How to Invest in Commercial Real Estate

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Episode #104 - The Ultimate Guide to Profitable Land investments With Special Guest Brent Bowers!

by Criterion, Braden Cheek, Brian Duck
May 15th 2023

Today hosts Braden Cheek, Brian Duck and Joel Thompson bring a new topic to the podcast with special guest Brent Bowers: LAND INVESTING!

Time Stamps: 0:00 - Introduction 0:43 - Say hello to ... More

Awesome. Well, welcome back to how to invest in commercial real estate. And I am super excited about today's show because it's something we don't talk about a lot, right? And I love stuff we don't talk about a lot because we purposely name the show how to invest in commercial real estate, not how to own neighborhood, commercial shopping centers, right? And it's something we don't know that much about. And so we're gonna be really curious and we think our listeners, you guys can learn a lot from our guest today. I don't think we've mentioned this topic even one time. So this is a fantastic topic to have. Yeah. And from my perspective, it initially seems insane, you know, but II I love it. A lot of people do it. There's money to be made. Um So with, with that anymore, I'd love to introduce Brent Bowers with the land sharks. Um Brent, tell us a little bit about yourself. Obviously, you're a land guy, but you know, what does that entail? Give us a little bit about your background and, and maybe how you got into land investing. Absolutely guys. Uh Thanks for having me. I I started real estate in 2007. I, I got a real estate license because I thought that would make me a better investor. I bought that first property that, that actually my sister, the sister agent that was training me, got a listing.

So I made an offer on it. I thought that's what you did. So I bought that first property. It was my first rental and then I was like, listen, I'm gonna go make it big. I had a lawn service, uh, left that to my dad. He kept running that. Um So 2007, I moved to Palm Beach County. Uh Then 2008 happened for me. Then 2009 made things even worse for me. I went from literally being a business owner, real estate agent to my first rental property to just getting married to homeless. Um, wow, couldn't afford anything. So I ended up having to move in with my in-laws, not, they live in a 900 square foot house and there was four adults and then a small child in the house and it's like it was just, I was eating humble pie. So I was like, I gotta change, I need to go back to school. I need to learn something new. So I was like, I need to go to college. So I tried to join the Air Force. They wouldn't allow me. So they luckily I'm coachable and the Air Force recruiter was nice enough to say, listen, army will take anybody. Just go next door. I did, I did, uh, basic training a it off to Germany for three years.

I deployed immediately as soon as I got to Germany, um, to Afghanistan for one year and then back home for one year and then another deployment. Uh, that first marriage didn't work because I was always gone. Uh, I blame you. What's that? I blame you. Yeah, it was me. It really, it was. Um So the army pulled me out of my second combat deployment, sent me to college, met the beautiful woman in my dreams. I'm married to now we got married, started having babies and guess what? History started repeating itself and, and I was preparing for third combat deployment and the train up for that was ridiculous. Uh So I'm like, scared to death. Now it's like, OK, another woman's gonna leave me now. There's kids involved. So I started taking massive, you know, steps to learn how to become a real estate investor. And I heard a guy on a podcast just like this talking about land flipping land, doubling his money over the night. And I was like, there's no way it's that easy. So I started taking steps that day in 2016. Um And then now here I haven't had a job since 2018.

Uh I've created a lifestyle business just doing land deals and seller, financing them and earning passive income. That was a super long intro. But I hopefully I gave you the whole life story. Well, that's a great, that's a great story. We, we teach all the time or talk about all the time on this podcast about the reason that we did it was so that we could have more free time and, and everybody's motivation for that is different. So I love hearing your story. Thank you. Yeah. And another point we always talk about is uh and you're reinforcing it with your story. There is your one contact away your one book, away your one podcast away from changing your life if you're open to it. So I cannot wait to hear how you went from broke and in the military, not even in the country to making a ton of money doing land because of a podcast you uh you heard. So, yeah. And obviously, first of all, thank you so much for your service to our country. I mean, you obviously took a massive sacrifice there being gone from, you know, your, your first wife. So thank you so much for that. And the other thing I heard in the beginning was I tried to get a real estate license. I mean, how, how common is that? Right? And the state of Oklahoma, the attrition rate of realtors is 90% within the first year.

