Hitting Pay Dirt and Finding Freedom with Guest Mark Podolsky: MakingBank S3E8
with Mark Podolsky
MAKING BANK is a weekly YouTube TV show and iTunes Podcast full of #Success and #Business with Josh.
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It doesn’t sound like a real business but buying and selling dirt online can actually be very profitable.
Today on #MakingBank, host Josh Felber invites Mark Podolsky to discuss his journey from miserable investment banker to lifestyle entrepreneur via a very unusual route. He shares great advice on how to build freedom and flexibility into your business.
Mark has been buying and selling raw land full-time since 2001.
He has completed over 5,000 land deals and his company, Frontier Equity Properties, has an A+ rating with the Better Business Bureau.
Mark is the host of a top rated podcast and his passion for investing in land, creating wealth efficiently, and helping other people develop their inner entrepreneur geek has led him to become known as of the ‘Land Geek’.
So, tune-in to hear Josh talk to Mark about how he was once an unhappy investment banker but a new guy hire by his firm helped him on his incredible entrepreneurial journey to success and achieving the lifestyle he wanted to live, as well as…
- How he got started in buying raw land.
- How Mark made over $90,000 in his first six months of buying land.
- The first things to do and consider when buying raw land to resell.
- How Mark’s business give him freedom and flexibility, and why those 2 things are so important to him.
http://thelandgeek.com/makingbank – Free course – $99 value!
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Hitting Pay Dirt and Finding Freedom with Guest Mark Podolsky: MakingBank S3E8
Josh Felber: Welcome to Making Bank. I am Josh Felber, where we uncover the success strategies and the mindsets of the top 1% so you can amplify your life and your business today. I’m really excited for today’s guest, Mark Podolsky, AKA the Land Geek, is widely considered the country’s most trusted and foremost authority on buying and selling raw undeveloped land within the United States.
He’s been actively investing in real estate and raw land since 2001 and has completed over 5,000 unique transactions. Mark’s company Frontier Equity Properties is an A plus rated BBB real estate company. Mark has achieved this level of success largely due to his core business philosophy, happy customers guaranteed, which we should all have a good philosophy for.
Mark is one of the top rated podcasts in investing category on iTunes titled the Best Passive Income Model and the art of passive income is also the host of the Land Geek Podcast, Work smart, earn more and learn how. Mark, I’m excited to welcome you to Making Bank today.
Mark Podolsky: Josh Felber, I appreciate it. Thanks so much.
Josh Felber: For sure, man. So give us a little bit of background, I guess, what got you started into the whole entrepreneur space?
Mark Podolsky: So in 2000, I was a very unhappy investment banker. I was working with private equity groups doing mergers and acquisitions middle market, 5 to 500 million enterprise value.
Josh Felber: Sure. All the small stuff.
Mark Podolsky: Small stuff. Yeah. I had a 45-minute commute to work and back politics micromanaged, no control, long hours, high pressure. And so Josh, you got to the point where like I didn’t get the Sunday blues anticipating Monday coming. I’d get the Friday blues anticipating the weekend going really fast and having to be able to work on Monday. So my firm hires this guy and he tells me that on the side he’s going to tax deed auctions.
He’s buying up raw land, and he’s putting them up online, and he’s selling it, and he’s making a 300% return on investment. Well, Josh, I’m looking at companies all day long, a great company. A great company has 15% EBITDA Margins are higher free cash flow, great company. Your average company is at 10% and I’m looking at companies all day long, less than 10%. So all from St Louis, Missouri from the show me state, I don’t believe him, 300% So we go, I’ve got like three grand saved up for car repairs.
We go to this auction in New Mexico. I’m looking at raw land. I’ve never done anything in real estate except by my house. And it just looks like dirt to me. We go to this auction and there’s no one in there, and I’m buying up these half acre lots, and I paid an average price of $300. So I got 10 and a half acre lots, $200. Next week, just put them up online. They sell for an average price over $1,200.
Josh Felber: He was right. Wow.
Mark Podolsky: So I take all that money and I go to another auction, Arizona where I’m from and I start or let them live there. I’m from Saint Louis. So there’s no one in the room, I’m buying up properties left and right. And after that one auction, I made over $90,000 in six months.
