Episode 91: How to Buy & Sell Raw Land with Mark Podolsky

Acquania Escarne 0:00

Hey guys, welcome back to The Purpose of Money podcast today I'm super excited. We're going to talk about land and how you can actually purchase land and invest in real estate, sometimes with no money.

You are listening to The Purpose of Money podcast, a podcast where we talk about ways to build wealth and create more freedom in your life. Today. I am your host for Acquania Escarne.

Today we are joined by a special guest Mark Podolsky, also known as the Land Geek. He is the Managing Member of the Land Geek Enterprises, Managing Director of Frontier properties and founder of geekpay.io. He's also a former investment banker. We'll talk about how do you go from investment banking to real estate investor. Mark is widely considered the country's most trusted and foremost authority on buying and selling raw undeveloped land within the United States. He's been actively investing in real estate and raw land since 2001, and has completed over 5000 unique transactions. Mark's company Frontier Equity Properties, LLC is an A plus rated BBBB real estate company. He is also the host of one of the top rated podcast in the investing category on iTunes aptly titled, The best Passive Income Model, and the host of the Land Geek podcast, work smart. Earn more learn how.

Hey, Mark, welcome to the podcast How you doing today?

Mark Podolsky 1:44

Acquania thanks so much for having me. And I have another podcast as well called The Art of Passive Income that's more current than those other two.

Acquania Escarne 1:52

Awesome. Okay, so I want to talk about your interest in so many podcasts and why create multiple ones. But before we hop into that, let's talk a little bit about land. So when it did you develop this interest in investing in land, and why?

Mark Podolsky 2:12

So let's rewind the tape to 2000. And as the miserable micromanaged, 45 minute commute to work and back investment banker specializing in mergers and acquisitions with private equity groups and Acquania. It got so bad for me, I wouldn't get the Sunday blues, it's anticipating Monday coming around. I'd get the Friday blues, anticipating the weekend going by really fast, and having to be back at work on Monday.

So my firm hires this guy. He's telling me that as a side hustle, he's going to tax deed auctions. He's buying up raw land pennies on the dollar. And he's flipping them online. And he's making a 300% return on his money and Acqunia i'm looking at companies all day long and a great company great, has 50% EBITDA margins, or free cash flow, average company's 10%. I'm looking companies all day long, less than 10%.

So of course, I don't believe him. I've got three grand saved up for car repairs. I go to New Mexico with him, I do exactly what he tells me to do. I buy a 10 half acre parcels and average price of $300 each. I flipped them online. They all sell for an average price of $12,000 each through 300%. It worked. So I took all that money with another auction in Arizona, which is where I live. And again, it's 2000 There's no one in the room. I buy lots acreage for nothing. I saw that property make over $90,000 cash. So I go to my wife, and she's pregnant the time said, "Honey, I'm gonna quit my job and become a full time lead investor." And she said, "Absolutely not." So I said okay, okay. So it took me 18 months for the land investing income to exceed the investment banking income. And then I quit. I've been doing it full time ever since.

Acquania Escarne 3:59

A happy wife happy life. I'm glad you knew better than to just quit after what appeared to be an easy return on land. But 18 months is not bad either. There's plenty of people who will side hustle including myself longer than that before becoming a full time entrepreneur. But I'm glad you saw the vision and you kept the system going. So I am still a little baffled by this right? Because a lot of times people tell us oh, this is easy money. This is quick. This is do this just do these things and it'll work you actually did it. But is it still working that way and all these times later? Or do you tend to do a lot more teaching of the process and you don't actually purchase that much land anymore? Like what are you currently doing?

Mark Podolsky 4:51

So I purchase about a deal a day I sell a deal a day. Now when I say I do it, right. Personally, I don't do it. I am the CEO of the machine. That does it. But you know, what I like to do is help people get out of what I call. Solo economic dependency, which means that they're personally not working. They're not making any money. So anyone with a W-2 job, freelancers, solopreneurs, let's pick on people that have stopped their money problems, but after time problems, doctors, lawyers, dentists, right. So if the dentist's hands aren't in the patient's mouth, the dentists isn't generating any revenue. And that's fine. There's nothing wrong with any of those things. But it doesn't scale. And so I really think that once your passive income exceeds your fixed expenses, and you're working, because you want to not because you have to, you can move up Maslow's Hierarchy of Needs, in a self actualization, and do what you really want to do in life.

