How to make $4m in One Year Flipping Raw Land with Pete Reese

Pete Reese: [0:00] We send out actual offers on the properties too. You know, it's a it's a two page thing, and first page is kind of introducing ourselves and what we do. Second page is actually a purchase agreement where we've got their parcel number, the acreage, their county, state, and an actual offer price that we're offering them. It's kind of a one page purchase agreement, and, you know, sometimes people just sign it and mail it back to me.

Speaker 2: [0:25] Welcome to the Collecting Keys Real Estate Investing

Pete Reese: [0:38] I'm I'm

Speaker 2: [0:43] outs of running a full time real estate investment and wholesaling business.

Mike DeHaan: [0:49] What's going on, guys? On this episode of the collecting keys real estate investing podcast, we have Pete Reese, who is a land flipper from turningprofit.com. That's the name of his podcast that he's just started. Go check that out, Turning Profit. But Dan, I mean, I I hate to say it. I know you kinda gave me a follow-up because this is before. Think this was my favorite podcast that we've done.

Dan Austin: [1:10] Mike is crushing on Pete. You guys I mean, seriously crushing.

Mike DeHaan: [1:13] I am. No. He's had such an incredible, I guess, wealth of value in it. I think I liked it too because he just honestly reaffirmed our business model.

Dan Austin: [1:22] Yeah. 100%. He explained our business model, but like he also the way he does it. I mean, he's legit. He's doing stuff. You can tell it.

Mike DeHaan: [1:30] Yeah. He's he's doing stuff. He's making big money. His business this year, he's was he say 4,000,000 worth of gross revenue as of right now. And this is, you know, middle of November twenty twenty two. So he's doing big deals doesn't have a crazy big team. But he has just perfected the art of finding valued opportunities with land. And he does it virtually from his home in Southern California, does it in several markets around the country. He has his processes figured out. He finds the properties with direct mail, and he goes through all the stuff about how we sort of like built that, how he figures out value and does everything. So so many wealth bombs wealth bombs. There's wealth bombs,

Dan Austin: [2:09] definite wealth bombs and knowledge bombs, dude.

Mike DeHaan: [2:11] And knowledge bombs in this but now I loved it. It did a really, really good show. So definitely go and check out pturningprofit.com. Aside from that, you guys share this with anyone else who might be interested in finding deals, or wants to learn more about flipping and investing in land. Aside from that, guys, enjoy the show and let us know what you think. Enjoy. Alright, Pete Reese, thanks for coming on the show all the way from Southern California. Land flipping extradinaire, sounds like. So really excited to sort of hear your backstory, kinda where you came from, and how you got into what you're doing now.

Pete Reese: [2:46] Yeah. Well, first of all, for having me, Mike and Dan. Yeah. I'm excited to be on here and talk a little bit about land flipping, or anything else real estate related I guess too, but Shading in your life, I wanna hear it all. Yeah, I'm not sure how you're interested in all those boring details. But yeah, I've been in real estate for quite some time, I guess you could say I've been in real estate since the year 2000 when my wife and I, we bought our first home. Did pretty well on it just because of dumb luck and we tried to buy it right, sold it a couple years later, got the proceeds tax free, thought this was great, so we kinda upgraded into another house, did well on that one after we fixed it up, did some DIY type improvements myself, which in hindsight were really poor quality. They all were

Dan Austin: [3:32] when we first started. Oh yeah,

Mike DeHaan: [3:35] that's how it has to start though.

Pete Reese: [3:37] Yeah, my wife was telling me how great of a job I was doing, I look at some of the pictures and I'm just embarrassed.

Dan Austin: [3:42] Yeah, I love it.

Mike DeHaan: [3:43] Yeah.

Pete Reese: [3:44] And then I started, we started getting into flipping homes, and it kinda went down that whole rabbit trail about 2004 to two thousand seven, 'eight ish, somewhere in there until the real estate market crashed here in San Diego, and luckily a couple years before that I had gotten my broker's license and I got it pretty much just so I could get the commission on the deals that we were buying to flip homes, but it actually worked out pretty well because it gave me kind of a fallback plan when the market crashed and flipping homes, it really wasn't too much of a viable business model at that point. But then my wife suggested, hey, you know, you should talk to the banks and see if you could start listing their properties. And I went down that whole thing, and was an REO listing broker for a number of years, and Nice. So, those were the properties that were selling at the time, and it was great for the time, not something I wanted to be in long term for sure. It's tough, you know, dealing with all the people issues related to that. I mean, when you get a property assignment, you know, you get an email from one of these banks, and they say, hey, new property assignment, your first job is you have to go knock on the door of the house, see if it's occupied, and if it's occupied, then you have to negotiate with them for cash for keys or something, so. Interesting. A lot of sad situations back then, you know, kids entering the door, and it's like terrible. I still think about that kind of stuff. And I dealt with it in the best possible way I could.

