Episode 31 | Jack Bosch | Military Millionaire Podcast

00:00 - 05:00

David:

Hey, what's up military millionaires. Today I have a super exciting episode with Jack Bosch, The Land Guy and we talked all about land flipping and how he has taken flipping a single piece of land for not very much invested and turned it into hundreds of apartment complexes and just generational wealth.

But most importantly, towards the end of this we talked about his book Forever Cash and his philosophy on financial freedom and how to attain it. And it is brilliant. I'm a huge fan.

So if this is your first time listening thanks for joining the community. This podcast is produced every week for your enjoyment. Show notes are found at Frommilitarytomillionaire.com/podcast. Now relax and enjoy the show.

Intro:

You're listening to the military millionaire podcast, a show about real estate investing for the working class. Stay tuned as we explore ways to help you improve your finances, build wealth through real estate and become a person that is worth knowing.

David:

Hold onto your seats guys. The show will be on just after this word from our sponsors.

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David:

Hey, what's up everybody it’s Dave From military to millionaire and I am here with Jack Bosch also known as The Land Guy. And I'm super excited about this because I have not yet had an expert in land development land flipping on the show, which is a super niche method of real estate investing and he's got a great story.

So jack, welcome to the show. And tell us a little bit about yourself.

Jack:

Thank you very much for having me on the show. I'm super excited to be here. And I yes, so I'm the land guy and actually more like the last couple of years my wife and I have been running our business just like you and your wife running your business together and happens since the year 2003.

So well the short the short version is as you can tell from my accent I'm not from here I'm from Germany originally I came over to this country back in 1997 pretty much broke just as a college student and started working after graduating from college got the work permit start working two five and a half years to get the green card and halfway through that I just decided that this employee thing is not for me and then the two week vacation and making just about broke and income wasn't the right thing and I and and I needed to do something.

So long story short, we tried real estate, we came across real estate, we tried all kinds of stuff we came across land and we figured out land is simpler than houses and you can do almost everything with land that you can do with houses.

David:

That's awesome. So what got you interested in land in the first place?

Jack:

Well actually I didn't actually happen like that, that I got interested in it. Instead we found that we struggled right, we tried wholesaling and we came across a triplex that we put on a contract and we tried to wholesale it and nobody would buy it. And now I know why back then I didn't know why because I didn't know anything about the cost of rehab and so on.

Now we have a portfolio of a whole bunch of houses. We have over 300 apartment units. So we now understand all about that but back then I didn't.

05:00 - 10:00

Jack:

So we couldn't sell that thing because it had way more expenses than we thought it would. But then we looked into tax liens and tax deeds, and tax liens and tax deeds, where you could buy properties, why buy liens or buy auctions and buy the properties. And we were outbid. And what we bought as liens were paid back right away. We couldn't make any money, basically. And then we had one thought that one thought was like, Well, if there's people who haven't paid their property taxes, and those people have so much don't want their property, literally, they have shut down, they have basically made peace with the fact that they that they are going to lose these properties. But what if we could find out what their mailing addresses and contact them. And I'm not talking about just the people who whose property is coming up for auction three weeks from now, but I'm talking about the people who just stopped paying property taxes last week, or last month or half a year ago or a year ago, because in many states, it takes like in California, for example, it takes five years before property even goes to auction.

David:

Yeah.

Jack:

And in other states, it takes three to five years before a tax lien is being proposed. And in that time period, people have literally made up their mind that they don't want to have these properties anymore, but nobody's contacting them.

So we contacted them. And what happens is only owners of land contacted us back, literally not a single house owner called us, at least initially, not really, like the first property was like a property worth eight to $10,000. And we're like, what the heck are we gonna do with that? So it was like, there was like, Well, I don't know, but let me just offer 400 bucks. So because we figured we got to have to give a discount when we sell it, because who's gonna want a piece of land, right?

David:

Yeah.

Jack:

So we offered 400 bucks, the guy accepted it, we bought it. We drove up there for the sale with the owner sign on it, and the neighbor next door bought it the same day for $4,000.

Okay, well, that's working. So then we like the next deal came along, it was another land deal. So we never really got interested, it wasn't like we got interested in land. It turned out that land came our way. And soon after this process, we realized that we'd land. Even though we knew nothing about real estate at that point, we had done 20 deals knowing nothing about real estate. Because all because with land, especially with land flipping, and especially when you flip land that's worth less than $100,000 when you're not developing it right when you're not rezoning it when you're not doing any of these complicated things with land, when you just flip it and you make a low enough offer, because the second deal was a 40 acre parcel worth about $20,000 and be regarded for $500. And then we sold it for $10,000 online in 10 days, and, and so on and so forth. And then just last month, we bought a property that we bought for $500 sold for 5000. Another one we bought for 5000. We sold for $65,000, or $64,000, and so on.

So these deals. The bottom line is we realized that we don't need to know anything about real estate. Because or at least not much. Of course, you need to learn the terminology. But I don't need to know if it costs $1,000 or $10,000 to replace a bathroom door here bathroom, it doesn't, I don't need to know if it costs 5000 or $15,000 to replace a roof. I don't need to know what the cost of granite countertops is called the Cox's. I don't need to know the cost of new cabinets because not all that stuff is on a piece of land. And if I can buy them cheap enough, I can always sell them cheap and cheaper, cheap, but with a profit. So if I buy something for 10 cents on the dollar, I can always usually sell it for 30 cents on the dollar, triple my money, or 50 cents of the dollar. And if you price it cheap enough and on top of it, if you do overtime, we figured out that we can actually get cash flow from that by selling the seller financing. And then if you can offer it for 80% of market value and get as a down payment as much as you pay for the property, you don't need to know anything about houses and that's when it all started. And for five years, we put the blinders on and we didn't touch her house. And we didn't do anything. And we didn't even know the first thing about houses. Yet those five years we did something like 2000 deals.