So 90% of people who get a real estate license in the state of Oklahoma do not renew for that second term because that first year um is its own terms. So you have to go and renew after that and 90% of people don't. So the key to getting in real estate investing is not always starting with real estate license, even though that may help get a foundation of, of knowledge. Um Brian doesn't have a real estate license. Uh Your partner Victor doesn't have real estate license. Yeah. So here's, we'll, we'll move on from this after I give people a tip is if you want to sell homes to individuals, uh then you need a real estate license if you want to make tons of money in uh flipping houses. If you want to make tons of money buying uh commercial real estate or owning commercial real estate, you do not need a real estate license for those activities. I have mine but you don't need it. So we'll move on from that. But anyway, we got into land investing. So what was, give us, uh, talk about the first deal? What was the kind of the, the first deal or two? Um where you thought, hey, I may be on to something here and I'm kind of embarrassed. So around all you, you know, super wealthy commercial guys, that first deal, that first deal for me was, um, you know, I took action that night.

I knew that there were people out there that uh don't pay their taxes on land. So I called the County Treasure in Colorado. And I was like, look, I want a list of people that are not paying their taxes. And she's like, oh, you want to pay the back tax? And I was like, heck, no, I don't want pay the back taxes. I want to figure out who owns the land and send them a letter and I'll buy the land from them and pay those back taxes, get them caught up. She's like, ok, so she sent me this scanned, looks like it was faxed of all these A PN numbers and I had to put them into the, the county assessor's website. Luckily, I was listening to the four hour work week on audible at that time and I figured out how I can hide a virtual assistant for $5 an hour in upwork. And she did all that for me. So I mailed that list. I mailed 687 postcards that said, hey, my name's Brent. I'd like to buy your land in El Paso County, Colorado. If you're interested in a fair cash offer, call me or text me. God bless you. Well, the first call that I took in the bathroom in the army, I had to like literally hide to take the call was a retired CPA.

He's like, look brand, I'm multiple years behind on taxes. I don't want this land anymore. I traded for it many years ago for doing tax work. It's yours for $285. And I was like, what, $285? He told me where it was at. I looked him up on a app called Land Glide. As well as I looked on the county assessor figured out where the land was. And I was like, look, can you, can you please give me till Saturday? And then me and my wife and my newborn baby rode out there and looked at this land. I had no clue what it was worth. Luckily there was a real estate office close by. So I called them and I was like, hey, I'm getting, I'm under contract for this land, which I wasn't. I was like, I'm in the process of buying this land. What do you think the thirty-day blowout price is? What do you think to get it done? Now? Price is she's like, well, I think it's worth about $10,000 and uh for a broke brand new second lieutenant in the military, like I was doing the math like in my head, $285 into 10,000. That's a good deal. I think I thanked her for a time. I said I'll call you when I own it.

You can list it for me and I didn't realize like realtors don't care about listing your $10,000 land back then. Um They still don't, yeah, they still don't. So I'm telling my wife and she calls me right back and makes me a $5000 offer. She says I can close next week. I said, let's do the deal like she lowballed me, but I didn't care. I, I turned $285 into five grand. That was the first deal. The second deal was about similar. I bought that one for $500 and this was, this was like landlocked land and these are really small deals, right? I needed to build my confidence up because I was like crushed. I was so broke. So I bought that second one for $500 and I thought it wasn't worth anything because it was landlocked, right? All around state property. I put it on Craigslist for $500 down and 400 a month. I had a buyer the next day. So let me stop you there. I've got two thoughts. Uh because I, as I go, I want to say some things. First of all, if somebody tells me they have a piece of land for $285 I'm not wasting the gas and the time to drive out there, I'm just giving them the $285. I don't even here where it is.

