Episode #261 – Automating Your Land Investing Business with Joe McCall, Part 1

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

0:40 All right. Hello, and welcome to this week's episode of the REI marketing nerds podcast. As always, this is Daniel Barrett here from AdWords nerds.com, where the best real estate investors in the world go to find more leads and deals online for their real estate investing business, AdWords nerds.com. All right. Hey, this week, I've got Joe McCall on the show. Now, if you have been around the block for a while, Joe McCall should need no introduction. In fact, he could just go back to my own past episodes with Joe McCall. He's been on the show before he is always such a thoughtful and insightful guy, a fantastic real estate investor. But I think the thing that really sets Joe apart is his talent for automation, delegation, streamlining complicated processes. I met Joe so many years ago now. And he was the first investor I met, who was successfully investing, doing a bunch of deals really active business, essentially doing it from the road, like just doing it part time, you know, going on vacations, kind of living the lifestyle that I'd always imagined, you know, being in college reading The Four Hour Workweek and books like that. Joe McCall is that guy. And if you have ever been interested in how you can take something like real estate, or perhaps land investing, which seems complicated, he's got all these moving pieces. And truly automated, Joe is the guy. And in fact, he tells a story in this episode of how he ran his land investing business, basically with just his two teenage sons, which is really fascinating to me. So we are gonna get into it. You're gonna get a ton out of this episode. I know I did. So let's go listen to Joe McCall from Joe mccall.com. Welcome the show, man. Thank you so much for being here.

2:35 Hey, Dan, good to see you. And really it is. Yeah, you have been on a couple times. Now. Every time I get a ton out of it. You were one of the first real estate investors I worked with, which is pretty cool. And a million bazillion years ago. Yeah, it was a long time ago. So like, very happy to have you on, you are always doing a bunch of really cool things in terms of investing in terms of teaching. And so that and I just I just love having you on? I have a personal question. So we're going to start there. So you know, we were talking before we jumped on. And I think a lot of people will know you as one of the people that really popularized lease options as a business model in Rei. And you were really one of the first people to really push that and kind of make that what it is today. And I noticed that you kind of shifted a little bit you started focusing on land, you got like a course up that you kind of teach land stuff. But specifically, the thing that jumped out at me on your website was you mentioned that you do land with your two teenage sons. Yeah. So is this like, give me the background in this? Right? So my kids are seven and nine. I'm like, in my head every now and then I'm like, it'd be so cool to like, all work together. And then I'm like, Baby, they'll like ilmi. Like, maybe that would be terrible. Like I have all these quotes, or maybe you'll want to kill them. Yeah. Like, tell us a little bit about your kids. Tell us about how you guys started working together?

3:53 Well, I have the same thing. I you know, my I wanted to teach my boys. I have two boys and two girls and my boys are doing their own thing. Now we don't do land together anymore. Although they, they they still like it and I have a feeling they'll come back here and I'll explain kind of why like we started when they were maybe 1415 years old. And they wanted to just make some extra money. They were too young to go out and get jobs. And so I was at this time when I was doing wholesaling and I was doing lease options. And I was trying to come up with a business that I could do with my boys and as teenagers and so he's you know, with land, I mean sorry with houses, it's a little harder to train a young teenager, his voice is cracking how to negotiate with a seller how to understand ARV after repair value and how to estimate repairs and try to talk to a seller who has been living in the house for 20 years and negotiate with them or have an intelligent conversation with them. So I thought what if there is a way we could do? I heard about vacant land. Yeah. So I just started interviewing people on my podcast who were doing vacant land and I had a student who was doing a lot of houses And I he was struggling because he was doing deals but he didn't like it. And I, I had interviewed a guy, what his name is Todd, something, Todd some. Anyway, his last name was Todd, one of my favorite interviews I've ever done. And he talked about how he was doing vacant land. On the side.