David:

Man, that's insane. That's so cool.

What's funny about that, you mentioned the guy next door buying the property for you know, almost 10 times what you put down on it. We own a little five acre patch of land on a house. And the guy next door to me on 10 acres I had told him for years, if you ever sell, I want the five acres between our properties. And sure enough, you know, two, three years later, he got moved to Tennessee or something. And he called me. He's like, hey, the guy wants to buy the house. He wants all the land. But if you give me $1,000 an acre more, I'll give you you know, whatever. And I was the knucklehead next door who bought the land for way more than it was worth because there is something to owning the land that borders your properties and no one can build on it.

10:00 - 15:00

Jack:

Exactly.

That's your backyard, it allows you to have extra fun there, it allows you to perhaps in your mind build something for the kids or the grandkids down the road. Whatever it is, yes, it's nice to have it. And it's just for extra space.

David:

I was lucky enough that we had a few cows. So I let them multiply.

Jack:

Alright, there you go.

David:

Our cattle now cover the mortgage. So I might have paid a little bit extra, but it's still cash flowing. And they mow the grass.

Jack:

They exactly, they mow the grass real nice. You'll never get a city violation from them.

David:

Yeah, exactly.

So there's a lot of cool benefits to that. So the land thing so you flip a lot of properties. And then what went from there so I know that you own a lot of houses and multifamily and commercial is up deep like rezoning and all that other fun stuff.

Jack:

No, I never got into rezoning. Although some of our students we now teach this but last 10 years, we have been teaching this we have seminars, and we have courses on it and so on but, some of our students have not gone to this good to the rezoning process. It's a matter of fact, one of them just I mean, he's a, he's become a big player, he just told me yesterday, he and his wife, they became they pulled up with some other guys and bought a piece of land in the Bay Area for literally $10 million. So that's a different playground that we're playing between usually below $100,000. But they actually sold it for $16 million, just just like a couple of years later.

So I mean, that is obviously a great deal. But another one of our students and he got a property worth $200,000. And by rezoning it, he made the property worth $650,000.

So you can do those things. But they're only worth if you're literally adding 100 grand or more to it. Because otherwise the time effort that it takes to be involved in that process is more than you would, it ties you down so much to make. Let's say if you do this, and you make an extra $20,000, you're all excited. But if you would have used that time to do more simple deals, instead, you would have made $100,000 in that same time.

And so we basically stick to our guns and just a little bit that continues to do flip, flip, flip. Now occasionally, what we do is we hold on to property. So we have some properties in the path of growth, the city's approaching rapidly, if you bought it for 3000, they're worth 25 now, and within the next 10-15 years, they're probably going to be worth $300,000 to $500,000. So they're easy to hold on. Because for the same reason there is a there in the farming area. So we gave grazing rights to a farmer in the area. Because of that our property taxes now dropped dramatically, because it's essentially used for agricultural purposes, and self paying like $300 in property taxes a year we pay like $5 or $8 in property taxes.

So there's some ways that you can do that while we just sit on them and hold on to them. So that's the thing. But then, but to answer your question, really what happened is we will start to land forever. And we have stuck to them forever. We have continued to England. But 2008 came around and 2009 came around and when the market crashed, our method of flipping land continued to work. But what happened is that I ended up going to one of the real estate investors association meetings, which I recommend to everyone. If you live in any bigger city, there should be a real estate meetup or real estate investors association that you should join. And I joined the local one in Arizona where I live and called Ria. And they talked about the price of houses at that time. At the time, like it was late it was early 2009, I believe.

And I couldn't believe my eyes. I couldn't hear everything with my ears. I mean, I was shocked because they basically told me that you could buy houses that would cost 200 to $250,000, just three years prior, you could buy them for $40,000 right now. And they're like, and that's Arizona was one of the hardest hit markets.

So I came home and we in essence, we're always cash flow investors. So you think land doesn't cash flow, right? But we believe, sometimes you gotta do some flips to make money. But then you want to use that money and invest that money into something else that produces cash flow, because the ultimate goal is not to flip, flip, flip, flip, flip the ultimate goal in my mind is to be financially free.

David:

Absolutely.

Jack:

Financially free, in my opinion, only if you have cash flow coming into your account more than you can actually spend on a monthly basis now almost every month can be outspend but I mean reasonably speaking, right?

So I mean, like, like if you're currently making $5,000 a month, if you have $15,000 a month in cash flow coming in, you are living the life right if you're currently making $10,000 and yet $30,000 a month coming in, you're living a good life, right?

15:00 - 20:00

Jack:

So we realized that that's why we started doing the seller financing deal on the land, where we could take a piece of land that we bought for 3000 sell it for 30,000 get a three to $5,000 down payment and get cash flow from these pieces of land. And that's a beautiful scenario, because now I get all the money back that I paid for the property. Or I can even do a double closing, right? I can buy and sell at the same time, use none of my money and get the deal done that way. And then at the end, you, you go out, and then you get cash flow for like 10-15 years of like 500 bucks a month. That is great. So we always optimize, that we built it up into 10s of 1000s of dollars in cash flow over these five years. But then the market is the market change. We saw these houses for sale. They're like, well, now the cash flow makes sense on these houses. We looked at them occasionally, we peeked at them occasionally 2006, and 2007. And it just didn't make sense. People were paying $300,000 for houses with a with a, I don't know, zero down and a 2000 or 15 $100 mortgage. And these houses were bringing in $1,000 in rent and there's like, how does anyone make, how does this even work? The model didn't make sense to me.

