Episode 74: The Future of the Land Business (Honest Conversation)

clay hepler (00:12)
Hello and welcome to a long overdue episode of the Ground Game Podcast. This is your co host Clay Hepler.

Justin Piche (00:21)
This is your other co-host, Justin Piche and we're here to show you how to win the ground game. It is long overdue. I mean, summer is a tough time. Like, let's be real. And we're s we're some busy guys. We have tried to get this in, but we are here. We're bringing you another podcast episode, maybe a few weeks later than we would have liked, but we're here.

clay hepler (00:38)
We are here, man, and we got a lot to talk about because I think that the malaise of there there there's there seems to be a feeling of a cloud that's blanketing the land in investing industry right now.

And you know, I I just got back from a mastermind in Oceanside, California. And it was it's called collective genius. So basically there are different levels of collective genius. One of the levels is I'm not in the top level. There's CEO, which is fifteen million plus net worth and over ten million dollars a year, and then there's premiere, which is two to two to ten.

million dollars a year and then there's elevate, I think, and select or whatever. So I was in Premier, in Oceanside, and you know, all these guys, there's guys doing thirty, forty, fifty million dollars a year. And, you know, I I just think in general, real estate has been hard over the past two years. It's just been hard in two, three years. you know, and I think that you and I have always been very positive about how things have going because we're positive people.

And we just orient around like let's let's figure out a solution here versus let's look at all the problems. I think that's a really healthy way to operate in life. But I also think like everyone's feeling a little bit like button-down hatches, right? Because of variety of different things. And today the point of this podcast is to not just go back and forth in a dialogue, which we will, but to really

unpack what's going on in Justin's life and then we c we'll do the vice versa, you know, what's going on in your business, like what's what's happening today. and and for those that are not really familiar with who you are, Justin, could you give us the elevator pitch of who you are, evolution of your land business, maybe qu quantity of people, just like one to two minutes just to f for maybe someone's listening in. Cause we are one of the biggest land podcasts

Justin Piche (02:29)
Yeah.

Yeah, I mean I guess

clay hepler (02:33)
You know, you know.

Justin Piche (02:33)
if you yeah, if you if you don't know who I am, I started investing in land in twenty twenty one.

kinda operations, sending mail like everybody else, had some successful mailers, got some good deals, scaled the team pretty quickly over the next couple of years, added in subdivides, and really just scaled and grew the business twenty in twenty two, twenty three, twenty four, twenty-five was by far our best year. and we kinda entered the year

Making a decision on if we were going to continue with the, you know, mass outbound marketing, large team, a lot of deal flow, or shrink the team and do kind of the sniper type approach. And we decided to try it out for another six months in the mass kind of marketing. But the market has been a little, yeah, it's been, it's been tough this year for sure. It's been tough this year. But most of the things I'm working on are large scale developments. I still have a large flipping.

kind of business, large lead gen business right now. And it's causing a lot of headache, you know. The the place where I enjoy my time is in the larger developments, putting together funds, putting together debt and equity and running these three year, you know, thirty, forty, seventy lot developments.

clay hepler (03:42)
Cool. All right. That's really that's really helpful. So you mentioned there's so many different directions we can go with this, but you mentioned the mass outbound. you know what what what is mass look like? Could you just give us a glan like a glance of what that looks like?

Justin Piche (03:58)
Yeah, hundreds of

thousands of outreach per of cold outreach per month. Right. You're targeting anything and everything. when you do volume at that scale, and this is the thing that I think has taken me some time to realize, and main mainly through trial and error. When you're small and you have a limited marketing budget, I mean we all have limited budget. I mean, there's no unlimited budget, but when you have like a smaller marketing budget, you need every dollar to go further. Right. And so you

clay hepler (04:04)
Per month.

Justin Piche (04:26)
Pull specific lists, you get really picky on what criteria you're filtering on when you pull those lists and you target, you know, those lists and you field those inquiries and those properties, and you put a lot of effort and energy into vetting those deals and and and doing them. but when you scale up, you kind of run out of quality properties to go after. There is a point at which, you know, you're doing a couple hundred thousand records a month, like.

You have to target the entire country and it's not good to do business everywhere. There just aren't the markets aren't good everywhere. And so I think that's kind of the biggest lesson or realization I've come to over the last year and a half to two years is that there is a limit to the scale of your flipping business in terms of number of deals, number of target records you target. And when you go big, it is really hard to maintain.

The quality of outreach on each lead. When you're focused on fielding so many leads per day, so many contracts per week, per month, so many deals per year, the the numbers metrics, it's easy to say, okay, well, we just need to do deals to keep alive. And so you start to your your quality criteria goes down. You start to accept deals that you might not otherwise have accepted if you didn't have such a high burn rate. And then

Those lower quality deals are invariably the ones with the most headache and the most problems, which further bog your kind of team down. So that's kind of like the negative side of of like operating at a large scale is that there's a lot more problems that you didn't have to deal with when you were more selective on your your the properties you were targeting.

clay hepler (05:58)
Mm-hmm. Yeah. and you know, the the the goal is like, how do I do more? Right. How do I create more revenue opportunities? And what actually ends up happening is you create more headache. And there is a law of diminishing return, right, at that level. That's what you're that's basically what you're saying.