I'll dig up a tree and replant it and call it good for $295. 2nd thing is we are gonna hold this episode for like three months so we can, you know, write the county assessor and get a list of land. So if you're listening to this podcast, we're ahead of you. We're beating you. You're not gonna do it before we are. All right. Keep going. I love this. That's so true. We don't drive to those, those parcels anymore. Um And I can't tell you how many, at least I can feel two hands probably nine times. Now. We've gotten land for free one time. I ven mowed a guy six bucks so he can buy a, a pack of Pabst blue ribbon PB R to celebrate the freedom from the land freedom. That's right. Well, so they, they got bigger, they just kept getting bigger and bigger and bigger. Um Because I was building my confidence. Uh like the third one was, I got under contract from a bank for 25 grand. I didn't have 25 grand in 2016. That was like you telling me I needed to come up with like $6 million back then. I would have like not been able to figure that out.

Um So I went out, I literally was gonna sign my contract. I was gonna wholesale the land deal. It was 44 acres next to Shriver Air Force Base in Colorado Springs. So I got 33 bandit signs, the signs you see all over the place. We buy houses fast for cash. Well, I put them around and rode on the back with a big black sharpie market that said 44 acres cash only 38 K and my phone number. And lo and behold, I found the buyer that day. Honestly, I think God was just blessing me because I was taking massive imperfect stupid action. And that buyer shook hands with me on the side of the road that day for 38 grand. Uh He closed a couple of weeks later because we had to delay closing because I had to go to the field for the army and I got a $13,000 certified check and I just kept going and going and I was trying to sell her finances as many of them as I could. And I was making about nine grand a month within about 12 months of doing it. And I put in my resignation and got the heck out of the military and just kept building it.

And so what, uh, so you say you're selling them, uh, seller financing? So you're getting a little down payment and then you're getting monthly checks. What were these people, uh, doing with the land that they wanted to sell or finance it? Were they gonna put something on it or? What was their plan? Yeah, it varied. So that first, uh, one I sold, that was a realtor. She was speculating, she eventually sold it for like 2020 grand. Um, the second guy that bought the non buildable five acres, uh, in Colorado, he, he just wanted a place to go turkey hunting. The third one that was a, like they, they sold a ranch in Texas. They wanted to move to Colorado. Um, and then I started buying like cheaper land out in the desert of Colorado and I sold to several truck drivers. It was crazy. I sold the truck drivers for a while. Um, and then, you know, it, it varies. Like every buyer is like someday maybe I want a second home or a cabin. Um I sold another nonbuilding piece of land uh that I got off that first tax delinquent list to a guy that owned a concrete company.

He just needed a place to park a few trucks. Got it. So you're, you're mentioning Colorado a lot, but I don't think that's where you said you were from. So do you live in Colorado? Not anymore? I was stationed out there in the military. So I, I was like, I'm gonna do this in my own backyard. And then I was like, oh, I ran across a, a bunch of parcels of land in Arizona that another investor was buying. So I started investing out there. And then I was like, well, my dad's in Florida, he needs something to do. So we started buying in Florida and selling in Florida. Now I live in Florida and is the techniques uh the same or are you now have a different way? To come across good deals on land. Are you still using the back taxes? Yeah. Um those are very small list. Uh The techniques have changed a little bit. Now I go and find the, the areas that, that are in demand because it's a lot easier to sell land that's in demand and more expensive because realtors help you sell that. So now I find the areas where there's high demand, you can find that on Zillow and Redfin and you just basically pick your area that you want to go to, let's say Orlando Florida, then you go to filters.

