#87: Why Land Investing is the best Passive Income model?

LISTEN AND SUBSCRIBE

Apple Podcasts | Google Play | Stitcher | Spotify

Want to grab the transcript of this interview? Click here!

Today, the Richer Geek is proud to introduce the land geek. Mark Podolski, he's widely considered to be the country's most trusted and foremost authority on buying and selling raw, undeveloped land. Today, Mark will share his journey into the world of buying, selling and leasing raw land as an investment. He has actively invested in real estate and raw land for almost 20 years, and has completed over 5000 unique transactions during that time.

Mark has been actively investing in real estate and raw land, and has completed over 5,000 unique transactions. Mark’s company, Frontier Equity Properties, LLC, is an A+ rated BBB real estate company. Mark has achieved this level of success largely due to his core business philosophy – “Happy Customers Guaranteed.”

In this episode we’re discussing…

· [2:11] Why is the best passive income model?

· [3:11] How he works and how he deals with Land property after he pays for it

· [6:42] The advantages vs. real estate business

· [8:08] The ROI of this kind of deals

· [10:17] About his book and how he started, avoid mistakes investing, and the importance to get a mentor.

· [13:55] The different ways you can invest in the raw land to create passive income

· [15:30] How they help people to get economic dependency and high-income earners who have money, but they don’t have time

· [18:04] The importance of the automation and how saves time with it, and the program they created for payments

· [21:12] The minimum amount to invest with them and annual return yield expected

· [23:11] They offer to the listeners for free, the course “How to double your money three days or less”, it’s usually $97

Mark’s Top Tip’s

· “I think it's the best passive income model. It's a one-time sale. We get recurring income every single month. But no renters. No rehabs, no renovations, no roads. And because we're not dealing with a tenant”

· “Now I own the property, and I'm going to sell this property 30 days or less, I'm going to make a cash flow. I have a built-in best buyer, do you know who it is? Tommy, the neighbors, the neighbors. I'm gonna send out neighbor letters saying, here's your opportunity, protect your privacy, protect your views, know your neighbor. And oftentimes neighbors will buy it now if they pass, I'll go to 3 my buyers list. If my buyers list passes, I've got a little website you may have never heard of, called Craigslist is the 10th most trafficked website, United States, I go to a smaller one Facebook marketplace, I sell groups”

· “I'm going to make it irresistible for my new buyer. So often ask for is a $25 000 down payment to control these 10 acres. I'm going to get my money out on the down, or I might go six to 10 months out. And then I'm making a car payment, let's say for 49 a month 9% interest over the next 84 months. So now I've got 449 a month coming in for the next 84 months. Don't have to deal with any tenants, toilets, termites, trash, no headaches, and the game we then play can we create enough of these land notes where our passive income exceeds our fixed expenses? And now we're working because we want to not because we have to.

· “Put in improvements is very risky. And even to get shovel ready for the developer is a completely different model and much riskier. So, I'm happy to make my 300 to 1,000% ROI on these deals.

· “The mistake I made was, the first one was I didn't have a mentor. The weird thing was when I first started, I was doing really well right out of the gate. I thought I was the smartest person in the room. So, I lacked humility.

· “I understand cash flow management, I now use a program called profit. First, I understand just the fact that what makes Mark happy. I talked about it in the book, but I had Parkinson's Law of money. So, the more money I made, the more money I spent, thinking that's going to make me feel good or be, successful. And it was a great kick in the head of a delicious, humble pie, which didn't taste that good at the time”

· “I have a very simple mission that I've been working on, it's helping people get out what I call solo economic dependency, which means if they're personally not working, they're not making any money. So, think about somebody with a job. lawyers, doctors, dentists have a dentist who doesn't have his hands in somebody's mouth. He's not generating any income”.

· “If I can automate it, I'll spend any amount of money to save two seconds of my time, because like, I can always make more money. I can't get more time. One of my favorite places I spent every day is on Zapier. I love Zapier. And so that's one of my favorite sites. We created a program called LG pass comm that automates our mailings and automates our actual deal flow”

Mike’s Top Tip’s

· “Get a mentor, even if that mentor costs and it should cost money. You should be able to be should pay for the knowledge of not making the mistakes that that person made. And I think that's fantastic. It's paramount”

Resources from Mark

+ Read the transcript

Mike Stohler
What if you could be doing something smarter with your money that creates income. Now, if you're wanting to get ahead financially, and enjoy greater freedom of choice, if you want a comfortable retirement, and you know you'll have more choices, if you can do more with your money. Now, if you've wondered who else is creating ways to make their money work for them, and you want actionable ideas, with honest pros and cons, and no flow. Welcome to the richer geek podcast. We're here helping people find creative ways to build wealth and financial freedom. I'm Mike Stohler, and in this podcast, you'll hear from others who are already doing these things, and learn how you can too.