He was, he was one of the higher level executives at a big huge car rental company. He saw the writing on the wall, new CEO came in, he kind of clicked wiped, cleared house. So this guy started wholesaling, vacant land flipping, I'm sorry, selling vacant land on owner financing. And within a year, he was able to make more money from notes from the income from the owner finance notes of his vacant land. Then he was in his executive corporate level job. And I loved your story. Todd, what was his name? Scott Todd. That was his name, Scott Todd. And he's got a great website, land moto.com, if anybody's interested. And so I thought, that's really cool. And so I told one of my students who was doing a lot of houses, hey, you should check out land and I sent him that podcast, he went and bought some courses and got some coaching. And then within a year, he's making about 11 grand a month on owner finance notes selling land, so he'll buy land at 2535 cents on the dollar sells it with owner financing. And I thought this is really cool. I this is fascinating. And I went to somebody's event workshop. And it was a good workshop, you know, but I started talking to the students that were there that were doing deals. And I started interviewing them kind of like, what are you doing? How are you doing it? And one guy said to me, yeah, this is what we do. Like, I'm just doing it part time. And he started explaining his system to me, where he sends out direct mail, the direct mail sends him to voicemail, the voicemail a couple of times a week, he listens to the voicemails, and then he sends them an offer without even talking to them or calling them back. And then he has is either himself or his assistant follows up every two weeks. And then if they don't hear back 30 days later, they send the offer again, and they keep on just sending the same offer over and over again. Yeah. And they follow up. And I thought, Oh, that's really cool. And so I'm a big fan of fan of freedom soft.

And so I started thinking about how can I automate this whole business. And I started doing it myself where I started sending direct mail to people who own vacant land. And we could talk about that later. But then they would, the postcard would say call text or call our 24 hour recorded voicemail. So the letter when they would got it, they know they're not when they call that number, they're not going to talk to anybody and I didn't give them a website, I want them to call that number because I know within freedom soft, I can get phone numbers inside of freedom soft, I can set up campaigns that are centered around that phone number. And so anytime somebody calls me it captures that as a lead. Now I can follow up with them, if they hang up or whatever, I can call them back, I can text them, I can follow up with them. So we set this up where they send out postcards, we got responses, they left a voicemail. And then I started learning how to evaluate these deals. And it's very, unlike a house where you're talking to a seller, there's a lot of emotion involved. They've lived there for 20 years, or they've owned it for 10 years as a rental and they've put in a ton of money into it. And they're you know, they're tired, frustrated, landlords, whatever, with land, the whole land owner is much more detached. It's more transactional in nature, not emotional as much, right?

So it's more of just a numbers game. And so I would start making offers that like I had a spreadsheet, you know, 2535 cents on the dollar, I'd figure out okay, what was it worth? What can I sell it for? And I would just make an offer at 35% of that. And we would send the offers and with freedom soft, I'd send the offer inside of freedom soft and then it would freedom soft does automated follow up. So two weeks later, send a text and then it would send an email if I had their email and then it would send them another letter and it would remind us to follow up with them. And so when I figured this out, I thought I could have my kids do this. And so I just trained my kids how to get into freedom soft listen to the voicemails. Go to Zillow or Redfin, look up similar properties in that area, get an average price per square foot or price per acre, figure out okay, property might be worth this, if you have two different numbers, like we would look at active comps and sold comps, pick the lower of the two number and just go with the lower number make an offer at 35%. But the numbers in here, so I created little loom videos, I wasn't loom at the time, it was something else.

And I showed them how to do it. And I gave them access to a Google sheet. And they would ever like maybe two or three times a week in the evening, usually after they were done with school and sports or whatever, they would go in there and they would send their offers. And then I started to set it up where I knew which deals came from my my one son and which deals came from my other son and I would pay them 15% of the profits. But I wanted to pay them I paid them hourly at first because I knew it was going to take several months for a deal to come in and I didn't want them to be discouraged. So I would pay them hourly but then I would deduct what I'd already paid them from the profits in the deal. And so together over you know, I'd say two and a half, three years we we did about 153,000 $1,000 in profits on deals that they did with me $153,000 in profits. That's that was the difference between what we sold them for and what we bought them for. We did this in about four different states, North Carolina, Oregon, California. And there's one other maybe Florida. I don't remember what but I think Florida was one of them. Yeah. So that's it. And so I thought this is great. And I created a course shortly after that, about a year after that, I created a program and I started selling the course and teaching people how to do it as well, because my, my approach has been a little difficult a lot of guys teaching land right now. Yeah, I wanted to make it so simple that you know, a teenager could do it. That was kind of my goal with this where you didn't have to talk to sellers if you don't want to now it helps if you can talk to sellers. It's good. Because you know, it's always better if you can, if they can build a little bit of know like and trust. Look. Nice. What do you drink in there, Dan?

