  SPEAKER_02: Like you need a separate company that raises money for your company that does the construction, right?
• 2:42
  SPEAKER_02: So I've got a private equity company too.
• 2:44
  SPEAKER_02: And then over the years, we just had a ton of people reach out to us, saw what we were doing on social media and said, Hey, can you teach me how to do that?
• 2:51
  SPEAKER_02: And we said, sure.
• 2:52
  SPEAKER_02: So we started a coaching program around that where we've got our little mastermind community where we teach and bring in guests and speakers.
• 2:59
  SPEAKER_02: And, you know, I got a full course to help people really get started in the land development space.
• 3:04
  SPEAKER_02: It's really good if you're like a builder that wants to scale the number of homes you're doing, you're tired of chasing onesie twosie little vacant lots, or you're a land flipper that wants to do larger payday deals, you know, you go from$30,000,$50,000 deals to half a million seven-figure deals.
• 3:18
  SPEAKER_02: So that's that's who we've seen and who seems to be a really good fit for the community.
• 3:24
  SPEAKER_00: Yeah.
• 3:26
  SPEAKER_00: So a lot of it is um, you know, people come from different aspects of real estate, whether it be multifamily or you know, mobile home parks, and they're not real educated on, you know, what you can do with land.
• 3:38
  SPEAKER_00: And most of them think of it as a very, very long-term play, but it doesn't necessarily have to be.
• 3:44
  SPEAKER_00: Um what exactly are you looking for when you acquire?
• 3:48
  SPEAKER_00: How's the process look?
• 3:50
  SPEAKER_00: Um, you know, from start to finish, you know, from how do you acquire it and then how do you exit?
• 3:57
  SPEAKER_00: What's the exit return look like?
• 3:59
  SPEAKER_00: I know it's all different.
• 4:00
  SPEAKER_00: You know, some of them look really good, and others you're like, yeah, I don't want to talk about that one.
• 4:05
  SPEAKER_00: But anyway, go ahead.
• 4:07
  SPEAKER_02: So a couple things to clear off when people hear the word development, they kind of get the wrong idea.
• 4:13
  SPEAKER_02: They think they need lots of money, they think that they need to have the construction background, and it's just not true.
• 4:19
  SPEAKER_02: There's actually three phases of development, and the one that we work with most people on is the first phase, which is entitlement.
• 4:26
  SPEAKER_02: So the first phase is just where we take a piece of raw land and we get it approved for a new community.
• 4:32
  SPEAKER_02: That's it.
• 4:33
  SPEAKER_02: No construction, no permits, none of that.
• 4:36
  SPEAKER_02: And we just we pre-sell it, and so it's sold before we ever do it.
• 4:39
  SPEAKER_02: Now, phase two, that's where you're going in and you're grading out the land, you're putting in the sewer, the water, the utilities, everything in it.
• 4:48
  SPEAKER_02: And then you're selling the ready-to-build lots to a builder, right?
• 4:52
  SPEAKER_02: You're basically making a neighborhood with no homes.
• 4:55
  SPEAKER_02: And then the third phase of development, which everyone's used to, is actually going vertical, actually building the thing.
• 5:00
  SPEAKER_02: What we focus on when we're going after land is number one, we reverse engineer what our buyers want.
• 5:08
  SPEAKER_02: So we work with national home builders, right?
• 5:10
  SPEAKER_02: Dr.
• 5:11
  SPEAKER_02: Horton and Lenar, we've all heard of the public attractive companies.
• 5:14
  SPEAKER_02: All we do when we're looking at an area is we go Google Lenar, Nashville, Tennessee neighborhoods.
• 5:21
  SPEAKER_02: DR Horton, Nashville, Tennessee neighborhoods.
• 5:24
  SPEAKER_02: And on their website, it shows a map of all of their communities with a pen so that you can see exactly where they're building.
• 5:33
  SPEAKER_02: And those are the areas that we focus on.
• 5:35
  SPEAKER_02: And we're focused on those large parcels that are down the street from these developments.
• 5:41
  SPEAKER_02: It could be a little bit further away, but if you were to go pull up a GIS parcel map, what that does is it shows you all the land parcels connected together.
• 5:51
  SPEAKER_02: It's like a giant puzzle with all the puzzle pieces being the land parcels and they fit together.
• 5:56
  SPEAKER_02: And I'm looking for the large puzzle pieces that are down the road from all the small puzzle pieces.
• 6:01
  SPEAKER_02: The small puzzle pieces being like the development with a lot of lots on it.
• 6:05
  SPEAKER_02: That's really it.
• 6:07
  SPEAKER_02: We put it under contract and we get it step one.
• 6:11
  SPEAKER_02: After it's under contract, we get what's called a concept plan done.
• 6:14
  SPEAKER_02: Your local civil engineer can do this.
• 6:17
  SPEAKER_02: That concept plan is just houses sitting on a piece of paper, right?
• 6:23
  SPEAKER_02: It's just a bird's eye view of like how many units and how would they fit on the land?
• 6:27
  SPEAKER_02: Cool, got it.
• 6:28
  SPEAKER_02: We take that concept plan to the planning director of the city, or perhaps it could be like a local council person, and we say, Hey, are you excited about this?