You wanna see the sold and you wanna see the land only and then really start with like 30 days in Florida. And if you're on Redfin, you're gonna see all the red dots. I'm looking for clusters and once I find those clusters, I basically find the land that's selling in the like the most like in demand size parcel. So I'll click on each one of them. It's like, ok, half acre, half acre, half acre, 10 acres, half acre, half acre, ok, half acres in demand. Then I'll go to props stream and pull a list of all the landowners in that neighborhood, that area where land is selling because I know the price per square foot or the price per acre. And I know the in demand parcel size. So I'm gonna pull a list of landowners that own that parcel size in that area and I'm gonna set up what's called my, my land offer letter machine and I'm gonna mail all those owners and offer it 40 30 cents on the dollar and all they have to do is sign it and send it back. I'm not receiving a bunch of phone calls. I'm just looking for, I'm doing marketing. I'm detracting the people.

It, it, I don't even know if that's a word. I'm, I'm repelling people that want a big bag of money for their land and I'm attracting people that are, that are motivated to sell right now. See the, we talk about this all the time because I think the hardest part is getting to that point where you've got maybe $100,000 plus to where you're passively investing or starting a business or doing something. But up until that point, like when you define the need, ok, you know, I need to make some money. I need to improve my life. I need to figure something out. Real estate seems awesome. Let's do that to the point where you're buying, you know, 30 40 cents on the dollar, half acre land. I mean, that's still may be 50 $1000. You've got to do whatever you can. If it's making $3000 on a, on a spread of land, you got for $285. Like if a guy is willing to give you 3000 $285 that day. Hey, I made $3000. I'm 3% closer to my $100,000 goal. And II, I mean, it's absolute insanity. It's, it seems insane. Right. Like doing these things, calling the tax assessor and say, who's not paying their land?

That's kind of crazy. But you have to do whatever it takes to, to make it, you have to do whatever it takes to get your foot in the door. And sometimes buying that $285 piece of land in the, in, in Colorado is what it takes. Yeah. So something that comes to mind that I remember going through when I first started was doing things like this, I would get the newspaper out because it was in 2002 or three. And I would go through the real estate ads looking for sellers and calling them. And I just remember how many hours I would spend driving neighborhoods calling these people and when people would ask me, they're like, oh, well, you know, Joel, how do I get involved? And I'm like, well, the big thing is you gotta be willing to work for free and you know, you said, do whatever it takes. If people aren't willing to do whatever it takes, people listening to this podcast, they're gonna like this sounds awesome. But when it comes down to hours of looking up properties, sending offers with no guarantee of profit hiding from your boss. In the military to start. It's just something about if you don't know for sure you're gonna make money on it. Apathy sets in and, and people take no action.

But in addition to that, the other point I was thinking is people that are listening do, do that work. And then you'll come across a piece of land that's $25,000. And you're gonna say, II, I can't, I don't have 25,000, we have 25,000 wholesale. It just like he did call us or call, call Brandon and, and say, hey partner with me, we'll split the profits. It's really easy. So there's, there's no barrier here. Uh If you want to do the work uh that it takes, you know, make the phone calls, send the letters, come up with the, the the property or the opportunity and then present it to us or anybody else. Good properties and good opportunities always uh it's always easy to find the money for. So, so Brent, let me ask you when you say you look up uh places that are in demand, are they in demand by home developers, commercial real estate developers, both other, other uh customers you're targeting. Yeah. What's, what are you looking for? Yeah, so it's, it's been residential demand. A lot of new builds. Um You know, I'll give you a couple of examples like you can look at like Coral Springs or Lee high acres, Florida.

You go to Redfin or Zillow type in the last seven days of solds for, for vacant raw land. It's gonna be like overwhelming. There. Are they typically the ones you're buying now and reselling, are they close to existing neighborhoods? And so you're thinking, OK, well, that this, this uh city is expanding in this direction. Is that kind of idea? Exactly. Yeah, for a while there, I really was just buying on the outskirts of that city. Um, now I'll pretty much buy closer to the metropolitan or, or where all the, the growth is happening. But here's the thing, you'll still get deals on the outskirts because, and you could, you could see the path of growth that's going there and then do we, every once in a while we'll end up with the commercial piece of land. Um, we got like three acres in Colorado Springs off of a four lane highway that backs up to a golf course right off of Academy. So you'll come up, you'll, you'll, you'll get those parcels as well and you just gotta figure out what to do with them, which those are more complex in my mind. But sometimes like that gives you a bigger discount when you're uncertain about these things.

