Episode #25 - The Multi-Million Dollar Investing Market That Everyone Ignores, with Jack Bosch | Adwords Nerds | Adwords Nerds

Episode #25 – The Multi-Million Dollar Investing Market That Everyone Ignores, with Jack Bosch

Real estate investing is popular. TV shows show the life of investors selling mansions for triple their investment within days. Coaches, seminars and book jump into existence and keep up the hype.

That’s why it’s so hard to find deals nowadays. More investors fight over the same amount of sellers. At the core of it, every real estate investor tries to buy a house, potentially do some repairs on it and sell it for a profit. Except for a few.

Some investors have been smart. They chose the “unsexy” side of real estate investing, silently pocketing six to seven figures without tons of competition. One of them is Jack Bosch, from whom you’ll hear how to turn this neglected market into a giant opportunity for yourself.

Show highlights include:

– The most common reason investor’s first deals lose them money—and often their business. ([6:45])
– The best way to get leads to leverage this untapped goldmine (you need NO tech skills to do this). ([14:40])
– You might think these investments need huge down payments, but here’s where you’ll find real estate that skyrockets within a few years. ([25:55])
– Is a house not selling for 3 months? Why that’s completely normal and actually a good sign for the long-term health of your business. ([41:00])

To get the latest updates directly from Dan and discuss business with other real estate investors, join the REI marketing nerds Facebook group here: https://adwordsnerds.com/group
Need help with your online marketing? Jump on a FREE strategy session with our team. We’ll dive deep into your market and help you build a custom strategy for finding motivated seller leads online. Schedule for free here: https://adwordsnerds.com/strategy


Read Full Transcript

You're listening to the REI Marketing Nerds podcast, the leading resource for real estate investors who want to dominate their market online. Dan Barrett is the founder of AdWords Nerds, a high tech digital agency focusing exclusively on helping real estate investors like you get more leads and deals online, outsmart your competition and live a freer, more awesome life. And now, your host, Dan Barrett.

Dan: Alright, hello everybody and welcome to this week's episode of the REI Marketing Nerds podcast. As always this is Daniel Barrett, here from AdwordsNerds.com. This week I've got a really interesting interview. I have to be honest, I really enjoyed this one. [0:00:59.4] I am talking to Jack Bosch. Now if you don't know Jack; Jack runs a course that is called "The Land Profit Generator" but not just that, he is a successful land investor. He invests in multi-family. He invests in residential. This guy is all over the place; all these different areas of the real estate investing world. We go deep into what makes land investing his thing. I got to be honest, he converted me. About halfway through I found myself thinking like, "Hey I should invest in land." So if you've ever thought about it or you don't know anything about it this is a fantastic intro to land investing. Go say hi to Jack, he's' at LandProfitGenerator.com. He's got a bunch of free trainings and stuff you can go over and check out there. Really great dude; really fun interview; I'm really looking forward to this and I hope you enjoy it and get some value out of it. So without further ado, here's my interview with Jack Bosch. [0:01:57.2]

Dan: Alright everybody, I'm here with Jack Bosch from Land Profit Generator that's at LandProfitGenerator.com.
Jack, how you are you, man? Welcome to the podcast.

Jack: I'm happy to be here, thank you very much. I'm excellent.

Dan: Yeah, so I definitely want to – I think most people can tell by the intro that you are – like we were just talking about this – you're a land guy. I want to take a step back a little bit and ask how you got started in real estate investing in general because I know you do a whole bunch of different stuff and then maybe kind of walk me through how you got into land specifically. I don't know if that's how you got started or you got to that later but how did you find yourself where you're at today?