Welcome back to another exciting episode of the richer geek. Today, the richer geek is proud to introduce the land geek. Mark Podolski, he's widely considered to be the country's most trusted and foremost authority on buying and selling raw, undeveloped land. Today, Mark will share his journey into the world of buying, selling and leasing raw land as an investment. He has actively invested in real estate and raw land for almost 20 years, and has completed over 5000 unique transactions during that time. Alright, everybody, welcome back to another episode of the Richer geek. Today, we welcome the land geek. Mark Podolski and I kind of like saying that mark, you know, the Richard geek meets the land geek. How can we? I'm not even gonna say how we can get together but I'm gonna say it anyway.

Mark Podolsky I I know how we can geek out together. We can automate it with with technology.

Mike Stohler
We'll do it. That's right. So welcome to the episode. Mark. How you doing?

Mark Podolsky
Pulses normal respirations. Fine. I'm excited to be here. Thanks, Michael, for having me.

Mike Stohler
Wonderful. It's under 100 degrees. So I'm happy. Now, the land geek, so I assume that we're talking land.

Mark Podolsky
We're talking land? Absolutely. I think it's the best passive income model. It's a one time sale. We get recurring income every single month. But no renters. No rehabs, no renovations, no roads. And because we're not dealing with a tenant. We're exempt from Dodd Frank respa. And the SAFE Act all this owners real estate legislation. So Mike, if you if you want I can actually walk you through the exact model I use?

Mike Stohler Yes, please. Because see, I deal with real estate. And you just mentioned basically every headache that I deal with.

Mark Podolsky Exactly, exactly. Yeah, I'm gonna be your favorite geek. By the time this is done.

Mike Stohler
Talk me through it. Alright,

Mark Podolsky
So You're in Scottsdale, and I'm going to assume that you Oh, you own 10 acres of raw land in say, Texas. And so in you owe $200 in back taxes. And so you're advertising two important things to me. Number one, you've no emotional attachment to that role, and you are in Scottsdale properties in Texas. And number two, you're financially distressed in some weird way. Because we don't pay for things. We don't value them in the same way, and you haven't paid your property taxes. As a result, the county treasurer sends you a notice saying, Michael, if you don't pay your taxes, we're going to auction off your property to a tax lien, or tax deed investor. So all I'm gonna do is look at your 10 acres, I'm gonna take the lowest comparable sale, let's say it's 10 grand, and all I'm going to do is divide by four. So I'm going to send you an actual offer of $25 000 for your 10 acres. Now you accept it because in reality, or because for you $25 000 is better than nothing. Now in reality, three to 5% of people accept my quote unquote, top dollar offer of 25 cents on the dollar, but you accept it. Now once you accept it, I have to confirm a few things. I gotta confirm that you still own the property, that the back taxes are only $200 that there's been no breaks in the chain of title. There's no liens or encumbrances. There's something compelling about the property. And because it's so inexpensive, it's only $25 000. I outsource to the my team in the Philippines for 11 bucks. They're connected to American title company. They get me all this information. And I get the GIS maps, the plat maps, the aerial maps, everything that my buyer is going to want as well. So as I'm doing my due diligence, my in depth research, I'm also doing my marketing package. So everything checks out, I cut you a check for $25 000. Now I own the property, and I'm going to sell this property 30 days or less, I'm going to make a cash flow. So I have a built in best buyer, do you know who it is? Tommy, the neighbors, the neighbors. So I'm gonna send out neighbor letters saying, Hey, here's your opportunity. protect your privacy, protect your views, know your neighbor. And oftentimes neighbors will buy it now if they pass, I'll go to3 my buyers list. If my buyers list passes, I've got a little website you may have never heard of, called Craigslist is the 10th most trafficked website, United States, I go to a smaller one Facebook marketplace, I sell groups. And then I go the lands, land, Moto, calm land and farm calm, lands of America calm, land flip, calm, land hub, calm all these platforms where people buy and sell raw land. But the magic happens in my pricing, I'm gonna make it irresistible for my new buyer. So often ask for is a 20 $500 downpayment to control this 10 acres. So I'm gonna get my money out on the down, or I might go six to 10 months out. And then I'm making a car payment, let's say for 49 a month 9% interest over the next 84 months. So now I've got 449 a month coming in for next 84 months. Don't have to deal with any tenants, toilets, termites, trash, no headaches, and the game that we then plays can we create enough of these land notes where our passive income exceeds our fixed expenses? And now we're working because we want to not because we have to.