So, how much competition are you running into? Do you ever, uh, um, call on a piece of land and that it's already gone or, or you're having to negotiate because they've already got a higher price bid or what's, what's the competition scene like? You know, I've seen the, the competition increase since the whole building boom and COVID and all that. But I've also seen it decrease lately too as, as the interest rates have went up, I like to say there's virtually no competition in this business because you know, HGTV has made house investing sexy. Everyone's trying like, ok, I could be a, I could be a whole wholesaler. You don't need any money or time or credit to do it. So everyone's going after that, I can air B and B it, I can rent it. Airbnb massive competition. I can rent it out. Like, you know, that was my first investment property in my second, my third was rentals and I had to pay full price for those things because there was so much competition but land, you know, I I just mentioned I I've gotten like nine parcels for free like land for some people.

Like the the sellers are just so detached or unemotional or pissed off or have never stepped foot on it or inherited the land, not like a homeowner and not like a very savvy commercial business person that, you know, they understand cap rates and all that. I'm dealing with regular people that are detached and unemotional compared to like a homeowner that raised their family there. So I say there's virtually no competition because there's, they don't see a way to make money on it. There's no storage unit. There's no, there's no offices to rent out. There's no ugly house to buy and get rid of the cat. Pee and flip it to AAA family. So, uh something else we talk a lot about since we're in commercial real estate. Are the tax advantages? What, what's the tax situation? Is it just all the capital gain and it's that simple or are there any other tax advantages to it? Uh Are there certain pieces of land that might have tax advantages? Man, there is not even, I wish it was capital gains. It's actually ordinary income. Um So about every dollar I make, I pay 32 cents to the IRS.

So because there's ba basically me back up, there's nothing to depreciate. There's no buildings to depreciate buildings to cost segregate. So I've got to take, I got hit so hard in 2021 on taxes over 66 figures. Um I have to take land profits and invest in commercial, buy a office building and we literally bought our own office building then rented it out. Uh I pick up houses like I'll buy houses like for exactly what people owe on the mortgage subject to existing financing. So I can reduce my tax burden, you know, and I guess if you hold the land a year, you can get your taxes, you know, reduced by 40% or so and go to long term capital gains, but you may miss you may miss market windows and if not, if it's taxes ordinary income, it doesn't matter how long any investment you hold for a year or more, it will be taxed on capital, long term capital gains. Uh, but he's flipping them in weeks or months and, and so that's what turns it into ordinary income.

Or if he's getting, you know, monthly checks uh, from a seller carry that would be ordinary, you know, what are the questions? Yeah, I'd love to hear a little bit about how you're scaling this because it, it seems like it can be a lot of work, but it seems like also immediately right off the bat you were leveraging, you know, knowledge like the four hour work week and using up up work. Um now, you know, maybe people could leverage some sort of piece of artificial intelligence, you know, to, to shove those parcel ideas in and say, hey, locate me the best located piece of land. I mean, that's, that's got to be a thing if not right around the corner. So what are you using to help kind of scale this outside of yourself? Yeah, virtual assistance. We're actually testing uh artificial intelligence texting right now. I'm not big on texting. Um just testing it out. But I, I had a team of 15. Now we're down to uh I, I've descaled. I'm like opposite of what everyone's trying to do with scale because now I'm, I'm really building lifestyle freedom. We took almost all the month of March off. I'm taking six weeks off in June to go to Costa Rica with my whole family.