• 6:39
  SPEAKER_02: Is this something that you're in support of?
• 6:41
  SPEAKER_02: And they'll go, Yeah, you should submit this, or no, this doesn't stand a chance, change it.
• 6:46
  SPEAKER_02: We don't want townhomes, we want something else.
• 6:48
  SPEAKER_02: Okay, we bring it back to them.
• 6:49
  SPEAKER_02: Once we get their blessing, we take that concept plan to our list of buyers, in this case, these national builders.
• 6:55
  SPEAKER_02: And if we get a deposit and a contract on it, we start taking it through.
• 7:01
  SPEAKER_02: All that is done during the due diligence period so that we don't have any of our earnest money at risk and we don't risk pursuing a project that nobody has any interest in.
• 7:11
  SPEAKER_00: So you put it under contract and then you take it basically to the city to kind of get pre-approved or approved.
• 7:18
  SPEAKER_00: And then how long is it under contract?
• 7:22
  SPEAKER_02: We only buy it after all approvals are done.
• 7:25
  SPEAKER_02: So we want an 18-month contingency to get our approvals.
• 7:29
  SPEAKER_02: A lot most of the time it's shorter than that.
• 7:32
  SPEAKER_02: But the seller's on board every time because we're offering them more money than what their land is worth, and they know that.
• 7:38
  SPEAKER_02: Yeah.
• 7:39
  SPEAKER_02: We're giving them a substantial amount and we explain that to them.
• 7:42
  SPEAKER_02: Hey, I want to pay you this amount, but I can't right now because your land's not worth it.
• 7:46
  SPEAKER_02: I have to do the entitlement work to get it approved for the community so that I can pay you more for it.
• 7:52
  SPEAKER_02: Does that make sense, Mr.
• 7:53
  SPEAKER_02: Seller?
• 7:53
  SPEAKER_02: Great.
• 7:54
  SPEAKER_02: Okay, I need 18 months to do that.
• 7:55
  SPEAKER_02: You're on board?
• 7:56
  SPEAKER_02: Awesome.
• 7:56
  SPEAKER_02: And then, you know, we pay them two, three, four, sometimes five X what their land is worth.
• 8:01
  SPEAKER_02: They're very happy.
• 8:02
  SPEAKER_00: Yeah.
• 8:03
  SPEAKER_00: I would think um, well, you're you're kind of getting a premium from the buyer.
• 8:09
  SPEAKER_00: If we go into that next step of selling it, it you know, you're they'll pay a premium for you know entitled land because they don't want to you're basically b uh selling time is what you're selling, not land, kind of in a way.
• 8:23
  SPEAKER_00: Yeah, and the value, yeah.
• 8:24
  SPEAKER_02: They don't have to go, they didn't find it, they didn't negotiate it, they didn't have to deal with the city, go through all that stuff.
• 8:29
  SPEAKER_02: Yeah, we do all that work, but it's also worth a lot more.
• 8:32
  SPEAKER_02: Like, you know, a a farm, uh a 50-acre farm is worth a lot less than a 200 home community.
• 8:42
  SPEAKER_02: Yeah right when it's approved for 200 homes, you got a lot of equity baked into it.
• 8:47
  SPEAKER_02: So that's one thing I like about it is we force appreciate the value of the asset before we buy it rather than doing the value add strategy after we buy it.
• 8:57
  SPEAKER_00: Yeah, that's uh that's interesting.
• 8:59
  SPEAKER_00: I had a person on with um apartments and they were putting under contract and starting the renovations while it was under contract, so it was ready day one.
• 9:09
  SPEAKER_00: It's I think you're but but what you're doing is basically the same thing for land.
• 9:14
  SPEAKER_00: Um that's pretty incredible and smart because you're taking a lot of the risk out of it for your investors.
• 9:21
  SPEAKER_00: Um so that's a pretty actual simple business model, which I like a lot.
• 9:28
  SPEAKER_00: Um, you know, keeping it simple.
• 9:31
  SPEAKER_00: So if you're in the Nashville area, you're looking at like some of these expanding markets like a Murfreesboro or uh Mount Juliet or Clarksville or you know, off some of these highways and they just keep going forever, like you know, New Salem Highway or something.
• 9:46
  SPEAKER_03: Yeah.
• 9:47
  SPEAKER_00: You see Ryan Holmes and Lennar and all those building out there, they're gonna keep going until the end of time, probably.
• 9:53
  SPEAKER_02: Yeah, yeah.
• 9:54
  SPEAKER_02: Follow the main arteries, go where they're already building, right?
• 9:57
  SPEAKER_02: Because these guys, what I like, what I like about working with the Nationals is they're a publicly treated company.
• 10:04
  SPEAKER_02: Yeah, they have to make stock price go up.
• 10:06
  SPEAKER_02: There's only one way to make stock price go up, and that's buy more land and build more houses.
• 10:11
  SPEAKER_02: That's it.
• 10:12
  SPEAKER_02: And if that doesn't work, if plan A doesn't work, they always fall back to plan B, which is buy even more land and build even more houses.
• 10:19
  SPEAKER_02: And if that doesn't work, there's plan C, which is buy even more and build even more.
• 10:23
  SPEAKER_02: So, you know, they have to buy.
• 10:26
  SPEAKER_00: Yeah, that's interesting.