Acquania Escarne 5:58

I agree with that. And I definitely see how that's possible. And so tell us more about life after the conversation with your wife. So she says, "hell no, don't quit your job." But you said, "Okay, fine. I'm gonna replace my existing income, and then I'm gonna quit." Were there any type of particular deals that you went after in order to get to that number faster? Or did you just rinse and repeat the original process? Did you only buy $300 plots and sell them for 1200? Or did you eventually move up to larger land acquisitions?

Mark Podolsky 6:32

No, I was always seeking to very inexpensive raw land, in fact, Acquania if you want, I walk you through the process, step by step. So you can do it?

Acquania Escarne 6:41

Absolutely. I know, my listeners want to know, and I want to know, too, so yes, let's give us a play by play. This is a podcast where we get the How to tips and the story. So feel free to hop into the how to.

Mark Podolsky 6:54

Okay, so where do you live.

Acquania Escarne 6:55

I live in Virginia, one hour outside of DC. So Northern Virginia is what they call it.

Mark Podolsky 7:02

Beautiful. Okay, if you're in Northern Virginia, I'm gonna assume that you own five acres of raw land in Colorado, and you owe $200 in back taxes. So you're essentially advertising two important things to me. Number one, you have no emotional attachment to the raw land, you're in Virginia, the properties in Colorado and number two, you're financially distressed in some weird way. Because we don't pay for things like our property taxes, we don't value them in the same way.

As results, the county treasurer keeps sending me notices, saying Acquania, if you don't pay your taxes, you're gonna lose a property tax deed, or tax lien investor. So all you're going to do is look at the comparable sales last 12 to 18 months on your property y axis that I'm doing because I'm buying from you. But if you're buying it from me, you'd be you. Right?

So that's all we're going to do the comparable sales last 12-18 months, for your five acre parcel, you're going to take the lowest comparable sale, let's say it's $10,000 and divided by four. And that's going to get what Warren Buffett would call a 300% margin of safety. So I'm gonna send you an actual offer of $2,500 for your five acre parcel. Now you accept it. Why? Because for you, it's $2,500 is better than nothing.

In reality, 3% to 5% of people will accept my quote unquote, top dollar offer, but now that you've accepted it, I have to go through due diligence or in depth research. I have to confirm you still own the property. I have to confirm back taxes are only $200. I have to make sure there's been no breaks in the chain of title, no liens or encumbrances. And I have this whole big property due diligence checklist. I outsource it to my team in Jamaica, cost about 11 bucks. They're connected to an American Title Company. And we'll assume everything checks out. They're getting the aerial maps, plat maps, satellite maps, GIS maps, everything that a buyers gonna want.

But if I was investing more than $5,000, I won't take any risk i'd close traditionally through an American Title Company. But $2,500 I'll take some chances. Everything checks out. I buy the property from you for $2,500. And now I'm going to make a cash flow like a rental home. So I'm gonna sell three days to us. But Acquania have a built in best buyer. Do you notice?

Acquania Escarne 9:20

It is people on your list of investors who are always looking for land? Do you have that?

Mark Podolsky 9:26

That's a good guess that's a really good one, but not the best buyer.

Acquania Escarne 9:30

Oh, the government?

Mark Podolsky 9:33

Nope. No.

Acquania Escarne 9:35

Who's the who's the best buyer tell us?

Mark Podolsky 9:38

The neighbors, the neighbors.

Acquania Escarne 9:41

who are tired of this land just sitting there?

Mark Podolsky 9:44

Yeah, so I'll send out neighbor letters say hey, here's your opportunity. Protect your privacy. Protect your views. Know your neighbor. So oftentimes the neighbors will buy it. Now if they pass. I will go to my buyers list. my buyers list passes. I'll go to a little website. You may have heard it's called Craigslist as a 15th most trafficked website, United States, I'll go to one that I know you've heard of called Meta, or Facebook, buy sell groups in the marketplace. And then I'll go to lands, landmoto.com Landandfarm.com, landsamerica.com, land flip.com, landhub.com. These are platforms where people buy and sell raw land, but acquire the secret is very simple.