10:55 Oh, you got you got to Pellegrino there. Yeah, drink, the drink of kegs, my friend. The drinking kegs, you get into Sam's Club. I use my, my, there's a Chipotle down the street from my house. So it's like every day for lunch. It's like Chipotle and Pellegrino. That's like my go to thing. So there you go. I share Sam's Club in stupid. It's a little probably a little cheaper in Sam's bag. Yeah, that's it. So we just, I wanted something I could do with my boys. Yeah. And then here's the cool thing, too, with like, because I've been teaching real estate for a long time since 2010. Yeah, I've had way more students success, testimonials from land and I ever did with house.

11:34 Really? And do you? Do you think that's just because like you said, I mean, you mentioned this right in the beginning, if they I think it's very smart, which is everything that has to do with residential also has to do with a very high level of emotion. Yeah. Because even if the person doesn't like have an emotional connection to the house, per se, when they're selling to an investor, there's usually a reason the reason is usually not you know why? It's, there's either stress or there's a time limit or something, right? There's some kind of distress. Yeah. And like, you know, which is always like, we always say like, you know, motivated sellers is like the euphemism but like motivation is like the reason that they're motivated sellers, there's some problem they are trying to solve, right? Whether it's like, dire or whatever, is a different thing.

12:21 Let's find motivated seller leads online, but don't know where to start. Download our FREE motivated seller keyword report today, AdWords nerds have spent over $5 million this year researching the most profitable keywords for finding motivated seller leads. And you can grab these exact keywords when you download our report at www dot AdWords nerds.com/keywords. And so is it just because the transaction type is simple enough, like you said, you can automate enough of it where you know, the best investors have deep expertise, they've got experience like you don't, you don't need to start with that. But a lot of times, those are the people who do the best is it just, it's more of a thing that anybody can do is that kind of what gives you a better chance at it,

13:09 where there's a lot less competition, a lot less competition. So there's not as many people contacting the sellers trying to buy their property, you don't have to move as fast. It's not as an emotional decision. So it's just a numbers game, I know that we average about one out of every 20 offers get gets accepted when we talk to the seller first, when we're just mailing offers one out of every 30 they get accepted. Okay, other investors, they'll do what's called blind offers, where they'll just send, they'll download a list of 10,000. And they'll send 10,000 offers just bam, yeah, and they do that kind of based on an average price per acre in that city or in that county or in that area. But I prefer to like get as many calls as possible, talk to them first, and then send them an offer. But you can there's different ways to do it. But I found that it's just it's just not as competitive. Now, in some markets, like particularly parts of Florida and parts of North Carolina, maybe or Arizona or Colorado, it is more competitive. Yeah. But it fluctuates. It goes up and down. And when you compare it to houses, for example, with houses your if you're sending postcards, which I like to send, you're lucky if you get half of 1% response rate.

Okay, we're getting two to 3% response rates right now, depending on the postcard that we send, I can show you my stats right now we're getting three and a half percent in one county in a very competitive County in Florida. Three and a half percent response rate right now. Now, not all a lot of them are hangups, and a lot of them are angry calls, like stop calling me. But you, you get the same no matter what you send. And when you're in a competitive County and you're lucky if you get half of 1%. So our average cost in marketing per deal in land is from our numbers right now not promising this for anybody else. It's about 1000 to $1,500 in marketing per deal. Now that That's after a lot of follow up, you know, we make a lot of offers, but on average 1015 $100 in marketing per deal, I have so many friends in houses that are spending five to $10,000 in marketing on average per deal that they complete. Now they're making 2030 grand per deal. So that's they're still making a lot of money, right. But it's just a it's a lower barrier of entry with vacant land. And there's a ton of it. There. I did some studies where I looked at how many property how many houses are avail available per active investor in the United States. And I basically just looked at the entire US how many LLCs had bought properties in the previous 90 days versus how many houses there were. And I had about one house for every, you know, 3000 real estate investors that were doing yearly, one house for every 3000? No, no, I'm sorry, other way around 3000 houses for every one investor? Was that the right? Okay,