So we stayed away from it, we never got sucked into that part of that hyper thing, we just left our pieces of land. But then all of a sudden, if I can see that the rents had not gone down, the rents were still at $1,000. But the same house is now $60,000, $40,000, we bought the house for 25,000 off, so we couldn't resist. And that's the moment when we jumped in. And even though we hate tenants, toilets and termites, and land is not right and houses ever, we started buying a portfolio of almost 50 houses that we own free and clear around the country. And then from there, we moved on to add apartment complexes because we soon realized that the cash flow from the houses is okay. But the hassle factor is still huge. So we didn't want to deal with the hassle factor. We didn't want to deal with any of that. We just wanted to get cash flow.

So we are now buying 100 unit plus apartment complexes and syndicating debt, offering our investors very conservatively underwritten deals, where we promise them about a 15% annual return. And but usually we beat them like the dealer be bothered December last year, we're ready at a level that within four and a half months, we prove the net operating income by 20% on the property.

So within another year, we have probably proved it by another 20%. And even though it's a five year horizon, we are probably going to be ready in two years to sell this property and double our investors money.

David:

Yeah, that's awesome.

Jack:

That’s not typical, perhaps but so on. So we do that. And by we continue doing our land deals, right, we continue always doing our land deals

David:

I like that you mentioned that you didn't get sucked in because a lot of people don't, they don't think of it that way, right. And we talk as investors about knowing your niche and sticking to your niche and knowing what you're good at and becoming an expert. And there's guys, like you mentioned, do out here in Hawaii, they'll fix and flip properties and then they'll buy on the mainland after they've built some wealth. But they got really good at that one niche before they branched out. And I think that's huge. Because had you started jumping into houses in 2006-2007 when everyone else was saying, Oh no, you're silly everyone's buying their market always goes up might be a whole different story right now.

Jack:

Might be, we will have been wiped out pretty sure or perhaps thanks to our land notes and our land deals or graphs could have paid for the other thing, but we will have lost millions and millions and millions of dollars in that process because when we do like when you do something we like to do it big, right? We don't like to buy a fourPlex we buy to buy our first apartment complex we bought at 94 units and and then the next one is about a 90 the next one it at 146 units and so on so if we will have done this, we will have gone in big but but I am more than anything where we're contrarians but more than anything we're fundamental investors like I'm a big Warren Buffett fan and Warren Buffett invest purely into fund buy based on fundamentals.

Now what that means is basically he says he looks at the numbers and if the numbers make sense and the surroundings makes sense he invests, in 2006 - 2007 the numbers did not make sense it was a speculation It was a big game of musical chairs. And, and right now and then right now we see a similar kind of thing happening in the apartment complex in the world in my opinion.

There are people bidding third, and like tertiary markets and bidding apartment complexes up to the wazoo with expectations that rental rates will continue to go up by three to 4% every year, when they already have gone up three to 4% for the last five, six years. And this game of rapid growth needs to stop at some point of time because people are not making that much money to be able to continue paying those rents.

So that's why it's so hard for us to find the deal because we're not playing that game. We're only playing the game of finding the gem, we underwrite our deals with an expectation of a 1% breath growth in the future.

20:00 - 25:00

Jack:

But when everyone else expects 3% so everyone else pays for the properties based on unreasonable expectations. And here's the point. We don't count on those, we only buy properties that are underwritten under under market rents that have some issues that we know if we fix them, we can get rents up, but only to the market, not expectations that we care that we can keep raising them for three to 5% every single year for the next few years. It's crazy out there right now again, in the multifamily market. And, but anyway, so.

So we stuck our lane, we stuck our land. And then once the market in houses just made cold, so freaking complete sense that we just couldn't say no to it.

David:

Yeah, no, I mean, that's silly prices.

I'm kind of getting the same question right now. Because I'm moving to San Diego for the military in two months, and a lot of people are asking me why as a real estate investor, I'm not buying a house in that area. And I'm looking at home prices and thinking man, I remember what 2007 2008 2009 did to that county. You know, I'm not willing to buy at this point in the market, unless I can get a really solid deal with a lot of renovation and they're not out there right now. Not not very common.

So unless I find that perfect deal, I'm gonna rent and I'm going to just avoid anything that could go wrong, keep investing in my market.

Jack:

Right.

And now here's the thing, I have a, I don't know what your opinion is about the market shifting and so on. I don't actually expect a crash to come at all. I don't think what we've seen is the settling of the market in many areas and markets that have gone a little bit into overdrive and are now settling. And in essence, we haven't seen a normal market in real estate in the last 15 years.

Yeah, if you look at it 15 years ago, 2004 markets are going up like crazy, then it crashed like crazy, then it's a whole nother ball game for a while and then it came roaring back. Now we're finally at the point where the market is coming back to a regular price, we just bought a new house, we did buy a new house in Phoenix, Arizona, because it's just a place we fell in love with it, it's a place we're going to stay for the next probably 15-20 years or so just a gorgeous house. But we're selling our old house and our old house is not selling in a moment. It's taking Nivea 60 days now we get constant traffic and constant activity, but we're expecting what it takes in a normal market, which is 120 days to sell the market. It's just that we have so many newbies in the market right now that are expecting a house to sell in three days like it did over the last couple of years that they're like scribe is crying foul.