It's in the pricing I'm gonna make an irresistible offer and ask for is a $2,500 down payment for somebody to control that five acre parcel in Colorado, and then I'm making a car payment, but say 297 a month and 9% interest over 84 months. So it's a one time sale. I'll get my money out on the down payment. I could go 6 to 10 months out. And now I'm getting 297 a month. And 9% interest was 84 months. No renters. No rehabs, no renovations, no rodents and because I'm not dealing with a tenant. I'm exempt from Dodd Frank, RESPA, and the SAFE Act, all this owners real estate legislation. So it's a simple game. Can we create enough land notes where our passive income exceeds our fixed expenses? And then we become totally financially free?

Acquania Escarne 11:17

So let me ask you this when you've sold this land to the neighbor, and they've decided to take your payment plan, instead of paying for it outright? Are they allowed to build on it? Are they just keeping it raw, as you say, like, what happens to this land while they're paying for it or paying,

Mark Podolsky 11:36

They can use it recreationally, they cannot get a building permit until they own it. Free and Clear.

Acquania Escarne 11:42

Wow, okay. Oh, interesting. This is getting spicy. So I've never attempted to do tax liens or land notes and I kind of skipped a step. So for those who are listening and have no idea what raw land means, can you just define that really quickly, because I should have done that in the beginning. And I and I didn't?

Mark Podolsky 12:07

Well, raw land is the basis of all wealth. So essentially, the land that we're going to be acquiring is going to be rural, undeveloped land. So when you're out on the highway, and you're driving, and you see all this land, that's what we're buying,

Acquania Escarne 12:25

Okay. And raw is different from like, what builders may use to build subdivisions, because they add pipes and lights and electrical and all of this stuff that makes that land developed. Right?

Mark Podolsky 12:41

Right, I wrote a book called Dirt Rich, because all I can afford is a dirt. So we are going vertical on this land. Because that's development, that's a very different model. And that costs millions of dollars to bring infrastructure into a subdivision.

Acquania Escarne 12:55

Okay, I like it. I like it. So are we mostly targeting rural citizens who they already may own five acres that they're living on, and now they're like, oh, an opportunity to get five more, let's do it.

Mark Podolsky 13:11

Yeah, that would be our buyer, nice to buy, right is going to be somebody that had a dream, that was unrealized as life got in the way, they got tired of paying the property taxes, and they're no longer using it. It'd be like if I looked at your garage, and all the things you're not using and made you an offer 25 cents $1. How quickly would you accept it?

Acquania Escarne 13:33

That's money in the hand.

Mark Podolsky 13:34

Right.

Acquania Escarne 13:35

You know? So let me ask you this, then when it comes to actually finding these properties, you mentioned, you went to auctions. Some people might be afraid to go to an auction, because every time you see him on TV, you're putting your hand up, you're accepting bids. And if someone maybe puts the price higher than you want it to go and you accidentally raise your hand, you're stuck with it. So what are the terms at auctions? Like if you're the last to bid, it's yours. And you have to pay everything there at that moment? Or do they also have some type of notice? Like how do you confirm that this land is free and clear to be owned via auction?

Mark Podolsky 14:16

Well, that's when I started. So that model has evolved now because I want to get the property before it goes to auction. So I'm going to go directly to the owner before it goes to auction and buy it directly from the owner 25-30 cents on the dollar. So in an economy, that's they getting very like this, we go into a deep recession, right? Well, that might be another opportunity to revisit a tax deed auction. And in that case, again, my whole philosophy is I always make more money, I can't get more time. I would hire a bidding service to go and they would just have self discipline and I'd say do not bid any higher on these properties at this price, all the due diligence would be done by my team in Jamaica online and we would just give them our max price based on the market. And maybe we could pick up 10 15 20 properties. Otherwise, you know, it's not efficient to go fly out or drive out, spend time in a hotel, you take cashier's checks, they don't take a check, they won't to take a credit card. So he's making cashier's checks out to the county, maybe $2,000 increments. And then you get a, what's called a Treasurer's Deed, which is not a great deed necessarily. So if someone is going to want to build on that property, they will want to have they want to actually go through a quiet title process in order to make sure that that property is totally free and clear.