Jack: Wonderful, yes, so as you can tell probably from my accent, I'm actually an immigrant to the United States. I'm from Germany. I came over here about twenty-something years ago, 22 years ago with literally two suitcases to finish my college degree. What happened was I fell in love with both the U.S. and with a girl and that girl is now my wife of 17 years. [0:03:03.3] So it all worked out. She is an immigrant herself, she is from Honduras. We met here in college. I came here to finish my college degree. She was already here, one year away from finishing up so we finished our college degrees at the same time and we basically said, "Let's give this a try, let's stay here." I was lucky and blessed to get a work visa, get a job, and ride that job all the way – and managed to keep my job to getting a green card. It took five and half years. But somewhere halfway into that about a third into it I realized that this job thing wasn't the right thing for me because I had to travel 100%, I had to be gone 100%. I only had two weeks’ vacation and my family is Germany, my wife's family is in Honduras, Central America. We wanted to keep in touch with our families. We wanted to stay in touch with our families. We wanted to make enough money to actually even afford the airplane tickets to go over. [0:04:01.1] All of that was not really happening during that time. So we kind of realized – plus the .com bubble burst – there was a technology company that I worked in. I'm not a technology guy but I got a job in the business department and I felt like the entire five and half years I was bluffing my way through it because I was dealing the technology all day long and I learned enough to manage it to get through but I realized that wasn't my career path, it wasn't my industry, it wasn't my thing so I needed to get out. Then the .com bubble burst, literally 40% of the employees were let go from that company. I was lucky to survive again. But it all changed my outlook on life, my outlook on the career path. I realized that the 40/40 or what is that 40 years, 50 weeks a year, two weeks’ vacation is not a plan that I can subscribe to. [0:05:02.9] So we realized that we needed to do something different. We had no idea. We had no real estate experience, nothing. I think the language of real estate, we understood in terms of like drywall, what is drywall at that point? I didn't know. The walls look pretty dry over here, right? There are still words today that I come across in the construction industry that I have never heard. So we started looking through stuff and reading up on things. We came across wholesaling and we kind of stumbled into real estate. We tried a bunch of techniques. We tried to flip a wholesale house. We weren't successful because we calculated all the repairs wrongly. We didn't know it would cost $10,000 or $1000 to repair a bathroom. Then all of a sudden we stumbled into land. We got our first piece of land for $400 and sold it to the neighbor across the street for $4000 that same day. We didn't have to touch anything. [0:06:00.6] We didn't have to estimate any repairs. We didn't have to – we saw the property because we felt like we wanted to but now I haven't seen any properties for 12 years anymore because it's all done online and we didn't have to deal with repairs, with mold, with contractors, no tenants, termites, none of that. We just bought an $8000 property for five cents on the dollar and sold it for 50 cents on the dollar to the neighbor and we made money. We were like, "We can do that again." So we started doing more and more and soon enough we didn't look at houses anymore and by now we have done over 4000 land deals.
Dan: Wow, that is awesome. I mean it's really funny, man, because I have done a handful of these interviews now and it's so funny how almost everybody has the story of "I did my first deal but I didn't make any money or I lost money or I barely made money because ..." and it's always because I thought the repairs were going to be X and they were really Y. Right? So I think it's so interesting to think about like you said like land doesn't have a building on it. [0:07:04.7] So when you were getting started pursuing land deals or you started going down that path rather than going down the traditional wholesaling path – I know you said you own a significant number of properties now but what were the things that really attracted you to land specifically or what are the things if an investor is listening to this right now and they don't do land right now, that's not part of their business, what would you say to sell them on that idea of investing in land rather than flipping more, wholesaling or whatever they are doing now?

Jack: The main thing is when I realized over the years that you can do almost everything with land that you can do with houses just it doesn't include the number one item that causes headaches and that is the house. Right? I know houses. Like I said, I have almost 50 rental properties. We have apartment complexes. We have all that stuff as cash flow sources. [0:07:59.9] But from a living point of view, if I can do the same without the house I'm eliminating 80% of the complexities that are part of the deal. It's not wrong. I mean I know people that flip 500 houses a year and they are happy with that. It's just I’d rather flip 500 lots a year or a 100 or whatever the number is – this year we're looking to flip about 150. It's because when there is no house it, there's nobody that can burglarize it, they can't break stuff, they can't steal stuff, there are no special surprises that can usually come up like there is no foundation issues that you didn't see, there is no roof damages that you didn't see so all those issues are just out the window. Yet at the same time, you can buy these properties, you can flip them, you can change the zoning, you can even split which you usually can't do with a house, you can sell them apart, you can wholesale them, you can retail them, you can just sell the financing. We do that a lot. We love that. [0:08:59.5] The best part of land is particularly when you focus on the land below $100,000, it's almost always 100% owned free and clear by the owners. It's always a cash game or self-financing game. Because of that, these owners don't know what to do with it. Many of them have inherited it and they are like sitting on that. Their dad gave it to them, they are in Pennsylvania, the lot is in Texas, and they don't care. They are never going to go down there. So they are literally giving you way higher discounts than they would give you on a house. We typically – we never pay more than 25 cents on a dollar for a piece of land. So we just literally this week, we sold a property that we paid for $10,000 and we sold it for $47,000. That's market value - $50,000 was market value. So we sold it for $47,000 and we bought it for $10,000. What is that? That's about 20% of market value. That's the nice part. You're building these offers and you're eliminating all of these complexities and yet you can do the same thing. [0:10:01.4] You can make the same or better profits that people are doing with houses. We have done deals with $130,000 profits, with $80,000 profits but also some deals with $5000, $3000 profits just like in the house world. You wholesale a house, you make $5000. You wholesale a bigger deal, you make $50,000. You rehab a house; you make $30,000, $50,000, $80,000, $100,000 and it's the exact same thing in land. So you make the same money just with less work and a little less hassle. There is work but it's less work.
Dan: Yeah, I don't know much about the land space really. I'm curious because my specialty is lead generation. I get the whole idea of a motivated home seller. Like I know who that person is and I know the basic ways that we go out and find those people. How does it differ when you get into the land selling space? I'm going to break that into two questions. One is, is it still the same kind of idea where you're looking for motivated land sellers in the same way that people look for motivated home sellers? [0:11:04.6] And then what are the basic processes or channels that you use to go out and find those people? Or does it work totally differently?

