Episode 13: Team building, Scaling, and Work-Life strategies

Justin Piche (00:00)
Welcome to the Ground Game Podcast. This is your co-host Justin.

Clay Hepler (00:05)
And this is your co-host Clay. And we are here to talk about how to win the ground game.

Justin Piche (00:26)
All right, so this is gonna be another good episode. I'm excited. Just a quick aside, we're going to meet up in Pittsburgh at the end of the week. I'm flying up and Clay and I are gonna book a conference room and just kind of, yeah, do some planning. Do some planning, do some business meetings, know, it's a business trip, know, expense it. It really is a business trip, so I can say that facetiously, but it truly is.

But I'm excited and I'm excited to come up to your neck of the woods and talk shop.

Clay Hepler (01:01)
Dude, so my, I think that, you know, we got some really interesting things going on in the background, for our, long-term ground game listeners. we got some really interesting stuff for the people that really the podcast is for, right? you know, we've been getting reached out to a ton about certain things and we see that there's a massive gap in the market for an opportunity. And, know, in the coming months we'll be talking about the opportunity.

and it's super exciting and everyone that I've spoken with about it thus far has just been jaw gape, right? And, and, and there's a massive, massive opportunity for this in the space of people that really need this type of help. and so I think it's something exciting that we're going to be rolling out. but it won't be for a couple of months. And so, we're just going to start that planning, have some great food, hang out, do the, the, the fun thing.

two entrepreneurs getting together. I was joking. I was at a mastermind this past weekend and I came home and on Sunday night, it was pretty late on Sunday night and all my family was there doing like an advent thing, like putting stuff on a Christmas tree, you know, all the decorations. And they were like, hey, like tell me how it was. And it's like, you get there and you just talk shop, right? You just talk about business. You talk about the things that really light you up. And for a lot of people listening to podcasts, man, it's like,

That's super exciting, right? For other people, it might be sports. It might be talking about the newest draft, NFL drafter or whatever. And for us, it's like, dude, how are you, how are you growing your business? Right? Those types of things that are really, really exciting. So I'm super pumped as well to get up there and talk, talk some shop.

Justin Piche (02:48)
Yeah,

absolutely. maybe just something Clay and I have both been getting some questions from folks of kind of maybe, do we do consulting? Do we do private coaching? And for our listeners, both of us do. And I don't think either of us are really heavily kind of advertising. It's kind of a, neither of us can really take on a ton of clients, especially doing private coaching, but it is something we do. And so if any of our listeners are interested in learning more about that, I know I have my website in the show notes.

Clay's got one as well. If you want to work with, you you know what, you guys know our styles and who we are. can't, don't want to say a bad word on the podcast and mark this thing as explicit. So, you know, just if, but if you are interested, if you're at a point in your business where you want to scale and you want to get, you want to, you want to grow that business and you think you would benefit from some hands on somebody who's further ahead than you, we're certainly open to helping. You know, that's one of the things I think give both of us life.

It's one of the reasons we started this podcast in the first place is just to give back to the community. just know it's an opportunity, but let's get back. get into kind of what we're going to talk about today. We're to give a quick update on some quarterly goals as we do every, every episode. Clay's got a good team building tactics, one that I actually have not done. So this is going be Clay leading it. I'm going have some good questions for him. We'll see. And then we're to get into some of the questions that folks have been asking us. And I know are present on the minds of a lot of land investors. So similar to the last episode.

These are, think, topics that are relevant to anybody who's active in the space right now and looking to scale their business. So, Clay, you want to jump into some quarterly updates?

Clay Hepler (04:26)
Yeah, so we're at 620 for the quarter ish and you know, coming up on two weeks before Christmas holidays. We're hoping we get to 720. We lost some, we gained some from last week as as normally happens. And so, you know, I have learned a lot of lessons this quarter about what really matters, like what the constraints in our business are.

And, but again, I'm pretty happy about 620 thus far with our marketing spend and where we're at in our business maturity. And I have a lot of confidence that we can get to 700, 720 by the end of the quarter. So that would be really exciting to get into Q1 and kind of get that off the ground.

Justin Piche (05:15)
Yeah, man. No, that's great. And this is, you know, we're kind of nearing the end of the season where leads are coming, right? Leads are flowing well because we're coming into the holidays and it always slows down. At least for me and my business, you know, not everybody has the same experience, you know, doing this for more than three years now. And in my experience, this time of year really starts to slow down. So this is really my last good week. I had this meeting with my team today and I told them, was like, Hey, this is the week to get those followups done, to get those last contracts signed because come next week.

Christmas is on Wednesday, it's done. It's done until mid January, right? That's when the kind of US goes on holiday, right? So yeah, anyway, that's great, man. That's great. I'm rooting for you. 720, here we come. For me, I hit my quarterly revenue target. Gross profit, 800K. This last week, we sold five lots for, one of them was a...

Clay Hepler (05:47)
It's

Justin Piche (06:14)
Get out of here.

dog barking in the middle of the thing. All right. We hit our goal. One of them was four lots that we sold kind of as a package. So I expected a little bit more gross profit out of it. But honestly, I think there might not have been access. This is something I don't know if you've experienced this is maybe just a quick aside. You close a property with one title company, the title insurance policy that gets issued has access, right? They review it. They look at the deeds. say, okay, you got access. There's no exception on the title policy for access.

And then you have a buyer that comes and sometimes the buyer wants to use their own title company or attorney. They bring it to a new title company or attorney. And then that title company sees some issue in the property. And I've had this happen so many times and I tell myself, you know, like guys, we've got to push buyers to our title companies so that we don't have these unknowns that may pop up on the property. But in this particular case, I think the second title company was right. I don't think the property has a legal access. But thankfully we were able to.

to still sell it at the negotiated price, even despite not having legal access. The buyer was a local guy. He knew some of the lot owners around. It didn't concern them all that much. But hey, yeah.

Clay Hepler (07:26)
Wow, dude, that's a deal killer. I

mean, you just inverted a deal. Let me ask you a question. did you, was that something that you guys self-disposed or is that a broker dispo?

Justin Piche (07:35)
We had

a broker disbought. So it's kind of, this is one of the, there's an easement in the deed and all the deeds had the reference and easement, but I've had this happen on a couple of properties where the deed references easement, some of the, either a lot it crosses doesn't reference the de-easement or something like that. That's generally what happens. And so if a title company doesn't dig deep enough into that access and they just like read it they underwrite it as, yeah, it's got access, we're ensuring this, but you don't get a survey. It doesn't matter. It's not like you can.

go back to the title company and file a title insurance claim and say, but you didn't accept access. It has access. Well, there's a clause in almost every title insurance policy that literally says, if there's anything that could be uncovered by a proper and full survey of this property, it's not insured. It's kind of like the catchall phrase in every title insurance policy. And it's bit me before, I would say probably wasn't a deal killer in this because it was such a low purchase price on a price per acre basis that I'm confident we would have.

still been able to sell it and made a little bit of money on it, even without Access. And I have sued successively for Access in Alabama, so I know that there's a process for it, but it certainly would have been a profit killer and a deal extender. It would have kept my cash tied up for longer. So really happy that it ended up working out and the buyer was okay with the way it worked. But realized some maybe 40k of profit on that and another 40k of profit on another sale. So 80k in the last week of Realize Gross Profit.

meaning we hit our 800k revenue target. thank you. Thank you.