Justin Piche (06:11)
Yeah.

Yeah, exactly. And and like there's a benefit to doing like the larger, broader marketing is that you have more opportunities to find those diamonds in the rough, but you also have less time to find and spend on those diamonds in the rough.

clay hepler (06:28)
Yeah.

Justin Piche (06:29)
Does that make sense? Like if you're

send out, if you're if you're reaching, if you're reaching 100,000 people a month and you know that boils down to call it 10 10 leads a day. I don't know. Maybe you're getting 200 like quality touches, quality leads per day, or per month, something like that. You know, that's you have a higher chance of finding good deals in that than you do if you're only doing three leads per day and having you know 60 quality touches per month. But it also

You know, you also feel this pressure to do more deals because you're spending a lot more money to get those touches. I mean, like, let's be real. The the difference between kind of a sniper small data, small targeted list approach and a mass outreach approach is $30,000, $40,000 a month of additional marketing. And if you don't hit, like if you're not hitting on those over you know for a period of months, then what ends up happening is you just you start to lose money. Right. And one of the big things about this business is

What you do today, the deals you're getting today, that's what's gonna pay you in six months to twelve months to eighteen months. And so for us it's been really good because we scaled through this period of time where we were getting really high quality deals in like late 24, early 25, and we have a lot of inventory and like some of those paid out into twenty five, which which made, you know, twenty twenty-five a just a great, great year for us. But if you're not continuing to get those quality deals, then

What happens is your inventory and the future profit, pipeline profit, if you will, that that pays out eventually that you planned on starts getting eaten up by your operating costs. What and you're not if you're not finding deals, you know, today, then you're essentially just like paying for today's operations with past performance and not generating higher performance today. And so what's gonna happen in six months, 12 months if if you know, if you aren't able to get those those quality deals?

That's kind of the the challenge we're running into in the business right now is we've got some some aging inventory, but some good deals in the pipeline. but we're just not finding quite as many solid deals that we actually want that I'm excited about, you know. We'll find we find these small flips, you know, buy for forty, sell for sixty or eighty or something like that. And those are great. But you need a lot of those if you have a really high marketing budget, really high OpEx spend.

clay hepler (08:40)
Yeah, it's interesting. I I I wanna I I wanted to run something by you because I had this I I have a couple of thoughts for you, but one of them was you're mentioning broad stroke marketing, interruption marketing. And it's interesting that the evolution of marketing, let's say over the half the last half decade or the last decade was

Let's say interruption based marketing, right? Facebook ads were really popular. Google ads was were very popular. you know, texting was incredibly effective five years ago. but there's a huge, huge I I'm seeing it change in social media, especially, which I believe social media at this point is sort of like what newspapers were in

in the past or or TV, they sort of dictate like what what does a culture actually value? And because obviously there's there's a lot more there, but it's interest based media. Like people can go viral and when it's a very specific this is who I am and this is what I look for. and so I was having a conversation with a trainer

the other day and he was talking about with cold call leads in general, the mutual company that that you and I are, you know, that I introduced you to, whatever, that he doesn't even like, and I'm saying this as a guy, if you've listened to Grogate in the past, you know kind of this is not what I think, but he doesn't even like lead managers to intake sales conversations. Because he believes that the alpha in twenty twenty six, which is this is very interesting.

is quality conversations. And y when you are having quality conversations with sellers, and you have quality tracking and quality focus, you convert a higher qual percentage. I can just say internally, we had our best month in the history of our company for acquisitions this past month, by a long shot.

And that's because we took this at heart. We took the quality conversations at heart. and my acquisition manager's absolute stud. but but that's because he's very good at those those those conversations. and I think that's the future because I think people are gonna crave connection 2027, 28, 29. You're not AI, like AI doesn't really create that connection in conversations. They're gonna crave walking out to the parcel, building the relationships, and this is gonna become more and more.

This is a podcast about you, but I figured I would I I'd love to hear your thoughts about that.

Justin Piche (11:21)
No, I I I

agree. No, I agree I agree with that. You know, I agree with that. I think

The hard part for like a CEO owner who's running, you know, a a large business is is you have to have good good people that are having those quality conversations. There's no doubt, you know, a a really good salesperson can run a solid seven figure to business today creating those quality conversations. And I do think kind of the mass outbound kind of low value touches does hurt, you know, businesses today because people aren't people there's too many people doing it, right? There's too many options for people.

a random text or a random call from kind of a low level person to just generate some interest isn't gonna do it for but a really quality call from somebody who's really interested in the property and and you know, understands w how to get to the bottom of what those people need. That's that's definitely alpha today. I agree.

clay hepler (12:11)
So you know, I think that these mass marketing, we've been talking about it for a while, is is changing. Is this changing your org design?

