Episode 22: Cold Plunges, Hot Land Deals & Prioritization

Justin Piche (00:00)
Welcome to the Ground Gave podcast. This is Justin Pichet.

Clayton Hepler (00:05)
And this is Clay Hepler and we are here to teach you how to win the ground game.

Justin Piche (00:25)
Clay, you just got back from a crazy vacation. How was it?

Clayton Hepler (00:31)
Well dude, I went to see the Northern Lights and I didn't see the Northern Lights. Like... Okay, so we went to Tromso, which is 69 degrees north, which is in the Arctic Circle. Okay? And...

It's pretty much the best place in the world to see the Northern Lights, which is why we chose it. And so we get there and it's snowing and it's cloudy and like, you know, it throws like three hours of sunlight. And so, you know, this great trip that I've been waiting to give to my mother, you know, 70th birthday, like don't see the Northern Lights, crazy. But I did do some really cool stuff, did dog sledding, right?

So that's like really cool. When there's a indigenous people in the Arctic Circle in this part of the world in Scandinavia, Northern Russia, it's called the Sami, which they are basically reindeer herders, it's pretty cool. So went and did some like experience with Sami and reindeer, which is pretty cool. Learned a lot about that. And did this awesome for the tech bros in

you know, high performance bros in the audience. Sauna slash cold plunge, but not in our cold plunge, cold plunging in Arctic waters, like literally Arctic waters in February, which is, you know, the average temperature in this in this area is like 40 degrees, 39 degrees, which for those that don't know, that's a little colder than your ice bath. And so basically, we we did this sauna.

cold plunging thing that you're on a boat in Tromsø's harbor, okay? And it's like in the main harbor. And it's like a normal size, pretty big size boat, about two stories up. And there's like Turkish bath and Finnish sauna and hot tub and all this stuff on this boat. It's very cool. And so what I did is like the standard like, you know,

Justin Piche (02:37)
you

Clayton Hepler (02:49)
Kuberman protocol the sauna to the cold plunge so I did the sauna then went up on the deck and it's not like a normal cold plunge like you have to leap off the side of this boat into Arctic water so when you hit those waters man dude and you know so I'm leaping off and I'm like I'm gonna be in here for three minutes like I'm doing it and so

Justin Piche (03:04)
Ha!

Clayton Hepler (03:17)
I did it. I got in there for like two and a half, three minutes. It was crazy. And at one point I was like pretty sure that if I was in there longer, like I was gonna, like I started to get lightheaded and I'm like, you shouldn't get lightheaded in water. And so you have to climb out, Justin, of the water with this like, you know, contractor steel ladder, you know, like roofer ladder. And it's like attached with, you know, like,

Justin Piche (03:35)
you

.

Clayton Hepler (03:46)
I don't know, carbon fiber, not carbon fiber, the kind of carbon fiber rope to the side of this boat. And the boat is in arctic water and it's steel. so I'm walking up and I'm like, dude, this is nuts. it obviously feels really great afterwards. that was one of the highlights of the trip.

Justin Piche (04:03)
you

That sounds really intense.

Clayton Hepler (04:12)
It was super intense, but it was really, really fun. So all in all, great. I tried whale, like eight whale, which is like pretty interesting. Wasn't good. really, it was like salty, like salty. Like it tastes kind of like a, like a more meaty sardine and you know, cause like whales are mammals, right? And so they're not like fish.

Justin Piche (04:19)
Interesting.

Don't recommend it.

Clayton Hepler (04:42)
And so they have that sort of, you know, mammal like, I hate to be crude, but like fleshy kind of feel. And so it was interesting. Tried whale. What else? Went to Oslo. Oslo was pretty cool. Went to a great like house club, techno house club there one of the nights. So all in all, pretty, pretty great trip.

Justin Piche (05:06)
That's nuts. That's exciting, man. Glad you got to get out, experience some fun times with your mom, jump into the Arctic Ocean. I guess you'll just have to make another trip for the Northern Lights another day.

Clayton Hepler (05:18)
Yeah, that's right. And you were on a cruise.

Justin Piche (05:22)
I did. We had a Disney cruise with the kids, which was really fun. I out of Galveston. I was like a week and a half ago, but it was, it was really good. It was just with five of their families from my church. so between all of us, had, we had 17 kids aged seven. The oldest had just turned seven and the youngest was, you know, like I knew like a couple months old. So it was pretty nuts. It was nuts, but the kids loved it. My kids had just had a really good time. Wasn't very relaxing, but

Clayton Hepler (05:38)
my gosh.

Justin Piche (05:50)
a really enjoyable, memorable experience. My daughter did, she's five and a half. She did this bibbidi-bobbidi-botique thing where they do like a princess makeover and she was just all about it. Just loved it. Meeting the princesses, meeting the characters. I think the best part about Disney Cruises is the show, like the shows that they put on. I mean, it's so high quality and really funny kind of interesting fact.

Clayton Hepler (06:16)
Mm-hmm.

Justin Piche (06:19)
The boat that we went on, it's called the Disney Magic. kind of the, it's like, think it's the oldest boat that Disney has. And my cousin who she's 42 right now, but my cousin was one of the original performers or the original kind of Cinderella in their, in their twice charmed or whatever, whatever it's called. They're like their first day opening show. She was like the original performer. So she worked on that boat for a few years. It's kind of cool to see.

Like the boat that she worked on and the musical that she was the first kind of Cinderella in. It was really cool.