• 10:28
  SPEAKER_00: I I like it.
• 10:30
  SPEAKER_00: Our business model is to buy and keep buying.
• 10:33
  SPEAKER_00: Well, they they have to turn it.
• 10:34
  SPEAKER_00: That's how they get their fee, basically.
• 10:37
  SPEAKER_00: Um, so I think a unique way of saying that is you do uh you're basically selling time.
• 10:44
  SPEAKER_00: You are.
• 10:45
  SPEAKER_00: I mean, those people don't want to mess with all that and headaches.
• 10:48
  SPEAKER_00: But um, so from an investor standpoint, when you're when people invest, so if somebody wants to come into your accelerator program, you not only teach them how to map out and how to find the properties, are you also showing them like investor attraction, stuff like that, how to compliantly you know, set up a fund or uh what it what are y'all doing, like a 506B or C or Yeah, we've done both.
• 11:15
  SPEAKER_02: Yeah, we've done both.
• 11:16
  SPEAKER_02: We've we've done funds, we've done 506B, we've done 506C syndications.
• 11:21
  SPEAKER_02: You know, every deal's different.
• 11:22
  SPEAKER_02: Sometimes investors bring all the money to the deal and we just put them in first position as a debt lender on the property.
• 11:27
  SPEAKER_02: I've done that too with um uh very high net worth individuals that are you know comfortable with something like that.
• 11:34
  SPEAKER_02: Uh we've done we've done all sorts of structures with investors, but what I like about it and what investors like about it is everything is pre-sold.
• 11:45
  SPEAKER_02: Right?
• 11:46
  SPEAKER_02: There's no speculation.
• 11:48
  SPEAKER_02: Sure, the buyer could back out, but they're putting like 10 to 20 percent of a deposit down.
• 11:53
  SPEAKER_02: So, you know, I've got a um$8 million development we're selling, they gave us$800,000 down to be used towards the development.
• 12:01
  SPEAKER_02: That's free money with no interest that goes towards, which means I don't have to raise quite as much money from investors.
• 12:09
  SPEAKER_02: Sometimes the deposit is so great, I don't have to raise any money at all.
• 12:12
  SPEAKER_00: Yeah.
• 12:12
  SPEAKER_00: So let me get this straight.
• 12:13
  SPEAKER_00: So while it's under contract and getting approved, you'll have a developer come in and buy it before you even have it?
• 12:24
  SPEAKER_00: Or am I understanding that correctly?
• 12:27
  SPEAKER_00: Or what do you mean?
• 12:30
  SPEAKER_00: So so when you you go in and you put a uh property under contract, and then you have to go through the city and all that.
• 12:39
  SPEAKER_00: When does the company buy it from you?
• 12:44
  SPEAKER_02: If I'm selling just the entitled paper, no construction, yeah, they buy it 60 days after the approval.
• 12:50
  SPEAKER_02: I double close on it.
• 12:51
  SPEAKER_02: So right when I go and close with the buyer, or I'm sorry, the seller that's selling it to me, I go and close with my, I can walk into the other room and I go close with my buyer.
• 13:00
  SPEAKER_00: So that's kind of what I was getting at is it's pretty simultaneous because when you have that much time to get through the city, you say, okay, this one's about to be done here in the next 90 days, and you can line up a buyer, so it's like boom, boom.
• 13:13
  SPEAKER_00: So what's the average life cycle for like an investor return?
• 13:17
  SPEAKER_00: Is it like 12 months or 18?
• 13:20
  SPEAKER_00: And what kind of return are they typically getting?
• 13:22
  SPEAKER_02: 18 months or less if we're just doing the entitlement, typically it's less than that.
• 13:26
  SPEAKER_02: If we're doing the development, it depends on how big the project is.
• 13:30
  SPEAKER_02: So, you know, I've got a 74 home community that you know we we just closed on.
• 13:35
  SPEAKER_02: We closed on the first takedown, the first phase.
• 13:38
  SPEAKER_02: And on that deal, it's gonna they're gonna be taking lots down over a 20-month period.
• 13:43
  SPEAKER_00: So when you talk about development, are you actually building the build-to-rent or or building the homes?
• 13:49
  SPEAKER_00: And what do you mean by that?
• 13:50
  SPEAKER_02: So I developed the entire 20 acres.
• 13:53
  SPEAKER_02: So it was a farm, and we put the roads, the utilities, the infrastructure in.
• 14:00
  SPEAKER_02: Okay.
• 14:00
  SPEAKER_02: Basically created an entire neighborhood with no homes, and we're selling the lots to the builder to build the homes on.
• 14:06
  SPEAKER_00: Got it.
• 14:07
  SPEAKER_00: You put the roads and streets.
• 14:08
  SPEAKER_00: So so you basically take you can either do one or the other, you take a piece of land, just go get the entitlements, go through the city, and then flip it, or you can actually do the roads and all that and get it really where it's like move in ready for the developer, so or the developer of houses.
• 14:26
  SPEAKER_00: There's a little confusion, developer of houses versus developer of land, but anyway.
• 14:31
  SPEAKER_00: Um, but yeah, that's interesting.
• 14:34
  SPEAKER_00: Um, so are you like asset specific when you do uh the investments?