Justin Piche (12:21)
Yeah, I mean, I think it's gonna have to, right? I mean, how do you keep yeah, I mean, everybody needs to have a job, right? And and I I think the preferred way now we talked about this last year, right? We talked about what would it what you were thinking about doing with your org. I've talked to a few other guys who have done this. I was just having a conversation with Josiah Ronco about about how he redesigned his business at the end of last year. It's kind of the same direction, which is higher value.

conversations. It's all based around higher value conversations. Right? Sniping deals, figuring out your exact buy box, having a short list of target properties that you actually want to buy, and doing a whole lot of work to connect with those people rather than getting a ton of lists, you know, ton of properties that you might want to buy and not doing a lot of like upfront data research to figure out if they're all good or some of them are bad or whatever. And then just mass outbound and just find you know picking it's it's like

Low-hanging fruit versus a lot of effort more effort on the front end to find good deals. And I think the higher effort on the front end to find good deals and then investing in those quality conversations and nurturing those leads is is the way to go. I mean, one of things that we've seen this year for sure is that our good deals that we've gotten, which have we've had quite a few, you know, good deals, a lot of them aren't going to pay out for for some period of time. They're older leads. They're leads that we've been working on and nurturing, they're conversations we had.

in twenty twenty five, you know, and had multiple times in twenty twenty-five and kept reaching out and and trying to find the right time. And people that you just mass outreach to and you'd have one kind of touch and they say, yeah, I'm interested. And you you get in your CRM and then you kind of maybe send a text or email or, you know, call every so often. If you haven't had that initial good interaction, that initial rapport building, they're gonna be a lot harder to convert in the future. And I think that that that's why like what you were talking about earlier with

quality conversations up front, those are the things that are gonna stick in people's mind. Not everybody's ready to sell. We know that, right? A lot of the good deals come from that relationship that gets nurtured over a year or two years. And then you get that deal and it's fantastic.

clay hepler (14:26)
So yeah, and and this really hit home for me. I'm sorry, this is your podcast. I got a thought, I got a thought. So so so I was I'm looking for a bookkeeper and an accountant. And I went and interviewed five

Justin Piche (14:33)
No, dude, this is our podcast. I wanna hear.

Did you find them? I have a referral.

clay hepler (14:45)
Do have I do have I did I did find one, but I would always love the checkout or referral. Well, they're on like a trial basis, whatever. So it was super interesting. I interviewed all these people, and the ones that I ended up going with, there's a couple of reasons why. Capability, the what they presented to me was actually above and beyond what everyone else did.

And secondly, they figured out what my pain points were.

And the concept around the VA trying to figure this out is like they just sit there with the script and they follow the script and there's no diverge divergence from the script and you don't ever get to

Something deeper. And the something deeper creates the connection that lasts the next twelve to twenty four months. And this is why you see guys and gals in businesses, relational based businesses, real estate brokerage, investment, insurance that over time have this network.

of people that keep going back to them, referring people to them, because they create that connection, the meaningful moment. and that's what the business needs, I believe. and and so that is why we are again, we're like going down to fewer than 10 people in the org. because we're going after these larger deals and, you know, higher quality deals and also less headache.

Justin Piche (16:12)
Yeah, no, I I agree. I agree. I think that's a great direction to go in today's market.

clay hepler (16:16)
Do you have plans

on what your org you want your org to look like?

Justin Piche (16:20)
They're not fleshed out. I'm working on them right now. I gotta set up a meeting next week with kind of my leadership team to discuss what does it look like. What is the end? I think the big thing is like it's easy to just make a decision. it's not easy, but it's easier to just kind of make a decision and go with it. It's much harder to know what your workflows are are going to be. And that's kind of what I'm working on right now, is like

If I redesign the org and I have X number of people, what are they all going to do all day long to provide the maximum value to the company? If we're going to shift very drastically from a mass outreach model to a sniper approach, thousand, you know, several thousand records a month instead of four hundred thousand or three hundred thousand or however many records, how do we make sure we're actually getting a return on that time and investment? I mean, there's the obvious initial benefit of just a great OpEx cut.

makes the existing inventory that we have stacked up stretch so much further. You know, instead of spending a hundred something thousand dollars a month on OpEx and watching my, you know, profit pipeline dwindle as we're not very successful in getting these these new deals, right? You drop, you cut that in half or or whatever more by by by slashing kind of outbound marketing and restructuring the team, you've got a whole lot more runway. I mean, that's like the initial benefit. It's just the existing profit we have in the pipeline

That the in inventory, not in the pipeline, just in inventory and properties we own that we are ready to sell, that lasts so much longer when you've cut your op ex substantially. So there's that kind of like lower stress if you do this cut. But the the the other important thing is how do you make sure you're still maintaining a good deal flow? What does a good deal flow look like? It's obviously different, right? If you have half the number of people and you're targeting big deals, you don't need 10 deals a month. You know, two or three is is a good number of deals a month, if as long as there's enough zeros on the back end of those.

clay hepler (18:13)
Yeah, I was talking to a guy fortunate I was fortunate that he owns the number one house slipping company in Chicago. I think they did thirty-three million dollars last year with fifty percent net margins. Pretty decent business. Yeah, insane. And I was telling him about my business and this was right before the cut, we'll call it. and I was telling him how many people I had and how many money I made last year.

Justin Piche (18:26)
That's really good. Yeah.

clay hepler (18:38)
He's like, dude, you gotta be doing five hundred to six hundred thousand dollars per employee.