Clayton Hepler (06:57)
Super cool, Super cool. So today, we're gonna do a little bit about challenges, what's currently going on in the business. Just kind of riffing, right? To talk, you and me, in a very public way about what's going on in our businesses. I would say maybe even get dip into some philosophy or anything that's currently top of mind. I would say it's...

particularly timely for me because I just left for eight days. It was longer than eight days, but like eight business days, seven business days. And for a lot of people, that's like suicide or the business stops running. And it was a very healthy exposure to where are the holes in the business.

And also that time away is, I believe, a good respite from your day to day and allows you to see your business and really what you want out of your business more clearly. So I just want to start with that, but I want to kick it over to you to start off like what's going on with you, man? Like what's the, how's business?

Justin Piche (08:19)
Yeah, I mean, things are things are good. We're, know, usually because it's a very real estate, especially as a cyclical type of business throughout the year. Usually January is outrageously slow. And then like things start to pick up end of February through March, April, May, and then slow down again in the summer and then pick up in the fall and then slow down again in the winter. It's kind of like this these cycles. At least that's what I've experienced the last several years of doing this. This year was a little different. You know, January

we had a pretty good, like a really good month, both on the acquisitions and the sales side. And February has been a very slow transaction volume month on both sides. And we came into the year with a ton of inventory. think we got 70 plus lots right now in inventory that we own. yeah, just like haven't gotten a purchase agreement on the sales side for almost two weeks now. So you start to see like the money coming in piece of things, like where is it?

especially when you have high OPEX, right? When you're running a large team, you got high OPEX. So, I mean, I feel good, but I also, I always look a quarter ahead and when I don't see any ends coming for a period of time, like, okay, well, where are those gonna come from? Because they have to come from sales. So we've got to make some moves on the sales side and the Dispo side. So that's kind of the biggest unknown frustration right now, I guess, in my businesses. Things are not moving quite as well as I want them to.

Clayton Hepler (09:43)
Mm-hmm.

Justin Piche (09:49)
probably a timing thing. So a lot of work on my sales team right now to figure that out. You know, we have we have got seven negotiations on the sales side working. I think we're expecting one offer at least any second. And I was like a 90 percent chance we think we're to get this offer on a track of a subdivide. But it's but it's yeah, it's like getting those people over the edge, getting them to sign the contract has been has been a challenge. And then one of the other things we're doing right now

which we've been working on for a while is a complete CRM, like rebuilt for our Notion CRM. And it's going well. We're making moves. We've got the sales and dispositions kind of main database and dashboards worked out. We've got a transaction coordination tied to the new database for the sales side. The acquisitions database is being built out and that dashboard will go live here in the next like week or two.

But there's a lot of transitions, I think, for the way we work in our CRM that are happening alongside kind of a slowdown. And so there's a lot of things we could be doing to speed up sales, but people only have so many hours in a day. So Brian, my Dispo manager, is pulled in a bunch of different directions. So obviously, the number one priority, I think, clearly is bringing revenue in. That never stops being the number one priority. But there's also other competitive priorities.

Clayton Hepler (11:02)
Mm-hmm.

Justin Piche (11:15)
Getting the CRM fully built out is gonna save hours of work a week and allow us to be more efficient, get properties to market quicker, and just be better on the sales and dispose side. But it takes a lot of work to get it there. And so like that, it's the same kind of concept when you're hiring somebody new. When you hire somebody new and you, they're performing at the level you need them to perform at, everything, it's much better. Your time is more efficient, you have somebody else working on and moving things forward that where you're not.

having to do all the work yourself, somebody else is moving those things forward. And that's like the place you want to be. But getting from where you don't have anybody onboarded until you have this fully trained, like fully functioning, Kylie contributing member of your team, that part when you're doing both main, most of the work and training somebody else to do it is really challenging. It never, there's no easy way around it. And this is like a kind of question or think topic we talk about with coaching students and with.

other investors as they're looking to scale their teams, it's really hard to do that. That transition is always really hard. And it's the same way when you're building a new piece of software or a new CRM is the work to get it going and replace what you're currently using with the new system is immense because you kind of got to work them both in parallel. And so you worked out the kinks in the new one and then you go all in the new one. And then there's invariably going to be issues that need to be worked out and changes that need to be made. And eventually it's going to be great because you're going to save a lot of time.

but that interim is tough. So that's kind of where we're at right now with just like a tough interim period, I think.

Clayton Hepler (12:49)
Yeah, so for me if we're talking about challenges, know right before we locked, you know, I left one for vacation. I locked it probably, you know.

400, 500K of profit in a week. And these are longer term deals, but a good rezone, like true entitlement track, which super excited about that one. And a subdivide in a great county, although I might just wholesale it to be fair. And another subdivide, solid, solid deal. Couple of things top of mind for me in challenges is I brought my operations person on.

And as we are peeling back the onions of the business, pain is coming up. Now pain is in two places, right? There is pain of the existing processes, right? They're not efficient, they're not optimized to the extent that there should be, but also pain in the changing of how they should be. Some of our team members are experiencing intrusiveness.

from our operations person. And the intrusiveness is just this person trying to understand the processes. And when you have change like this, when someone's really trying to get in and understand, there seems to be a resistance, almost an anxiety that this person is coming in to try to change things. And sometimes people don't like change. And my team members are very high performing, but that's something that's really interesting that I've observed.