Pete Reese: [5:14] But it was just kind of like, you're put in the middle of this, really bad situation. But totally,

Mike DeHaan: [5:19] yeah, yeah, I guess I didn't realize they made you do the dirty work on that as the agent. I assume they had like a bank like hit squad that would And go out

Pete Reese: [5:26] and do all that sort of maybe some of the brokers were smarter than me and had, you know, like a team built where they actually sent a team member out to do the stuff that they didn't wanna do, but at the time, it was just me, and that was the worst part of it, you know, and a lot of times people wouldn't answer the door, so you have to leave a note at the door, and some people just dragged out the process even further, you know, I know the ones that

Dan Austin: [5:50] probably took two years. I can't imagine, like, scheduling showings and stuff as a broker when you have a situation, and you were trying to be sensitive to the family too, like, be a jerk to them because obviously they're losing their home.

Pete Reese: [6:00] Yeah. Yeah. Really bad, you know, and then, I mean, even down to the fact that when it came time, because then they started the eviction process of there was people still living in the home, and that process in California takes forever. And then then they'd post the sheriff is gonna show up on this date and time, and you have to show up, you know, as the broker, and you have to show and the sheriff show up as well. And some people just, even then, they were there, and they had all their stuff in there when the sheriff show up, and they knew, you know, a couple weeks ahead of time when that was gonna happen, it's just like, oof. Yeah. I don't know. Just a bad situation. Maybe they had nowhere to go or something, but it it was just a bad situation. Situation. But I was grateful for it in a way because it kept the bills paid in a time when a lot of people in real estate were really struggling.

Dan Austin: [6:46] For sure.

Pete Reese: [6:46] So it was good in that way. But I did learn about how things work from that side of things, how the banks sell properties and what their whole process is. So if it ever comes back to that, I'll have

Dan Austin: [7:00] You have some experience.

Pete Reese: [7:00] Some insider knowledge, I guess. Yeah. Right. As an investor. Got into short sales for a little while and then kind of into another business, which ran with my wife for about four or five years, then got the itch to get back into real estate investing and stumbled into land investing, land flipping, land development, and that's been about two years now, and I just went all in, and been having a great time doing that, trying to scale this business as as, as high as we can, so hopefully I'm on track to do almost 4,000,000 this year in revenue, and You're crushing it. Hopefully 10,000,000 next year, so. Yeah.

Mike DeHaan: [7:42] There you go. You're crushing it. Nice. I like that. What spurred that switch from, like, single family homes, especially doing like REO and short sale, to land? That's a pretty drastic difference. And one of the things that we find is super common with investors, and honestly, we fall into this too, because we're mostly residential investors, is taking that leap over to different asset types. You know, it opens up a whole can of worm because you gotta learn about the asset type, gotta learn how to find them, you gotta learn how to value them, you gotta learn how to sell them. I guess, like, what drew you to land specifically?

Pete Reese: [8:13] It was kind of interesting. I mean, I knew all of the basics about land, but I didn't know all the details of how the business model worked. I honestly just stumbled into some things, some anecdotes people were saying online, hey, I bought this property for 10,000 and I sold it for 30,000. I was like, well that's kinda cool, know, I would do a bunch of those.

Dan Austin: [8:32] Right.

Pete Reese: [8:32] And pretty low risk and I don't know, but I thought it was just interesting and that just, I took someone's course, I bought a course on it and tried to learn everything I possibly could and how to evaluate properties, all the different tools to use, everything associated with it. So I went in really deep and I tried to really learn the model, tried to really learn how to evaluate these properties, because you're buying properties all over the country, know, it's rare that we ever see a property before we buy it, after we buy it, anywhere in the cycle. So, you gotta get really good at evaluating properties from your computer and building a team and some help locally that can help you evaluate some of these properties as well. Interesting, so you're out virtual then? Yeah, exactly. So the thing about it was, I guess, jumping to that new asset class was just interesting to me because I saw kind of how the business model worked, and that was intriguing to me, and I figured I could learn it quick enough to to be up to speed. Yeah. So that's why I'm

Mike DeHaan: [9:30] Yeah. So, yeah, that's awesome. I was using it virtual as well, and that opens up a whole new challenge Right. Because land is valued so differently in places like, you know, up here, Eastern Washington, Northern Idaho, where I can drive five minutes north of my house, and I will be out of the city center. And there is nothing but land everywhere. Versus like Orange County, you know, or San Diego, land is gonna be a lot more sparse in terms of like usable land.

Dan Austin: [9:55] Right.

Mike DeHaan: [9:55] So, like do you target specific areas nationally?