Mike Stohler Okay, well, it makes it a little bit easier than 12 month leases, and people trashing your apartments. And so, you know, when you look on TV Land, right, where every newbie, learns that everything is so easy, and then they go out and make mistakes. And you don't, maybe because it's not sexy for TV, you don't really hear about land you hear, you know, fix and flips and multifamily, you know, the things that are hard, I mean, the hardest thing to ever do in real estate is the fix and flip right on your borrowing usually hard money, which you can never went on. And then you're assuming that you're buying a house and so it's, it's crazy in here. You don't have to fix.

Mark Podolsky
No, no, I'd be so boring on HGTV and the DIY network for pictures wrong.

scene.

Mike Stohler
That's right. It works. But it works. No. Do you ever? First off Do you have anything? You know, like in Cave Creek area? Couple acres? Yeah. I might be lucky. You know, that sounds great. So you keep it raw? So do you ever put improvements?

Mark Podolsky Or no, I've got a book called dirt rich. So yeah, all I can afford is the dirt, you know, to put in improvements is very risky. And even to get shovel ready for developer is a completely different model and much riskier. So I'm, I'm happy making my 300 to 1,000% ROI on these deals, and

Mike Stohler really only 1,000%

Mark Podolsky
Yeah, I don't I don't complain. So you don't get this really inefficient market. It's the last sort of market where nobody really understands what the price is of the value of the land. It's what a buyer and seller agreed to.

Mike Stohler
Yeah, I mean, that makes sense. And so is the cost of land that you're buying has stayed relatively low. You look at, you know, in the real estate world on the other side, we deal with what's called cap rates and things like that and right and, you know, because everyone's buying multifamily is everything, you know, for for cap and things like that. Everything the housing market, housing land, Ben, is it.

Mark Podolsky
So unfortunately, unfortunately, so, you know, COVID really, you know, was a huge boost to our business. You know, you've got trillions of dollars going into the economy. Nobody wants dollars. Everybody wants us inflation hedge. So what's the what's the standard inflation hedge role and gold? You know, people are buying Bitcoin and you know, or in like, you're dealing with multifamily. We want assets note cash is trash. So even a three cap or a four cap is going to be way better than you know. 0% on your money.

Mike Stohler
Yeah, your money markets point .015% you know,

Mark Podolsky
Right, right.

Mike Stohler
Yeah, I mean, that makes sense. I was just curious, you know, and how that worked. So you briefly mentioned your book, dirt wrench, I kind of get what it's probably about. But tell me a little bit about,

Mark Podolsky
it's about my story, how I got into land investing the million dollar mistakes I made, and then walked everybody through the model. And in a little bit more detail than what I discussed with you.

Mike Stohler
Tell me about some of the mistakes you've made?

Mark Podolsky
Oh, well, how long do we have?

Mike Stohler
So yeah, so you know, some juicy ones.

Mark Podolsky
For the listeners, you know that the mistake I made was, the first one was I didn't have a mentor. So and then, you know, the weird thing was, when I first started, I was doing really well right out of the gate. So, you know, I didn't know what I didn't know, I didn't have a mentor. And then, you know, I thought I was the smartest person in the room. So I lacked humility. And, and, you know, I mean, look, let's face it, a monkey could have made money in real estate in 2006. And I was that dumb monkey. So 2008 rolls around. And all of a sudden, it was like, or actually, I really got hit hard in 2010. Yeah, 50% of my note portfolio just vanished. And I'm calling up people like what's going on in like markets between paying my land note or food in food wins. So I had to figure out how to rebalance that portfolio. I understand our real estate cycle, I understand cash flow management, I now use a program called profit. First, I understand just the fact that what makes Mark happy. So I talked about in the book, but I had Parkinson's Law of money. So the more money I made, the more money I spent, thinking that's gonna make me feel good or be, you know, successful. And, you know, so it was a great kick in the head of a delicious, humble pie, which didn't taste that good at the time. Now I look back, it was it was a great gift. And it forced me to get a mentor, it forced me to realize what I didn't know. And then start creating systems and processes, automation, and getting myself out of actually being in the business. I mean, working on the business. So now, you know, 90% of my business is automated with software and inexpensive virtual assistants.