Josh Felber: Wow.
Mark Podolsky: And so I go to my wife, I’m like, “Honey, I’m going to quit my job and I’m going to invest in land full time.” She’s like, “Absolutely no.” Okay, okay. So I did it part time for 18 months and until the land investing income exceeded my investment banking income, I quit and I’ve been doing it full time since 2001 and I love it. I love it. So I think it is the best passive income model, the ultimate subscription model, because the way that I do and we can kind of get into it is, it’s a one time sale and then I get recurring income every single month, but it’s a piece of raw land.
So I don’t have to deal with renters, rehabs, renovations or rodents because I’m not dealing with a tenant. I don’t have to deal with Dodd Frank, Crespo, Say Fact. I’ve got nothing to maintain, nothing to protect. It’s not. Again, he’s calling me and say, “Hey, buy raw land is leaking.” Right? And there’s no one doing it. It’s a massive market and literally no competition, no private equity groups, no hedge funds. So if you went to a real estate investment meeting, there’d be 100 people in that meeting. 99 of them are house flippers and wholesalers. [inaudible 00:05:20] we’re land guys.
Josh Felber: Wow. So that’s amazing. And so you started all these back in 2001. Today, do you have more competition? Do you have more people at those auctions and stuff now? Or is it still just a couple guys showing, up buying land?
Mark Podolsky: Right. So entrepreneurially, like we got to pivot. So from 2001 to 2006, it got very competitive at the auctions. So it got to the point where I’m like, “I need to do something differently.” So that’s when I started actually getting people’s properties before they went to auction and avoided any competition.
So what I would do, is I would get a list from the county treasurer of people that owed back taxes and lived out of state, and then actually send them an offer for their property and say, “Hey, I’m interested in buying your property before it goes to tax deed or tax lien auction.” And they would sell it to me $23 cents. So ever since then, I didn’t have to go to auctions. Now 2008 rolls around the market crashes, no one has any money. You could go back to auctions. Today, I avoid off again.
Josh Felber: So it’s kind of cycled back and then, and then down again and now it’s come back to where it’s more competitive or everything.
Mark Podolsky: Exactly, exactly.
Josh Felber: And so, when you were making the offers then to people before they went to auction, you’re still buying the raw land and everything right there?
Mark Podolsky: Correct.
Josh Felber: Awesome. And then you turn around and you sell them back online still as raw land or do you sell them as your development opportunity or do you develop them or?
Mark Podolsky: No? I tell everybody I’m dirt poor. I could only afford the dirt. And when you look at the numbers, 80% of developers go under. So it’s a really high risk, high reward type of thing. So our margins are 300% to 1000%. So if I’m buying this asset $23 cents, then I can flip it online in time money I do own a financing. So let’s say for example, Josh, I buy a piece of property from you for $1,000. Well, I’ll then sell it for 10,000. And I’ll do a car payment, I’ll get $1,000 down to $49 a month at 12.9%, and then you’ll pay me over the next 60 months.
And we do it on a land contract, which is very different than a deed of trust. So a land contract, that asset remains in my ownership until you pay off that note. And with software today, I have this business, 90% automated. So I actually work in front of your equity properties two hours a week. I destroyed Tim Ferriss and his for our work.
It took a long time to get to that point, but I was finally there.
Josh Felber: That’s pretty amazing. I’ve not talked to anybody that’s invested in land. Did lot of different other parts of real estate, house flipping, commercial properties, and things like that. Is there a specific criteria that you look for when you go in? Or did you just like, “Hey, I’m buying land in the middle of New Mexico and it’s kind of out in there.”
Mark Podolsky: Yeah. Yeah. So there’s 3007 US counties. And so what I want to do is, I want to look at counties where I’m going to have the biggest buyer pool and I know definitively there’s deals being done there. And the way I get that knowledge is basically doing a google search and then kind of digging a little deeper to call the county assessor and I’ll get comparable sales.
So nobody wakes up Josh, thinks, boy, I’d really love to own a piece of raw land in Minnesota unless you live in Minnesota. So I focus on areas like Arizona and Texas, California, and Nevada, Colorado, New Mexico, Oregon, Washington, and Florida. Just in those states alone, we’ve got growth, we’ve got tons of raw land available, and it’s just a numbers game.