Jack: Yes. So the answer is yes. We are looking for the motivated sellers. However, they are a little bit different than the house world. To this day, I really don't get why anyone would give up a perfectly good house even though it might need some repairs for substantially below market value. I mean I get it. They don't want to put the money into it. They think the repairs cost much more. But on the land side, we are dealing mostly with – it's a variety of people but the majority of people that are people that either have the land in the family for a long time and they just never did what they initially wanted to do with the land. So it's somebody who perhaps in their 40s bought a lot in Texas or in Florida and they wanted to retire there. They wanted to build their retirement home there once they were done with working. They wanted to move there. Well their health has given up or now their grandkids are born and they longer want to be moving, they no longer want to be away so they are sitting on these lots a thousand miles away and they really don’t know what to do with them anymore. [0:12:10.6] At some point in time, they might have listed it with a bad realtor who put no picture and two lines around there and because of that it didn't sell. So in their mind, they think, “Well this property sits there, it’s not selling, what do I do?” Then an offer comes in for 20 cents on a dollar and they are like, “I know it’s not what I wanted but I just want to get rid of it.” They ask the kids, “Do you want these lots?” And the kids say no, I'm living vida loca in L.A., I don't want the lot. They are okay, nobody wants it. They offer me – it's worth 50 grand, they are offering me like eight grand for it. I'll take it because eight grand is what I need for the next medical bill or the next vacation or something like that and they get rid of it. Another case is when they inherited the property and they didn't want it anymore. Particularly land is one thing that houses well also has but land is just cash, if you just hold on to land it doesn't generate income. [0:13:07.1] Instead it costs property taxes. So if somebody is an heir, inherits a $50,000 property and now they have to pay $1000 a year in property taxes that they might not have, they might just jump on the opportunity to sell that thing because they don't anything to do with it. So these are some of the cases, then there are other cases where somebody just had it for a generation, perhaps they thought they would develop because it might be more rural land. One of the three kinds of land that we focus on is rural land, the other one is land right on the outskirts of big cities, the third one is an infralot. Infra lots you usually don’t get for 20 cents on the dollar, it's more like 40-50 cents on the dollar. But this rural land is land that will never be appreciating a whole lot but they bought it for $20,000, it's worth $20,000 and they are just like you know what, we had our fun when the kids were little we went out there camping and so on, it's time to get rid of it, will you give me four grand for it? [0:14:07.0] We'll take it. Then we sell it to another family that wants to have their own ranch out there, who wants to have their own place where they go ATVing, RVing, bonfires, and things like that. We might even offer some financing so we buy this property worth 20, take it for four, sell it to somebody for 20 with a $5000 down payment then monthly payments of $400. We get all of our money back right at the beginning so we have no money in the deal and we get cash flow now. So these are some of the reasons why people sell these properties and then how do we get the leads? Our best way is go with direct mail. So we get a list of owners from the county of everyone who owns land within a certain time, within a certain area, within a certain price range, potentially for a certain time, we have a few filtering criteria and then we send them a letter and we get anywhere from 5% to 20% response rates from people. So we get a tremendous response rate.

Dan: That's really high. [0:15:03.2]

Jack: If you do online lead generation, you can do it online too but it requires quite a bit of different skill set that you have. One of our mentors, one of the coaches in our system, he actually switched and he's an SEO expert and gets all these leads now online but most of our 99% of our students and us, we use direct mail because it just works so well.

Dan: Yeah, yeah, and I think there is a lot to be said for not a huge barrier to entry to do direct mail too. It's not like you really have to learn this complicated skillset, you can just kind of do it and start hopefully bringing in deals or cash flow right away. I think that's pretty awesome.

Jack: Particularly for the ones that have our system, because they have the letter, they have the mailing house, they know that they don’t have to send 100,000 either. They can send 500 to 1000 and they get a whole bunch of leads already coming their way that they can work with and get deals from. It's low volume. As you said it's a low barrier of entry. [0:16:02.1]

Dan: So what about the process of selling land to a buyer? Are you going out and finding the buyer similar to what a wholesaler would have a buyer's list and a seller's list, so do you do both sides of that? Or how does that work? Are there auctions sites for land? I feel like I've heard of that but I don't really know how that works.

Jack: Yes, so a buyer's list is always amazing to have. So I would want to answer the question in two parts; the short term and the long term. On the short term, if you get started in real estate, you don't have a buyer's list because you start with zero. So in that case what I recommend our students who have been very successful with, you use the social media platforms where people are hanging out. So right now literally one of our students posted – we have a Facebook group where our students help each other to be successful and then ask questions and I ask questions and our team asks questions. There is one person that just posted. She posted something on Facebook Marketplace and in two days she got over 2000 inquiries about that property.