Another thing is the pain of where we currently are. When you expose something, have you ever been a little kid? So I grew up on a farm and grew up going down to this little stream that we had on our farm. And one of the things that I loved to do was go close to the stream bed when you were a little kid and open...

there were these big rocks, like grab a big rock and open, like, you know, move it over. You had ants under the rock, you had caterpillars under the rock, you had all these things, you're like, I'm just looking for X, right? I'm just looking for ants. I just wanna try to find this little cool ant colony. But you got caterpillars, earwigs, ants, you might have a snake, you might have so many things that when you uncover that rock, other things invariably happen.

and variably come up. And so the difference of success when you're doing that is a skill set. And the skill set is prioritization. And that is a really difficult challenge that I'm facing right now. What is the highest priority? So now that we're coming in and we're opening up all these processes, because we're saying, we need to change some of the things that we're doing, right? We need to be more efficient, right?

Justin Piche (15:42)
Okay.

Clayton Hepler (16:01)
And so we're opening up, removing all these rocks and things are coming up, man, that you're like, oh, is this a fire?

How do I know that this is something I need to focus on and prioritize? And so what the conversation is with the operations person on a daily basis is like, hey, is this like a house burning fire? Is this like a little bush fire? Is this a little fireplace fire? And how to prioritize that, that is the mark of a

great CEO. Now, for listeners, the difference between Justin's business and my business and your business is just what we focus on. That's it. There's literally, I mean, of course there's a time component to it, but the profitability of your business is directly proportionate to what you focus on. And so it's really caused me to, as we're ripping apart these processes,

Justin Piche (16:33)
Okay.

Clayton Hepler (17:01)
and I'm looking ahead and saying, hey, this is where we want

to go. This is the vision for the business. On a daily basis, it's like this whiplash of where do I want to go? What type of business do I want to actually build? And what it's really causing me to say is like, simplify, simplify, simplify, bigger quality opportunities. At every turn, every time I go in and every time that I look at these new processes and say, there's such a massive cost of change.

Justin Piche (17:03)
you

Clayton Hepler (17:28)
We're going over a new KPI project to get better KPIs. And we're like, should we implement this in a notion or should we just do this in Google Sheets? Well, the V1 is like, let's just do this in Google Sheets. Let's keep it really simple. And then from there, we can iterate, we can improve. But there's such a massive cost of changing processes. And so I think a lot of times, when I was earlier in my business career,

Justin Piche (17:29)
Okay.

Okay.

Clayton Hepler (17:56)
And even I'm saying this as I remind myself this, right? So I'm not impervious to doing this. And I'm definitely a fallible human being, in many ways. So I don't have this correct listener. This is

just personal experience. The reality is, the reminder is, focus on the real important priority things. And that's what I'm trying to do. So the challenge currently is,

Justin Piche (18:13)
you

Clayton Hepler (18:25)
the daily focus on what business do I really want to build and having clarity on that. And when you're trying to build something, you're getting pulled in different directions. Should I add this revenue channel? Should I focus on this area? Should I do this new marketing thing? And the ability to prioritize is a high skill set. And so this brings me to the next point.

Justin Piche (18:30)
Thank

Clayton Hepler (18:49)
I get a lot of joy out of the people that are crushing it. Man, I know you've been doing this longer than I have. It's such a great feeling to get that text. Dude, I got this deal locked up and it's like, I might quit my job. One of my students said,

two weeks ago, like I'm gonna quit my job. like, maybe don't do that yet.

But that's a big thing. So that comes down to priority too, right? That comes to what, do you take on more people or do you take on, do you raise prices? Like how do you, versus your main business? And so that's kind of like challenges. mean dude, I wanna hear like.

I'd love to hear your thoughts on that or any feedback you have for me and like.

Justin Piche (19:33)
Yeah, no I have some have some

I definitely have some thoughts I I like you I

really enjoy coaching. Like I love meeting with people and like dissecting their business and just sharing experience and ways that I think about it. But that being said, also, I'm that's why I've been sending, you know, folks to you as well as just I've I've maxed out. And now I think I'm just going to cut it back even further. So I have one awesome coaching student that like for me, the best thing is like when when somebody is done, they're like, hey, man, I don't think I need you anymore. That is like the ultimate win.

that's like, yes, you've got it. You've gotten what you needed from me and now you have room to grow on your own and we can maybe work together in the future on a deal or something like that. That's the best. so I just had one student, we had our last session today and he's been just killing it. And I'm not taking on somebody else. For now, I'm gonna kind of reduce the load of students because too many things are happening in my own business.

And I could just like, yeah, obviously we have to make the cost of coaching kind of worth our time, but it will never be worth as much as the leverage we have in our own businesses. There's just no way. I mean, it would be just an exorbitant price to pay. And I would never ask somebody to pay that honestly, because I don't think they get enough value out of it for themselves. At least that's the way I think of it. Maybe that's a limiting belief, but yeah.

I think the big thing is where is your time best spent? It's clear to me that my best time is spent on the business, but I still want to help and want to coach. And I think there's value in the relationships that get formed. And so I'm still working on finding that balance. guess all that to say, I don't have it figured out perfectly of how much time I need to be spending with other people versus solely focused on my team and my business. But of late, as we've been scaling and as we're doing quite a few larger deals,

I am feeling much more like I need to spend a little bit more time in the business or on the business and on these larger deals.

Clayton Hepler (21:41)
So how do you think about prioritization in your business and in general? you have a systematic way of going about the prioritization? Is it a gut feeling?