So buying a house in a market that you know you're going to be in for a long time is totally fine with me. As long as you know you're buying a liability, right? But because on top of it, you are on top of the market. So buying something right now will probably not give you a lot of appreciation. So I'm with you, rent for the reasons of cash flow or the fact that you're not going to get a whole lot of appreciation. But I'm not, I'm not expecting a crash. I'm expecting a little bit of a correction eventually in the multifamily space in the big apartment complex 100 units plus apartment space. But that's a different space that is actually contrarian wise, why we're in this market right now.

David:

Yep.

Jack:

Because we want to be in this market with some very, very solid deals that we can carry through any kind of correction, in order to be prepared to have all the knowledge and have all the all the all the infrastructure in place when a correction comes to do what we did in 2009, just in a bigger scale.

David:

I agree.

Jack

We are preparing ourselves to jump into that market and buy 100 apartment complexes when the correction comes.

David:

Yeah. Which is a good place to be.

Alright. So I had a question for you. How can you know, average people interested in Korea transition benefit from your instructions on land development. And it's kind of unique to me, because I may be in a career transition in the next few years. No, you know, I'm just intrigued.

Jack:

Well, actually, a lot of our students including actually, that is our story too, when I came, when I when I worked in this job, I had to travel a lot. And not a lot, not a lot of time. And I wanted to get out but I couldn't get out because I was in a green card producing an h1 visa, which is the visa that is the process takes a lot of coming from Germany, it takes about five, six years to get your your green card coming if you're coming from a country like India, so it might take you 9-10 years, 12 years to get that visa, if you can even have it that long.

But the point is we have so I was in a situation where I basically could leave but if I would have left I was at 30-60 days to find another job or leave the country. So I was in a situation kind of perhaps similar to you that that you might have you can't really leave Not until you want to, right? You're happy in the military but you don't have much of a choice. You're kind of like you're there. That's the place where you are right now and you have two more years left with three more years left and then you get up so when we did the same thing we had like two three years left. Let's create Plan B as our goal so that once we are free to leave, we can make a plan B, Plan A. Right.

25:00 - 30:00

Jack:

So that flipping became our plan B. So we started this part time. And I say we again, I mean, my wife, Michelle and I, my wife, by the way, is also an immigrant from another country. She's from Honduras, Central America. So we both came here just to go to college together. A work visa has always been legally always been legal in the country and I want to make sure I say that.

And we built this part time. And that's, and that's a beautiful way. Because in this business, because you're not dealing with houses, you don't have to go with the CD inside of the place, because there's nothing to see, you can use Google Earth, Google Maps to see the property, Google streetview to drive by right, you can do all these things you don't physically have to be it this is the surroundings that I've learned from. This is my home office. So I don't go anywhere else. I don't go crazy. I don't travel, I haven't seen any of our pieces of land for the last 12 years, we have not gone to see a single piece of land. So we can do this remotely. We now even have students in Germany, Switzerland, Austria, China, Australia, like areas like South America, Peru, that do deals in the United States remotely because you don't have to be there.

And because of that, when you get moved around in your job, perhaps it allows you to continue doing deals and make that money. And we have one particular example. It's actually a gentleman in the military. He's actually the Air Force and fairly high up in the air force. I won't say his name or rank, but he is probably one of the top 50 guys in the Air Force. And he's one of our students. He is going to leave the Air Force. When he came to us. He was scheduled to leave here for about four years into the future from them.

So he came to us and he enrolled, he came to us and enrolled in our coaching program that young people don't have to do, obviously. But he said I want to do this. And we worked with him on and out on a model that he did very little of the work and most of it was outsourced. So he had yet kids, for example, his kids ended up helping him. But in other cases, we have virtual assistant that we can show them how to hire virtual assistants, we have a mailing house that sends out the letters, we have a call center that can take the phone calls, we have another we have what we have, we have found a call center that is trained on our method that people can just plug into, and they can within one day, they're ready, ready to take phone call. So that we have, we have services where they can get the data for that the ownership data that they can send to the to the owners, and then the research on the property that he did himself but that he could kind of sneak in after hours on the weekends and even while traveling with Wi Fi and so on.

And then as a result of that in the first four months he made $98,000 doing just doing this just method and and then it since then, even though he was then transferred to Turkey and was stationed over there for a while he continued working on 35 more deals since then.

David:

Wow. That’s cool.

Jack:

So as somebody is in transition, somebody wants to have a position that you can leave. This is a great business to do part time because it got me out of my job. I've got my wife, although Harris, and has done that for many of our students.

David:

It's actually curious, when I bought my first duplex, the lots shared a parking lot and across the way an empty lot. And I asked them how much they were selling it for. And they were like, Oh, $7,000 it was like half acre. I was like, I'll pass. But it's now been for years, and they still own it. So I'm gonna probably take up some of your ideas here and shoot them really cheap.

Jack:

Depending on its worth, if there's a duplex worth enough to actually build something on it, then that might even be worth living to a builder.

David:

It's not a bad idea. That's pretty cool.

I like this because, like you said that the time involved is not nearly as much as what some you know, fix and flip stuff will do, will take but it's fun. It's something you can do without nearly as much time, it doesn't take a $40,000 down payment to offer on little plots of land. And, and it's really not a super saturated market. It's not like large apartments right now.

Jack:

It's almost I won't say it's completely competition free, but it's almost competition free. Meaning we send out letters to people. I mean, we do everything different. Like we send, with a house if somebody or somebody wants to sell you their house right now. You gotta almost like leave this podcast and go meet the person because if you don't, somebody else will meet them 10 minutes afterwards.

David:

Yeah.

30:00 - 35:00

Jack:

When somebody calls us on a Monday we don't even go look at that record until Thursday. And then on Friday or Saturday, send him the offer and then we send the offer that is made. Which takes another four or five days to receive, even. So they received their offer, usually about a week to 10 days after they even called us.