Clay Hepler (09:08)
Nice dude. That's congratulations. And to

be fair, as we know, you we got this week, next week for selling deals and it's quiet for about two weeks.

Justin Piche (09:18)
Yeah. And dude, I'm selling, I got a few more. I got five selling this week, actually, but none of them will be realized gross profit though. There'll all be proceeds applied to a bank loan to pay off a development that I'm working on. So I won't actually realize any gross profit, but I'll be closer to it, I guess, you know, as we're selling through this development. Yep. And maybe one more quick, quick update. I, know, one of my goals was onboarding my US based closer, right? Sales professional on the acquisitions team. And

Clay Hepler (09:29)
Okay, okay, cool.

Justin Piche (09:49)
She is just like amazing. Really, truly. I'm so excited. She's training the acquisitions team up to be better, to overcome objections. And I'm getting a lot of feedback from my cold calling agents that like the tactics are working and I'm seeing more contract flow as well from that. then, yeah, the cold callers and lead managers, right? She's coaching lead managers and cold callers.

Clay Hepler (10:06)
What you expand upon that I mean what she's training the lead managers or the which

Justin Piche (10:17)
She's got one-on-ones, rotating one-on-ones with them, doing call reviews with them, and just giving them tactics that really, like, if I were doing this, I may be able to do a similar job, although I would argue that she's probably better at sales than I am, personally, and better equipped to train my team than I am, which is obviously one of the freaking amazing things about running a business is that you can actually hire people that are more skilled than you at specific roles in your business.

You know, lot of people have trouble giving up control. A of people feel like, man, don't want to, you nobody else is to do this as well as me. But I'm here to tell you that if you get the right person, they're better than you at the things you need them to do. And that is, that is where like the leverage of hiring and running a business, that's where it really, that's where it really kind of compounds. So.

Clay Hepler (11:04)
Yeah.

And the reality is like what I've realized over the last year. And this is something that we're really going to talk about today, which is decreasing compensation here in a second in the team building tactics. higher talent, higher talent, higher coachability and talent, right? The energy, right? And a lot of people, think a lot of land investors will cheap out.

or they'll overpay employees that they shouldn't overpay. One of the two, right? It's like one end of the, or the other. see this constantly in people that I work directly with. so overpay for talent and make sure you're not overpaying for people that aren't talented. Maybe someone in a more administrative role. And so that, I mean, that sounds like she's an incredible hire for your team.

Justin Piche (11:57)
Yeah,

I'm super, super excited. then, you know, we talked about wins and losses, so I'll share a miss on a quarterly goal as well. One of my quarterly goals was lead flow. It was, I had a target of 75 qualified leads per week for us to negotiate on. And we just missed that. And it's, think, I don't know if it's a combination of like needing to upscale my acquisitions team to better convert those leads, which is a part of what, you know, is improving through this hire.

or a marketing outbound, right? Outbound marketing. So I'm going to dive into the details when we do our quarterly review and figure out why did we miss this target. But that is a miss. I think we're averaging 50 or so a week, maybe 48, somewhere in that range, 48 to 50 qualified leads per week. And I wanted to be at 75 by the end of the quarter. yeah, I mean, thought that I put in enough marketing spend and enough marketing output to get there, but we just didn't hit it.

Clay Hepler (12:53)
Okay, so you attribute it to a marketing problem.

Justin Piche (12:56)
Yeah, either a overcoming objection and converting potential leads into actual leads or a quantity. There's two sides to it, right? Obviously, if we operate at the exact same scale level and increase quantity, we're going to up our leads. Conversely, if we increase our skill level at the same quantity, we're going to increase leads. And I'd prefer at this point to increase the quality and not the quantity of outbound marketing. I think that's obviously...

at this point, at this scale in my business, that is more important than just continuing to scale my marketing spend and just be okay at it, right? We just need to get better, more skilled so that we don't have to scale the spend. We just scale up the performance of the employees.

Clay Hepler (13:38)
Okay. And so I'm going to ask a couple more questions so that listeners can kind of get some benefit from this here. So, your cold collars are the qualifier qualifiers, right? Essentially. you saying you're, you, you're not getting in, in cold calling and other lead channels.

Justin Piche (13:49)
Yes.

Yeah

Clay Hepler (13:59)
So your cold callers and other lead channels, whether it's direct mail or whatever it is, you're saying you're not getting, you're getting 55 qualified leads as defined by your cold callers passing leads or a direct mail lead calling in a qualified lead.

Justin Piche (14:16)
Yes, but we kind of paused, we were like a two month pause on mail as we readjusted our marketing campaign. So I'm actually 5,000 mailers are going out this week or they're hitting by Friday. So we're back kind of on the mail train. So all of that was from a co-calling and other lead channels, but co-calling, co-calling primarily.

Clay Hepler (14:36)
Yeah, got it. Yeah,

yeah, yeah, yeah, yeah, yeah. so basically, cold callers were the people that qualified. Okay, so one thing that I want to just kind of go, I want to just go on this little diatribe here really quickly, because I think it's really important for our listeners. So if you're doing cold calling, okay.

Justin Piche (14:45)
Yes. Yeah. That's right.

Clay Hepler (14:57)
In my experience, the way that we run the business, is the cold colors don't qualify as much as Justin's business. If we have a lead submitted, they have attributes of a motivated lead,

we're finding that the quantity of leads that are submitted from our cold calling campaigns, it's about 30, 30 % 27 % are actually qualified, actually get qualified, right? So our process is front end to qualify. And then of those about 38 % of them get offers. Okay. So

Here is how you actually build a business. You look at the amount of leads that you have, right? So Justin's going to look back in his leads and he's going to say over the past quarter, this is our metrics, right? But if you're thinking about this, you're in your basement listening to us or working out. I'm not going to imagine any other places. Those are the only two places. But if you're thinking about this, hey, how do I get to my goal? Right? If we're talking about one lead channel, we focus on one lead channel, we say, okay,

Justin Piche (15:55)
you

Clay Hepler (16:04)
If I know these metrics, in my case, I'm going to do 10 or 12 deals a month, right? My average CEO size is X, that'll get me to my goal. I need to back in the benchmarks that we have. So if I know that, for example, it's 30, let's just say 50 % of leads come in that are qualified. And of the 50 % of leads are qualified, we offer on 50 % of those leads. And then you know how many offers per deal it takes. You can literally build out a cold calling campaign or whatever campaign.

and build it out marketing wise to hit your goals. Because this is a numbers game. And so as you're thinking about what Justin's saying is, he didn't hit his number goals, his marketing goals for this quarter. All he has to do is understand those metrics, right? And then he could say, do I need to add another person in the seat? But it's all based on data, guys. It's not based on emotion. Should I add another cold collar? I know exactly how many cold collars I need to hit my monthly goals.

But it starts with tracking the KPIs, right? So that was a little bit of a diatribe, but as you guys are doing your planning, this is gonna come out at the end of the year. When you're thinking through, what do I actually need to invest in this year in order to be successful? You need to look at your metrics, your KPIs, and what it takes for you to achieve an output in your conveyor belt, which is a closed contract. And that's what should define your quarterly planning.

we're going to move into team building tactics. This is the hard hitting actionable tactics that we actually are using in our business every week to enhance, manage and scale our teams. Now this is a odd.