• 14:40
  SPEAKER_00: Like if somebody wants to invest with you and they say, okay, I'm gonna do a quarter million dollars with Brandon and he's buying, is it tied to that and they get their payout right at the end, or does it roll over into the next one?
• 14:54
  SPEAKER_00: How does that typically look?
• 14:56
  SPEAKER_02: So if we've got investors that are equity investors in the deal, what we do is as the lots start to sell, right?
• 15:04
  SPEAKER_02: So let's say it's an entitlement deal.
• 15:06
  SPEAKER_02: Let's not go into a development deal.
• 15:07
  SPEAKER_02: Let's say it's an entitlement deal.
• 15:09
  SPEAKER_02: Um, typically, I'm only coming to investors with the funds needed for getting the paper approved.
• 15:16
  SPEAKER_02: So once I get it to a preliminary plot approval, I use all my own money to get it to a preliminary plot approval.
• 15:22
  SPEAKER_02: What does that mean?
• 15:23
  SPEAKER_02: Basically means the city has approved the development.
• 15:27
  SPEAKER_02: They want it, so you've removed that risk of whether or not the city's going to approve it.
• 15:32
  SPEAKER_02: Contingent on the civil drawings.
• 15:34
  SPEAKER_02: What are civil drawings?
• 15:36
  SPEAKER_02: Those are like the architectural plans for a house, except they're for the ground.
• 15:41
  SPEAKER_02: Just like you can't get a building permit to build.
• 15:45
  SPEAKER_02: You can build a home on that lot, right?
• 15:47
  SPEAKER_02: It's a zone to build a home on that lot, but you can't get a building permit until the city sees the architectural plans.
• 15:52
  SPEAKER_02: They need to make sure that home's going to be safe.
• 15:54
  SPEAKER_02: They need to make sure that the windows are big enough for like a firefighter to get in.
• 15:58
  SPEAKER_02: They need to make sure the home's not being built too close to the power lines, right?
• 16:03
  SPEAKER_02: Stuff like that.
• 16:04
  SPEAKER_02: Same thing.
• 16:05
  SPEAKER_02: The city said, hey, a development can go here.
• 16:08
  SPEAKER_02: We just need to make sure it's safe and the civil drawings are approved.
• 16:11
  SPEAKER_02: So we go to investors at that preliminary plot approval stage and say, hey, we've got the approval from the city.
• 16:17
  SPEAKER_02: We've got our in buyer lined up.
• 16:19
  SPEAKER_02: We got a contract.
• 16:20
  SPEAKER_02: We need the money to get it from where it's at, pay for the civil drawings, get it designed, and get it sold.
• 16:26
  SPEAKER_02: Um, 18 months or less is what investors typically see on that.
• 16:30
  SPEAKER_02: Now, if it is a land development project, we're developing it.
• 16:34
  SPEAKER_02: So we're we're raising capital, we're getting debt.
• 16:38
  SPEAKER_02: As the lots sell, the bank's loan, or the we don't hate using banks.
• 16:43
  SPEAKER_02: I prefer to use private lenders, right?
• 16:45
  SPEAKER_02: So the private lender is getting paid down once the first position lender is paid off.
• 16:52
  SPEAKER_02: Now the investors get paid off, and then we as general partners get to profit on top of that.
• 17:00
  SPEAKER_00: Yeah.
• 17:02
  SPEAKER_00: Um, do you ever deal with banks?
• 17:04
  SPEAKER_00: Probably not at all anymore.
• 17:05
  SPEAKER_02: Do you I mean I had a ton in the past.
• 17:07
  SPEAKER_02: I just prefer, I would rather pay more.
• 17:10
  SPEAKER_02: I would rather pay um more money and get the terms that I need than deal with a bank.
• 17:18
  SPEAKER_02: Because the problem with banks is they can call your loan due.
• 17:21
  SPEAKER_02: They could get bought out by another bank, call your loan due.
• 17:23
  SPEAKER_02: That's a huge risk that people don't weigh in.
• 17:26
  SPEAKER_02: That's a big, big, big, big, big risk.
• 17:28
  SPEAKER_02: And I just don't like that.
• 17:29
  SPEAKER_02: So with some of the private lenders, if I need a loan for a year and a half, um, I'm probably building in where I can pay for two six-month extensions if needed.
• 17:39
  SPEAKER_02: Right?
• 17:40
  SPEAKER_02: Whereas the bank's not going to give me that.
• 17:42
  SPEAKER_02: Um, you know, so I yeah, there's some things with the bank that there are some big risks that um I would prefer not to work with the banks.
• 17:50
  SPEAKER_02: Now, if I can get the terms that I want with a bank, I will, but typically I'm seeing getting the terms with with private lenders instead.
• 17:57
  SPEAKER_00: Yeah.
• 17:59
  SPEAKER_00: So um are you uh focused on Nashville specifically?
• 18:03
  SPEAKER_00: Are you like statewide or what's your kind of you know, MO as far as where do you go and all that?
• 18:10
  SPEAKER_02: Yeah, most of the stuff that we've had going on is in Nashville, Tennessee, though we've got projects in Tennessee that are not in Nashville.
• 18:16
  SPEAKER_02: But yeah, most of most of it is native to Nashville just because we really like Nashville.