And there's no issue with that. It allows us to design our life around the data design or business around our life, not our life or our business. And because it's land, I don't even have to look at it, we flip some land on the Big Island, by the way.

David:

Oh, that's cool.

Jack:

There's some properties on there that fee simple to own so they're regularly owned too, there's some subdivisions out there. And it's not the highest price area of the Big Island. But still, we buy it for about $3,000 apiece. So for about $50,000 apiece, all day long, I flip the whole bunch of them there.

David:

I like that you mentioned the rezoning piece earlier, because it's so I have a friend and this is in Oahu in the Lanikai area, which is super, super high end. And it's like on the hillside. They're friends of my parents, which ironically got a hold of them via direct mail didn't even know they knew my parents. I just have a unique last name. So they were like Hang on. They own it as four acres of land that's worth millions of dollars out here. But husband passed away, zoning lapse. It's now in like an agriculturally productive protected zoning mess. And I tried to talk to them about selling, you know, a couple years back when I first got on the island, and they had been trying to rezone this mess for two and a half years now.

And to my knowledge, I mean, I eventually just stopped following up because it's like nothing, no progress at all. And they're no closer to being able to actually sell this property they have than they were ahead of time. So I just say that to say that I totally understand your pain on zoning, it can be a nightmare.

Jack:

Yeah, we're playing the game of what is it worth and its current condition and its current zoning. Can we get it for much, much cheaper? Yes. And then let's flip it to somebody if somebody else buys it because they think they can do the rezoning, be my guess.

But unless we we we can no we can do it, we usually do it. Another one of our students actually did the same sorry, that sorry, he bought the property to rezone it and to bring up the value dramatically, and it would have been worth it. But the year into it. He's gotten so much headwind from the community around me, though it's not he doesn't resolve it into like, something like, bad or so he resulted into something there's a bunch of RV, the RV parks around and he wants to rezone it into another RV park. And they're like, No, we've had enough RV parks here. We don't want this. And so literally after one year, he gave up.

Now the good news is he hasn't under contract for I think $100,000 and it's still worth 250. So he's still gonna make about even if we wholesales it is still going to make like $50,000 in it. But he would have been able to make those $50,000 a year ago by just flipping it instead of going to the year long process that now has failed at the end. And now still making $50,000.

David:

Yeah.

Jack:

So resolving is something that is sometimes worth it. And particularly however, if you're in environments like Hawaii, where the, well there's a limited amount of land and you're giving it up very very, very slowly, which explains some of these horrendous prices in Hawaii, right? They don't want just the entire island to be full of houses, which at the price point of $200,000 a house would probably be tomorrow. Not everyone would buy a house there. So they are probably giving you, probably the rezoning process in Hawaii is much much harder than in other places.

David:

Absolutely.

Jack:

Yeah.

If you want to do that then I know in Illinois or Arkansas you probably won't have a problem rezoning it because they're happy rezoning it from residential to commercial because they're probably excited if somebody comes and builds a result commercially. That's down the road but something commercial out there that is great has some jobs right so it's always like location matters, but we don't deal with it. I've never rezoned anything because I would rather go, at that time, for 10 more deals and make another 200 grand.

David:

The velocity of money absolutely makes the point.

Jack:

Exactly those things. Yeah.

David:

That's huge.

All right. So I have a question for you.

What factors when you're looking for land, what factors do you use to decide on a real estate market? Is there something different when it comes to land?

Jack:

Yeah, so we like three kinds of land, the three kinds of land first, we'll look at infill lots, which is obviously the game there's a little bit different, you have to send out more direct mail pieces you have to make more offers in order to get something accepted. But when you get something accepted, you might make $50,000 or $100,000 on a deal.

So that deal that we did last month is we paid five for it. And we sold it for $64,000 for seller financing on top of it. So we're going to make $110,000 on a deal over the next 20 years. But but in cash flow thing and we have nothing in the deal because the down payment was more than to there won't be paid for the property, but that was an infill up it was an infill lot zoned for actually commercial also for multifamily was a small lot so you could put like a triplex or four For four Plex on it, but that's not my game fourplexes and construction and building, it's a it's a distraction to my core business, so I'm not doing it. Right.

35:00 - 40:00

Jack:

So therefore I'm sticking to my guns again. So we flipped it, let somebody else build the fourplexes and perhaps cashed out sometime down the road when they had when they started building.

But the second kind of property is the land in the outskirts of bigger cities, like in what's called the path of growth, and what the criteria we use for that and for the actually for the infill lots too, is that we look for cities that are growing.

Now you can find cities that are growing by simply going to Google and saying like, us, USA, 100 fastest growing cities, or you could go to a website called city dash data.com. And on their website, you can find some of the fastest growing metropolitan areas in employment growth and in, in all the different kinds of growth factors. And you can look around there, but don't overdo it. It's not like rocket science.

What we just just pick a few markets that you like, where you think that people want to go and move. Like, we find that the coasts are very attractive, the southern part of us are very targeted, the northern part has attractive areas to like lakes and things like that.

But there's also for example, a lot of what where do you want to stay away from, for example, this shrinking town. So for example, a small town in Florida, probably a good, small town in the middle of the Midwest, probably not good, because people are moving away from the small towns in the Midwest, they're moving to the big cities, they're moving south. And even though there's land around it, it's not worth much. And it's you're gonna have a hard time selling.

Small towns that have population growth in the south or in Wales, wherever this population growth is great, right? So it's all kind of like it's population growth, that really is an important factor that we're looking at what are the fastest growing cities and I say, usually, we like to stick to larger cities. Because larger cities, there's more buyers there, right, there's more, there's more demand there. There's more activity going on there.