Justin Piche (21:56)
Yeah, I don't think I have like a systematized way per se. I think the highest priority items to me are the large revenue generating activities. Whatever those things are that need to happen to make that stuff work, that's always kind of my highest priority. So an example of that might be raising money for large developments.

and building investor relationships because without the money, the deals can't get done. Doesn't matter how much work we put into them, how well they look on paper without investors and bank financing and all that. It's just not going to happen. So I put a lot of emphasis on that. I put a lot of emphasis on like the training and upscaling of the team for better acquisitions because obviously the top end of the funnel.

and like getting as many of the leads from the top end of the funnel into like the under contract bucket. That's super important to keep the business moving forward. And so spending money and time on training the team and reviewing calls and things like that, that's super, super important. Breaking down barriers so the team can work more efficiently. I'm at a point now where I don't really want to scale the team anymore. I mean, my overhead's pretty high. I've got a big team. We just need to continue to get.

more efficient on how much we're able to do with this team. And that's a big reason for why my number one rock this whole quarter is the CRM redesign and rebuild, because it's going to free up a lot of time spent just kind of in the details of deals. Just like, here's a perfect example. Right now in our CRM, once a property becomes a, once a property, so this is way I kind of break it down. Your data or like I call my data contacts.

Those are contacts and they, that's who we're marketing to. Once a contact becomes a lead and enters my kind of lead management, deal management CRM, that's when it gets worked. And so it stays as a lead until it gets under contract. And then once it gets under contract, it becomes a deal. And the way our CRM used to be set up is that each deal is a, that's a, a, in a database, a property, we call it our master property information card.

but each deal kind of has all of the acquisitions and all of the sales and all of the transactions data. So there's like a hundred fields or more on this, on each property. And that card carries through all the way through like the transactions process and then the sales process until we've got the lot sold. So when the sales team looks at that card on their dashboard, they're having to like sort and filter through a bunch of different fields, most of which are not relevant to them. And when they want to find information,

It just takes, maybe it takes 10 seconds extra per deal per day. And you're looking at 20 deals a day or 50 deals a day, know, extrapolate that over the course of a year. And then every single person is having to add that extra time looking at these cards inefficiently because there's way more information than they need. Like that's a, it doesn't sound like much, but over time it is, it's a lot. And it's those little incremental pieces of optimization of wasted time across the whole team, across the whole organization, across a long period of time.

that we're working to fix. And so one of the things we're doing is separate databases for acquisitions and sales. Once it becomes a sales card, the only information that's relevant to the sales team is gonna be displayed there. So they're not wasting that time kind of sorting through and finding information. It's all there. Another kind of process that seems insignificant, but once you get to like a large scale and a large team, it becomes significant is just document retention and storage, right?

creating new Google folder, Google Drive folders and making sure the contracts are there and the due diligence reports are there and all the photos are organized correctly and the marketing copy and like everything is there. Having to do that and then link it back to our Notion database, each one of those takes time every single day, every time we do it. And so now we're building in automation so that we no longer have to do any of that. Everything is gonna be handled in Notion. It's gonna be stored externally in Google Drive, but the Notion automation will create the folders, will create

to put the files in the right folder for retention, but we don't have to do all those extra little manual tasks over and over and over again every single day. Another thing is for me is the financial aspect, like tracking the actual financials on every single deal. From the moment we get a deal under contract, there's a number of ways that we can incur costs. Initially, it's the due diligence money or the earnest money that gets deposited. It's the due diligence report. It's the soil test we get. It's the survey we get.

We buy the property, so there's those costs. Do have a bank loan? Do we have an investor? Like there's all these different places where money is coming from and it's going to the deal. And then once we have it purchased, there's clearing work, there's driveway work, there's additional survey, there's marketing costs. There's all these individual costs that are attributed to each property. And it's really hard to track all that. And so a huge change we're putting in is every single sales card will have a ledger attached to it.

So all of the costs and monies in and monies out will all be tracked on a deal by deal basis in the card itself with receipts attached so that when I go, when I want to pull a financial report on a specific property or I need to pay an investor out or something like that, everything is there. I don't have to go into a bunch of spreadsheets and like go look back at my bank statements or go ask somebody on my team, hey, how much did this cost? How much did that cost? Hey, can you upload this invoice? It'll all already be there.

Obviously that'll save me some time. But just like little things like that, you know, really help improve the process.

Hey, guys, this is Justin Pache interrupting your podcast again to say thank you like I normally do because Clay and I really appreciate you guys listening and getting feedback on the topics that we're discussing. If you have any feedback you'd like to give us, please leave a comment. Be sure to give us a five star review and say Justin is the best. You can also say Clay is the best to my feelings won't be hurt. But thank you. And back to your regularly scheduled programming.

Clayton Hepler (28:09)
Mm-hmm. Mm-hmm. Yeah, as I continue to grow, what I realize is...

Oftentimes we don't need a new process. We need to do the process that we're currently doing better. And when I say oftentimes, I mean like 99 % of the time, we want to add a new process. We want to change our sales script. We want to do whatever. And it's just more about simplifying and optimizing versus adding. Right. And I think one of the things that kept me where I was for so long was always trying to add, always trying to add

And that becomes really tiresome. You really get to a point that you're on this treadmill of deals, of opportunities, of adding new things, and you never feel like you get traction. And so what happens is, when you go to try to do what we're talking about here in your business, which is look at every process, say, is this the most efficient way instead of adding new processes, right?

making everything a lot more simple and straightforward, it hurts. And a lot of times you incur a cost of a reduction of productivity. At least in my experience, that's been the case. I don't know if Justin, if you've experienced that, but.

Justin Piche (29:37)
Yeah, no, I agree. Anytime you change

a process, even while you're optimizing it, there's absolutely a loss of productivity for a period of time.