Justin Piche (18:43)
Yeah.

clay hepler (18:45)
And I and I was shocked by that. I was shocked. He's like, When we know in our organization, right, based on our return on ad spend, based on our channels, that we we on average get somewhere in that nate range 500 to 600,000. And so if you're saying, hey, how do I know what success looks like, right? That's what that's what you can one of the things you can measure by revenue per employee. Now there are other people that say online,

you know, you can use global talent VAs to scale this business and you should do 250 to 300 with VAs. And I've always really struggled with that. Like cause you know, 250 because VAs are way s cheaper. I I would say I'm not gonna plant my flag in the ground with this, but I feel quite strongly about the fact that because real estate is such a relational based business, that most positions in real estate.

in a r in a successful real estate investment company should be US based. Now that's very different from what I feel felt even a couple of months ago. But I believe that the new real estate business, the new land business can be a two to three million dollar or more business with four to five people layered on with AI for in supportive roles and supportive functions and maybe a couple of people of global tech.

maybe a couple of global talent, but not many. that's the business that I'm reorging and building and the one that I really think w will survive because with an OpEx budget like that, you're maybe at f you you might be at f yeah, you might be at forty K a month, maybe fifty, if you're counting debt service, maybe more, d just depending, you know, if you use investors, whatever. but

Justin Piche (20:21)
Yeah, what are you spending a month? Forty K?

Yeah.

clay hepler (20:34)
You know, you're at 40k a month and your average profit per deal might be 50. So you do two deals a month, and you know, you're netting consistently 50k a month net. and then you, you know, and no one gets rich in this business off the flips. I've never like it's always been for me a big a big deal that.

pushes me over the edge and then I have all these deals that like fumble to the finish ground. Like, I did nineteen

Justin Piche (21:02)
I know, right? That's exactly how

dude, that's exactly how the business goes. Right. It's all those like fumbling, like smaller deals that like pay the bills and maybe you lose a little, maybe you make a little. It's like the few you could you could pick out probably I could probably pick out four or five deals last year. That was my whole net. You know? It's like, so how do we just target those? I mean, do I need how many people do you need to just get those four or five?

clay hepler (21:26)
Yeah, I think it's three to five people.

you know, and and you know, if you have that level, then your dispo department looks different. Your pr a project man who does project management will depending on how you layer on AI, like we have some I have some thoughts about that, which we can get into later. But you know, you have one or two really good AMs. You might not even have a lead manager, you have a good data person and that's the entire bus that's the entire team.

Justin Piche (21:51)
Yeah. One of the things that came out recently, I Land Portals done this for a little bit, API, LAN Insights now has a trial on their API. and so I've been playing around with it and it's fantastic. It really is. I mean getting getting AI agents in plugged in to the API, being able to like laser focus filter properties a whole lot better and and more accurately and faster than you can do it on your own.

I think that's a huge unlock, right? K sorting through properties and finding good markets and you know, picking the exact properties with the exact characteristics you want in a county has just gotten so much better with with the with AI and A and API built into the data platform. So I'm pretty excited about that. Something cool.

clay hepler (22:36)
⁓

yeah, it's I I think that there you again that that that then sh like again, three to five people. You don't need you you don't need more than six.

Justin Piche (22:44)
Yeah, I don't think I I'm not definitely not gonna go down

to that immediately. Three to five, that's a pretty hu that's a drastic cut, you know, but

clay hepler (22:51)
Well that you

know, that's assuming that you outsource a lot of your marketing. You know, like like let's say you outsource to a cold calling company, your marketing, which is what we do. you know, so you

Justin Piche (23:00)
Yeah, then mar

then marketing cold calling becomes a budget line item and not a headcount item.

clay hepler (23:06)
Which to me was a big realization that I've recently made. Again, it's like it's so much effort to even bookkeeping. I I outsourced bookkeeping recently. Like I said.

Justin Piche (23:17)
Yeah, I mean I've

al I've always done that, but it is still just such a hard thing when you run a complex business. I was building a this is just like a total aside on bookkeeping. It's such a pain that you know what. I w I so I I mean I have a ton of entities, right? And and for J V partnerships where I spin up a J V partnership with a pr somebody who brings me a deal or something like that, those are their own entities.

I've got the investment firm and those companies. I've random, you know, deals that I'm doing with other people and they have LLCs and different entities are involved. And it gets, it's just like a mess. It just can get such a mess. Bookkeeping is one of those things that I wish I had nailed a bookkeeper right from the beginning, like someone good that could have like that had high capacity and could have scaled with the businesses so they would understand everything. But it feels like every year I'm having to find somebody new, you know, and get them on and just getting somebody onboarded is is ug.

It's painful. It is so painful. I'm on my I I'm on my third or fourth fourth accountant in in as many years. It's just it's tough. It is so hard. That's one of those things I hate about business. Taxes and bookkeeping and accounting.

clay hepler (24:08)
Ha.

Yep. Gotta do it.

Justin Piche (24:25)
Golly.

If you if you're listening to this real quick and you don't have like a bookkeeper that is keeping track of things on a month to month basis, stop what you're doing. Go find somebody immediately. It is such a pain in the butt. It's not so big of a deal when you're not making a lot of money, but you make one and a half, two million net in a year and you got to pay taxes on that and you got to figure it all out across like 10 businesses, and it is just chaos. Crazy. You don't know how much money you owe. It it's yeah, it's a lot.

clay hepler (24:26)
Yeah.