Josh Felber: For sure. That’s exciting. Now, what might be then, three things that have really put you on or what kept you in the game, the rigid down this path to where you are today?
Mark Podolsky: Well, in 2010 when we got kinda hit. So we’re on the long tail real estate. So when housing gets hit we really don’t feel it for about two more years. So I was really hit until 2010. I had a great year in 2008, 2009. 2010 was tough. 2011 was tough. We kind of came out of it in 2012, 2013. So that curve was little slower, but I would say what I really got out of it was it really forced me to create processes and systems and treat them like a real business as opposed to like if you.
From 2001 to 2010, people thought I was a drug dealer. It was so easy. It just wasn’t me. The market was so hot. I think my advantage was that I was very conservative financially and instead of over leveraging and going as big as I could go, I was conservative and I think that’s what sustained me because a lot of my competitors then were over leveraged. They had bigger houses, and bigger cars, and bigger lives, but then they were over leveraged and had to go.
Josh Felber: Gotcha. Along your journey then, do you go out and teach this now, or do you just still just focus on buying? Or people, “Hey, no. Mark, I’d love to learn how to do this.” Do you guys teach that now or?
Mark Podolsky: Yeah, we definitely teach it and even though it’s so funny because for me, it’s like the most gratifying part of business because nobody ever thanks me. “Hey, thanks so much for selling me this piece of raw land.” They’re grateful. I’ve retired people and I’ve retired spouses. I’ve got one client who is in … they quit their jobs, they have enough passive income. They quit their jobs and they’re in Europe right now and they’re traveling.
It’s so humbling and gratifying that to move the need of people’s lives, teaching them how to do this, and getting those kinds of results. That part’s just been amazing. I remember thinking, or actually it wasn’t me, it was my wife. She’s like, “Mark, why are you teaching anybody that had to do this?”
She’s like, “You’re going to create your own competition.” And I’m like, “Honey, let’s do the numbers.” I’m like, “There’s 3,007 years counties. There’s billions of acres of land. How many properties can I buy? her? You, me, a million people in this niche. We’re all going to run out of money before we run a deal flow.” That’s been the case. Now as I said, because I am full time land investing. I’m like, If it ever comes down to the day where I send out an offer to somebody that’s like, “Hey Mark, you got your offer?” And I’ve got three others. Just like yours is the lowest.” That’s what I’m shutting down Land Geek, but it hasn’t happened. It’s been amazing.
Josh Felber: Cool. And so with the passive income kind of model that you teach and everything and that you’ve created for yourself, what are the three benefits or the lifestyle that’s been able to afford for you because obviously, you said you don’t go or you don’t live in over exuberant life, but what are maybe some of the benefits that it’s really provided for you and your family?
Mark Podolsky: Well, I did live the over exuberant life. So I did have the big house, and I did have the big cars, I did the private schools, I had the nanny five, I have three kids, I had the nanny five days a week, and I did do all that. So it was quite humbling and quite kicking the ego to have to tell my wife like half my income’s gone and we’re going to have to adjust. So we got rid of the house, we got rid of the cars, we got rid of the private school, and we started playing charades on the weekends instead of going out to Mastro’s like we used to.
I look back and it was really hard to do, but now it’s kind of a blessing because I can really tell people honestly that all those things are great, but they won’t make you happy.They really won’t. So it was sort of a spiritual awakening for me about what’s really important in my life. So what’s really important to me, why I’m doing this is freedom and flexibility. So I work three days a week. I take Mondays off, I take Fridays off. Tuesday I do my podcast, Wednesday I have meetings, and then Thursday I work on the business.
Just this morning, you can see I worked out, I had coffee with my wife. And so for me, it’s really about this model allows me to really focus on what’s really most important to me, which ultimately is the quality of my relationships. It’s not going to do me any good to have all this money, and my wife and children hate me or not know me or I don’t know, just kind of not be the kind of person I want to be. Or I’m stressed out. I’m not present.
Josh Felber: For sure.