Small cities, usually if they're like the top 20 List of retirement cities of the United States where people want to go to, they're still okay, but there's less people to buy less people moving there less demand.

And then the third kind of group of property that we focus on is large acreage in more rural areas. But even there, you want to be somewhat surrounded by within two, three hours of driving or one to three hours of driving from a big city. Like always use an example. Elko, Nevada is a county northeast Nevada. There's absolutely nothing around. There's no reason in the world why anyone would ever want to go to Elko, Nevada, sorry if you're listening from Elko, but the only place there is that is a town called Elko. It's a cute quaint little town up in there on the way what's driving through, and it's the looked at properties and has a couple of casinos as a country house, and that's about it. But other than that, there's no reason to ever go through Elko.

Elko has lots of 40 acre parcels, but they're almost worthless. They're worth four or $5,000. I mean, you can pick them up for 1000 and sound for three. But that's not my definition of a good deal. I mean, it's a good deal, but it's, I rather buy something for three and sell it for 30, right.

So However, if you take the what is that the Smoky Mountains or something, what they're called, they're only a couple of hours away from multiple large cities like Atlanta on one side, Chattanooga on another side, like whatever other different cities are out there. If you take even Arizona for that matter, Northern Arizona is very attractive, even though it's in the middle of nowhere, because it's 20 degrees cooler than Phoenix, Arizona. If you've ever been in Phoenix, Arizona in August, you know what I mean?

Maybe August is 110 to 150 degrees every single day. So if you can be up there where it's where it's 78-85 degrees in summer, that's beautiful. So lots of people take their RV’s and go up there and spend the weekends there. So that is what I mean if you're in if you're in Seattle, right, this Shasta mount this chart, there's this there's there's areas that will show some of the things in California But still, if you're Northern California, there's areas like that if you're in Florida, there's areas where there's lakes and things like that so so make sure that you keep that in mind. So versus Elko, Nevada where there's absolutely no reason to ever go.

So apply some common sense to it like if you want to have if somebody isn't is in Atlanta, Georgia, and they like the outdoors, how many people do you think like would like to have a ranch out there like to have some 20 acres that day we saw trees on their Creek going through it, but it can park their RV, build a cabin, we can have their friends come out and they party on the weekend, they can have perhaps a few horses or cattle and just enjoy that. That's actually a surprising high amount of people. But I speak in any kind of real estate group there's usually half the hands go up when asked who would like to have their own ranch? And so, plus if you think of all the hikers, the campers, the dirt bikers motorcycle guys, they all love the outdoors so there's millions of people that love that and that land can often be bought very cheap and salt with very nice profits.

40:00 - 45:00

David:

Absolutely.

Alright. So jack, one last question for you. I know you have a book Forever Cash. And I'm just curious if you can briefly overview some of your, your central tenants of what your financial mentality is.

Jack:

Right.

I kind of covered it mentioned a little bit already, but I am happy to talk about it a little bit more.

My overall financial philosophy is that everything in your financial life shouldn't be designed for you to roll money that you make over again and again and again, into what we call forever cash. And Forever Cash is just another word for lifelong generational cash flow. So in our family, we talk about these three types of cash, there's one time cash, temporary cash and forever cash.

So one third cash is cash if you work for once, and you get paid for it once. So a flip is one time cash. But it's better quality one time cash and you going over and mowing the neighbor's lawn for 20 bucks, right? Mowing the neighbor's lawn is also 20 bucks, because he worked half an hour. You got paid 20 bucks doing real estate, but you might work 10 hours and you get paid $20,000, I prefer that.

David:

Absolutely.

Jack:

But doing one time cash is not a recipe to be able to retire really ever. Either let's flip something that makes you $100 million, or $10 million, or whatever it is, then that is enough to outlast your entire life, then it's not enough. And even the biggest models of money have been used up by people who do not have the right financial mindset. Just look at the top sports people like the basketball guys that have gone broke the Curt Schilling to baseball player with $60 million in like five years after retirement that is broke right?

Now, if they have a great name, they'll always find a spot to make an income. But $60 million is gone. I can't even imagine that now the process, my opinion of my wife, in our opinion, should go such as make money, make one time cash, do some flips, and find the easiest way to make those flips. That's why we must be to realize Lance was like, Man, this is easy and everything else, let us do that.

But that made us some of that money. And we used that money only for three different purposes. Purpose number one is to pay off a little bit of our debt, we had that student debt. So that credit card debt house that car debt, you name it, right? Use some of that to lose a little bit 10 or 20% of the money that you make from the slips and pay off that very soon you get to get your head above water from all your expenses in your life.

Second thing they use, use money and invest in yourself. Invest in yourself for more knowledge, because the only reason we were able to capitalize on the 2009 situation in the housing market is that by that time we had gained the knowledge and the experience and the confidence to be able to play into that market, right.

And the third thing is reinvest in your deals. Right. So so that's that's the way so that's the way you do that. And actually there's a fourth way, actually the third way is not to reinvest in your deals, put money off to the side, and then use that money to start investing in long term cash flow deals. That's what I mean with reinvesting that money. So reinvested money.

So the goal at the beginning is not to buy a new car, not to buy a new house, not to buy the Ferrari not to buy the Lambo not to go take a family case on a trip with a private jet and stuff like that. And I'm not saying it's crazy, I've seen people do that. So two years later, the market shifted on them and they're broke, they're broke, and I have to lend the money that actually has happened.