Dan: Yeah.

Jack: She was able to field. [0:17:03.4] Now that's a little extreme. Usually you don't get that many but it's common that if you use Facebook Marketplace – it's a great place, Zillow is a great place. You get most of your properties on Zillow. You post them on Craigslist. You post them on Redfin and those different websites where nowadays people go and look for properties. You're doing a direct to consumer kind of marketing on that. Most of these are free. Craigslist is free. Facebook is free. Zillow is free. There are a few other ones like big ones like the gorilla one of the – it's not an auction site but it's a listing site, they do charge, it's called LandWatch. LandWatch.com has several million visitors a month, has several hundred thousand properties on there. You do have to pay to be on there, and pay a little extra to be in the front page in the visibility for those kinds of things but you really don't have to pay for it. These other tools are extremely popular and they are free. So at the beginning, you go sell through those but what you definitely want to make sure that every person that contacts you, you ask them for their contact information so you capture their contact information and you build your buyer's list. [0:18:10.1] Then as you build your buyer's list over time, you go first to your buyer's list sell the properties there and then you go list it on these other platforms and many times you don't even have to list it on the platforms because you go sell it to your buyer's list in the first place.

Dan: Yeah, I think that is really, really good advice. If anybody like just kind of passed over that and didn't catch it, this idea of when you're doing any kind of marketing so even if you're posting on Facebook Marketplace, the idea of building that long-term relationship with people that might want their properties, that's just as important in land as it is in houses. I think that's absolutely huge. So you right now, you mentioned this a couple of times, but you have a coaching program called Land Profit Generator which people can go to at LandProfitGenerator.com where you're teaching these processes and the systems that you use and how to kind of go through these deals. [0:19:07.9] So for your average student, so someone who is getting started in land, what are they bringing in terms of marketing budget? Like what do they kind of come into the program with? What does that beginner level land investor look like? And when people start scale it up what does that look like? How are those two things different?

Jack: So I always say there is a spectrum and yes, we actually have a home-study course and live events and all those kinds of things but there is a spectrum. On that spectrum is – let's say over here you're doing everything yourself and over here you're outsourcing everything. We got a student who is very successful and she is a night nurse but she can't really do anything. She sleeps during the day, goes grocery shopping, picks the kids up from school and then goes back to work. Right?

Dan: I'm like laughing because I always hear about these people and I'm like I can barely get out of bed in the morning to my regular job that's during the day. [0:20:04.9] It kind of blows my mind, there are so many people out there that are so ambitious and motivated. Definitely mad respect to this person who is doing that.

Jack: Absolutely. Same here. We have another one who is a United States soldier. He never knows when he has time and so on. They go here, they outsource almost everything. Somebody else, there's a stay-at-home mom or a stay-at-home dad or God forbid unemployed for the time being right now, well they have a little bit more time or they have a job where they have some extra time. They can go over here. Time is what you have but not money, you do more yourself. If you have a little bit of a budget and no time then you go over here where you outsource more. So having said that you can do this literally for the cost of having a phone number like a virtual mailbox which cost $10-$15 or you can even use Google Voice, which is free, then you have the cost of the mailing which might be – let's say if you send out a thousand letters a month that's perhaps $500 or $600 a month and then the cost – if you take your phone calls, there is no cost to that. [0:21:13.2] So literally you can do this for as little as let's say $500 or $600 a month and a thousand letters a month – there is no way you're not going to get deals. You're definitely going to get deals. Or you can go all the way over here, with which you have a mailing house that – we know a mailing house that offer students work, they’re very competitive. Their minimum mailing a month is 50 letters so you don't have to ...

Dan: That's small. For a minimum, that's quite small. That's awesome.
Jack: You don't have to send large volumes to be able to outsource that. Then we work with a call center that works – that might cost you $150 to $200 a month for that thousand letter volume or so – so you now might have $800 a month in cost and then you have – well that's kind of it. [0:22:01.8] It doesn't cost a lot.

Dan: [laughter] You're like waiting for the other stuff to come but that's kind of it.

Jack: You already have a bank account. If you want to set up a LLC or something – my wife, Michelle, and I we did our first deals in our own name. Attorneys don’t advise that. I'm not giving you advice to do it that way I'm just telling a story how we did it. We did it in our name and then we used the profits to set up an LLC. We always say fast is better than perfect. So rather take action then take perfect action. Right? So we took action and we made money then we used the money to set up our LLC and so on. But an LLC might cost you – if you do it yourself a couple hundred dollars to set it up. If you have an attorney do it, it might cost a couple thousand dollars. I don't know. Then a little bookkeeping down the road, but bookkeeping you only need when you're successful, right, when you're making money. So a lot of these expenses – a few more expenses pop up once you make money like title costs, closing costs on the deal cost a little bit but hey, you're only going to close on a deal when you make money. [0:23:05.2] So if you make $10,000 and it cost you $1000 then you still net $9000. So most of the expenses, only actually incur when you actually make money. Your basic expenses are mailing, the mailing house, call center and having a phone number that people can call you to like a 1-800 number which might cost you $10 a month, perhaps a P.O. box that costs $30 a month.