Immediately.

Justin Piche (24:53)
For those of you who are more organized than I am when it comes to like transactions and you keep your entities super segmented and like good on you, you probably got a whole lot easier time than I do. But I've just got too much intermingling of things that it makes it really challenging.

clay hepler (25:07)
So my we we've been talking about skinning down a team, we've been talking about quality talent. What do you think in our business is a non-negotiable, you gotta pay up for quality? What are the top things that you see that you would say we ha you gotta pay up? No matter what, name the price, you gotta pay up.

Justin Piche (25:30)
I mean, I think AM, right? The person who's the highest value touches on on closing deals. You know, you gotta pay up. You gotta get somebody good. for my business specifically, project management, like you gotta pay up. If you're gonna handle mo if you're gonna handle five, ten subdivides at a time and you want the ability to underwrite not just project management, but underwriting. You want the ability to underwrite deals as they come through and get go no go on on deals pretty quick with with relatively high accuracy.

You gotta pay out for somebody whose quality. You can't just kind of wing that. I think those are two of the most important things. When it comes to like doing some of the bigger deals, and I mean you gotta pay for attorneys. Like you can't just I wish I wish you could just like AI all your agreements and you know, you can to some extent, right? And I I do that all the time, but I'm always having attorneys check things. Like here's a d a good example is we

Development I'm working on with Ben right now and Ari actually in Bastrop. We ha we were negotiating with a water company, water utility company to provide water. And they gave us this huge contract and then they wanted us to pay them like 350 grand or something up front to do some connections and all like it was just too too much money for what we underwrote. It kind of broke our underwriter because we had budgeted like 200 grand. So it was 150 grand over

And I wanted to understand all the language and you know, AI can only do so much. So I hired like a specific attorney in Austin whose job or whose like specialty is like utility contracts and whatnot to get his read, which gave me the ammunition to go back to the water company and negotiate on term both terms of the contract, which they weren't as flexible as I would have liked on, but mainly like the terms of w how much money we have to pay them and why we shouldn't have to pay them that.

And that was, you know, like three grand, four grand well spent on the deal. Things like that. You gotta get quality attorneys when they're when they need to be involved. Those are the things that are popping into my head. What about you? What do you think?

clay hepler (27:18)
Right.

I would say I interesting about project manager 'cause your project manager's global talent, correct?

Justin Piche (27:31)
Yeah, she's a civil engineer in Columbia.

clay hepler (27:35)
Okay. Next level.

Justin Piche (27:37)
She's great. Yeah. She's fantastic. High capacity, high energy, relentless. Those are like the those are good, you know. You want a bulldog. For a project manager, you want a bulldog. You want people that are gonna like aren't afraid to be annoying, right? When you're dealing with a bunch of projects like we are, you have to push people and push things to happen. And when you're dealing with government and contractors and everybody's waiting on somebody else, you need somebody to be

The quarterback that's pushing everybody to deadlines and making sure nothing's missed. And it's just it can't be like it's not like a relaxed job. You know, there's some jobs where that can be a little bit more relaxed, but when you're pushing projects on a timeline, it's not as relaxed. I mean, we're paying interest on like if we don't get these things approved, like if we miss something, like let's say we miss like a county submission deadline, we have to wait another month for the next meeting.

I've I've already bought the deal. Like that that's another could be another ten, twenty grand of interest before I can start selling these properties. Like that that's huge. That and those add up. You multiply that by five, ten developments, you know, one month delay across them all, there's a hundred grand gone in interest to the bank type of thing.

clay hepler (28:47)
Okay. I have a separate question, but we'll get to that in a second. I think it's really important for our listeners given what we've already discussed. But I would agree with AM. I mean, that's the single most important position that you have in your organization. Transaction coordinator as well. Super important to have a proactive transaction coordinator. ⁓ like having a good one is critical.

Justin Piche (29:08)
yeah.

clay hepler (29:13)
Critical. And and then finances. Most people don't know how to r read a balance sheet. They don't have a they don't have someone that can help them with a cash flow forecast. They don't have a good bookkeeper or a good accountant.

I just can't tell you how important that is. Finan getting your financial house house in order for most investors, it could be $1,500 a month, guys. $2,000 a month. It is so worth it. but most people fly by the seat of their pants. And finances are so important. You get bankable, you can get better banking terms if you ever want to do subdivides.

Like there's so many things that a good bookkeeper, fractional CFO, accountant. Now, most of our audience is someone who's doing, you know, over half a million bucks a year, million bucks a year, whatever. So it's a very different audience, right? I would I would just preface that you gotta be doing you gotta be making money for this to be worth it. But as soon as you start to make real money, seven figures, you have to have a world class bookkeeper and a world class accountant. And honestly, you should probably have a fractional CFO.

because at least I know from from my perspective, like I could use a lot of help in that realm, and I think a lot of people can too. projecting out, helping build relationship with even lines of credit, getting business lines of credit in your business so that you could bridge cash flow gaps when if you're doing a big development deal. There's a lot of stuff that you can do if you get bankable. and if you buy real estate with also flipping and you decrease your your total taxable income.

significantly, which a really good accountant can do, especially if you're cost segregating assets.