Acquania Escarne 15:57

So here's the question, I hope you're not afraid to answer. Have you ever purchased the equivalent of a lemon land, you know, like people purchase lemon cars is, have you ever had a bad deal that you thought was okay,

Mark Podolsky 16:11

Ah, I have made tons of mistakes. But because I'm buying it so inexpensively, and it's gonna sound crazy, but I've never lost money on a deal. And now I've done this over 6,000 times. So a good example was I bought 25. I'm sorry, 40 acres for $2,500 in New Mexico, and about 25 of those acres, were on a mountain. So I really bought a side of a mountain. So 15 acres are accessible. So I thought, well, if I get my money out great. So I put it at, I put on eBay, at $1, minimum bid, no reserve for 10 days, the first day gapping up to $2,500, by the 10th day $32,500, and I'm freaking out. So I contact the buyer. And I said, "Hey, I just wanna make sure you read the ad, you can see the maps like this is on a side of a mountain." He's like, "it's perfect." He was a film director in LA, that wanted to film out there and didn't want to deal with the county, getting permits. So it's cheaper for him to buy the property, then deal with the time and expense of the county. So, after doing this, so many times I've learned there's a pig for every barn. They all sell at the right price.

Acquania Escarne 17:35

Wow, that is such an interesting experience. But also insight, I had no idea. In some cases, film directors might purchase the land to film rather than going through the county for all the permits, which has definitely become a huge debate, at least I've noticed, because filmmakers in Georgia are leaving from California. And there's this whole debate on where can we film where should we film and California wants people to come back.

So the fact that you were able to sell a plot of land for the purpose of making a movie, it's kind of exciting, that's like book worthy, but I totally get your point. In that there's always someone out there who may want your treasure. So that is really, really interesting. Now, there's also something else I noticed you outsource a lot of the process now, but in the beginning, it was you and this person who told you about this system? If I'm someone who's just getting started, and I don't necessarily have all of the money and resources to outsource the entire process, do you genuinely think this is something I can still do?

Mark Podolsky 18:45

Oh, absolutely. I mean, I've got a free course will teach you how to double your money 30 days or less. And you can do it all yourself. So if you just go the landgeek.com/slashquickdeals, the landgeek.com/slashquickdeals, I'll get you started on the simplest model, double your money. And then once you have enough capital, then you can start building a business because a business is something bigger than yourself. You don't want to create another job for yourself. And I had to learn that the hard way because when I first started, I found myself thinking I built a business. And it was just a better job than what I had before in investment banking. Oh, I'm making my own hours. That's not being an entrepreneur. So an entrepreneur build something that's bigger than themselves. It runs without them. So when Steve Jobs died, Apple certainly didn't lose a beat. And that's what you want to build.

Acquania Escarne 19:42

Facts, I totally agree with that. And I do feel like a lot of entrepreneurs experience burnout because they do create a another job for themselves even once they quote unquote quit from their nine to five because they've made themselves the most essential, necessary person to do all the jobs in the company. So I think that's important in that you transitioned, you made the income, then you transitioned. But you also created teams, that helps you do this process for yourself and for your company that you built. And now you're helping others do it too. And you're able, like you said, to do a deal a day. So you're buying a deal a day, you're selling a deal a day, at least, that's pretty impressive. So what does a typical day in the life of Mark look like?

Mark Podolsky 20:34

So I'll give you my week. So Mondays and Fridays are my thinking days. I like to just spend that time, I've got typically no, nothing on my calendar that day, I'll just go and meditate or exercise, spend time with people I love. And really just take that time to think and maybe read and take long nature walks. Tuesdays are typically my podcast day, Wednesdays are my team meeting days, Thursdays are client meeting days and then that's really how I like to theme out a week, I spent about a half hour a week in the land investing business. I spend maybe a couple hours a week in Land Geek. And I might spend an hour a week in Geek Pay the software company. And it's pretty good. So I've got a good kicker, Acquania.