Dan: Yeah, I mean I think even from what you're describing. We talked about this a little bit before the podcast started but there are a lot of reasons why traditional real estate investing, house flipping, wholesaling, and obviously I love that industry and that's where all my clients are and where we spend our time but it's extremely competitive. It's highly, highly competitive and that raise prices. It's just like if there is a restaurant that everybody wants to get in and you can't find a table, chances are they are going to start raising their prices. [0:24:05.2] Right? That's how it works. You were kind of pointing this out which I had never really thought about but was true. You're like what other land people do you know? There is like maybe one other guy that I know. It's just the level of competition is so different. Why do you think that is? Is it just not as popular because people get attracted to the whole like HGTV house flipper kind of thing? Why do you think land is kind of a little bit on the downlow right now in that kind of investing world?

Jack: Yeah, I think that the HGTV Flip This House or whatever the shows are called, Flipping Vegas, Flipping Chicago, Flipping Atlanta, may have played a role in that they are going after houses and they don’t even think about land. Second is houses are sexy. I mean there is something sexy about taking an ugly duckling and making it into a swan. [0:24:59.6] That's absolutely beautiful. It feels you with a sense of pride. We have some houses. We flipped this one, look how beautiful it is. But after flipping a few, I was like that's not something I want to do ongoing; I went back to only doing land because the land is just more boring. I want to quote Warren Buffett who says, "In business, boring is good."

Dan: Yeah.

Jack: Because you don't want drama in business. You don't want costs to keep popping up. That just increases your stress level. The other reason is that people have been brainwashed almost to think that land doesn't cash flow; that land is expensive, and while this is true for the downtown two acres right next to the football stadium that is worth $20 million, it is not true for the outskirts of town. Like when you have a million-people city and in the outskirts of it; you go out three to five miles, the city is growing and an acre in the city might be worth $300,000; an acre outside here might be worth $30,000 but it will be worth $300,000 when the city comes and engulfs it. [0:26:11.4] These are easy sales because you can buy them for three and sell them for thirty to somebody who is going to sit on it and weather it. But yes to the person who owns it for the next 20 years, they will have to pay property taxes every year. So that's not cash flow for them but it increases the value. But most people think, “I have this piece of land, I have to pay property taxes on it, it's sucking money out of my pocket, I don't want it, and it's not doing anything.” So people have just not paid attention to it. The selling is a little bit different but it's in or out either way. HGTV, the focus is on something else. Everyone says houses, houses, houses. Nobody says land over here, land over here. The land over here is like you can make the same money. We have properties sometimes where there are 10 people fighting over them and wanting to get it so if you pick the right kind of properties the sale can be just as quick. [0:27:09.3] If you pick the wrong kind of property, the property might sit there. We have properties that might sit there for two or three months before they sell but they still sell and we still make two to five times our money usually.

Dan: See it's interesting to me because I think that relative – you know you're saying it's kind of boring. That's what makes it appealing to me. Like I don't invest in real estate but I think if I was going to do that I would invest in land precisely because of that reason. The complexity level when you put a house on something just skyrockets. I think ironically for a lot of people I imagine that part of it too is just psychologically we kind of understand how to value a house because we have all lived in a house so you have some idea of like a stainless steel countertop or whatever, it's got a really nice stove in it or it's a really nice whatever, you can kind of picture yourself in it and see the value of it. [0:28:12.2] Whereas land is kind of like unrealized value. So it's very hard to kind of understand like how it's priced or whether it's high or low.

Jack: Exactly. Even successful house flippers ask me constantly, “How do you value the land?” We have a five-step process that is very simple; in like two to five minutes you have the value of the land. It's very simple. Now the nice part is we don't have to get the exact value of the land because when we make an offer of 20 cents on the dollar, we can afford to be a little bit off.

Dan: There's a huge buffer built into that price already.

Jack: Yeah so we just need get the ballpark value but you said it right, it's boring. People don't know how to handle it. But that has been our blessing because that has allowed us to build what we have built without anybody paying attention to us. [0:29:01.9]
Are you an investor who wants to dominate your local market? Do you want more leads and deals online? Then download your copy of the Motivated Seller Blueprint absolutely free at www.AdWordsNerd.com/gift. What are you waiting for? Go to www.AdWordsNerd.com/gift right now to get your copy of the Motivated Seller Blueprint

Dan: So I have a lot of questions, I have a lot of questions about this. I’m very interested in this. Let me ask you, I’ve got two. I definitely want to get into what’s in your program because I kind of want to buy your program now. You sold me on your program, which is – this podcast is terrible for me. Anytime someone comes on this podcast, I’m like, “Let me in your program” but, so, my question though is like, so we’ve talked about, kind of like a lot of the benefits and stuff. [0:30:00.9]

Jack: I’ll give you free access to it.