So instead use that money to pile it up. And if you have the tendency to spend then open another bank account with a bank across the city and throw away the ATM, so throw away the card so that the only way you can retrieve money is by literally going there and just saying that I need money or going to do a wire transfer into the into the title company for your for your next big investment. You have to protect yourself from yourself sometimes. But then secondly, that I'm sorry, I'm going a little long I know But the second way is then take the and as you do this start investing in software brings cash flow. So we did land flips first to get out of that right together head above water. Then we realized we can sell these properties and sell five. It's literally triple our money on the deals, because you sell it for us instead of buying it here and selling it. There is also buying it low and selling high with a down payment that pays for what we paid for it. And now monthly payments allow us to sell for higher and on top of it, charge an interest rate on that and get a treat three to four times higher profit from those deals. And the beautiful part of getting the cash flow without the dependence on its termites, right? trash, no repairs, none of that.

45:00 - 50:00

Jack:

So we get that cash flow going, and then use that cash flow and also feed that into your debt account across the city, right then on the other side of town. And then because you don't need that money, you don't need the money right now, you keep doing your flips, you live off your flips, you use the cash flow to put it in other pieces. And then ultimately, you invest in more and more of these cash flow assets. Like that's why we do the apartment complex deals because they're bigger cash flow, even bigger cash flow for long terms and you can invest passively in some of those we invest in, we have investors that invest with us all the time. And and then and then overall, what happens is if you start having one source of income, two sources of income, three sources of income, four sources, and all these sources of income are starting to come in. And soon enough, within a few years, you have more income coming from these cash flows coming in from all these sources than you actually made in your job making your job and you're financially free. You're financially free now, not at a million billion dollar level. But at the level of where you were before that before you didn't see a way out.

If you made $5,000 a month you not at $5,000 in cash flow, you're financially free, you not have a choice, you can quit that job, use that money to live on, but use that time to really propel everything forward five times faster.

And that's what we did. I made about 20 $500 a month, that's all I made, right. And we replaced that in a matter of four months with a matter of 10 months, we had doubled that in cash flow, we had paid off our debt, we had put a year's worth of living expenses on the sideline, our green card had come through, that's when we quit. And within eight months after that, we officially hit the million dollars in profits. And we were millionaires. And we've been obviously millionaires ever since. And, and that's the path. And then we started investing in the house system proud to turn that cash flow from the land that eventually will end because it's like three years, five years, seven years, 10 years, 15 years cash flow, we turned that into a two house cash flow that's free and clear, that will go on forever. Our daughter is 11 years old when she graduates. She's gonna make that cash, right? She's gonna inherit those houses, right.

And then we started apartment complexes that one of them alone is bringing in like about 100 grand a year in cash flow. And, and those we keep and then we go sell and then and then we roll into other things. And it's a lifelong process. I'm never planning to stop on that because it's a way of life. And that way of life now allows us to live in a house that is a 7000 square foot custom home that we just bought two months ago. And that is absolutely the home of our dreams.

David:

That's super cool. I'm really glad I asked that question because you just gave so much value in your answer.

Jack:

Yeah, that's my pet peeve. I'm like, that's where I wrote the book about it. The book is not a real estate book, a book is a financial freedom book.

David:

And that's that's why I started this.

So you mentioned people who made a big and blew all their money on something and then needed to borrow money. The military was deployed, a lot of guys can get it depending on your job.

I mean, there's $100,000 bonuses for re enlisting. And if you're in a combat zone, when you get that bonus, it's tax free. So imagine this 24 year old 22 year old kid gets a check for $100,000 handed to him. And he comes back. And it's like a Harley Cummins truck, sports car trip trip here married to someone I shouldn't have. And now I have nothing left. I say the military because I have two options. And I just saw stuff. I got started talking to people about what they're doing with their money. So I am very passionate in the same regard. We could probably talk forever about that.

Jack:

I see it, I see it in our seminars. There's another seminar that we do a three day teaching seminar on whether or not somebody's coming up to me. At least multiple people came up to me like 20 years ago, I could have bought, I was worth $4 million. Today, I have to borrow money to buy your course. It's like it's like it's crazy. It shouldn't happen, you should only become very happy to become rich once.

David:

It's true.

Jack:

But that's why we protect our assets. Like we spent a lot of money now on asset protection and lawyers and things like that just to make sure our stuff is safe because I don't work too hard. We work too hard for it. Right? And we don't if we need a new car, we buy a piece of real estate that spits out the cash flow to pay for the car payment for the car is all the junky the cash flow is still coming in. It's just a way of thinking that is different from that he said and said 10 years from now. The Harley is worthless or crashed, a car is broken, right? The boat is gone. The wife may or may not be the spouse or may or may not be gone but and they're looking back and it's like well, we had some good times. Good times to be celebrated, right we celebrate traveling, but travel is our celebration. But yeah, you know what I mean.

50:00 - 55:00

David:

Alright, so I'm gonna ask you one last question because we just touched on it if you had to name if someone was asked you for advice, what would be one resource and I'll let you plug all your courses are in a minute but one resource you would recommend that they if like if you have to read this book or check out this course or whatever listen this podcast that you would recommend anyone getting started in real estate or on their financial freedom journey?

Jack:

One resource, now I'm not even gonna tell any of my stuff. I mean if you allow me I will mention it in a minute. But the book that changed my mindset is so many people quote, the same book is probably rich dad poor dad, right? You regret that now, I read it in a different context because my wife went to a college here that Robert Kiyosaki actually reached out to and hired a few people to help him create this first is the first marketing concept for when the media just published a book and nobody knew about the book yet.

So I was at dinner one time with my wife and saw some of these get back then she was still my fiance, we weren't married yet. And, and she 18 years ago, 19 years ago, and this guy tells me about this Kiyosaki dude, and, and how he works with that way of looking at things. It's completely different. It gives me enough to lend his talk, and I just read it in today's and it changed my mindset.