Team building tactic. This team building tactic is based on how to decrease compensation. Now the question is, I didn't know this was possible. Can I do this? Is it legal? I'm not an attorney. I'm not a hiring attorney. And so I'm just gonna tell you what I do.

And this is anecdotal evidence that should not be taken as legal advice. So what, how do you know if you decrease, you should decrease compensation. So a lot of new investors will hire someone, they will misappropriate a market rate and maybe they'll get into a cashflow crunch or they give someone a position that is they might've hired this person and they give this person a promotion.

in a position and the person can no longer fulfill the outputs of this position. Right? So really what we're seeing here is there was a skillset mismatch. And so in order for you to go back, go to someone and decrease compensation, there needs to be an output mismatch, an expectation mismatch. Right? And so for example, if you have an admin assistant and you promote him or her to an executive assistant or a chief of staff, which is additional responsibilities,

and then that person could not fulfill those requests, the requirements for the role, then you can go back to them and say, hey, this promotion was based on you fulfilling these outputs. You are no longer fulfilling these outputs. And so we need to talk about an adjustment in your compensation. So really we're focusing on outputs here. We're not focusing on emotion. really we're focusing strictly on that. Now, if you're in a position that you have a cashflow crunch,

which this happens to a lot of businesses, right? Especially immature land flipping businesses. There are a couple things that you can do. Now I'm kind of getting outside of my territory here because I've never done this. I'm just gonna say this. I've never done this, but I will tell you the theory behind it and you can apply it to your business. So if you come to a cashflow crunch, you can renegotiate compensation with the person and say, hey,

Justin Piche (19:58)
you

you

Clay Hepler (20:06)
The opportunity at our company is X. You've been at my company for this period of time and if you're interested in staying long term, we're in a little bit of a cashflow crunch and so we need to talk about decreasing your compensation for a short period of time in order for us to get through this period of time and then after that you would be your compensation would be back at that the original rate or maybe an increased rate. You know, this is what's

Justin Piche (20:10)
Okay.

you

Clay Hepler (20:34)
you can strategically do if you come in a really hard position, which naturally happens in development based companies, companies like ours that are kind of up and down and up and down. And it's not something like, that's totally out of question. And this really comes down to resources or resourcefulness, excuse me. You know, sometimes people say, I just need to fire everyone, right? You're in a bad position, cashflow crunch, you're super stressed. And you're like, I just need to fire everyone. And you don't really

Justin Piche (20:47)
you

Clay Hepler (21:01)
Allow them to come to the table and say, can we collaborate here and do a short term decreasing compensation so that we can survive as a business? That's just being strategic, right? It's not being, it's not actually being a poor boss or a CEO. It's just being strategic. And as long as they're bought into your vision in your dream, you can do that. Now the success rate of that is completely dependent on a lot of different factors, but I'm just saying those are the two examples where I would see decreasing compensation.

Justin Piche (21:01)
you

Clay Hepler (21:30)
would be something that would actually be present in a business context.

Justin Piche (21:34)
Yeah, think the first, specifically the first example you provided, that is the key that I want the listeners to understand is it's 100 % output based. You compensate folks for an output. And yeah, it's gonna be hard. Like yeah, it would be a really hard conversation.

But if you focus on what they're producing and what the market rate for that production is, you may be able to save a good employee. And honestly, most people will understand. Okay. Most people will understand. And if they are still bought into the vision of the company, then they will accept that. And maybe they'll work harder to get back up to that other level if they can upskill and take on those responsibilities. I think you, people have to understand, and I think most people do intuitively, but it's hard when you start getting with human emotions involved.

is that you are running a business, you're not running a charity, have expectations for outputs that you need to be achieved. And yeah, okay, you may not be the ruthless company, you know, that this big corporation that has no care whatsoever about their employees, you genuinely care. I I genuinely care about my employees, right? And I would find it really challenging to do this. But most companies, they wouldn't think twice, okay? They go through deep cuts when they need them, they cut employees.

It's just a business decision. There's no emotion tied to it. They don't require those outputs anymore. They found a way to get those same outputs at a lower market rate through outsourcing to another region or consolidating responsibilities in a team or buying some other entity. And then there's synergies between the two where they don't need a level of management or level of oversight that exists in the two companies. That happens all the time. Your business is just a smaller version of that. Not a charity, it's a business.

Clay Hepler (23:17)
Yeah, and one thing that I would last thing I would add to that is the moment you realize that you're building a mature business is the moment your business begins to mature. And

So as you're making these decisions, you might say, I'm so small, I shouldn't be having to make these strategic decisions. But those are the decisions that are the prerequisite to becoming a big company, to becoming a successful enterprise. And so every decision that you make not only is increasing your ability to make better decisions in the future, because you get more reps, but it's also setting the precedent.

for you internally, for your internal dialogue to become the type of CEO that runs a business that is a successful, massive business.

Justin Piche (24:08)
Beautiful. It's a great team building tactic. All right. And now we're to get into kind of the meat of the podcast, which is some questions that we've gotten, I think are going to be really applicable to a lot of people. So I'm excited to go through these. And the first one is with respect to scaling the business. And so here's a specific question. I'll give a little bit of kind of additional information and then Clay will have you kind of go first here. As your business grows, what are the key indicators?

that signal it's time to scale operations and how do you approach scaling while maintaining quality and efficiency?

Clay Hepler (24:43)
Yeah, we

didn't really look at these questions beforehand, so we're kind of just coming off the cuff

So as we look at the key indicators that it's time to scale operations and how do you approach scaling while maintaining quality and efficiency? this is a very difficult problem. as it relates to a land flipping business, we approach land flipping my business completely with

using the theory of constraints as a model for scaling. So I'll give you a perfect example. I realized about halfway through this quarter that my biggest constraint was selling deals. Probably at the beginning of the quarter actually it was like, that's when I really, I realized it. so I knew that at that point I really actually needed to hire someone, right?

what I did is I went out and I shifted a position around and I put a disposition admin. And this is gonna answer the question by using an example, right? So I put an admin in the position. This person would do very basic tasks, which would leverage me up out of responding to Facebook messages, responding to emails, tracking KPIs for the position. All these tasks that are very administrative that you can hire someone for $5, $6 an hour, right? So as you scale, you leverage up.

And then you can bring someone in to replace you after you build out sort of the, the SOPs and the operating procedures for the position. Now, granted, Justin and I were talking about earlier, I still need a little bit of help in building out my dispositions department, but I'm getting more confident. So the first level is, you know, you're seeing, Hey, when, when I scale operations, when I scale a specific part of my business, I want to scale the basic part first. Or you hire someone to come in and scale the basic part first.

But at the beginning we're saying, when do we know that there's a problem when we realize that there's a constraint here? There's a time constraint, okay? So I realize that this is a financial constraint. mean, if we can't sell deals, we go out of business, period, right? And so the way that I approach it first is a lower tier position, or you hire the person, but I didn't have the capital to hire someone that would be of my caliber that I really needed. the Dispo admin position.