Dan: Yeah, that’s even better. Do that and I’ll talk all about it, but you’ve worked with a bunch of people so you’ve
seen a bunch of people come to this program and I’m like, all programs, right? There are people that like are super successful and people that flame out, right? Through no fault of the actual content, they just – whatever. So, looking back and seeing all these people go through this process, what are some of the biggest mistakes people make when they try to get involved in land or to learn about it and how can – if people are listening to this and they want to start exploring it, how can they avoid those problems?

Jack: So the biggest mistakes are probably two that come to mind. One, is they get emotionally involved with getting their first deal. Bill Gates said one time that business is not emotions. Business is just numbers and it’s statistics and it’s activities and it’s strategy but it’s not emotional, alright. It’s execution is on but it’s not emotional. So if you keep the emotions out then you basically look at this – if you write a certain amount of letters, you get a certain amount of responses, you make a certain amount of offers, you get a certain amount of acceptances. [0:31:09.2] That has been proven to be true again and again and again without any exceptions of the last 12, 16 years that we’ve been doing that with the last 10 years that we’ve been teaching this. So, that leads me to the other one. So the problem is what people do is they send out 100 letters. They get 10 phone calls and they expect their first deal to be in there. Then if their first deal is not in there, they’re all like, this prop doesn’t work and they put it away and they move on to the next shiny penny. Well, there’s something like what’s called the law of large numbers. The law of large numbers means that on average our students get a deal and we ourselves still get a deal for every 300 to 500 letters we send out. But that does not mean that if we send 300 to 500 letters there’s going to be a deal in there. Not automatically, right? What on average, there’s a deal in there but it might be that we have to send 2000 letters and then in the last 100 letters of the 2000 there’s four deals in there or five deals in there and all of a sudden our average has come through. [0:32:08.5] Our averages have come through every single time if you make the sample size big enough. And the sample size doesn’t have to be 100,000 letters. If you make the sample size over time a couple of thousand letters, 2000 or 3000 letters, on average usually all of a sudden you get three, four, five deals in and you’re like “Oh my God, that happened.” You just don’t know if that’s in the first 100 or in the last 100 of that sample set. So, people get too emotionally involved and what they end up doing is they end up making 60%-70% of market value offers on those first deals just to get a deal but now they have no more margin left to make a profit on the deal, right? So you’ve got to take the emotion out and you’ve gotta just follow the system and if you follow the system you get the deals. And the second one is, really plays into that, is stay consistent. I’ve seen the people that fail most is the people who get out of the gate like crazy for three weeks and then they have a wedding come up and then they have a bachelor party come up and then they have this come up and that come up and they do nothing for the next two months and then the emotion and then all of a sudden it’s hard to get going. [0:33:14.1] But those that get going and send 100 letters a week, like 100 letters a week but consistently, they all of a sudden, they get a deal, they get another deal, they get another deal and low and behold within six months they’ve got five or six deals, they’ve made $100 grand then they quit their jobs and they start moving on to – start cranking up and they’re being successful. So it’s really consistently in knowing it is a numbers game at the end of the day.

Dan: I think that is, that was amazingly put and people – you probably thought, if we could see each other, you probably saw me smiling in the beginning because it’s like, I literally did a whole episode of this podcast on that exact thing but it’s the same problem with online marketing, right? It’s the people that think, “Okay, if I have a 20% conversion rate of leads to deals”, you know, one out of every whatever it is, I’m like “Okay.” [0:34:08.3] Or 5% I should say, right? So one out of every twenty leads becomes a deal, well I’ve got 20 leads, therefore, I should produce a deal, right? And the understanding there that that statistic is over a certain volume, right? And that the smaller the sample size the higher the likelihood that you will get really weird results, both good and bad. I’m sure you’ve had students that like send out 100 letters and got 5 deals and were like, “I’m rich. This is gonna be like this forever.”

Jack: One student sent out 10 letters and got – no, they sent out 30 letters, got nine answers and got six deals off that, made over $100 grand.

Dan: [laughter] I bet you, you hit that person for a testimonial as quickly as humanly possible.

Jack: People will send out 3000 and get nothing, send another 3000 and get 32 deals.

Dan: Yeah.

Jack: Right? So, it’s just all of a sudden they got 6000 letters and 32 deals, that’s less than 200 letters for one deal, yeah, exactly. [0:35:08.40]

Dan: I mean, I think – my friend Nick, who’s really a successful business person, and his business is he grows other people’s businesses. He takes an equity stake in their companies and so he’s just done this in a bunch of different, you know, industries, and really, really smart guy and he’s got this kind of like general rule of thumb that I really like, which is, he always says anytime he’s thinking about doing something new he asks himself can I do this forever? And if he can’t do it forever he doesn’t do it, right? And so the idea is like, you only take on, you know, a marketing challenge or a business or something that you can actually be consistent in, right? You have to hit the lottery in your first week or you’re gonna go bankrupt. Or maybe it’s not the right time.