15:51 I base that the I made? I was like, well, that I certainly know that competition is high.
Yeah. Okay. That's right. So there's like 3000 houses for every one house investor. Okay. But then I did the same thing for vacant land, there was like 21,000 vacant lots available for every active land investor. And that's seven times as much available land compared to the active land investor. So let's say I'm half off, let's you know, but it's still two to three times more land available properties available for land investors than there are houses for active house investors. Yeah, I think, you know, just Google ads is the thing of it. So that's still know the best. And we don't do a ton of land advertising. But we do do some, I think that's become more of a thing in the last year or two. And the cost, you know, the cost per click, and Google is a market function, or it's a The more people that bid on a keyword, the more cost to get a click from that keyword on average call that the cost per click. So the cost per click in like traditional Rei is easily 10 to 20 times what it is for land, right? It's just like the sheer number of competitors, and the amount they're willing to spend is so much higher. So I think it's like, It always strikes me as, like you said, a potentially really viable option that doesn't have as many just not as many people know about, it's newer, or you know, it's just not as established. So your questions like, you know, and again, so I know that people will listen to this podcast know this, I know, you're not saying this will just, again, you're talking about your own experience, you know, like promising this to anybody, I get that. But like, when you, you said like, Okay, you guys are spending about 1500 do acquire a deal on average, right? So then what is the sale of that property? Like, like, Who do you turn around and sell it to like, What's that process? Like?

17:35 I'm looking at my numbers right now, by the way, and we are averaging about 20 to $25 cost per lead with our direct mail right now. Yeah. Awesome. Okay, so our buyers are going to be depends on the size of the property, if we're buying a little quarter acre lot in Fort Myers, Florida area, that buyer is going to be usually an investor who's just looking to put their money in land in hopes of future appreciation. If we're buying five acres in North Carolina, that's going to be a recreational buyer, somebody who just wants to buy some land to go hunting camping, put a RV out there, or this is a place that they can have where there's no restrictions, there's no HOAs, that's gonna be more of a recreational type of buyer. Very rarely do we sell land to home builders. Some guys do. And there's a place for that. But mainly we're selling, what we do is we I almost don't care who the buyers are, I just care where the buyers are. And so you can go in and you can look in any state and see where's my aware of which states have the most land sold in the last 90 days. And you can find that on Zillow, just say look at all these states and say, Alright, show me the ones that have the most land that has sold in the last 90 days. And then you can drill down into the county using different tools. And he's alright, in the state of Tennessee, which counties have sold the most vacant land and the nice last 90 days, and I like to go where there's the highest demand. Yeah, maybe not number one, but number two, number three, number four, I want to go into those counties where there's already a lot of activity. I'm not trying to find a new market. I'm following the demand. I'm following the money. And then I go and see all right, well, who was buying the land out here, right. And then it's like, sometimes there are investors that are have a ton of property, sometimes their their retail buyers are just looking for land where they can go camping, and

19:18 you're you just typically selling it like flat out. You mentioned like notes earlier. So like, typically, how do you handle that? For us, we sell about 85 90% of our deals we sell on for cash. We're just wholesaling them. Yeah, I looked a few months ago in the last in the prior 12 months, our average profits were about $10,800 on a on a vacant land deal. So that can vary, you know, after direct mail or net net profit was maybe at 500 or $9,000. After all of our expenses, closing costs, realtor commissions, direct mail costs, etc. So that is the question. I forgot what it was. Yeah, well, I mentioned I was saying like, do you sell it up front? Are you do you know? Oh yeah, here's the thing, I would sell more owner financing. But my business partner, Matt Rocha guy, we've been friends for years. Now he, he, he's also an entrepreneur, but he's selling these deals because he wants to make more of the cash upfront. Now, he's, he's not as an avid another source of income, right? So I'm kind of stuck, where if I wanted to do more owner financing, which I do, I'd have to find somebody else right now because Matt doesn't, and understandably doesn't want to do that.

20:29 Yeah, that makes sense. Well, let's, let's talk about mail. You mentioned direct mail a couple times in there. And we were talking before the you know, we hit record and you were mentioning that direct mail is basically the only marketing that you're doing. So let's back up I would love from because you've been doing this a long time now, you've been you've been really top of your marketing, as marketing for investors has changed over time, right? Like you've been on top you are on top of digital stuff early, you've done mail, you've kind of been around the block in terms of the most common marketing approaches. Before we talk about you specifically, backup and give me your take on the current marketing landscape for investors, right, like, because it's like when I talk to people, the things I always hear are like I hear about competition, I hear about problems with text messaging, marketing, and like cold calling, and things like that. So like, from your perspective now, where are we as like an ecosystem in terms of marketing and how things are changing? And like, just how do you see the current landscape?