And then I took one of my lead managers and now she's coming over and she's incredibly talented, very process oriented. And so we have no problem in the acquisition department. In fact, my acquisition, one of my lead managers is just incredible. acquisition manager is very good. And so we're bringing over a disposition, what I'm calling a disposition admin, which is essentially a lead manager for that position. So I would still be over this person, but we're kind of leveling up in terms of skillset. Now again, I could have hired someone to do this for me.

Right? This is not, this doesn't necessarily mean this is the best choice, but for a capital constrained business, you can go sort of in this ladder as you leverage out of this responsibility. So I'm still over the, the Dispo associate and the Dispo admin, but these people are conducting the majority of the tasks within the position. And so eventually I will hire someone to come in and to be the director of dispositions. Right? And so they would manage everything within this column.

of dispositions, but that's actually how you scale a business, right? So first is constraint. And then for me, it's putting in low cost global talent to manage the administrative part of the processes. And then after you put low cost global account, you put increasingly more expensive, higher quality talent. I mean, my Dispo Associated is actually could probably run my disposition department one day she's so talented as an individual. And that's the cheap way to do it. Now, again,

I was talking about the more expensive way, more expensive ways. You just hire someone, you tell them, Hey, you've done this before. I'm going to set the objectives for you in order to achieve what I think we should achieve in this position. And a lot of cases, if this person is incredibly talented, they can tell you the objectives that they need to achieve. And you just hold them accountable to those objectives until they solve the constraint. And then you focus your energy on something else. Right? The reason why some businesses can go so quickly is that they solve constraints.

Right, early on in the land flipping business, just gonna say one more last thing, Justin, and then it'll be your turn. Early on in the business, a big constraint is actually capital, right? Capital is a massive constraint, especially because you need to get the marketing rolling. So people that start with less capital, right, like me, I started with about 30, 35K, not that much money, right? And so it took me a lot longer to actually get my business off the ground, right? And I had to pay for my life, had a couple of early lucky deals.

and to pay for my life. But my constraint was really that. And so I needed to find capital or I needed to do things extra to kind of keep putting capital marketing on the flames. And then I realized acquisition was the next part, the real constraint in my business. Right? So acquisition became the true constraint. And so you hire people admin, then you hire fulfillment, then you hire marketing, then you hired sales, and then leadership in each of these separate columns. Okay, so the acquisition part, now I have a director of acquisition sort of.

and I have lead managers and then I have a cold calling manager and I have all these people that are really playing these functions within these contexts. Okay. And so the next thing, the constraint that I realize now is really the dispositions constraint. And then after I know exactly what's going to probably happen, it's going to be an operational constraint. I'm not going to be able to manage both of these sides of the business. Right. and so that that's kind of how I think about it. It's all, it's all through the theories of constraint. And one thing that I would say that, and I've learned this from, people much smarter than me.

If you just focus your efforts on your constraints, you can let everything else burn to the ground and you will still be successful as a business owner. that's how I approach scaling. And so I say the same exact thing when I work directly with people or I'm just talking to someone on the phone or we're talking about, hey honey, how do we scale the, you know, how do we make your cooking a little bit more fit? No, I'm just kidding, I would never say that.

Justin Piche (30:41)
No!

Clay Hepler (31:12)
No, no, no, no. But that's it. That's it.

Justin Piche (31:13)
man.

That's great. No, man. What a good answer. I approach it really in a similar way, especially kind of just let's I'm going to take you back to Justin starting his business. My first main constraint was also dispositions. And that's exactly what I did was hire somebody, an admin on the sales side specifically to list properties on Facebook and respond to Facebook messages and just keep

buyers leads kind of rolling. And then I hired a dispositions manager, sales manager. I went for the more expensive talent because I realized I want way more built out than this person is capable of. And then I kind of went the expensive approach that Clay is talking about. I built out the kind of initial, how are we going to do this? How are we going to have a repeatable process? How are we going to get buyers leads in the door? But then I hired somebody who was much more skilled, who then could take it and run with it.

And that and that kind of, we have, yeah, talk about when I, when Clay was talking, one of the things I was thinking about was the buy back your time book. And one of the first kind of exercises in there is doing an audit of your time and all the tasks that are required to keep your business rolling. And know we talked about this in a previous podcast, but I talk about it with other people too, because it's so important to actually do this and fundamentally understand what are all the things that need to be accomplished in your business? What are the ones that drive revenue?

What are the ones that don't, but are still necessary? Call them admin tasks or whatever. What are the ones that you enjoy working on and what are the ones you don't? Okay. And Clay's approach and what my approach was really similar is looking at those tasks that either drive revenue or don't drive revenue that I don't want to do that. I don't really like doing and hire people to build the, to do work on those, build out the SOPs, get people to do the kind of the easy, repeatable kind of admin tasks at first, and then put higher level talent in to take care of the

harder revenue driving activities for you to continue to scale that part of your business. You know this it's like I said this before but I'll say it again. This timeline or scaling your business is really like walking on a tightrope or a razor or whatever you want to call it where you're just you've got to figure out how to do it efficiently. And I think this approach otherwise you're going to spend too much money in OpEx and go under before you're able to be successful right.

I think this approach of bringing in lower level people, outsourcing the tasks first, leveraging your time until then you can't handle even the bigger picture tasks and then putting somebody really good in that place to manage those. That's really, in my opinion, the most efficient way to scale your business. And this is a question I get asked a lot by potential coaching clients and just newer land investors that I'm in conversations with. Most of them are single operators.

It's just them running their business. They're trying to do everything. Maybe they've sent out a bunch of mail. They've got leads they're trying to negotiate. They want consistent deal flow. They're starting to have to sell deals as well. This is the first kind of big problem that people come into is when they have some deal flow and they have all aspects of their business they're trying to handle, right? At first, it's really just, you need to get lead flow. You need to get negotiations going. You don't need to worry about dispo. You don't need to worry about sales. But eventually you'll get deals in the pipeline where you need to worry about all of that. And that's where people are like, man, I don't have enough time.

to effectively sell these properties, effectively generate leads, effectively negotiate with landowners to keep my pipeline full. something has got to change. And so for people in that position, which may be a lot of our listeners, generally my first advice is you need to focus your time on the highest value revenue driving activities of your business, which at that point in time are going to be negotiating deals and getting good revenue profit potential in your pipeline. And so the first kind of scaling

thing that somebody needs to do in my opinion is lead generation. That's the first thing you need to start generating enough leads to basically fill your time up to where you can't handle the negotiations anymore. And then the next step is either a lead manager to basically qualify and tee up those deals. So instead of having to do all the comping and initial conversations, you're only focused on the closing call, which is at that point the highest value activity. And then eventually you need to get somebody in place to manage those negotiations too. So you can start focusing on growing.

every aspect of the business. Kind of like steps, but it's the same type of approach. Bring somebody in low, at a high value, low cost, global talent to manage processes, repeatable processes, and then bring in people that can actually scale the business afterwards.

Clay Hepler (35:50)
agree with that. one last thing I would leave you with just a helpful heuristic. The way that I think about scaling is bottom is admin, general administrative stuff, pulling lists, handling Facebook messages, managing data. After that's fulfillment, transaction coordination, management of that. After that's marketing, who's pulling, who's looking for your markets, who's scheduling your markets, who's, you know,

Managing your cold collars who's managing your direct mail campaigns after that it's sales Bringing lead managers acquisition managers and then after that's leadership right CEOs the expensive talent directors of dispositions directors of marketing whatever I don't know if anyone at the listing his podcast is at that level. That's like a five million plus dollar your business Maybe three million plus dollar your business

But that's kind of the hiring ladder that I think through.