Mark Podolsky: I’m anxious all the time because I’m constantly worried about this or that. So that’s really what the model has afforded me. My passive income exceeds my fixed expenses. I’m challenged everyday. I’m intellectually challenged. I love working on the business, growing the business, creating systems and processes, doing different things, and learning more and having this community which is awesome. But ultimately, that freedom and flexibilities. I’m really in the freedom business is what I meant.
Josh Felber: I think that’s really important because a lot of times as entrepreneurs we get so caught up and we’re going, we’re pushing hard, and everything else and a lot of that other pieces get … we don’t have that presence when we’re communicating with our family, our spouse or friends or we lose the freedom that we’re trying to get.
Mark Podolsky: Yeah, yeah, absolutely. That typical entrepreneurial dilemma. They either have money and no time or they have time and no money.
Josh Felber: I was getting ready to go into. I’m like, “Man, I love Mark story and you know, I really want to get into land investing and everything else.” What would you say maybe are the three to five points if somebody is ready to start and they want us to go start doing this on their own?
Mark Podolsky: Let’s go through the model then. So first thing we need to do is we got to research a county. So again, we don’t want to go to Minnesota or Arkansas, nothing wrong with those states, East Coast. We could have EPA issues. So super fun sites out there, which is a huge problem. You can look those up at epa.gov. The first thing is you want to do county research.
Once you pick your county and you know definitively deals are going to be done there, we need to get a list of people that own real property in that county. So let’s call the county treasurer or the county assessor and get that list. Then we’re going to scrub the list. We’re going to get rid of all the houses, industrial property, commercial property, and we can do that by use code, VL, vacant land or whatever that use code might be in that county.
So now we’ve got a good list. Then we want to scrub it one more time when we do batches because I’m not going to send you Josh an offer if you’ve got an acre, same thing has 10 acres. Otherwise, you’re going to send me a letter back in the mail. So then, we’re going to send out our offers and then with that we create these offers is we want to do that Warren Buffet, massive margin of safety.
So we’ll look at the comps and we’re going to divide by four, right? And then we’re going to actually send an actual offer because again, I can always make more money. I can’t get more time. So I don’t want to be in the appraisal business. I don’t spend all my day being on the phone and people say I mentioned selling my land. “What’s your offer?” You have to have an actual offer. 3 to 5% of people are going to accept that offer.
Then we go through our due diligence. We have a whole due diligence checklist legal access, ingress, and Egress is a clean title. No breaks in the chain of the title. All these things that you would typically do in real estate. Then we close on that property. Now I own the property. Then within 30 days, I’m going to sell that property. Josh, guess who the best person is to buy that property?
Josh Felber: Who? I don’t know.
Mark Podolsky: I got built in best buyer. The housing guys don’t have it.
Josh Felber: Yourself?
Mark Podolsky: No favor the neighbor. So we send out neighbor letters saying, “Hey, before we go to the open market, here’s your opportunity to get a larger tract of land, protect your view.”
Josh Felber: Got you.
Mark Podolsky: Because now the fear is like, “Who’s my neighbor going to be? Are they going to put a house? What are they going to do out there?”
Josh Felber: Sure.
Mark Podolsky: I’ll buy it. So now the neighbors past that we could have our buyers list. These are people that we’ve already educated on the benefits of owning raw land. If they all passed and we go to a little website you’ve probably never heard of, it’s the 10th most trafficked website in the US called craigslist. And then we have a program that we do automation. So by the click of a button, I have 124 ads posted.
Josh Felber: Wow.
Mark Podolsky: It’s within 90% stick rate. It’s amazing. Oh, if craigslist doesn’t go well, we did the same thing on Facebook. So we automate Facebook ads and then by so groups. So now within 30 days if that property hasn’t sold, [inaudible 00:19:18] now because I missed it. The down payment needs to go higher, the down payment goes lower. The price needs to go higher, price needs to go lower. The interest rate needs to be changed. Something needs to change. That property is sold. And now we sell the property. We want to get our money out typically on the down payment or within six months.
And then we have these recurring passive income which again, we’re using software called geekpay.io to automate it. So now it’s a one time to get the system where it automatically charges the ACH or their credit card on file if and then charges next one on file. They can log in, they can see their card balance, they can make a prepayment, and it’s an amazing system. So with software knowledge, it’s automated.