Clayton Hepler (29:44)
for a period of time that,

and so this goes back to the prioritization thing that I was talking about, which is if you're trying to change every process at once, what happens is you don't really change any processes. You do everything like halfway. You build a bridge and it's half built and ends up collapsing shortly after you finish it because it's not properly fortified. You don't have all the right things in the processes together.

And so building the business in the way that you want to build it, this is the one thing that you told me, dude, years ago, it's like when you were originally working with your private clients, what business do want to build? What do you actually want to build? Not the business that people tell you, the gurus tell you to build, right? The business that you actually want to build. You don't need to have 20 people like we do, right? You might want to have five and just do a couple of deals and you make 200 grand, 300 grand a year and you're happy.

with that, like that's okay. Or you wanna say, dude, I wanna scale up and I wanna only do these types of deals. Like a guy submitted a deal to me the other week, really interesting guy, and he was looking for funding on this deal, it's about a three million dollar deal, and he's a one man shop, he has engineering experience, like seemingly super talented guy, needs funding for this larger development deal, right? And he doesn't have any people, he works in a specific area.

and he might make two million bucks from this deal, right? And no overhead, two million bucks, does his own thing, hand writes letters, and that's the business that he wants to build, because he knows the areas he can drive to the properties, like that's okay. And so getting clear on that, which informs the prioritization, the challenges that we all face. If you don't have clarity of where you want to go, your vision of what you want to do, the business that you want to build,

Justin Piche (31:40)
you

Clayton Hepler (31:41)
then you cannot

properly make decisions about what to focus on.

Justin Piche (31:46)
Any good deals you got going on right now that are exciting that have you fired up? Because that's I mean, for me, that's the thing that gets me the most fired up is like a really good looking deal.

Clayton Hepler (31:56)
Yeah, we got a couple of interesting deals going on right now. Like I told you, this entitlement deal is really, really interesting. You know, I think, I'm gonna go back to what I was saying. Like, the thing that's firing me up right now is like,

There's this painful, very painful internal process that we're going through right now to improve our outbound, improve our data management and data control, which is making it even better than it currently is, which is really exciting. And I know that that's going to yield like very, very good results, but it's like a hard workout or when you tackle a new book, a really hard book to read.

Maybe you're learning physics or mathematics or something like that and you're kind of going through this book or a really hard fiction book and you're kind of working out, it's like a workout for your brain. This is how I feel like, but I'm like, I know that this hurts, but I know that afterwards it's gonna feel really good. So I'm really excited about that. As it relates to deals, we got this subdivide we closed in a couple weeks ago, it's just flying off the shelf, just flying off the shelf.

Justin Piche (32:48)
So

Clayton Hepler (33:13)
really good, really good deal.

So we got a bunch, we already had an offer on, you know, three days on the market on one of the one of the eight tracks that we're selling out. We have a really low basis, so it's going to be a good deal. And yeah, man, I mean, other than that, I just really I'll tell you, I this really interesting deal that we bought, and we bought it for like,

80 and we thought we were going to sell it for like 160. And I guess I'll say this is exciting because there's there's a pond on our parcel. It's like a residential parcel. It's like not six acres in a residential neighborhood. And we had to keep dropping the price. We just keep dropping the price because no one was really liking it for some reason. And there's a pond in the back of our parcel. There's a septic issue. And the neighbor called the agent.

And he's like, hey, I want to buy, they have a pond on their parcel and we have a pond on our parcel, so it's kind of like two ponds, but we share part of this pond. They're like, I want to buy like 0.4 acres of your parcel for like 25 grand. And I was like, that's great. I thought I was going to take a loss on this and this guy ends up like paying for the survey.

Justin Piche (34:18)
Okay.

Clayton Hepler (34:42)
and we're closing on this parcel, I just signed the closing documents for like 25 grand and so

we kept dropping the price for the main parcel, but this guy came in, bought this other sliver for 25 grand and so our basis, we might end up selling the whole parcel for 160, even though we're reducing the purchase price, we are gaining that amount back with this little sliver in the back and so it's like,

Justin Piche (35:10)
Yeah.

Clayton Hepler (35:10)
That rarely happens, but that's like a really good deal. So we'll make like, you know, 60 grand on that one. 65, which is a solid deal.

Justin Piche (35:20)
Yeah, that's awesome. That's awesome. Yeah, man. Let's see. What do I got? I have like a lot of larger kind of deals in the works right now, which is really fun and exciting. But they are a lot more complicated when you start bringing on significant outside investors and doing funds or, you know, SEC regulated funds, the deal complexity and you're using a lot of leverage. The deal complexity gets quite a bit larger.

And so that's taking a lot of my kind of energy and time. I'm really pumped and excited about it. The first, the first kind of big fund deal, me and two partners are buying for 2.6 million. We've got our LPs all lined up, all the funds kind of verbally committed. We're, we've set up the entities. Now we're working on the entity docs. The bank is working on the lending package for it. We just got our water tests done. We had to, it's a well area, so we had to do four.

wells. Each one was about 500 feet deep and do a water test on them. So I these are like expensive things. like it's that's where I these bigger deals. We have to do major subdivisions, get more complex is when you when you have to come out of pocket. We're probably out of pocket one hundred and fifty thousand dollars before even buying the lot, before getting any leverage, before bringing any partners or money partners in. It gets a little like, you know, know, pucker factor there like, man, if this water test doesn't come good, like