Pete Reese: [9:59] Exactly. Yeah, so what we'll do is we'll first of all look at certain states and certain counties within those states, and try to get a feel for what the land market is like. Are there a lot of listings there? Are things actually selling? Is it an active market for land? Some areas, there's tons of land, tons of listings, very few sales. There's kind of this, don't know, almost a weird imbalance between what sellers are expecting and what buyers are expecting, so not a lot of transactions happen. But I really look for the areas where land is actually moving. Like there's an active market, things are pretty well defined, like 10 acre property goes for 3,000 an acre or something like

Mike DeHaan: [10:42] that. So

Pete Reese: [10:44] when we can see the activity, that's a really good start. Most of the areas that we mail to, and we generate everything with direct mail. I'll And pass I can get into that too, specifically what type of direct mail we do, but we mail to areas where pretty much an hour to two hours outside of like a major metropolitan area or at least a larger metropolitan area, kind of a circumference around there, and then a lot of the buyers get pulled from the surrounding areas, but maybe some of those metro areas for people looking to invest in property for recreational purposes, or maybe they just wanna get away from the city and build something on their own, be away from everyone.

Dan Austin: [11:22] Yeah. Interesting. So you're not when I initially heard land too, I feel I go two ways. Like, there's land where you're gonna sell it to, a developer probably who's gonna develop large tracts of homes, then and there's land where like you said, maybe 10 acres that somebody just wants that to be their their home. They wanna get away from the city. They want they're retiring, and they wanna go out, or they just like being out in the woods somewhere wherever you're I guess, I shouldn't assume woods like we have here, but is that kind of where you're doing most of your transactions, are those smaller parcels outside of a town it sounds like that people would maybe buy to build a house on or recreate on?

Pete Reese: [11:55] Yeah, that's kind of the sweet spot, and as we've gone along, we've been getting bigger and bigger on the parcels that we've been buying. Initially, I was buying properties at least two acres was kind of my minimum. Now, I really don't look at things under 10 acres. I've sold properties as large as six fifty acres, so there's a big spread, but kind of the smaller properties actually are a little bit more difficult to deal with, infill lots they call them, because they only have sort of one exit plan. It's gonna be a building site, or no one's really gonna want it, because if it's an acre or two, and you can't build, it's not buildable for whatever reason, then what are you gonna do with it? It's gonna be tough to to really do do much with that property. If you've got something that's 10 acres or above, and maybe it's not buildable for some reason, there's still an active market for people that are either looking to use it for recreation or agriculture or something something along those lines, animals, all

Dan Austin: [12:56] kinds Yeah. Of

Pete Reese: [12:58] Boy, interesting.

Mike DeHaan: [12:59] That's cool. That's an interesting niche. The direct mail to you, I mean, I like to hear that because that's our main marketing method for our for mid lead source.

Pete Reese: [13:06] Oh, yes.

Mike DeHaan: [13:07] Our residential wholesaling business. So many people, they get into these try to get these really complex systems without these, like, cold calling texting. We do that a little bit, but direct mail is tried and true. Yep. You know, especially I'm assuming you have like a brand or something behind it that you can push people to Yep. And get a little bit of credibility. Exactly. And it's hard to beat that when that's set up well.

Pete Reese: [13:27] Mhmm. We send out actual offers on the properties too. You know, it's a two page thing, and first page is kind of introducing ourselves and what we do. Second page is actually a purchase agreement where we've got their parcel number, the acreage, their county, state, and an actual offer price that we're offering them. It's kind of a one page purchase agreement, and, you know, sometimes people just sign it and mail it back to me. Or they'll sign and email it.

Mike DeHaan: [13:54] You're now the second person that said that. The guy that was on on a couple weeks ago, he said the same thing. I wonder if you guys took like the same mastermind course, and that's what they teach you.

Pete Reese: [14:03] Yeah. Yeah. Probably. It's kind of a very common method, you know, for people doing this this type of business model. Mhmm. Yeah. There's another method where it's kind of, I guess they call it a neutral letter, where they just say, hey, I'm looking to buy your property, give me a call and let's talk about it. You'll get a lot more interaction that way, but the problem is that most of the time you're gonna be too far apart.

Dan Austin: [14:24] Yeah. Their land is the most valuable land in all of Jerusalem. Like

Mike DeHaan: [14:28] it's Yes.

Pete Reese: [14:29] Just the ridiculous,

Dan Austin: [14:30] I know you get a lot of those sellers too. So then, you're setting these contracts out of your year, I should say, how are you like finding these pieces of land? Okay. So you say you pick these these metros, you go outside of them, is there, specific data source or, like, how do you know that this is going to be one that we're probably going to that we're going to mail and there's a good chance we'll lock it up?