You might not look as approachable to a to a a commercial bank. They might be like, you don't have make that much income. But if you have the right bookkeeper and accountant and fractional CFO, they can argue on your behalf to make you get a better loan. They can show in terms of cash flow forecasts and the right bookkeeping that you actually made the money that you said you do you did. and

you can get a loan, maybe you wouldn't have normally been able to get. and if you have a good fractional CFO, they can actually prepare that for a bank. So I would say that those positions, specifically finance, is huge. anything to add there or I I have a follow up question for you. Yeah. So the transactions versus project management. I think this is really hard as you start to scale out of just being a flipper and you go into being a developer.

Justin Piche (31:31)
Yeah, what's your follow up?

clay hepler (31:42)
A flipper developer, you're doing small subdivides, minor, maybe major. How do you think about the roles between a transaction coordinator and a project manager? Do you mind giving a range of the costs of those people? Do you feel good about your transaction coordinator, project manager? ⁓ and yeah, so would love to hear your thoughts.

Justin Piche (31:59)
Yeah. I mean, I think it's like a

pretty clear distinction between the two. Right. Transaction coordinator, their job is to get transactions over the line and to make sure you're prepared both you have the funds ready in time. You're curing and solving title defects and issues and any work that you need to do to do that in time. You're keeping up with your deadlines, due diligence and closing deadlines. They're

You know, title companies are are tough. Okay. They're tough to work with. I've I've I was so excited a few years ago with like going with nationals. That did not work out great, by the way, for anybody who's listening. Like getting one large title company that can handle everything, it just did not pan out very well. Just continually run into issues. service level is not as high as I would have liked. We've actually gone back to kind of finding more individual local title companies that can help.

'cause the national, you know, if they don't have an office there, they basically just like outsource the title work and they are no help in curing. And as we know with land, yeah, I mean there's a whole segment of this this of this business which is curative title. Okay. And the but something that maybe most people don't realize or people do realize after doing enough deals is that half of the deals have some sort of curative title element to them. Right. And and it

Most people, yeah. There's there's so many issues. And it is impossible with most of these deals to actually get the ones that you can really get outrageously steep discount are like partial interest, right? Because those people don't have any options and they're not gonna spend the twenty to forty grand it's gonna cost to like get all that issue solved. Most of the title issues are relatively minor, but they still require money and time to work. And so you don't actually or you're not able to get a good like discount on the purchase price because of them. You just have to be good at working through them.

clay hepler (33:21)
Yeah.

Justin Piche (33:50)
And title companies, local title companies and attorneys are the ones that can help the best. Nationals don't help too much with that. But the transaction coordinator, her job on my team is to you know, read and interpret the title commitments. Obviously, she uses AI to assist and then determine the best way and fastest way for us to cure that title, you know, push back on exceptions on the title policies, things like that. And she works hand in hand with the project manager because the project manager, her job is to underwrite the deal.

And manage the project. What due diligence like items are go into the end root product? What surveys do we need? What soil tests do we need? You know, what clearing work do we need? What contractor bids do we need? How do we dial in underwriting? You know, the output from her might be, you know, back to acquisitions to renegotiate or discuss, you know, retrade with the seller because we found something out. and it's they're all they all work, yeah. I they all work together.

But they're they're distinct, right? One's object ob objective is to get deals over the finish line title wise, close and be in communication with buyers, sellers, title company, attorneys, realtors, et cetera. And the other is to make sure the project is profitable and lining up the work so that the money, when the money goes out on a project, there's the minimum amount of time before it's finished and you're able to sell. Those are kind of like the two distinct roles.

clay hepler (35:13)
So I like I like that. I wanna just kind of go into this a little bit more. I think it's pretty relevant. the transaction coordinator and the project managers are always working hand in hand. So your transaction coordinator isn't getting surveyors, perctester, they're not calling surveyors or protesters, they're just talking with the title company.

Justin Piche (35:36)
Title Company, buyers, sellers, coordinating closings. Yeah, all that. And I think prop part of that reason is because we just have a lot of deals. Like we've had pretty high deal flow because we've run a big organization. You know, that may change a little bit where if we're not getting quite so many deals, then obviously the amount of communication she's gonna have to have on the buy and sell side is gonna go down, which gives capacity for other things. But I think that capacity probably transitions more into

Deeper initial due diligence or finding ways. One of the things that's like super frustrating with title companies is how long it takes to get a title commitment. Sometimes you find a good title company that can get it quick. You can get in a week or two. But most, most of them, the vast majority, and we've worked with a hundred of them, take months to get a title commitment. And and and the the problem there with with like running a big operation, especially like us.

is we're gonna lose a lot of money on due diligence. We don't have time to wait, especially on double closes, by the way. If you're taking title to the deal and you're gonna buy it and subdivide it, it's not nearly as big of a deal. It's a much bigger deal when you're trying to double close something because there's a minimum amount of due diligence that we need to do to make sure we can provide marketable title and we've solved issues for the sellers or for the buyers that are going to end up buying this. And if we can't get a title like title commitment coming back and knowing that title is clean or knowing that the barriers to clean title are not insurmountable and that we can solve them.