• 18:22
  SPEAKER_02: It's a really good market to do development in.
• 18:25
  SPEAKER_00: And, you know, there's probably peace of mind being able to drive out to the land and all that.
• 18:30
  SPEAKER_00: So take somebody like me who's you know been in real estate and around it, raised capital, kind of a real estate entrepreneur, somebody similar to me, not necessarily me, but with that MO, somebody that's raised capital on apartments that's out there, you know, what does it look like uh joining your accelerator program?
• 18:55
  SPEAKER_00: Um, I mean, what's the biggest benefit?
• 18:58
  SPEAKER_00: I think it's probably getting through city council, but you know, what what all what all goes in it and all that?
• 19:06
  SPEAKER_00: What all do you teach them that's kind of unique?
• 19:09
  SPEAKER_02: Yeah.
• 19:09
  SPEAKER_02: So who's it not a good fit for?
• 19:11
  SPEAKER_02: I like to start with that first because we're very careful about who we allow in the program.
• 19:15
  SPEAKER_02: It is not a good fit for a W-2 person.
• 19:17
  SPEAKER_02: Look for a little side hustler to make some money.
• 19:19
  SPEAKER_02: It is not a good fit for a newer real estate entrepreneur.
• 19:25
  SPEAKER_02: Development, like, you know, there's high stakes.
• 19:27
  SPEAKER_02: These are big mistakes, and you have to have a foundation built.
• 19:32
  SPEAKER_02: This is a good, and it's not a good fit for somebody that doesn't have 40, 50 grand of liquid cash that they can put in their first deal and reach the finish line, right?
• 19:42
  SPEAKER_02: You need that money, or you need to be able to go and figure out how to raise the money.
• 19:45
  SPEAKER_02: So that's who it's not a good fit for.
• 19:46
  SPEAKER_02: Most of the people in the program are one builders that are tired of chasing onesie, twosie vacant lots.
• 19:54
  SPEAKER_02: Like, you know, they're having to talk to 100 people to do 10 deals.
• 19:57
  SPEAKER_02: And they said, like we did, because we came to this realization, why don't we just buy one parcel of land that we can build 40, 50 homes on and have a pipeline for two years instead of you know doing this thing, right?
• 20:08
  SPEAKER_02: It's the only way to grow and scale.
• 20:11
  SPEAKER_02: So that's one demographic.
• 20:13
  SPEAKER_02: The other are these land flippers.
• 20:14
  SPEAKER_02: You know, they've flipped some land, they're making, you know, 15, 20 grand uh a lot, 40, 50 grand a lot, or they're subdividing, maybe making you know, six figures on a subdivide.
• 20:27
  SPEAKER_02: With them, they've been in the business long enough where they're ready to just up their game.
• 20:32
  SPEAKER_02: They're ready to do some bigger land deals, get some half million dollar, million dollar paydays.
• 20:36
  SPEAKER_02: So um, that's a really good fit for them.
• 20:39
  SPEAKER_02: It's good for a mature real estate entrepreneur because a mature real estate entrepreneur has the background to do sales and real estate transactions.
• 20:47
  SPEAKER_02: That's number one, understands negotiation, and they've probably built something where they have some steady cash flow coming in.
• 20:54
  SPEAKER_02: That's important.
• 20:55
  SPEAKER_02: You gotta have some kind of cash flow coming in from this, because if you don't, I mean, it's a year, year and a half to get these things approved, right?
• 21:02
  SPEAKER_02: You know, it's it's a great bolt-on to an existing business.
• 21:06
  SPEAKER_02: You don't have to just develop it.
• 21:08
  SPEAKER_02: If you're already out there searching for houses to flip, wholesaling houses.
• 21:13
  SPEAKER_02: I've got some wholesalers in the group that are big wholesalers, um, builders, um, land flippers, and you're already doing marketing for property, all you do is just add this to your marketing.
• 21:23
  SPEAKER_02: And when you find a deal, you work it like you have any other deal.
• 21:26
  SPEAKER_02: We'll take more time to close, but it shouldn't slow down your cash flow.
• 21:31
  SPEAKER_02: And so when this thing does close, these are like the real big wealth-generating hits that you get because your cash flow keeps the light on, and then you know, you do one or two deals a year, this half a million million bucks, and like we're talking about some serious money.
• 21:46
  SPEAKER_02: So that's that's who it's a really good fit for.
• 21:49
  SPEAKER_02: Um, what do we teach?
• 21:52
  SPEAKER_02: Everything A to Z.
• 21:53
  SPEAKER_02: You come in, we have weekly calls, we've got a school community, post your deals in the school community, we give you Live feedback on your deals.
• 22:01
  SPEAKER_02: We teach you how to go and identify the right land parcels.
• 22:04
  SPEAKER_02: When you do have something, we hand hold you through and walk you through your deals so that you don't make any mistakes.
• 22:11
  SPEAKER_02: You know exactly what to say.
• 22:13
  SPEAKER_02: We've got AI agents that are built that'll do the due diligence on your land for you, save you like six hours a deal.
• 22:19
  SPEAKER_02: We're really using a lot of AI with what we're doing today.
• 22:21
  SPEAKER_02: I mean, I'm blown away by what's capable.