Justin Piche (36:49)
Yeah. All right. Next question we got is identifying opportunities. What specific criteria to use to identify potential land investment opportunities and how do you differentiate between a good deal and a bad one?

Clay Hepler (37:03)
I think the question of what's the highest and best use of this land is it's a helpful one and also we just do the conventional stuff. Is it buildable? FEMA floodplain slope wetlands.

All that stuff. mean, pretty, pretty straightforward.

Justin Piche (37:19)
Yeah, you know, I think I agree. I'm a proponent of highest and best use. You know, I think when you're presented with an opportunity, a lead opportunity, generally my approach is to find what is the way to make the most money and with return on hassle being minimized, right? You got to kind of find the meeting of those two things, right? If an entitlement deal is the most profitable thing to do with this piece of land, but you have no experience doing that and you have to learn this entire other business to manage it, but you can still make money.

as a flip or as like a rural subdivide or a minor subdivide, I probably wouldn't go the entitlement route. That would probably be where the hassle, the return on hassle kind of crosses over and it becomes more work than it's worth doing. But yeah, that's certainly the way I view or the lens at which I view opportunities through as well. I think, you know, a lot of this comes with experience. Okay, you've bought and sold pieces of land. You've looked at hundreds or thousands upon thousands of pieces of land.

You've sold a lot of land and you know what buyers in your market want. what, one thing maybe as an encouragement for folks who don't have a ton of experience figuring out, this a good or bad property to buy? Cause that's a huge question for new investors, right? You send out your new first mailer, your first set of cool calls and you get a bunch of leads coming in. How do I know if I should buy this or not? I'm not confident in my company yet. I'm not confident in, in the end valuation of this property yet. You don't always have to know. mean, I don't always know.

what the end value of the property is going to be. Despite having years of comping experience and access to tons of data tools that can tell me what has sold in every location around this property for any number of years, I often don't really know. You know, I have a feeling, right? In markets that I'm comfortable working in that I've worked in for years, I feel really good. And in some cases, I don't even look at comps because I've sold property nearby and I feel like, I know what this will sell for.

But other times, especially when I'm going into new markets, which happens as I scale, I need more markets to go into because I'm sending too much marketing for to stay in the same ones. I don't know. So we get to the best answer we can. We negotiate the contract and then we engage local brokers to help us figure it out. You don't have to know everything. You don't have to know everything. You do need to get control of the deal because if you don't get control of it with a contract, then you have nothing. So write a contract where you put a little bit of money in earnest and you get the property under contract.

and then you can dive so much deeper into the property and you don't have to lose money on it, right? There's no shame in admitting you're wrong when you're in your option contract and canceling the contract. I mean, don't go locking up a bunch of deals, you know, that, because you just want to and you're paying way too much money, that's not gonna be a good use of your time either, but certainly you don't have to know everything.

Let's do the next one. I'll jump into this one first. This is a technology and land investing. What role does technology play in your land investing business? Are there specific tools or software that you find indispensable for managing deals, marketing or team collaboration? Man, the tech stack, the software stack that you use in your business, there are infinite combinations of software programs that you can use to manage your business. And I've used a bunch of them, but certainly not even close to all

I will maybe highlight the top ones that I use that I think are critical to my business. For team communication, we use Slack. I think Slack is free. They have a free version that's pretty good. You can do the pro version that gets you access to chat history and a couple of advanced features, which we use because I want to be able to, we have enough people on the team now where we hit that kind of minimum message threshold very quickly. And then we can't even look more than a month or two back. And that's kind of frustrating. So we have the pro version, but Slack integrates really well with

of different software with Google Drive, with Zapier, Zapier, however you say that. And so I really like it. I find Slack is super useful for me. For my kind of contact management CRM and phone system, I am using Follow Up Boss. I think it's one of the best, if not the best tool for automating follow up and keeping track of all of your contacts, managing marketing plans through.

It works for my sales side of my business and my acquisition side of my business. It's my phone tool. It's kind of like everything when it comes to contact, outreach, contact management, data management. And then for me, my most critical tool is Notion. You know, a lot of people start with maybe like Pebble REI, which I think is a great CRM for folks to start with. You've got Pipe Drive that a lot of people like to use. You've got Go High Level. think there's...

a ton of different CRMs Monday, there's a ton of different CRMs that people use. Notion to me is by far the most customizable. And as my business has scaled, I found that I've been able to build whatever it is that I want in it. I can look at all of my acquisition deals, all of my sales, all of my transaction coordination, all of the financials of my projects. I can do project management in this tool, everything, create different dashboards, permissions for my team. And we're just continuing to build that out. have a Notion developer.

basically part-time that work as husband to one of your best employees, right? I mean, and he's great and he's helping to build out even more functionality in our CRM. I just, man, I just can't speak highly enough about Notion. So those are the kind of the CRM and contact management, team collaboration, softwares that we use. And then there's obviously the standard kind of specific, there's data.

you know, software that you that people use that are, you there's a bunch of different ones out there. think land insights is a fantastic one. That's kind of a new newer one. You got land portal. You got data tree. You've got the Appy brothers have a that's the land portal, right? That's the land portal. So you got a bunch of different software like that. I don't think it really matters all that much which which one you use. know, data tree data is generally considered the best land vision data tree.

Clay Hepler (43:04)
Yeah, that's not important.

Justin Piche (43:15)
Data is generally considered kind of the best and most up to date. And a lot of those tools basically use updated API to data tree data. You got priced for analyzing deals. You got land ID for visualizing and mapping things. Those are kind of the generic ones. I don't know if I need to talk in depth. think any Atlanta investor will recognize those tools. What about you, Clay?

Clay Hepler (43:35)
Yeah,

I mean, I would say communication Slack CRM is follow up us and our general project management software for transactions, dispositions, marketing is notion. So we have a very similar tech stack when we have other things, you know, we use paint like wise to pay overseas employees. There's like a lot of other stuff that we,

that we use in our business, as a general role of technology, technology is critical because we are a remote-based company. That's how we communicate with each other. Google Meet is sort of our, how we send messages, emails. That's all of our meetings are on Google Meet. And that's the software that we use in the general core part of our business.

Justin Piche (44:24)
Yeah, I think one other thing maybe on technology to touch on is AI. We've recently started implementing a whole lot more AI into the business. that's pretty like general term. But what I mean is it's making individual pieces of the business more efficient. So we're using AI to enhance our data so that our marketing is more specific to people, especially when we're cold calling. We'll have information like, you know, what's the nearest, I don't know, like attraction to this property. And so a cold calling agent can say,

talk to somebody and be like, you know, I love how your property is only 10 miles away from so-and-so State Park or something like that. Just like little things that let people know, this is more personal than just some generic outreach. We're using AI in our, especially on the dispositions side to generate property listings, to draft email templates. Yeah, I mean, there's just so much and there's so much more opportunity for how to use that in your business and set up automation flows essentially so that

certain tasks kick off, you know, a prompts to be sent to AI that come back into email templates, they get uploaded into follow up boss to action plans that get initiated onto contacts. There's just tons and tons of opportunity to take a lot of the manual tasks that I'm currently paying hourly employees to do and automate them. And I don't see it as need even needing to scale back on the team. I just see it as leveraging better, leveraging the team to do more value, add work and less manual tasks.