Jack: It’s not. I would say it’s not a treasure hunt, it’s a business and that really makes it flipping different from many other techniques. [0:36:01.2] Like, I do apartment buildings and yes, that’s a business too but first of all it’s a million times more complicated and in the current market finding an apartment complex that makes sense is a treasure hunt. That’s a treasure hunt. But the land business is not a treasure hunt. It’s a business that is a cookie cutter business that just works again and again and again if implemented the proper way.

Dan: That I think is what – really, someone like me, so I always say like, I want to put everything in a spreadsheet. I love spreadsheets, you know. Show me, you know, online marketing is very much like that. There’s a funnel, just like you said. There’s a bunch of different stages. There are metrics I’m trying to hit in every stage. If you’re running AdWords and your impressions look good and your clicks look good but your conversion rate is poor, I know where the problems is and I know what to look and expect, right? So, that approach is really cool. It’s sort of a different kind of tactic to go down but how does land track with the rest of the housing market? I know right now a lot of investors are worried about a tightening housing market. I don’t know if that’s 100% going to happen in 2019 but I do know that a significant number of people have told me that’s what they’re concerned about. [0:37:10.3] So, does land kind of follow the housing market? Is it neutral to it? Like, what’s that relationship look like?

Jack: Right, so, just one word quickly to what you said. On the selling side, we’re following 100% internet marketing techniques on the selling side of these properties. What you want to do is, you don’t want to just to put a property on Zillow with a picture. No. You want to follow the exact same techniques that you probably teach and show people in your podcast on there. You want to have a proper flow of the listing. You want a proper sales copy, right? You’re following the AIDA method (standing for "A"ttention "I"nterest "D"esire "A"ction) in our listings, right? We are doing all these different things to make sure that it’s – that the property – and that’s how we stand apart from everyone else on the selling side. So I just wanted to throw that in from the point of view of, like, internet marketing. That’s exactly what we do on the selling side. So, now to your question on land to tracking houses. [0:38:01.7] So, there’s two kinds of land that tracks housing in a different way. So, first of all, I belong to a mastermind with over 100 people where the average person does probably over 200 deals a year, 200 house deals a year. I’m the only land guy in there. But, they do house deals a year.

Dan: Do you want a shout-out to your mastermind? You can if you want to.

Jack: No, it’s – I just belong to that one. It’s like, you have to be like, allow deals to even belong. I have my own mastermind for land flippers called Ultimate Boardroom but this is a different one. All I want to say is that I went there and when we talked, that was the subjective of the last meeting, what’s the market doing. The consensus is really that the market is actually not so much happening, it is. But it is finally get back to a normal market. We haven’t had a normal market in 16 years. Like, the last time we had a normal real estate market was in 2003. In 2004 it started accelerating like crazy, 2005 it went into overdrive, 2006 went in even more overdrive, 2007 it crumbled then it went down then it went back on the bottom for a while and then it shot, it kind of came back up for the last 10 years. [0:39:10.6] But, we are now finally getting to a market and people screaming that this is a tightening market, the world is coming to an – no! It is normal to have a house on the market for three months before it sells. It is not normal to have a house on the market and have 25 offers on the second day.

Dan: Right [laughter].

Jack: So, this just like – we’re back to a world where life is normal. Now, might there be a recession? Yes. I personally don’t think it’s going to be very strong but still, to answer your question, the high value ready for development land in the prime positions, the multimillion dollar land that the Toll Brothers, all the different builders are all buying up – that land is actually heading, the value of that land is ahead of the house market because builders, the moment they see foot traffic dropping, they stop buying more land. [0:40:02.1] So, as a result, that value drops a little bit before house values drop.

Dan: Oh, okay.

Jack: And they also start buying before they start building again so in an upswing, that goes up before the houses start going up because they’re seeing the early indicators and then either stop buying or they start buying. The land on the outskirts of town in the rural areas actually lag the overall economy because we are selling to the end-buyer and the end-buyer is only then tightening up when he loses his job, when the economy goes down, when unemployment goes up and so on. Then, at that point of time, the end-buyer starts tightening a little bit their belt and not buy as much or not pay as much for land. So the land we’re dealing with actually has a – right now we’re like on a 10-year boom or so. If the market takes a little dip, we have a longer runway in our industry than the house flippers have, which is actually a nice thing. [0:41:00.4] I think right now though we’re in the market of our lifetime. Like, we can buy properties cheap and we can sell very high. The buyers are there, they’re bidding, they have cash. It’s like, it’s the market of our lifetime. How long will the market last? I’m thinking probably two to three years. I don’t know if it’s going to be that much so that’s why I tell my students – if you want to get started you’ve got to get started now because you better take advantage of this window right now and make the most we can. Just this week we sold a property, we made $130,000. We made $40,000, $37,000 on a deal. We’re even having a lot in Beverly Hills, that we got on a property for $305,000 they were listing for $600,000 that’s worth over a million. I mean, the market is just crazy hot but people are buying like crazy.