Now that the two that have cash flow mindsets are credited with that. Now, having said that, just reading the book is not going to do it right because you got to still take action, you got to do something. So the data and resources that I use is I listened to podcasts, I started only after reading the gap I started reading self improvement books. Because I realized that I need to shake my mind in those kinds of ways.

So I started with something. Schwartz is the name of the magic of thinking big. I started reading everything from I forgot his name right now but Dale Carnegie right and I'm looking through beyond here is my bookshelf I'm looking if I can see some of the books here. I took all of them with me because I can't I couldn't imagine leaving them behind when we move but all the kind of the classic self improvement books like Think And Grow Rich and Tony Robbins unleash the power unleashed unshakable or unleash the power within or whatever this those kind of things, there's like, it's a constant thing that you that you want to work on. Because people say like all motivation only lasts only for a little bit. Well, so that's taking a shower, and we do it every day, right? So you definitely want to want to tap your mind into that every single day. And somebody else told me that whatever you put whatever it goes into, into your mind, wherever you consume on a daily basis, it will eventually come out of your mouth again.

So if you put stuff into your mind by watching TV by hanging out with people, you shouldn't, that is that you are filling you with stuff that is not uplifting, that same stuff will come out of your mouth, eventually, it will die, it will decide the direction of your life.

So if you want that, if you want success together, put positive stuff into your, into your mouth, in your mind, mind so that it comes out of your mouth again, and in that way and that it's uplifting to others. And it helps and helps you do that. So it's probably a much bigger answer than you want it.

David:

I really like that about the shower, I'm gonna put that in a quote. And that's gonna go up on my social media here this week. That's hilarious. And so true.

Jack:

Yeah.

David:

So as we wrap this up, you know, I want to give you a chance to plug your course and some of your seminars and stuff. Where can people get a hold of you?

Jack:

Well, thank you very much. We have a course called Land Profit Generator that you can get on again and watch the video and watch a training webinar on landprofitgenerator.com. So just simply go to WWW.landprofitgenerator.com. And we also have a Facebook group that is free and of course is free to watch the webinar. And we have a Facebook group that is called Land Profit Generator Real Estate Group that's on Facebook that is also free to join. It's a closed group you get to apply for and make sure you answer the questions. Because we don't want anyone to spam in there because it's a true group that we help each other get graded. Like we've created like a true land profit generator family, like a tribe in the sense where we help or where we were we help each other succeed through that. And then after for those who have the land profit generator, we have seminars or something I'm not even open to the public, the only open to those who have our land profit generator course.

55:00 - 58:55

Jack:

So if you because in that seminar, we don't have guest speakers and it's not a pitch on and we're not selling a bunch of stuff that's on, it's for those who have the course already to go dig deeper into what they're doing already. And people have called it the most life changing event I've ever been to. Because it's an it's an it's an event that I teach it. And it's not because of this life changing because I'm just a regular guy, but it's life changing because of how we structure it, then we started to go into the depth of why you want to be successful, right? We've got to know that not just there's information that would make everyone wealthy, that everyone that every university professor would be well, right.

So information is out there a dime a dozen would make somebody take action if they can emotionally connect to the reasons why they need to take action. So we're doing a little session just like half an hour at each time in our live events on that. And that really drives people forward to take action and make things happen. And so but but the simplest way to start is to go to a land profit generator to find out more about the technique and how it works. And then join our Facebook group so you can convince yourself of what the impact is like, like, who am I to tell you that we have this amazing system that works? Right? Probably not believe me anyway? Because I'm probably thinking I want to sell you something.

Just join a Facebook group, watch the webinar, join the Facebook group and see how our students are doing out there. Are they helping each other. And how usually successful our group of people is.

David:

Absolutely. And I know your Facebook groups got a pretty solid following it. It's big. So it's obviously not just...

Jack:

1000 people oh, and we also have a podcast. I have a podcast called forever cash again, like the name of my book forever cash life, real estate podcast again, forever cash life real estate podcast.

And my wife also has a podcast called the Inflow with Michelle Bosch podcast where she teaches specifically designed for women. And so it's a combination of, of life, success and real estate kind of advice, interviews. She has some amazing guests on that show. Some nationwide known people in the money, real estate, spirituality, success phase, it's an amazing podcast. It's called Inflow with Michel Bosch.

David:

I'll link to that one as well. I'm gonna link to all this now in the show notes. As always.

Jim, thank you so much for joining us. This has been a lot of fun for me, because this is something that I've been curious about. But, you know, I wanted to have you on the show because obviously land and real estate is awesome. But I really appreciate the five minute spiel on financial freedom and forever cash to me that that is just huge, because that's learning to invest in real estate can be life changing. But if you don't learn how to control your expenditures, it won't matter.

Jack:

A lot of people don't want to make money. Very few people know how to create wealth.

David:

Yes. That’s huge.

Jack:

And what we're focusing on is truly wealth creation. Like, I'm convinced that when we pass away, our daughter and her grandchildren will never have to work again. They can do what they love in life. And the funny thing is, we found what we love and love, I will do real estate for the rest of my life.

David:

That's a good feeling. It's a great feeling.

Awesome. Well, thank you very much for joining us today.

Jack:

Thank you very much for having me.

End:

Thank you for listening to another episode about my journey From military to millionaire. If you liked it, be sure to visit Frommilitarytomillionaire.com/podcast to subscribe to future podcasts. While you're there, we'd love for you to rate the show. Give us a review on iTunes. Now get out there and take action.