Clay Hepler (45:52)
I completely agree. use it to read zoning codes. We use it to send emails. We use it to write listing descriptions. And it's just going to get more and more important to use in your business. It will no longer become AI as an accessory. It will become AI as a necessity. And that's how the land business will continue to develop.

Justin Piche (45:55)
Yep. Yep.

Alright, next question here, mentoring and coaching. How has mentorship or coaching influenced your journey in land investing and what advice would you give to someone seeking a mentor in this field? Clay?

Clay Hepler (46:29)
Yeah, I actually gave this advice to someone I was speaking with earlier today. There are so many charlatans. I'm gonna go really negative right now. I'm gonna go really, really negative. Yeah, it will come back as positive. There are so many charlatans, like actually. Like, over the past two weeks, there's a guy that was just thrown in the jail, a guru that was just thrown in jail.

Justin Piche (46:41)
It'll come back to positive.

Clay Hepler (46:57)
for defrauding multi million millions of dollars a coach for coaching course Real estate guy he invests restaurants out in Utah There's a woman in Texas that was called self-proclaimed like the Morgan's Queen or short sale Queen something like that and that was thrown into federal prison or is being prosecuted by the SEC or something like that for defrauding investor funds and Morgan's fraud I think

One of the two. Don't quote me on this, but this is what I'm seeing. There are so many charlatans there. In addition, what I'm seeing more and more in the land space is that people that can't actually build a business, because if you listen to this podcast, you probably already know this. This business is not easy. Like it's easier than wholesaling, I would say that, but it's still not easy. And so there are so many people that they'll go in, they'll send a couple of pieces of mail, they'll get

They'll make some money and then they'll say my gosh I'm now gonna sell a course because it's easier for me to sell a course than it is for me to actually build a business they're the type of people that Also, we're doing crypto a couple years ago and then before that they were doing something else, right? And so this is how it goes back positive There are people in the space that we all know that are actually legitimate operators There are a couple of them and there are people in the space to teach this

land investing in the like beginning land investing that are actually legitimate. I would say that there are. The most important thing is the person with whom you work, whether it's a mentorship, private one-on-one coaching, actually is doing the business. That is it. And you can ask them, are you doing the business? Prove it to me. Right? Have those conversations.

You're gonna get on these calls with these gurus and it's gonna be high pressure sales. You're gonna get on Facebook ad or whatever and it's gonna be high pressure sale and they're gonna be selling you your course and they're just gonna be upselling you data or whatever the heck they're gonna upsell you. And really the person with whom you should work has that experience. Other than having experience and still being working in the field, you gotta resonate with it, right?

know, for there's a very clear type of person that I work with versus Justin, we're very different people. And our skill sets are different. Justin, I'll speak for him, is more of a team building guy. Right? He's a team building guy, right? He really understands how to bring together culture and team building. This is from my perspective, and run a really squeaky clean organization and bring people in and empower them to be their their highest self.

He is so if you're at that stage in your business, I think Justin's actually a good a good person in that in for that type of person that is looking for private one. go and coach you not that he can't help for anything else. But like that's the type of person he is. You know, for me, I'm a sales and marketing guy, right? If you need to build a sales team, if you need to build a high performance sales team or a marketing team, I'm the guy, right? I know how to do that at a very high level. And I will become an expert in dispositions as well very soon.

So both sides of the funnel will be my expertise, right? Because I like that stuff, I have a bend towards it, and also my disposition, I have a certain type of disposition. So I think that those are the three things. They're still in the business. You're working with them for the right reasons. They have a skill set that actually helps you achieve your business, your end goal, right? And then you like their disposition, you like actually working with them.

Justin Piche (50:38)
So I have personally invested well over $100,000 in both coaching, consulting, kind of business consulting over the course of the last three years. And I am a huge proponent of paying somebody else to skip the long and arduous process of learning what not to do.

There is a ton of value and this is something that it took. It took me personally a while to learn because I am a very kind of I can do this myself type of person. Like I'm a very I will do this like if there's something that needs to be figured out I'm going to be able to figure it out. Right. And maybe it's a bit of a pride issue. Right. Maybe it's a little bit of a self confidence thing but there is huge value in my opinion to short cutting those hard lessons learned and having somebody who is ahead of where you are.

speak into you what you think, their opinion is of what you should do next. That is, there's so, I mean, that's why many people seek out masterminds where people are running much larger businesses than them that have learned the lesson that they are either going to learn through trial and error or going to learn through understanding what has worked for other people, right? And to Clay's point, yeah, there are a lot of folks out there that are

are starting education businesses or have education businesses on the side that are charlatans. There's also a lot of really good ones. And I think it's clear in the space which ones are good and bad. neither of us are going to comment on who's good and who's bad. There's a lot of really, really good people in the space that are teaching this. So I just think you need to make again, I can't. Yeah, I'm going to emphasize it again. They've got to be doing the business, right? There's this business is changing. It's changed so much over, especially over the last three to four years and even from

the really the heyday of the 2017, 18, 19 timeframe that if the person who's giving the course and doing the group coaching and stuff isn't still in a, isn't an operator in the space with a team, managing deals, managing lead flow, managing marketing, managing dispositions, they're going to eventually get out of touch. Maybe when they create their course, it'll be really good. It'll be relevant. Eventually it will not. All right. It just changes too fast. And so that, yeah, that's what I would say as well is just find somebody who is steps ahead of where you are.

that is still doing what you want to do and seek those people out. That's where you're gonna get value.

Clay Hepler (53:05)
And I think too, the last thing is like the, the, if you're thinking about a paid level, like a pay grade, like private coaching is by far the best. It's by far the best cause you can just borrow that person's brain directly, directly. and then the group coaching is kind of the second best. And then third best is like just getting a course, right? She also didn't have to know who you are. Some people just can crush getting a course and they're good and they don't really need the group coaching. Other people really want that one-on-one help. with the, with the group coaching.

So I want to go through the last one here and we can wrap it up today. Given the demands of running a land business, how do you manage both, how do you both manage work-life balance? What practices do you implement to ensure you're not sacrificing personal time for your business growth?

Justin Piche (53:51)
We

laugh, I'm laughing because the episode we just released today, think episode 11, we talk about kind of struggles and one of mine was seriously, is this, I mean, this is a hard balance, okay? Especially for people like myself and Clay who are very motivated and ambitious, right? Got big goals, right? Got big goals. I put a lot of my energy and effort into my team, into my work, into my business. And you know, this is...

Something everybody needs to understand and realize is maybe it takes it takes It might take some sort of huge fallout with a significant other or with friends or with family to actually introspectively look at this, but you only have 100 % of your time like You don't have more than that. All right, you have 24 hours in a day period Okay, and some of that you gotta sleep some of that you need to take care of yourself. You got to eat You're right. You've got to breathe. You've got to work out

I mean, maybe you don't have to, but that's not taking care of yourself. I mean, I'm guilty of going to seasons where I'm not working out like right now, to be honest, you know, I'm going to be, I'm not working out right now. Sad. I need to get back into it, but there are times in your life where you're not able to fill every cup. Okay. But you have to really think what is the most important thing. And to me, the most important thing is my family. And I'm still guilty of prioritizing the business over my family at times. and it's tough and it's really tough.