That's kind of like the prerequisite to spending the other money we need to spend to find out the other things about the project. And so like I don't want to get a project under contract or a property under contract, let's just say, and order tit order soil work and spend a grand or two grand or three grand or whatever it is on that and get a survey and get it, you know, get a kind of a a site plan and and spend, you know, a day of my PM's time.

lining up contractors to figure out the scope of work and all of that type of stuff. And then, you know, a month later we get a title commitment that's like, well, this person only owns 30% of this lot, even though they thought they owned the entire thing. And like now you've got to try to find these other people to buy this. I've spent four, five, six grand now and the deal's going to fall apart. And that happens that happens all too often. it's it's really a frustrating thing. And so I the lower deal flow would be it would would help the transaction coordinator be able to do more of that.

clay hepler (37:41)
Yep.

Justin Piche (37:50)
kind of vetting. There's ways to get like kind of title report lights, you know, that don't involve the title company necessarily. There's all kinds of people that can do title searches, especially in counties where they have e-recording. You know, you can get people that have access to e the the public records are trained to do title searches and for 150, 200 bucks you can get like an ownership search or lien search, things like that. That you can get a whole lot quicker. That'd probably solve a lot of our issues is getting those things done before we wait for the full

The full title report to come back.

clay hepler (38:20)
It's interesting that you have your project manager underwrite your deals.

Justin Piche (38:26)
Yeah, I mean she's both, right? She's we have so we have two we have two civil engineers on our team. One of them is trained in CAD, site plans, and primary underwriter for flips. So like literally every deal that comes across that gets that gets pushed over in a lead, his job is to underwrite it. Look up comps, get a value, get an offer range kind of target for the for it. The other, my lead project manager, underwriter, she's underwriting subdivides.

Specifically. She's underwriting developments. She's calling utility companies. She's figuring out what we can. She's reading subdivision regulations. She's searching for on market deals. She's vetting JV partner deals that come across our desk. and then managing all of our active projects that the company sources. So they're kind of distinct roles. She's not underwriting like every flip and every lead that comes across. That's somebody else.

clay hepler (39:10)
Yep.

What well, you know, there is you know, organizationally it's it's interesting that you have, you know, this obviously the J V deal is awesome. but you know, if you have all these surveyors and perk testers, right, that you have to call if you're doing all these flips, I'm sure a lot of her time is dedicated to just literally tracking people down and and c literally just calling. Like it's crazy how long it takes us at least to get a hold of people.

Justin Piche (39:41)
To get a hold

of people, I know. My god.

clay hepler (39:43)
And

it get people out there and make sure that they

Justin Piche (39:45)
She's d

and she's real frustrated right now because it's summer, right? It's summer, and so there's so many people that are on vacation. And so it's even harder during these couple months to get a hold of people. It's like you you you're talking to somebody and then you get an out of office. So I'm out of office for two weeks. It's like, my gosh, two weeks? We can't get an answer on this thing. I guess. Yeah.

clay hepler (39:56)
It's crazy.

Yeah. Yeah. A hundred percent.

A hundred percent. I l I love that. I think that organizational design's really great. I think that if you're thinking about the building the the the business of the future, your business of the future, you know, I I would say it at least kind of how we're designing it, is you have a TC role. If you're doing subdivides and stuff like that, you have a core project management role. Someone who's really, really next level.

You have an AM or two AMs, right? you might have a executive assistant, right? That's a that's a multi seven figure business right there.

Justin Piche (40:37)
Yeah, with the ideal size could be, for sure.

clay hepler (40:38)
You know, yeah, you might have an a

you might need to have a a data person, data person, marketing person with the right deal size. But even smaller, man, people that are in, you know, smaller smaller businesses, i you know, if you have two AMs, you can manage the intake i from cold outbound at that at the level. I think that a really good a acquisition manager can do fifteen

New leads a day. Now I'm I'm you know, I think it depends on how you want your organization to flow. But if you're purely saying I want to have a really d dialed in tight org, you could do a TCPM double AM EA data person, and that's your entire business. You could r and that business as a CEO, you would just have to do sales management, check raising capital, check like that's the right.

Justin Piche (41:30)
Yeah. Yeah, that would be a really tight org. That's no disp no in house dispo, hundred percent realtor outsource dispo, right?

clay hepler (41:30)
That's all you need to do.

Yeah, but like I I think that again, like

Justin Piche (41:40)
If you're

going after high quality only deals, then that totally makes sense. Right. And maybe one day we'll get to the point where like we don't have garbage coming in that we need a in house, you know, dispo team to to to manage. and those folks could be repurposed towards higher li h you know, high value acquisitions type tasks or or you know, the organization can get tighter.

clay hepler (42:01)
Right, but if you think about it, Justin, like, okay, so your T C could also be if you have a org that is even five deals a month, even seven deals a month, right? You could have an org that sits like this, your T C person could also be managing all your brokers. If your project manager is the person who is talking to perk testers, surveyors, underwriting deals, pushing deals to the finish line.