We're going to be how good a bit of money, but thank the Lord. it didn't, everything came back fantastic. So we're just waiting on the results of the study, but that deal is closing in about a month. And so I'm to work on getting all the investor funds into a bank account for the purchasing entity here in the next two weeks. And then we'll be ready to close by the end of the month. Last kind of piece is just that water study that comes after the well test. So the well tests were completed, lots of water. They still have to model the aquifer kind of draw down from the wells.

to determine exactly how many wells we can have, but initial indications are that we're gonna be golden for our, we're doing 34 lots, so golden for the 34 lots. But it's not a sure thing yet, so I'm not gonna count my chickens before they hatch type of thing, but I'm optimistic on that deal. And then another crazy deal with the same partners who are amazing, that I've probably talked to you about, about buying this property in,

Stephenville, Texas, 4.8 million. So we sold a house on 11 acres or selling on this end of this week, early next week for 1.25, another 93 acres for 2.25 and then another 110 acres for 2.2. So buying for 4.8, selling all that for 5.7, all, yes.

Clayton Hepler (38:12)
So you're have no money in the deal.

Justin Piche (38:15)
We're doing so we're kind of doing a double close. Not exactly because one of the buyers is not willing to sign an indemnification for on the title company to let their funds be used for the initial purchase. So we went back to the owners and negotiated a fee for them, essentially owner financing the deal to us for one like a day, basically. So we're to pay them a twenty five thousand dollar fee to essentially fund the transaction and basically give us the land with no money.

transfer title to us with no money, but owner financing. So a deed of trust will be originated, title will be transferred, everything. Then we'll close all the sales transactions and all of those proceeds will be applied to the original seller plus a $25,000 fee. And at the end of that first sale of all of this, me and the partners will net somewhere around 550K. And then we still will own

Clayton Hepler (38:50)
Dude.

Justin Piche (39:12)
another 65 acres, totally free and clear. That's worth 1.5 to 1.8 million dollars that we need to sell. This is a nuts deal and shout out to my partner Ben who basically like found the deal and kind of put it all together. It's really, honestly, it's incredible. I feel really blessed just to be partners on market. But I think he found out about it through a friend, like a really good friend of his who's

Clayton Hepler (39:22)
Let's go, dude.

On market deal,

Justin Piche (39:41)
whose father-in-law is the seller. So it's kind of a relationship about finding out about it, but it just happened to be listed on the market. But it's nuts. It's a crazy, crazy deal. And I'm really, really excited about that one. And then we get to some other ones in the works. I've got a couple in that some folks reached out, or someone reached out to me just to see if I wanted to partner on a deal in Spokane, Washington that looks really good that we're moving forward to. So I've got...

earnest money down paid for a surveyor, but it's 150 ish acres. It looks like we can split it into 15 lots with an exemption. And it probably is going to take about two years to sell out of, it looks like it looks to be 120 % return on investing cash. Maybe like a, deal has like a 65 to 70 % IRR on it. So we use, if we use investors, it'll be about 600 K raise total for the project. And then

everybody, you know, they'll they'll probably make, you know, 50%, 60 % returns in two years on their money. And the GP GP entity, you know, will make, I don't know, like 700 K, 700 K on the deal, something like that. It's just like lots of lots of opportunities out there, but lots of kind of things moving, I get really pumped up about the big deals. But then I always come back to reality with the rest of the business. And I look at slow sometimes slow sales, and I'm like, what could we be doing to like sell these sell these flips more?

Clayton Hepler (40:45)
Not a bad, not a bad gig.

Justin Piche (41:08)
One interesting thing that's worth talking about, I think, because I think this could be beneficial to anybody, especially folks that originate mortgages and have no portfolios. So there's a bank in Texas that I work with and was talking to the banker today, and they're willing to lend on mortgages up to 80 % of the principal value and they'll match the terms of the mortgage. So

If you, I, let's, cause we, have a subdivide in Waco, Texas with these same partners of those other Texas deals. And we've sold the first, the first lot we've, we've sold owner financing, $20,000 down $200,000 sale price. So $180,000 mortgage. Now we could sell that note, but it's, kind of a low down payment, you know, 10%, not, a huge down payment. And we probably, and it's a 15 year note. It's a longer term note. And so in order to sell that note at a good yield for the borrower,

Clayton Hepler (42:03)
Okay.

Justin Piche (42:06)
we're going to take a pretty steep discount on the principal value and probably sell it somewhere in like the 70 % or whatever of the remaining principal value of the note or maybe even less depending on who the buyer is. But if we can use this bank to leverage against it, they'll match the terms of the note. So they'll do a 15 year amortized like mortgage on the mortgage at a lower interest rate. So we can immediately pull out 80 % of the principal value.

that we wouldn't and we have a loan on this. So we got to pay the bank, the bank down to the lender as private lender down on this. So we can transfer this loan over, get a loan against it from the lender, pull that cash out, pay down the lender we have on the whole property so they can fully release that portion of the property. And then instead of just selling it and being done with it, we're gonna, we'll be able to make for the duration of the loan, the arbitrage.

Clayton Hepler (42:40)
Okay.

Justin Piche (42:59)
of our additional interest because we're charging more interest than what the bank's going to charge us and the additional principal, the extra 20 % of principal. So we're essentially getting the same money money out as we would with a note sale, but we're going to make margin for the duration of the loan on that, which is super exciting. It's hard to find banks that are willing to do this. I've tried a couple of times and haven't had a ton of success. This is the first bank that's willing to offer those types of terms. Most lenders won't really underwrite mortgages for much more than 50%.

of the mortgage value. then, and they, and okay, almost all cases, I mean, there's, there's expense to it, right? We're to have to do a title search. They're going to have to trans you know, we're going to have to sign the title. Uh, and then, so there's legal fees and then we have to do an appraisal on the property. That's the last piece. So obviously if the appraisal comes back lower, then they'll lend some amount of what the property appraises for on the mortgage and not that full 80%. But, um, pretty exciting to even just like look down that room.