There's got to be non-negotiables though. I think that's what everybody needs to do is you need to look at your life, your day to day, your business, your family, your health, and you have to figure out what are those non-negotiables that you're not willing to bend on and be disciplined enough to not bend on them.

It's hard to do. I don't think anybody, I mean, there's some people that are so disciplined that they don't struggle with this, but I think the most, most of us do. Most of us struggle with setting those, those non-negotiables and actually, actually treating them as non-negotiables and not stepping over the line in one way or another. So I think, yeah, if any, if, to encourage anybody, if this is a struggle of yours, like it is mine, you've got to sit down you've got to think, what are the things I'm not, I cannot give up on. So for me, I cannot give up dinners with my family.

every night. Obviously, I'm traveling or something like that's not gonna happen. But dinners with my family have to happen every night. So we're gonna end this recording by five p.m. because at five p.m. our family goes on a little walk and at 5 45 to six we sit down for dinner and then we do kids bedtime and like I will not be doing anything between five and like 7 45. Does that is only family time period. No non-negotiable for me and my business. Maybe just one one example.

Clay Hepler (56:32)
But after that...

Justin Piche (56:33)
Well, you know, tonight I have some work I need to do. So after that, I'm to get back on the computer. I'm going to update some investment opportunities for kind of some some stuff that I need for some some partners. And there's a few things I need to do tonight, unfortunately. those hours are protected. Going to log off. I'm not going to check my phone. I'm going to be with my family.

Clay Hepler (56:36)
Hahaha

Yeah,

the bright lines. So here, before I give you this advice, you have to know where you are in your season of your life. If you take advice from someone who is a single person that has no kids, that advice is going to be very different, especially if you have no kids, right? I'm just going to triple click that, right? And so Justin has three kids and I have one kid.

that's going to define how we do this. But here's the thing. I don't think work life balance exists. It just doesn't exist. You can if you're building a business, it is a soul, all consuming thing. It's completely consuming. And if you want to build a really big business, you have to do it. There is no four hour workweek your way to success. Right? There's just it just doesn't exist.

Justin Piche (57:35)
you

Clay Hepler (57:51)
if you have a lot of money, maybe you can hire someone to run this business. But like most people that are listening to here, listening to this podcast, like give up on the notion of work like balance for like five years. Just give it up. Just don't even like, don't even if you want to build a really big business. Don't even consider it now. There are bright lines like and I'm going to I'm going to just contextualize this. There are bright lines that you should have.

I'm sorry, not you should I choose to have with after a certain time at night, like I'm not like I don't work after a period of time. I don't go back to my computer, but I also wake up really early, but I'm like done. It's like six 30 seven o'clock and I'm done. Like I'm done for the night. but I work really, really hard because that's literally what it takes. I don't see any way around it. If anyone knows another way around it, call me up. email me, but

Justin Piche (58:28)
you

Clay Hepler (58:47)
It requires an

inordinate amount of work in order to be successful. The context here is I want to build a really big business. Now if you want to build a smaller business, maybe a 100K a year, 200K a year, you do not have to work this hard. But I want to build a eight figure, multiple eight figure business. And so I work so hard because I want to actually do that. I actually enjoy it. But one last thing, the work like balance notion.

Justin Piche (58:50)
you

you

Clay Hepler (59:15)
when you start to compare yourself, you might question, am I working too hard? You might question that,

right?

Justin Piche (59:20)
you

Clay Hepler (59:22)
If you get into a room with entrepreneurs, you'll understand what that looks like, right? But your context is completely different from a W2 employee. And so

don't beat yourself up if you're working really, really hard and you feel like, my gosh, like, should I be doing this? Should I not be doing this? In reality, this is what it takes.

in order to be successful in this business. And it's kind of harsh, but there is no such thing as work-life balance. And I think a half a decade is like what it takes. don't think it, you gotta be working hard on a single thing for at least half a decade, maybe a decade. So there are some people in social media that say two, two, two D H W two decades of hard work. This is from Tom Bilyeu. He's like, dude, you gotta work out, like work insanely hard for two decades.

I think in order to be very, very successful, you have to do that. Now you can expand like a rubber band, but we say insanely hard, let's actually operationalize, contextualize that. That's like 50 to 70 hours a week, right? It's not 40 hours a week, right? It's like 50 to 70, like somewhere in that range. And if you're on that level, I would consider that to be working hard. in other words, don't manage work-life balance. one other thing, I take vacations.

Justin Piche (1:00:32)
Hahaha

Clay Hepler (1:00:36)
And when I'm on vacation, I do not mess around. I'm fully present. I do not like check my phone on vacations. I'm going to Norway in February for like eight days. I'm completely off. I don't check Slack. I don't check my email. I literally just like put my phone in a, in some place and I can't touch it. When I go on vacations, when I was on my honeymoon, I don't mess it around. So my wife knows, if we're talking about boundaries, my wife knows that when I'm

with her I'm present with her and so there's never any negotiating between us or she feels bad or she feels like I'm not prioritizing her because when I'm there I'm fully present and I bring my full self to that conversation so she's never like Clay you're checking your phone and like kind of half doing stuff I'm very direct with my communication like this is my time that I'm gonna be present with you and on vacations I'm present with you we're going places I'm present with you and so

The work like balance things when it comes to a spouse again, I'm not giving you spousal advice I'm just telling you what I do, but that's how that's how I actually do it

Justin Piche (1:01:41)
You know what I think the challenge with kind of work-life balance and I think maybe the connotations of it are like hey you're you know when you're at work you're at work when you're when you're elsewhere you're elsewhere and I think the way you the way you treat your time being fully present when you're with your wife or with your son like that that is obviously a very important thing I think what

maybe for those of you who aren't entrepreneurs or haven't maybe yet started your business, which probably is a very small to none of our audience. I imagine most audiences, people in kind of engaged in this. And so you'll probably resonate with this. The stress or the thinking about it doesn't actually turn off. So, you know, when you're working at a W2 job that you can kind of unplug from, like you're working for it and then you leave and like work is at work and home is at home. That's a very, very different feeling.

than running a business where you have dozens of people and entire families dependent on your work and your company making money for them to live their lives. There's a different level of stress that comes with that. And so I, you know, I do find it really hard to, don't, I don't know if I've ever like really fully unplugged ever since starting this business. And so that is, that does, that is there, that's hard. That's hard. All right. There's times when I can be plugged in less, but, but that's hard, but that's why you need those lines. There needs to be the lines that you,

you separate, you segment, you compartmentalize your time. Obviously your relationship with your wife or husband or significant other is of vital importance and you need to protect that because you don't want to make, you don't have a hard business and a hard kind of relationship with the most important person in your life.

Clay Hepler (1:03:20)
Yeah, I would. Here's what I would say about the like turning off thing. It's kind of like eating sugar, right? Like when you eat like a amazing piece of cake this holiday or like you're in Thanksgiving, you're like, dude, I want that pumpkin pie, baby. And you eat that pumpkin pie and then you're like, man, that cookie, that cookie looks really, really good.