Josh Felber: So couple of questions and based on what you’re saying, so when you were talking about the best people to go to then would be like the neighbors, everything else. So some of the tracks of land that you are buying, the raw land are in an aid development that may just be have parcels that are undeveloped?
Mark Podolsky: Yeah, possibly. Or it could just be that these people were buying property as an investment or mom and dad bought it as an investment and here’s your chance to get the larger tract. Sometimes they’ll say, “No, I’m not interested in buying. I’ll sell you my property too,” which is great. So now I got an email, a larger tract to sell.
Josh Felber: Sure. And then what percentage of the deals do you usually have closed within the 30 days?
Mark Podolsky: About 99%. We’re pretty good at it now. It’s awesome.
Josh Felber: So you have this whole process, and program, and the automated back end pieces everything. When people come and they say, “Hey Mark, I’m going to work with you on this.” Do then just plug them into that whole model or just say, “Okay. Hey, here’s the program,” and they just go to kind of do it on their own or how do you guys have that set up?
Mark Podolsky: Yeah. We have personas. So everyone’s different. So are you a do it yourself or? Here’s where you go. Come on, there’s no more secrets, Josh.
Josh Felber: It’s all out there.
Mark Podolsky: All that information is free. Here’s where you go to get all that free information and start doing it right. If you want to have a Sherpa who’s going to take you up Mount Everest so you don’t get hurt, we have that program. If you want to go up super fast up that mountain, we’ve got that program. So it depends on who you are, what you want to do.
Josh Felber: So you guys came then accommodate anybody to-
Mark Podolsky: We’ve solved just about every pin point in this business.
Josh Felber: We’ve got few minutes left. What would you say probably along your journey would be your most transformational or life changing event throughout your journey?
Mark Podolsky: 2010 was pretty transformational for me kind of getting back to a value based and losing sort of ego in assessed. But I’d say as far as the business being validated. So in 2010, I was still profitable. I was still making six figures. I just wasn’t making high six figures anymore. And so I think for me, that really helped propel me into thinking, “Well, I better start really treating this like a business and doing all this Michael Gerber e-myth stuff and developing the processes and really treating it like an entrepreneur.”
Josh Felber: First of all, where can people find out about what you guys do and more information about, “Hey, I want to invest in raw land.” Where should they go check you out at?
Mark Podolsky: So we have all this information at the ranky.com. That’s a good place to go. If they’re listening to the podcast, they go to the ranky.com/makingbank and we got a little course we created to kind of let people put their [inaudible 00:23:23] their passive. We saw that inside a box, but let’s keep giving people the love, they’ll get for free.
Josh Felber: That’s real. That’s awesome. They just go there, fill in the information, they’ll get the digital digital course?
Mark Podolsky: Digital course.
Josh Felber: Oh, awesome. That’s great. And then the land geek for just more information on your guys’s overall programs and everything.
Mark Podolsky: Yeah, absolutely.
Josh Felber: Cool. One last thing you’d like to leave our audience with that you feel is important to their journey?
Mark Podolsky: I think the value of grit and I love that Zig Ziglar quote, “If you’ll do for the next three to five years what other people won’t do, you’ll be able to do the rest of your life with other people can’t do.” But I think that a lot of times to come up like this artificial timeline and we might be really great at one thing and then we try to do another thing and our expectations were we should be just as good at that. But when it’s new, like you’ve got to go through the suffering of the learning curve and sort of, I’ll have to say, embrace the suck. But once you kind of get to that point, then life becomes amazing.
Josh Felber: Cool. Now, that’s awesome. Well, I want to really just thank you and appreciate your time today coming on, making bank, and really kind of diving in, and learning some of the whole nother way to generate income and a whole nother way as an entrepreneur to diversify and create another stream of income even with raw land and what you guys are doing and hearing about your journey. So thank you for your time today, Mark.
Mark Podolsky: Yeah. Yeah. Two hours a week is all it takes to get this side hustle going. You’re an entrepreneur.
Josh Felber: That’s good. It 18 months. If you want to exit out of where you are today.
Mark Podolsky: Absolutely. All right. Thanks, Josh. I really appreciate it.
Josh Felber: Cool, man. I’m Josh Felber. You’re watching making bank. Get out and be extraordinary.