Acquania Escarne 21:36

You do.

Mark Podolsky 21:38

I can't complain.

Acquania Escarne 21:39

Yeah. That is a pretty good life, I think you probably said three hours or so is spent in the businesses. And the rest is how you know how you want to spend your time, meditation, exercising all great for health and mental health. But also, you've established confidence in your team to do the other jobs. That's what it sounds like.

Mark Podolsky 22:04

Yeah, I mean, absolutely. So it's, there's no doubt that there are people that are way better at doing a task than me. And so my role is really to think strategy, and find those people that will execute really well and love executing on that strategy. While being aware that the system and the process is more important than anything else, people change, lives change. And you want to make sure that that system, and process will be the most important asset of your business. And we've got it now 90%, automated with inexpensive virtual assistants, and software on the front end software on the backend.

Acquania Escarne 22:56

I love it. I love it and you've created companies that pretty much support the entire mission. So you're also you know, developing a process for yourself that works and definitely can be, you can find people like you said to replace anyone who leaves the system at any point because the jobs are either automated, spelled out, or once you can hire for so I think that's pretty awesome.

Mark Podolsky 23:23

Yeah.

Acquania Escarne 23:23

Yeah, that this is so such a different topic. I actually haven't talked that much about land. I've had a guest once before who had a land fund, and they were raising money to purchase land so that they could build on it, and sell it to builders and things but raw land. This is the first time we talked about it on The Purpose of Money podcast and I feel like I've learned so much in just this amount of time on how you can use that to expand your real estate portfolio and you guys know, I'm always looking to do that, because I am all about passive income, and all about not dealing with toilets and tenants.

So I'm definitely going to check out your website and your free course for myself. But I want to ask you one more question. The name of the podcast is called The Purpose of Money. And everyone that I invite on the show has the opportunity to tell us what is your purpose for money?

Mark Podolsky 24:24

So my purpose for money is really simple. It's just to be a good ancestor. That's it. So look, the truth is nothing lasts, right? The only thing that's going to really outlive me, so I'm going to lose everyone and everything. But the only thing that could possibly at least outlive me if I'm lucky, are my values. So the purpose of money then is in parallel to my values. So in my estate planning, the money that I'm leaving, to the generations are for specific purposes.

If they want to start a business. If they want higher education. If they want their first home, to make things a little bit easier, absolutely. But at no point in time, well, I as an ancestor make it so easy that they don't have to ever work. Because I think that work provides a lot of meaning and purpose in their lives. And I certainly don't want that money to be squandered. In any sense. I do believe in Effective Altruism. So a good portion of my estate will go to relieve suffering, which I think also is a parallel to being a good ancestor. So to me, that is, the purpose of money is simply to serve the next generations.

Acquania Escarne 26:01

I absolutely love that. And that's a very well thought out way to leave a legacy. So thank you, Mark, for sharing that with us today. Before we say goodbye, I really would love for you to drop the link to your free course again for us and any links to websites that you want my listeners to check out, because I'm going to include those in the show notes so they can follow you and also take advantage of offers you have.

Mark Podolsky 26:27

Sure, I think the best place to start is thelandgeek.com. Thelandgeek.com is a great place to start again, the free course is that thelandgeek.com/quickdeals. And not only is Dirt Rich out but Dirt Rich two is coming out how to scale your land business. So be on the lookout for that as well.

Acquania Escarne 26:50

Awesome. Well definitely check it out. I'll make sure to drop links to everything in the show notes. Can your book be found on Amazon?

Mark Podolsky 26:58

Absolutely.

Acquania Escarne 26:58

All right. So that's what we're gonna include a link to. Guys, this has been great Mark, thank you so much for sharing your expertise on how we can really get into investing in real estate and raw land. I hope this has been a helpful episode. Wherever you're listening. Please like, subscribe and leave a five star review. And until next time, keep building generational wealth.

Thank you for listening to the purpose of money podcast. For more resources and information, check out my website, thepurposeofmoney.com and while you're there, please sign up for our newsletter so you have the latest information on new episodes and blog posts. Until next time, keep creating freedom in your life today.

Transcribed by https://otter.ai