And then you eat the cookie and like, man, that brownie looks really, really good. It just keeps compounding, keeps going. Right. If you engage with it, it stays there. Right. So if you engage with your work mind, it stays there. It's really hard to shut off. But listen, I'm going to say this. No one's going to believe this shit. When I say it, no one's going to believe this stuff when I say it. But the reality is if you shut off, it actually helps improve your performance.

Justin Piche (1:04:03)
Wait. Wait.

Clay Hepler (1:04:15)
And so you can be the hard charger, 60 hour week guy, 70 hour week gal. But when it comes to actually production, and we're measuring out production as the amount of output that your business can actually make, being able to unplug is a superpower. Because you get all this creative flow, you get all this thought, you have this thinking that kind of bubbles up. You just let your mind roam and think. And so,

That's why I'm, I really am conscious about the, when I take my time off with my wife or vacation or whatever, that I'm so present because I view it as like this performance enhancing thing. think a lot of times with, with entrepreneurs, me included, we think like, okay, I gotta constantly be, I gotta be moving forward. I gotta be working out. I gotta be doing this. I gotta be eating while I gotta be eating healthily. And the context is always if I can,

If I need to tell myself a story in order to unplug in order to be present my wife, I'll tell that story. So I just manufacture a story of, hey, this is really good for me. This is really good. This will improve my ability to function in my business. And also I really enjoy it. But if you're unable to unplug, what I've found to be very helpful is I view it as a sort of performance inducing, enhancing drug, right? It's like, okay, I can take in this

Justin Piche (1:05:21)
Okay.

Clay Hepler (1:05:39)
Time and I can be present and I know it's gonna enable me to be more creative and thoughtful and hopeful and optimistic Because I have that time away So that's just something that's really worked

for me

Justin Piche (1:05:50)
Love that. All right, man. Those are some great questions. These are really good. Let's let's do a quick deal review. I will make it quick because this is kind of a one of our longer podcasts, I think. But I've got this deal. It's actually what I would call, I think, my biggest deal yet. It is with partners. So I'm not the sole like runner of this deal. I have two partners on this deal, but I'm buying a property in Texas in the triangle.

to develop into I think a 24 lot development. Two separate sections. One is going to be smaller residential three acre. We're going to build a road, chip and seal, about 2000 feet of road and then run about a mile of asphalt millings road, which is just a little more durable than like a gravel or caliche road back and do basically an exempt subdivision on some back acreage with a view.

I really love the partners that I'm working with on this deal. And we are in the process of essentially organizing who are the equity partners that are going to be personally guaranteeing the loan to get a bank loan, traditional bank loan on the property right now. I'm pretty, I'm just, really excited about it. This was a pocket listing, a broker pocket listing. One of the partners had essentially a relationship with a broker.

Found some folks in this area looking to sell their land negotiated the contract on one property and then there was a totally another property that was on market that would provide us an entrance off of a County maintained road to this back parcel so we have two separate contracts with two separate sellers and looking to develop it into to one one development and You know first I was pretty skeptical I Put think I put something on Facebook because I was out there with my drone and I kind of filmed kind of what we were doing with it

But as things have developed, we've gotten some maybe more firm quotes from road construction companies. We've talked with the surveyor. We've talked with the county officials. We've got close for our water study and really assess the market. I'm just feeling more and more excited and positive about this deal. So in this particular case, maybe just how I'm funding or how I'm going about this, there's so many different ways you can do this. Right now, I have quite a few bank loans, frankly.

So my, my DSCR for a bank, when they're looking at me and my financial picture may not meet their minimum requirements for giving a two and a two plus or whatever, $1.8, $2 million loan, whatever it's going to be, you know, the, the, the personal guarantee kind of part is there, but what banks really want to see is they want to see income coverage for the debt service. That's, what debt service, what is it? DSCR debt service coverage ratio, I think is what it stands for. And so I'm in a situation where

I either need to privately fund this, which kind of is a hard sell, honestly, without running a syndication or kind of a SVP, a fund to do it. And with those, with either of those structures, the profit to investors has to be substantially higher, right? It's hard to, I mean, this this looks to be 110 to 120 % return on cash deal, $1.5 million raise. So it's going to make a good bit of money. So bringing this in a syndication or a fund,

it's going to be really hard to do that. You're not going to be able to keep as much of your equity or as much as your profit because investors aren't going to accept some really skewed GP to LP profit share like what you would find in institutional investing. Like if you're going to buy an apartment building for five million dollars and you're to do five million in renovation, you're going to turn around and sell it. Investors who invest in those types of syndications, they're used to seeing some sort of six to eight percent preferred return plus a 20 percent kind of IRR on the back end and seeing some sort of

two and 20 coverage for the GP, right? They're gonna get 2 % of assets under management as like a fee, and then they're gonna do 20 % of the carried interest or the upside on the project. But if I do that, I'm giving away so much equity in this deal, which is incredibly profitable, much more profitable on a cash on cash return basis than an apartment syndication. It just wouldn't work great. So the route that I'm going to take is bringing on equity investors that are going to be members of the LLC that is gonna purchase this property.

And then that entity is going to get a bank loan. And so the bank is going to want to see personal financial statements from all of the people that are equity partners on the bank. And they're going to consider all of their financial pictures to underwrite the loan. So me, my two partners, and any of the other equity investors that we bring. Now, me and the equity or the partners are the ones who are managing the deal. We're hiring the contractors. We're lining up the contracts. We're hiring this. You know, we're doing the marketing. We're running the deal. Right. And so

Because of that, we're going to assign more of the profits to us. The equity investors are also going to get a really solid return because they're personally guaranteeing the loan. They're putting their own kind of assets, net worth on the line for the bank. And so because of that, it's not going to be a 20 percent, you know, 25 percent kind of return for them. It's going to be a higher return for them. But that's how running this project. And anyway, really excited about it. But just a quick kind of deal review looks like a really good one.

Clay Hepler (1:11:03)
Love it, dude. Love

it. That sounds like a killer deal. Everyone's going to make a lot of money.

Justin Piche (1:11:08)
Yes, that is the plan. That is the plan. I think one more maybe aside as we end this for people. I think one of the mistakes that I made when I first got into subdividing was having a rosy picture, a rosy estimate for how quickly I'd be able to sell lots into a market. You know, maybe having too much optimism of how quickly lots would sell into a market. When you're doing a small split, you know, introducing two, three, four lots into a market, yeah, you might be able to say,

I'm going to hold these for six months, seven months, eight months, something like that. When you're introducing 24, 25, 26 lots into a market, it doesn't really matter where it is. Generally, you're going to have longer hold times because you need to sell that inventory.

Clay Hepler (1:12:32)
Yes sir, I agree with that. So guys, if you got benefit from this podcast, you know what the gentleman's agreement is. Please rate, review, and subscribe. Again, we see about 10 % of our listeners actually end up rating, reviewing, subscribing, and that just makes me so sad.

That means that Justin and I are doing something wrong. We're not adding enough value. We're not telling enough jokes. Which I certainly don't have a, I have quite a few of those.

Okay, yeah, we're both dads, so we can do the dad joke vibe. No, but guys, seriously, if you got benefit from this, please rate, review and subscribe this. would mean the world to us and really help us get the ground game out there with no ads on our podcasts to date. Thank you so much, Justin. Do you have anything before we send off here?

Beautiful. Thanks as always guys and we will see you next week.