• 22:24
  SPEAKER_02: And that's that's the first half.
• 22:27
  SPEAKER_02: The second half, we have people that have come into the program and they're already doing land development deals.
• 22:32
  SPEAKER_02: Like I've got some civil engineers that have been doing civil engineering for 25 years.
• 22:37
  SPEAKER_02: I'm not going to teach them anything about land development, right?
• 22:39
  SPEAKER_02: But they need to know how to raise capital.
• 22:41
  SPEAKER_02: They need to know how to set up a fund.
• 22:43
  SPEAKER_02: They need to know how to do a syndication, how to structure it, how to pitch it to investors, how to attract investors.
• 22:49
  SPEAKER_02: That's the other half of what we teach is the capital raising.
• 22:53
  SPEAKER_02: So there's two sections there that are the bulk of it.
• 22:56
  SPEAKER_02: And then the third is what we teach is AI.
• 22:58
  SPEAKER_02: And it's, I can say it's AI for land development, but it's AI for business, quite frankly.
• 23:03
  SPEAKER_02: So teaching them how to create bookkeeping AI agents where your bookkeeping is automated, teaching them how to create their land due diligence agents for their market.
• 23:13
  SPEAKER_02: They can plug ours in, but it's for Tennessee, but they can make it their own in Arizona, California, New York, or whatever it is.
• 23:19
  SPEAKER_02: Um, teaching them how to have their uh personalized executive assistant AI agent set up that's automating and doing a lot of things that you would pay an executive assistant to do.
• 23:30
  SPEAKER_02: So that's kind of something newer that we launched this year because I saw where it's going with AI agents, and it is nuts what you're able to do now with AI.
• 23:40
  SPEAKER_02: I mean, you can really literally run an entire team of AI agents and replace a lot of the people that you would normally have to hire.
• 23:47
  SPEAKER_00: I'm doing a little bit of that.
• 23:49
  SPEAKER_00: I've just kind of like became a weekend hobby, and it's like, golly, just getting these little tiny tasks off my plate, um, just silly stuff, and I'm like, oh wow.
• 24:00
  SPEAKER_00: Um you know, like it can get into Chrome and start doing stuff for you, and it's pretty incredible.
• 24:07
  SPEAKER_02: I've got it, I've got my whole so I was paying a controller$90,000 a year and a bookkeeper$40,000 a year, and we were doing meetings every single week.
• 24:15
  SPEAKER_02: I've completely automated all of my bookkeeping.
• 24:18
  SPEAKER_02: I don't need any of those people anymore.
• 24:19
  SPEAKER_02: I've saved six figures in that alone, and it's able to do an executive assistant, you're paying$55,000 a year, managing your calendar, your emails, uh, reminding you of stuff.
• 24:32
  SPEAKER_02: I've got an agent that sorts through all of that.
• 24:35
  SPEAKER_02: It sends me a daily debrief.
• 24:37
  SPEAKER_02: It goes and handles the tasks that I don't have time to do.
• 24:40
  SPEAKER_02: It's a game changer.
• 24:41
  SPEAKER_02: Due diligence on your real estate deals.
• 24:43
  SPEAKER_02: I mean, underwriting for commercial land, you name it, it's nuts.
• 24:48
  SPEAKER_00: The bookkeeping is one I used it for because you know, I got a couple years behind on some taxes, and I'm like, just clean this up so it's like CPA ready, you know, because it's like you you just get overwhelmed with how many transactions go, and then you know it gets away from you.
• 25:05
  SPEAKER_00: But I was able to like knock out two years like really fast, you know, by and I have it all set up now to where it's so streamlined.
• 25:14
  SPEAKER_00: Uh it's almost hands-off now.
• 25:16
  SPEAKER_00: But yeah, it's pretty incredible.
• 25:18
  SPEAKER_00: It's like uh inventing another Carson.
• 25:20
  SPEAKER_00: So um, who let me ask you this.
• 25:23
  SPEAKER_00: A lot of this stuff's good.
• 25:24
  SPEAKER_00: I'd love to be in your um, you know, the AI stuff.
• 25:28
  SPEAKER_00: I could probably watch all day, but you know, you're looking for people that honestly, you know, how much money do they really need to have liquid to tie down one of these?
• 25:38
  SPEAKER_00: You probably need somebody that's at least liquid for a hundred grand, but can afford for it to sit on the sidelines for you know a year to two years, depending on how long it gets tied up.
• 25:50
  SPEAKER_00: And what are the risk factors involved for somebody that's new?
• 25:54
  SPEAKER_00: I mean, if say the you know, the land doesn't get pushed through or whatever, you know, yeah and all that.
• 26:01
  SPEAKER_02: So as far as to do your first deal, you could do a 30-unit subdivision again, because that's kind of the smallest that these national home builders will um buy, right?
• 26:13
  SPEAKER_02: Now you can sell it to a regional or maybe you chop it up and sell it to you know six lots to five different builders, right?
• 26:19
  SPEAKER_02: But let's say you want to do a 30-unit subdivision.
• 26:22
  SPEAKER_02: If you're doing a 30-unit subdivision, you're gonna make$300,000 to$600,000.
• 26:27
  SPEAKER_02: Like if you're not making$10,000 a unit, don't do that deal, right?