Your TC can manage all the the dispo relationships. And so you don't even need a a disp in-house dispo person because you know, provided you can automate things well, that's the that's a business you got one, two, three, four, five, six people. And if we take the 500,000 to 600,000 per person, six people, you're doing three million bucks a year. But on

You know, with that what maybe four million bucks a year with that with that orc. I just think that, you know, it's and you know, you you have a good connection, there's not a lot of people there. I I just think this is the type of business of the of the future. You don't really need an EA either in that role, but I mean, you could have five people or six people. So, you know, I I think in we've really talked about the change of the the land business change. Would you would you leave the listeners with any sort of thoughts?

of what what takeaways that they should really focus on because we've kind of gone over a lot

Justin Piche (43:29)
I know. I mean, everybody has their own vision for how their business should run. I think

I think in the current land climate, mass marketing is tough. It's a tough business to be in. And I think, you know, controlling your operating expenses, keeping them tight, targeting higher value deals, and being comfortable with lower volume is is probably the right approach for most people. it's hard when you don't have like for me and you.

It's a lot easier to make a decision to get a team tighter and smaller, not knowing exactly what the deal flow is going to be. I mean, we're talking about three, four million, you know, that that's so dependent on the types of properties you're targeting and how good your team is at getting them, the markets you're in. And you could have that dream and it might not come true. And if you don't have a lot of, you know, for for me and you, we have inventory, right? I have a lot of inventory that's sitting on my books.

that has that will produce some amount of profit. And even if it doesn't produce much profit, we can drop prices and recover capital pretty quick, you know, if we needed to, to stay, you know, stay alive and keep funding funding this kind of trial of of of sm tidying up the business and and designing a new marketing strategy that that is much more laser focused and and and much l lower cost to run. If you don't have that, if you're still like starting out, you know, you you just you're relying on wholesale or or double close type deals to stay alive.

You know, you need deal flow to keep the lights on, period. It might be harder to make that decision. and so I don't know if that helps anyone, but maybe it's just an acknowledgement. Not every business type is right for everybody. But I don't think that's at this point in time, scaling and doing a ton more marketing is the way to go. I think the way to go is do is just getting laser focused on doing larger, higher quality deals.

clay hepler (45:19)
And I think that

Justin Piche (45:20)
So, like what I need

to find figure out, and real quick, what I like, what I'm trying to figure out is how much of like the broader marketing should we do, if any? Right? Should we do any? Should we just go sniper? Like, I you know, there's value even in a in a broader marketing but kind of like smaller scale with the right property types and higher quality cold callers or higher quality team like going after those deals. obviously, like the 300,000 record dollar records a month is not gonna keep.

We're not doing that, you know, anymore. But what is the right number to drop it to? I don't I don't think I'm in a good position to say, dude, I'm gonna go from twenty people to six. Like that's that's cra that that feels crazy to me. It's it's probably it could be a good thing, you know, but it feels crazy to me. I think that's a little drastic right now. But certainly we're gonna look at, you know, how do we how do we balance both of those? How do we balance more like prove out.

The sniper strategy with the core folks that are gonna be sp you know, their their roles are gonna be designed around a couple deals. I mean, honestly, even one. You get one four hundred thousand dollar deal a month. Like that's money, right? That's like I would love that business. I would love that business. but are we gonna get one four hundred thousand dollar deal a month? You know, I don't know. I don't know. So how do we how do we transition from where we're at to where we want to go without killing the golden goose?

clay hepler (46:25)
Yeah.

Justin Piche (46:38)
It's a tough challenge. It's it's interesting. We'll see what happens for sure.

clay hepler (46:42)
and on that note, it it is challenging and that's the gift that we're given every day as business owners.

Right. We we get to go out there as gladiators and test our metal and see how we do, right? And right every day. It don't stop, brother. but you know, I I hope this was beneficial. We'll be back, we'll be more consistent on this. You know, Justin and I will be more consistent. We've just had a crazy summer, but hey guys, if you got benefit from this podcast, let us know that you did. Let us know.

in the comments by rate reviewing and s and subscribing to the podcast. Keeps us going after this hiatus. Just in any last minute stuff.

Justin Piche (47:20)
No, I appreciate everyone's yeah, maybe just I appreciate everyone's patience. I've had like one or two people text me and be like, when's the ground game coming back? Well, we're here. We're here. We're here. You know, it's one of those things where we love we love doing it. And we also have families and businesses and you know, we're not we don't make money off of the podcast. We do this because we love it and we love having conversations and we love diving deep into like the current market of the land business and helping people.

clay hepler (47:27)
Ha ha ha.

Justin Piche (47:47)
And we love hearing people, you know, reach out to us, especially bringing deals, but also just questions, comments. I've had a lot of conversations with folks, just randomly helping them out. And I love that. And and so that's why we do it. It it brings value to our lives, not necessarily monetarily, but but certainly there's some value to it. So I appreciate everyone's patience with the the kind of lack of consistency in our podcast output this last two months, three months of time.

clay hepler (48:12)
Yep. Dude, I got a jump. I have a meeting right now.

Justin Piche (48:17)
All right, with that, we'll see you guys later.

clay hepler (48:20)
Bye.