Clayton Hepler (43:53)
It's so basically they're

doing a wrap of your mortgage. They're wrapping your mortgage. Yeah.

Justin Piche (44:00)
Basically.

It's kind of like more like it's not necessarily like a rap in the sense, traditional sense. It's more of like a hypothecation of. I don't know, maybe I'm just not thinking about these terms right. But yeah, I mean, it's not like a line of credit where you're I guess it's not not a hypothecation where you're getting kind of like a line of credit against an asset. It's more yeah, a mortgage of a mortgage. Maybe that is a rap. Excuse me, listeners, for my lack of knowledge in the specific terms that we're doing.

Clayton Hepler (44:30)
think that's a wrap.

Justin Piche (44:33)
I've always thought

of wraps like, like, like you buy a property owner financing and then you lend to somebody on the land contract.

Clayton Hepler (44:41)
Yes. Yeah, and I could totally be wrong too. I could totally be wrong. Just, yeah, right, right, right, right, right. Yeah. Yeah. So, I mean, you know, that's super interesting. I guess, you know, I would say for wrapping up for me, dude, for kind of top of mind things, like what's going on for me is like,

Justin Piche (44:42)
But I maybe, yeah, I'm sure.

Listeners, listeners, don't hold us accountable to these financial terms. We're just land investors. We don't know.

Clayton Hepler (45:09)
fewer higher quality opportunities. So, what we're doing currently is, I will say it's quote unquote dream 100, which is this concept created by the late Chet Holmes who created this book called The Ultimate Sales Machine. Great book in which he talks about essentially targeting whales, big whales, big opportunities. And whales could be, by the way,

I wrote this post on Twitter a while ago. I know a guy who just focuses on car washes, development parcels and self storage development parcels. Like that's literally all he does. And he sends out X amount of mail per month. And that's how he runs his business. Very few big opportunities. And he entitles these tracks and makes an absolute insane of like probably $14 million this year he's going to make or 15 with very low up.

But he has a lot of experience doing this. He's done it for a couple decades. But the Dream 100 concept is essentially you send, you find these select group of clients, potential clients, and you market to them in a way that is personalized, that is repeatable, and it's catered to this specific person.

Right, so I would market to Justin Piche different than I would market to, you know, someone in California, right? I would know Justin is 35 years old. I would know that he has children. I would know that, you know, he is religious, he's Christian. I would know all these specific things that are a part of his identity. I know he's a land investor, he's an entrepreneur.

And so I send him marketing specifically catered to who he is, right? Not some other person. I'm not sending him, you know, you know, infomercial in direct mail for Pella Windows when he's doing his house. He's renovating his house. He doesn't need windows. He's already got all of his windows ordered, right? But I send him something.

very catered to who he is, right? And that's what we are doing in our business. We're still doing the volume stuff, but we are also taking this approach, Stream 100, and adopting it to a series of opportunities that we're really excited about. And so that's something, a new thing that, as you can hear, I'm continuously moving closer towards quality, quality, quality.

And this is a business decision. It's not a right or wrong thing. And the biggest shops in the world are, a lot of times there are those volume shops, there's big volume shops, but this is the type of business that I really want to build. And so we're moving towards those and some finding things that are confirming what I want to do and I'm following those things and applying those to my business. So that's an interesting concept that we are focusing on.

Justin Piche (48:29)
That's awesome. That's really interesting.

it going so far?

Clayton Hepler (48:34)
Dude, we just started it, so it's very much we're doing this and we're starting to send out marketing and I won't know for three months. So in three months, for those loyal listeners, you'll hear me talk about this. I'm sure I'll deep dive in this concept, but this is something that we're really focusing on.

Justin Piche (48:57)
Here's something interesting. So it's very little to do with the land business, but as a land investor, makes me think because I obviously buy a lot of land. The lot next to my house where I'm building my new house is available or will be very soon. We used to have this incredible neighbor. God rest her soul, Patsy.

who live there for the whole time we live there. And when we were neighbors with her, she passed away this last year. And when we were neighbors with her, you know, she was so sweet. We'd always talk to her and she'd give the kids little gifts for Christmas. And, you know, she's like the grandma on the street type of thing. And one time a couple of years ago, I was talking to her. was like, hey, Patsy, if you ever are selling your home for any reason, I would love to be considered in buying it. Like I would love to like have an opportunity.

And, know, she was like, you'll never leave this place. You know, know, kind of funny conversation. but obviously in the last couple of, in the last years, like kind of she, her health was going and, she has no kids, but she has nieces and nephews and they were, you know, helping her move her stuff out. And she ended up moving to assisted living. And we had lots of conversations with them. We actually tried to see if we could rent her home while we were renovating our house so we could be right next door. but it wasn't, it just wasn't in good enough shape to, to make it work. And it just was, it would have been too much for them to handle.

But Patsy had told her nieces and nephews that to give us a shot. so that shot is just come. You know, there's a lot of moving pieces and it's expensive. It's like 600 plus thousand dollars to buy a little five thousand square foot lot right next to our primary house. Because it's just a really expensive part of Houston. So I'm in the midst of trying to figure out how to afford that with everything else that I have going on. Because obviously, like, I don't want to take cash out of

business because most of it is working. Right. And if I take cash working out, then obviously that's a ton of lost opportunity. And so I'm just thinking through how to get that done. Right. have that big deal in e-rath. If that closes on a reasonable timeline, there's enough cash or profit in that deal for me to buy it. But that's totally uncertain. Like, when is that going to close? Who knows? Like, I can't rely on that.