• 26:31
  SPEAKER_02: You know, you should have plenty of margin.
• 26:32
  SPEAKER_02: So you're gonna make three to six hundred thousand dollars on the 30-unit subdivision.
• 26:36
  SPEAKER_02: It's gonna cost you probably around$50,000 to$60,000 to get that sucker approved.
• 26:42
  SPEAKER_02: Now, if you're in New York or California, God bless these states, okay.
• 26:47
  SPEAKER_02: Don't quote me on that because that is a whole nother world, right?
• 26:50
  SPEAKER_02: Um, but for business-friendly states, Texas, um, Tennessee, you know, Florida, you know, it, you know, you're you're it's about how much, you know, so you can get a development done for$40,000,$50,000, a smaller one, and you can make really good money on it.
• 27:07
  SPEAKER_02: Now, I I recommend people, you know, learn how to raise capital because you don't want all your money tied up into liquid, right?
• 27:14
  SPEAKER_02: You're eventually gonna have to learn how to raise money and do these deals.
• 27:17
  SPEAKER_02: But for your first deal, yeah, if you got 40, 50 grand of liquid cash to put into a deal, you're golden.
• 27:22
  SPEAKER_02: You you can do your first development, quite frankly.
• 27:25
  SPEAKER_00: And as far as the one of the biggest benefits is not only like the instruction on the land, but I think kind of leveraging your expertise, because most people don't understand coming in, like if you're just like a local builder or whatnot coming in that it's hard to raise capital, but when they're able to kind of leverage your expertise and stuff like that, doesn't that make it easier?
• 27:48
  SPEAKER_00: I mean, that they're working with somebody like you.
• 27:51
  SPEAKER_00: I don't know.
• 27:52
  SPEAKER_00: I mean.
• 27:53
  SPEAKER_02: Oh, I mean, so you act about the risks.
• 27:56
  SPEAKER_02: There are so many risks, and I've figured them all out because and I'm sure there's more that I haven't even figured out yet because I've made all the mistakes, right?
• 28:04
  SPEAKER_02: I I if you do what I said by putting it under contract, getting a concept plan done, getting the okay from the city, you know, just gauging how excited they are about it, they'll tell you whether or not to submit it or not.
• 28:19
  SPEAKER_02: And then getting your builder lined up, that builder's gonna put a deposit down and they're gonna put a contract down.
• 28:26
  SPEAKER_02: And if they walk for some reason, you keep their deposit.
• 28:29
  SPEAKER_02: As long as their deposit covers your cost in the project, you've mitigated a lot of the risk.
• 28:34
  SPEAKER_00: Right.
• 28:36
  SPEAKER_02: But there's so many things that can that can go wrong if you haven't done one of these before, and that's why we started the program is we we know what all those risks are at every turn, and we can make sure to to mitigate those.
• 28:49
  SPEAKER_02: I and I've made all of them, right?
• 28:50
  SPEAKER_02: Like, don't buy the land before you get all the approvals.
• 28:53
  SPEAKER_02: Made that mistake.
• 28:54
  SPEAKER_02: Make sure you design the community with the in buyer in mind.
• 28:59
  SPEAKER_02: One of the first um developments we did, we got it approved for 36 units.
• 29:04
  SPEAKER_02: Well, all those lots were 30 feet wide.
• 29:09
  SPEAKER_02: Yeah.
• 29:10
  SPEAKER_02: Guess what?
• 29:11
  SPEAKER_02: There's five foot setbacks on the side of the homes, right?
• 29:14
  SPEAKER_02: The side of the home to the property line.
• 29:17
  SPEAKER_02: Five foot setbacks on each side of the home means the home has to be 20 feet.
• 29:21
  SPEAKER_02: Guess who doesn't have a 20-foot wide product?
• 29:24
  SPEAKER_02: National Home Builders, the buyer doesn't.
• 29:26
  SPEAKER_02: So we had to go get it re-amended to 30 lots instead of 36.
• 29:30
  SPEAKER_02: And we sold those lots for 60, I'm sorry,$80,000 a piece.
• 29:34
  SPEAKER_02: We lost eight lots, I'm sorry, six lots at$80,000 a piece.
• 29:38
  SPEAKER_02: That's$560,000.
• 29:40
  SPEAKER_02: Now we still make great money on the deal, but that that was a big mistake.
• 29:45
  SPEAKER_02: Still lots of things that you that you can do.
• 29:48
  SPEAKER_02: You know, you like with the three reports you need to you need to get during your due diligence period is you need a geotech report, right?
• 29:57
  SPEAKER_02: Are the soils good to build on?
• 29:59
  SPEAKER_02: Are you gonna hit rock?
• 30:00
  SPEAKER_02: You need a phase one environmental, make sure there's no toxic sludge that's been dumped on the site that's gonna grow these giant lizard Godzillas in in the backyard.
• 30:09
  SPEAKER_02: And then three, you need an endangered species report.
• 30:11
  SPEAKER_02: You need to make sure there's no trees with bald eagles' nests that are getting cut down or you get a felony and get thrown in jail.
• 30:17
  SPEAKER_02: So, you know, those are those are the three.
• 30:18
  SPEAKER_02: And so if you know the road ahead, you can mitigate a lot of the risks.