Mike Stohler
Yeah, you know, that's, I keep pounding this in our listeners brains, did you hear that everybody, it's no matter what you do, no matter how you diversify, don't do it on your own. I've made the same mistakes, you know, it's, we can harp on it all day long all year long. Get a mentor, mentor, someone who knows what they're doing. For instance, don't go buy land on your Oh, you know, here's, here's an empty parcel, I'm going to buy it. And, you know, that is you made the point, it's, don't make the mistake, save a lot of money. Get a mentor, even if that mentor costs and it should cost money. You should be able to be should pay for the knowledge of not making the mistakes that that person made. And I think that's fantastic. It's paramount. Now, the different ways, are there different ways that you can invest in the raw land to create like, the passive income is it you know, we're mentioning you can just buy it you can do a note on it.

Mark Podolsky
Right? Well, yeah, so the two ways you can the passive income pieces, you would owner finance it. You could flip it, but then you got cash, you got to pay taxes, and you got to redeploy. I'd rather have a land note where, you know, I've got the cash flow coming in. And then I've got a little bit more flexibility as far as my cash management. I'm not constantly having to hustle to buy more more and more raw land. Now I do because I have a team but we tried to do a deal a day. But the pressure is not really there like it was with you know, just flipping because he flipped now you got this cash and I gotta keep doing it. You start all over you know from from zero.

Mike Stohler
It's nice to have long term cashflow,

Mark Podolsky
long term care exactly that mailbox money. There's nothing better.

Mike Stohler
I like it. Yeah, I love going. Well, how much money do I have this month?

Mark Podolsky
Yeah.

Mike Stohler
So you have a program that allows people like our listeners, you know, our listeners, they have the money, they don't have the time. They may be sitting today and say, you know what I'd like to get into this land. I like what Mark is saying. How can my listeners work with you? To make some passive income?

Mark Podolsky
Yeah, yeah. So we I have a very simple mission that I've been working on, it's helping people get out what I call solo economic dependency, which means if they're personally not working, they're not making any money. So think about somebody with a job. lawyers, doctors, dentists have a dentist doesn't have his hands in somebody's mouth. He's not generating any income. So the only way to get out of Tilak anomic dependency is to create passive income. And so when I first started, I was helping everybody on the economic spectrum, except for high income earners. And now, we're helping high income earners who have money, but they don't have time. And so we have this program called done for you, where we create an LLC for them. And we take capital, and we invest it on their behalf of their LLC. And we'd have a management fee, and we take a profit split. But what's interesting about our program, as opposed to a fund is that we get the power of compounding. So you as a class shareholder, and me as a C class, shareholder, or shareholder, we won't take a distribution as a C class shareholder, unless you as a class, shareholder, take a distribution. So if you don't want the money, we don't want the money. We can keep rolling in our passive cash flow into new deals, and compound those returns. And so it's it's been a very really popular and exciting program.

Mike Stohler
And it sounds I like that program because people that have money, they don't need that passive income right now. It's not though, you know, where's my $200? Where's my $500? That's right, that's nothing done they would rather keep in the bank habit compound. And then when they're x years old, then start doing it because they don't need that stuff now, and I liked it I like it when you can just reinvest it.

Mark Podolsky
Yeah, I mean, if we can get get you to 10 15 20,000 a month passive income that will move the needle when you decide you want to retire or maybe you have an option of retiring a spouse.

Mike Stohler
Yeah, well, there you go. Yeah, spouse would like that when they you know, yeah. You talked a little bit about automation on your you know, I'm interested in and because a lot of our listeners are techies. Yeah, tech geeks. A little bit about automation.

Mark Podolsky
Okay, so I, I'm ambitiously lazy. And so if I can automate it, I will I'll spend any amount of money to save two seconds of my time, because like, I can always make more money. I can't get more time. Yeah. So one of my favorite places I spent every day is on Zapier. I love Zapier. And so that's that's one of my favorite sites. We created after a program called LG pass comm that automates our mailings and automates our actual our deal flow. In fact, we got so ambitiously lazy, we can automate sending out a check to our sellers now, so I only have to write a check anymore. We use a program called simplified comm to record deeds. So I don't have to go to actually I don't do it anyways, but my acquisition manager has limited power of attorney to sign for me to record deeds, and then they just do that. So I don't have a mailbox anymore. I go to Phoenix digital mailbox calm, instead of having to go to the mailbox and open the mail, I just get it on my app. And in fact, I don't even open it anymore. I have a VA go through it and say this looks like it's important. So don't have to look at that.