Who knows if we'll get what we expect to get out of it. There's so many unknowns, I can't rely on that. I don't know, there's a lot of like, what ifs kind of running through my head right now. of course, my first play was to talk to them about owner financing. But they're not interested in doing that.

Clayton Hepler (51:34)
So is this a house? So you're gonna buy the house? What would you do with it?

Justin Piche (51:36)
So currently,

so I would yeah, so my so here's kind of my neighborhood. I live in the Houston Heights. So if you please no stalkers, you know, if you talk to me, I would tell you that anyway. And in the neighborhood, it's a mix. It's a really like nice little area. It's a mix of old bungalows that were built in like the 19 early 1900s that are, you know, single story, 1000 to 1500 square foot, two to three bedroom craftsman style bungalows. And and then there's some like

transitional type houses where people have done some additions and then there's a lot of like big new builds. And currently what happens is when I have, when there's a derelict house, like her house is termite written and like it, like it's a demo, it's a complete tear down. There's no, no saving the structure. Uh, what typically happens is a builder comes in and they offer a cash price for the lot and they typically offer five 50, 600, six 20, six 50, somewhere in that range for the lot. They include, they demo it. They build one of their kind of like high end spec houses on it.

And then they sell that house for $1.7, $1.8 million, like on repeat. So their cost based on the land is about 600 call it on average. It probably costs them 600 K and like true costs to build the home they're in for 1.1 and they make about a half million dollars in profit when they build a brand new house and they just burn through these, through these neighborhoods. So if I don't buy the house, then there's just going to be a really nice big house next to me, which is totally fine. It's kind of like always been the expectation, but if I do buy it,

Then I have double the yard. So 5,000 square feet to 10,000, which is obviously a whole lot more, even though it's still small, it's still a small piece of property. It's a whole lot more. And I have lots of options. Once I have title to it, I could split it in half and take 2,500 square foot on my lot. So I kind of have a one and a half size lot and sell the other 15 or 2,500 square foot to the neighbor. Then whoever's the, there's a new build on the other side of the house that's going up right now. And so, you know, they may be interested in buying half the lot and expanding their lot size.

So that's one option. People in my neighborhood do this. Some people do this thing called a pool club where they form a company, an LLC that people buy into that company purchases the lot, builds a pool on it. And the families all have ownership over this entity that owns this pool. And so they can all, have some agreement of how they utilize the pool to get basically like a private kind of pool. So that's one option, but obviously that comes with its own kind of challenges of like sharing a space with other people and other families.

Clayton Hepler (53:55)
my gosh, my gosh.

Justin Piche (54:05)
My ideal case is that I build like a little casita type thing on the front of it, maybe like a gym, like one bedroom, one bath, kitchenette type thing, and then put a pool in the back and just have like a pool and a yard and like everything we could ever dream of in this, if we're gonna live in the city. But it takes a lot of money to do that. know, I see every expense as like lost opportunity now. I used to not see things that way.

Clayton Hepler (54:23)
Dude, that sounds expensive to me.

Justin Piche (54:32)
But when you run a business and your money could be working for you in specific ways, when we spend money on things, I think about it as a lost opportunity of what could I have earned with this money, which isn't always the healthiest. Like sometimes you just gotta enjoy, you know, what, you know, the gifts you've been given through your labor. But other times it could be a problem. The deferred gratification can also kind of get you to, if you defer it forever and then you never enjoy anything.

Clayton Hepler (54:59)
That's right.

Justin Piche (55:01)
So it's interesting. But now I'm trying to figure out how can I 1031 something into it potentially? You know, like the Stephenville deal or the Erath County deal. a 30 % partner in it. How would I? I don't think you can 1031 a partial interest. And so could I sell the portion of my property in my partnership to me personally and then sell that portion of the property and then 1031?

that portion of the property that I owned 100 % fee simple into this lot. Like with that time, I'm just like, my mind is just going crazy thinking about the options.

Clayton Hepler (55:38)
I love that dude, so creative,

so creative. And that's the fun part about doing deals. Dude, I think it's time to call it quits. We're at the end of our time here. As always, listeners, please give us rating, review, feedback on if you like this style. Please reach out to us on social media. We're trying new styles and the way that we get that is feedback, direct feedback.

Do you like this more conversational? Do you want us to go back to more topic-based? Do you want us to do deep dives like we've done in the past? What is what you want to hear so that we can tailor podcasts more towards that? Please rate, review, subscribe, share with friends, and as always, show notes are below. Links are below to Justin or myself. But as you heard in this podcast, we have pretty limited spots on our calendar.

Good deal. Alright, Justin, anything else before we hop? That's right, that's right, that's right, that's right.

Justin Piche (56:38)
That doesn't mean it'll always be that way. That doesn't mean it'll always be that way. But

maybe just for this season. But I think one thing just to mention is we always like looking at deals. So I will always look at a deal. You can ask anybody who's ever sent me a deal. I give feedback on it.

Clayton Hepler (56:48)
For sure.

That's right. Yeah, that's exactly right. Yeah, we're always, we're always open for opportunities. And dude, anything else before we hop off?

Justin Piche (57:04)
I think that's it. I think that's it. As always, a pleasure and we'll talk next week.

Clayton Hepler (57:10)
Talk next week.