Dan: Yeah. I think what you said is actually really insightful. This idea of we’ve been in a really wonderful market for a long time and so even just regressing to the mean a little bit feels hard. [0:42:08.5] Something that someone told me that I thought was really true was that, you know, this is going to be a period where a lot of investors who are, have just, their whole career is they’ve specialized in a certain kind of deal and they don’t have any flexibility in what they can do. They don’t have the ability to adapt to the market. They’re going to have a really, really tough time and so I would definitely say, you know, if you’re an investor who’s listening to this and you do, you know, you’re just a wholesaler or you’re just a flipper, whatever – you know, look at what other investors are doing, the different types of deals that are out there because I think the more diverse we can all get, whether its diversity in the kind of marketing that you’re doing or diversity in the kind of deal that you’re doing or whatever it is, the better off I think everybody’s going to be. So, why don’t you, Jack, you tell people – this was awesome. It was really, really fascinating – if people want to know more about you or they want to, you know, they’re curious about land profit generator, how can they learn more? [0:43:03.1] How can they get started with you?

Jack: Absolutely, well, you can go to LandProfitGenerator.com. There are some videos in there that you can watch and some training material that is all free. You can also find me on Facebook. We have a Facebook group that is called – it’s a slightly different name, it’s called Forever Cash because my wife and I always talk about – we use the land deals for cash and for cash flow and then to grow the cash we make over into additional real estate to that we build cash flow on its own. And you can go to the Facebook group Forever Cash, Land for Pennies and join us there and see. It’s usually restricted for students only but right now it’s – we open it up for a little window of time just for people to see how well this works and there’s literally, there’s not a week or even usually a couple of days pass by without one of our students just posting another success story, like, “I got my first deal. I got my first acceptance. I sold my first deal. I made this, I made that.” It’s really a wonderful local support group and when a question gets answered there’s like 20 people answering a question, experienced students. [0:44:08.1] It’s a really fun environment to be in. And just one quick word also to the selling thing with the economy – now we had done, the beautiful part about this land strategy is that we have done it on the way up in the market, on the peak of the market, on the way down, on the bottom, on the way up and it has worked. I’ve been teaching this for 10 years. If you look at 10 years ago, the market was in the gutters yet people made $100,000 grand on deals because it’s a knitch strategy that most people don’t look at. There’s always enough to land to clip and always enough buyers for it.

Dan: Well that’s awesome. I definitely encourage everyone who is listening to this, go check out Jack. You can find him at LandProfitGenerator.com and then I’ll have links to the Facebook group and everything. I’ll grab that and I’ll put it in the show notes for this episode. You can get all our episodes at AdwordsNerds.com/podcast and we’ll have the links there. [0:45:00.6] Jack Bosch, thank you so much man. This was really fascinating and I’m doing it, man. I’m going to get into land investing in my literally non-existent spare time. I’m going do this and I’ll let everyone know how I do but I really appreciate you coming on the show and sharing what you know, man. It was fascinating.

Jack: Thank you for having me. I mean, it’s all different than AdWords but hey, we run AdWords for our land customers. We build our buyers list with AdWords. We follow all the internet marketing techniques when selling the land because at the end of the day you’re listing something for sale, you want to generate traffic to it and it’s all the same thing. The purchase side is different, the selling side is pretty much the same so, thank you very much for having me.

Dan: Yeah, my pleasure man. Alright, talk to you soon Jack. Thank you. Alright everyone, that’s it for this week’s episode of the REI. What is this place called? The REI Marketing Nerds Podcast? I completely forgot. Hey, if you are not in our Facebook group, you need to come check that out. That’s at AdwordsNerds.com/group. It is free. It is awesome. [0:46:00.4] I do a ton of free training in there. In fact, I just did an in-depth training in there about how we go and steal our competitors’ traffic in AdWords. So if you’re in a competitive market or a touch market, you gotta go and check that out. And again, that’s at the REI Marketing Nerds Facebook group at AdwordsNerds.com/group. And, if you’re not on my mailing list, I have been creating what is single handedly I think the most valuable mailing list for real estate investors anywhere on the planet. I’m really, really proud of the work that we’ve been doing. High-quality trainings, lots of information, really, really good stuff and you can go and get on the list at AdwordsNerds.com/list. That’s AdwordsNerds.com/list. If you’re not in those places, I don’t know what you’re doing but I really appreciate you listening to this podcast so thank you so much. I will see you next week. Dan Barrett out. Talk to you soon. [0:47:00.6] Bye.

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