Mike Stohler
So you are geek, you are a geek

Mark Podolsky
get really geeky. Then on the back end to collect money. We create a program called geek pay.io a set and forget it collection system. So we can get our down payment via credit card or ACH and then we get recurring payments via ACH which is a lot less than credit cards. But what's great about it is if the ACH does fail, we can have alternate payment methods as a backup. So hit the next one, the next one, the next one, and we tell our borrowers Hey, if you don't want to ever get it He put in some different, some different account number routing number and do that as well. And then I used to get these calls all the time, Michael, hey, what's my current balance? Hey, what's kind of make a prepayment this month. So now they can log in, they can see their current balance, they can make a prepayment at any time. It does all the notifications. It gives them journal entries, because it does the good bookkeeping, you get everything for 1098 at the end of the year, it's it really solved all my my pain points. And it's the only software I know that actually makes you money. So because if you charge a no collection fee, and no setup fee, it becomes a profit center using the software.

Mike Stohler
And there's enough money to be made. That you're saying that you can create a plan to basically fire your boss have that freedom and flexibility. There's enough out there Yeah.

Mark Podolsky Oh, 100%. It took me 18 months to replace my investment banking income to become a full time lead investor.

Mike Stohler
There you go. Yeah, okay, a little bit better than the multifamily and hotels, but that's really, really good. Now. How can people find you? Well, before we say that, you know, one thing that I want to know is, do you have a minimum? Or, you know, tell us about if people want to get involved with you? Do you? Tell us about how,

Mark Podolsky yeah, the minimum is 150,000. Yeah. And then that's, that's how you can get started.

Mike Stohler
Okay, and and do you have a? Or can you tell us an average rate? You know, preferred rate or what they can maybe expect?

Mark Podolsky
Yeah, I mean, typically 25 to 30% annual yield?

Mike Stohler
Yeah, you know, it's a little bit better than 10%. preferred return.

Mark Podolsky
Yeah, that's, that's after fees. And yeah, yeah, that's net. net.

Mike Stohler NET NET. Yeah. And, you know, multifamily right now is, you know, 4%, four and a half percent cap rates and things like that. It, it's fantastic. This has been a wonderful opportunity to allow our investors or allow our listeners to understand that, you know, it's not all that you see on TV, it's not only fix and flips multifamily. The hard asset type of, you know, something has improvements on land is a very valuable if that's the first and billionaires in the country, right? We're all landowners, you know, they,

Mark Podolsky
right?

Mike Stohler
You know, I think it's fantastic. Now, how can people find you?

Mark Podolsky
Okay, so the best place to go is the landgeek.com And for those that are interested in actually doing it themselves, we have a course it's usually $97 How to double your money three days or less. I'd love to offer to your listeners for free. They can just go to thelandgeek.com forward slash quick flip. Okay, we're in and go there.

Mike Stohler
So and how can they find your book if they want to get to know you a little bit better?

Mark Podolsky So either on the website or amazon.com

Mike Stohler
Oh, there you go. Well, Mark, I appreciate all that you've done. This has been a fantastic opportunity. And I've always wanted to interview someone that was also a geek

Mark Podolsky
x I think I gave you the wrong site. So I think the land geek.com forward slash wholetaling, wholetaling.

Mike Stohler
There you go.

Mark Podolsky
Yeah. w h o l. e. tailing TA. Yeah,

Mike Stohler something with a hole in it.

Mark Podolsky
So the whole Yeah. Yeah. But thanks, Michael. I really, really appreciate you having me on.

Mike Stohler
Absolutely. And have a great day from the Richard geek to the land geek. Everybody have a wonderful day.

Thanks for tuning in to the Richard King Podcast, where we're helping others find creative ways to build wealth and financial freedom. For today's show notes, including all the links and resources from our show, and more information about our guests, visit us at www.therihergeek.com slash podcast and don't forget to jump over to Apple podcasts. Google Play Stitcher, or wherever you get your podcasts and hit the subscribe button. share with others who could benefit from listening and leave a rating and review to get the podcast in front of your eyes. I appreciate you and thanks for listening

The information, statements, comments, views, and opinions (collectively, “Information”) provided in this podcast are not intended to be and should not be construed as financial, economic, legal, accounting, tax or other advice. For our full disclosure, click here.

ABOUT MARK PODOLSKY

Mark J. Podolsky (AKA The Land Geek) is widely considered the country’s most trusted and foremost authority on buying and selling raw, undeveloped land within the United States. For almost two decades, Mark has been actively investing in real estate and raw land, and has completed over 5,000 unique transactions. Mark’s company, Frontier Equity Properties, LLC, is an A+ rated BBB real estate company. Mark has achieved this level of success largely due to his core business philosophy – “Happy Customers Guaranteed.” Mark is the host of one of the top rated podcasts in the Investing Category on iTunes aptly titled The Best Passive Income Model and The Art of Passive Income. He is also the host of the Land Geek Podcast- Work Smart. Earn More. Learn How.

Passive InvestmentsNichole StohlerJune 2, 2021podcast, season 1