Um, so I'm actually compressing. Uh I have one acquisition manager. I have one executive assistant. I have one accountant and it's me and, and plus me because we're using realtors now to do the disposition side to where I used to have subscriptions to all the land websites And I'd pay a, a virtual assistant uh 40 hours a week to post to all these sites. Plus I was paying thousands a month to have these subscriptions. And then I'd have a full time guy answering the phones and selling the land, just, just selling it, selling it, selling it. And when I started buying more expensive parcels, I could do less volume because the profits were larger. And then other people that I didn't have to manage that if they don't kill, they don't eat a K A realtors uh are, are, are teaming up with me to sell it now. So business in the last eight months has totally changed for me. I'm, I'm literally just compressing and, and scaling down what is the two questions? The largest uh land parcel that you've purchased? And then what is the most expensive, roughly uh piece of land you've purchased?

Yeah. The largest one I've ever purchased was uh 40 acres. And the most expensive parcel I've ever purchased was 1.2 million and we're building, uh, 34 town homes on it. And I love that where I'm not doing it. I was just the guy that found it and then I put some money together. I think I have 60 grand into that land deal of my own money. So I'm just a small part of it. I love it. Yeah, it's definitely a, we, and, I mean, there's, there's a living to be made just in finding a good opportunity and putting it together, right? Yeah, everyone says cash is king. I don't believe that. I think the dealmakers king and the cash will come. You know, if you, if you get out there and get loud, there's a reason why I teach people every day on tiktok how to make money and land on that 1.2 million. Uh Did the bank carry a note on that? No, no, it's 100% debt free. So you just raised equity. Yes, here's how it worked. So the seller is really cool. Um We're actually hopefully buying another parcel of land from him. Uh He, he allowed us to make $600,000 down payment.

They gave me one year and my acquisition manager Jen, she's the one that negotiated all this like she's just a sweetheart. Um gave us one year to pay off the remaining $600,000 balance, no interest, no payments and he's paid off. And then we raised, we raised all that money with, with uh a couple other private investors. What did you think uh that 1.2 was worth when you negotiated that deal? Uh Well, about 1.8 is where, what the evaluation was on it. Now, obviously after the town homes were built and I'm not a builder, like I'm like, I have no clue what's going on like right now with, with the whole building process. Uh I know you guys know a lot more about that, checking out criterion. Um So luckily I've partnered with very smart people that are taking care of that part, but we had uh we were able to sell it for 1.8 million if we sell or financed it. And I was willing to do that. I was all for it, but my partner saw bigger dollar signs than I did.

So I said, let's go, I'll ride that way with you. Yeah. Yeah, that's great. We're always talking about partnering with other people if there's a portion of the project that you don't understand, find someone to partner with you. Yeah, we've had really good luck. Well, man, I think this has been an awesome, awesome episode. I almost kind of wanted to leave right in the middle and start finding land deals uh to buy it. It's really inspiring. I hope if you're listening, you're inspired. Uh because I, I agree, I don't think a lot of people are saying, you know, how do I find some land to buy. Most people in their lives have never even thought of owning a piece of, of land. They've, they've thought about buying a house one day, but having just, just a piece of land, they've never thought about what else you got. Wrap it up. Everyone out there listening to the podcast. Go find us some land that uh, criterion and, and Brent with um the land sharks. I love it. Land sharks. Land sharks. Yeah, we need, we need to do a deal together. So let's find a piece of land. Let's let's make something happen, Brent. Brent. Appreciate you, man. Congrats on your success. Keep going. And uh let's partner on some stuff together. God bless gentlemen. Yeah. Let's talk about uh investing in some commercial because that's my, that's my dream one day to own, to take more land profit and, and own more commercial and keep that forever.

Like that's legacy wealth right there. Well, thanks again, Brent and everyone else. We will see you next week on how to invest in commercial real estate.

Episode #104 - The Ultimate Guide to Profitable Land investments With Special Guest Brent Bowers!
Episode #104 - The Ultimate Guide to Profitable Land investments With Special Guest Brent Bowers!
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