21:31 Now? That's a good question. Because here's the thing I remember when I got started in 2006, that was like the hottest time of the market that we've seen in a long time. Now, having said that, 2012 through 2020 has been a hot, amazing time as well. But like, even back then, in 2006, competition was fierce back then I remember hearing people complaining all the time. Oh, this doesn't work anymore. It's too competitive. It's too hard to do deals. One time I had a student and two students, and they didn't know each other. And they were in the Colorado area. I think Denver, this is a long time ago, they called one of them called me and said, Hey, this isn't working. I've got a bunch of buyers, but no sellers. And then another student called and said, Hey, I've got a bunch of sellers, but no buyers. This doesn't work. I was like, Really, I gave them their phone numbers. I said, You guys need to call and talk to each other. And that was within one day. I had this two students complaining about that. Yeah, well, it's a matter of perspective. Really. It it is this business works period. If you see, this is why I like podcasts and what we're doing here, right. Like, I maybe I'm I'm, I'm not very skeptical. I believe it's easy for me to believe things, you know, no, but I see somebody else doing deals on like, if that guy can do it, then why can I that idiot can make even if he's like just lying a little bit, or even if he's exaggerating, and doubling his numbers. Like, if he can do it, then why can't I do if they can do it? Why can't my kids do it? So I'm always thinking about that, like bigger ask.

And when I hear people complaining, I was like, Listen, I'm not that old. But I'm 50. I just turned 50. And I've been around the block, I've seen the market shift and make changes. And one thing that always stays the same is change. That's the one constant. But the other thing is like people will always find something to complain about. It's either too hard to find sellers. It's too hard to find buyers, the markets going up the markets going down, it's going flat, it's going sideways, there's always going to be a reason or an excuse. And I say this all the time. You can make money or you can make excuses. But you can't make boat. Yeah, so like, yeah, it's hard, then get over it. There's a funny video and I I don't like I don't cuss but there's a guy named Frank Kern. He's got a video on YouTube, do a search for the two commandments of business, Frank Kern. He said the two commandments are and I'll use the PG version, stop farting around and stop being a sissy. And he talks about this. And this is so good. I'm like, You know what people are just farting around, you're not taking it seriously. If somebody were to put a gun to your head and say, send out some marketing and make an offer in the next one hour, I'm going to shoot your ad off, you would find a way to make an offer, right?

Like you would go online and you would Google how to make an offer. And you would find okay, and you would go to realtor.com you would find a listed property and you would call the realtor and you would send the realtor an offer like you wouldn't worry about you had 30 minutes to make an offer. You wouldn't worry about how to your business logo or your card or your website or Google ads or direct mail or you would just like go right to the realtor. You'd go right to fizz bows you would go right to rentals and call landlords and you would just make an offer you would you would pick the Zillow estimate and do 50% of that, like you would make an offer. So stop farting around with all the stuff that just doesn't matter. And the second thing is stop being a sissy because you'll go out and You'll spend 10s of 1000s of dollars on coaching and education and masterminds and boot camps and stuff like that. But you won't spend $1,000 on a direct mail campaign, or PPC campaign.

So you just, you're just afraid like you want to, you want to get in the fight you want to, but all but don't hit me, you know, you want to get into boxing and, and but like, Oh, please don't hit me. But I don't want to get hurt. I'm not going to fail, am I and you're afraid of failure. So the people that succeed in this business, kind of have this fearlessness of like, you know what, I'm gonna figure and they're committed to the long haul. So they're committed, I want to do this for at least six months. All right, it's okay, if I don't even do a deal. I'm going to give it six months. And I'm going to consistently every day every week, put myself out there. I'm going to call sellers. I'm going to call realtors. I'm going to call landlords, I'm going to call buyers. I'm going to make offers and you're going to talk to five people a day and you're going to get 100 nose before you get one. Yes. But you're not going to be fazed by that. You're going to talk to 100 people, you're going to make 50 offers a week. And you're that's the people I know who have success in this business have that dogged determination. Like I'm going to do this and I'm not going to accept failure. It's not an option.

26:14
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