• 30:22
  SPEAKER_02: But yeah, I mean, there's a lot of risks, quite frankly, and that's why we started the community is you know, we can help you navigate those as you do your first development deal.
• 30:31
  SPEAKER_00: Yeah.
• 30:32
  SPEAKER_00: You know, a lot of this is kind of foreign to me.
• 30:36
  SPEAKER_00: I've mainly been an apartment guy, and you know, I've been a broker for a while, just um mainly dealt with mixed-use apartments, a lot of RV parks and other stuff, uh, you know, self-storage, but just doing land development like this is very unique.
• 30:50
  SPEAKER_00: So if uh like say a syndicator like was out there and they had, you know, most of the syndicators out there have friends they syndicated.
• 30:58
  SPEAKER_00: Could they come in and, you know, learn from you?
• 31:00
  SPEAKER_00: And you know, it's it's kind of one of those where, okay, I got a bunch of investors in apartments or RVs.
• 31:06
  SPEAKER_00: You know, this is a little bit outside of my grid, but that could they come in and partner with you and kind of do your mastermind and you kind of help navigate with them or yeah, I mean, yeah, you know, that's that's what it's for.
• 31:17
  SPEAKER_02: You know, we love doing deals with people when the right opportunities are there.
• 31:21
  SPEAKER_02: So yeah, I mean we've we've got access to capital sources.
• 31:24
  SPEAKER_02: If you got a really good deal, you know, we we can probably find the capital for you.
• 31:28
  SPEAKER_00: Yeah.
• 31:29
  SPEAKER_00: So you uh finding land and stuff like that, you know, okay.
• 31:35
  SPEAKER_00: Um well man, I appreciate you coming on.
• 31:38
  SPEAKER_00: I don't think I have do you have anything else you want to add?
• 31:41
  SPEAKER_00: I think you you've covered a lot.
• 31:43
  SPEAKER_00: It's pretty complex, but it's really simple at the same time.
• 31:46
  SPEAKER_00: Yeah.
• 31:46
  SPEAKER_00: I think a guy like you helping people, helping people avoid the pitfalls.
• 31:52
  SPEAKER_00: You think you know everything about real estate until you don't?
• 31:55
  SPEAKER_00: You know, I've been around it for quite a long time, and it's always something new that pops up, and having somebody with your level of expertise in this specific niche is a big deal.
• 32:06
  SPEAKER_00: So I would think uh, you know, your program would be a huge hit.
• 32:10
  SPEAKER_02: So yeah, no, I mean you covered pretty much everything.
• 32:13
  SPEAKER_02: If if people, you know, there's two people that we help.
• 32:15
  SPEAKER_02: If you are someone who wants to learn how to do this, you can go grab our free course at learnlanddevelopment.com.
• 32:22
  SPEAKER_02: It's called Land Development 101.
• 32:23
  SPEAKER_02: Go grab it.
• 32:24
  SPEAKER_02: I got like eight hours of content in there.
• 32:26
  SPEAKER_02: If you want to see interviews with civil engineers, national home builders, private equity companies that want to invest in your land.
• 32:32
  SPEAKER_02: Like I have guests that come on, you know, we put all that out there so you can grab the free course.
• 32:36
  SPEAKER_02: If you want to learn more about the mastermind, there's a video on that website that talks about it.
• 32:40
  SPEAKER_02: And you can book a call with me to see if it's a fit for you.
• 32:43
  SPEAKER_02: So that's learnlanddevelopment.com.
• 32:45
  SPEAKER_02: If you're an investor, if you want to just invest in pre-sold developments to these big big builders, um, go to hbgcapital.net forward slash weightlist.
• 32:59
  SPEAKER_02: So that's pronounced Harry Bob Gary, which is hbgcapital.net forward slash weightlist.
• 33:05
  SPEAKER_02: Um I have a video on there that explains what we do, our whole thesis.
• 33:09
  SPEAKER_02: And if you want to book a call with me, then uh you can book a call with me.
• 33:12
  SPEAKER_00: Yeah, and that's a big deal.
• 33:13
  SPEAKER_00: You know, I'm not trying to give financial advice, just my opinion on life and everything is diversify.
• 33:21
  SPEAKER_00: You know, don't put all your eggs in one basket, you know, um, with oil and gas going everywhere, you know, this and this, we don't know where interest rates are going to be.
• 33:30
  SPEAKER_00: So I think diversifying outside of you know the typical apartments or RV or whatever it is you're doing out there in the real estate world, I think it's always good to step into other places.
• 33:44
  SPEAKER_00: So, you know, whether you join the mastermind or just you can be a passive investor, which is a good thing, you know.
• 33:51
  SPEAKER_00: Hey, I don't have time for this.
• 33:52
  SPEAKER_00: I'm just gonna put a little money in it.
• 33:54
  SPEAKER_00: You know, that's awesome.
• 33:55
  SPEAKER_00: So that you offer that.
• 33:57
  SPEAKER_00: So anyway, I appreciate you coming on, Brandon.
• 34:00
  SPEAKER_00: Been a pleasure.
• 34:00
  SPEAKER_00: You know, uh, all this stuff's pretty new to me as far as what you're doing.
• 34:05
  SPEAKER_00: So um, anyway, I appreciate it and uh look forward.