Pete Reese: [14:51] Right, I use a provider called DataTree, and it's a First American product, but basically it allows you to build lists from there, and you can filter by all kinds of different things, but obviously we're just filtering for raw land, no improvement value on the properties. Normally within certain assessed value ranges, because that court kind of weeds out some of the really valuable or really unvaluable properties that might have issues. And a number of other different pieces of criteria to build the list, and then we just kind of fire them out. I know we're sending out a lot of mail, at this point, sending out probably 50,000 pieces of mail Oh yeah. Month.

Dan Austin: [15:33] Oh Yeah, you're pushing

Mike DeHaan: [15:34] it, you're doing good.

Pete Reese: [15:35] Yeah, we're trying to trying to scale as much as we can. Earlier this year, was actually sending out close to a 100,000 pieces but of mail a I dialed it back a little bit and kinda just putting some more effort into cleaning up the list that I'm sending.

Mike DeHaan: [15:49] Mhmm.

Dan Austin: [15:50] So That's huge.

Pete Reese: [15:50] Yeah. I I feel bad in a way that I'm like, well, maybe we're just missing out on some of these deals, the potential deals. But I do think that maybe doing some extra efforts into the list cleanup, like like I've been doing the second half of the years is gonna be a higher return on investment for sure. Right?

Mike DeHaan: [16:08] Yeah. I guess this kind of a selfish question. As you were sort of scaling that, I wonder if you experienced the same thing we did. Did you start to find that basically, you were stacking on more or less, more data, and you weren't doing the cleanup, that your cost per deal was increasing? Yes. So you were you were probably making more money, but it was becoming more and more expensive to squeeze more and more juice out of the

Pete Reese: [16:26] Exactly. Exactly. And you know, it's like, you guys are saying the same thing. Yeah. It's like, it still made sense to do the deal, obviously, and you're still making a lot of money on the deals, but it was probably going from 2,500 per deal to maybe 35, 4,500, somewhere in that range. Totally.

Dan Austin: [16:44] Yeah. That sounds about right.

Pete Reese: [16:45] That's like,

Dan Austin: [16:45] very similar to our numbers.

Mike DeHaan: [16:47] Yeah. Yeah. You're you're speaking our language. Yeah. We went through the exact same thing earlier this year. We started scaling our marketing to the point we were doing like about 40,000, 50,000 a month in direct mail. And we were having killer months.

Pete Reese: [16:58] Yep.

Mike DeHaan: [16:59] But man, they was like just getting more and more expensive for every deal that we got up past that point. And we kinda were like, and it was more work. So we're like, is the true ROI on the effort spent really makes sense when you start to get to that that next year. And for some people it does.

Dan Austin: [17:15] But when you talk about data cleanup, I'm imagining with land as your return to senders, do you deal with that at all? Or do you just let that just go to the garbage? How do you do that to make sure that you're actually cleaning up your list to sending it to actual addresses?

Pete Reese: [17:31] I think that the mailing house that we use runs it through some sort of cleanup process, first of all. But I'm sure there's a lot of return to sender stuff that I don't see, so we're doing standard.

Dan Austin: [17:44] Oh, because the mail house takes care of it for you?

Pete Reese: [17:46] Yeah, well we're doing standard class mail, first class, so Gotcha.

Mike DeHaan: [17:50] I

Pete Reese: [17:51] think some of them do get kicked back, but they're not supposed to if it's not a first class.

Mike DeHaan: [17:55] Right. Do you use Open Letter?

Pete Reese: [17:57] No. We use Rocket Print. Rocket Print.

Mike DeHaan: [17:59] Rocket Print. Okay. Haven't heard of them.

Pete Reese: [18:01] And they're pretty good.

Mike DeHaan: [18:02] Open Letter has a similar service where they'll provide, I guess, like a different postal postal rates and like the sites like they'll facilitate getting the return mail actually for you a little bit, which is which is pretty nice.

Pete Reese: [18:15] Interesting. Yeah. And then we just use, you know, like a a virtual mail house and so, like, when people mail stuff back and everything, then then we get an email that shows the scan of the mail, and sometimes it's a purchase agreement, sometimes we get angry letters from people that are Yep. So upset that we offered such a low value on their their prized piece of land. Yep. So it just it just depends.

Mike DeHaan: [18:39] So Yeah. Well, okay. We need to look into that too because we definitely we tell you, we currently get it delivered to our u UPS box all of our

Dan Austin: [18:46] return mail.

Pete Reese: [18:47] It's life changing. And Yeah.

Mike DeHaan: [18:48] I mean Yeah. Dan literally has like $70,000 worth of mail at his house.

Dan Austin: [18:53] Probably more than that

Mike DeHaan: [18:54] at this point. From the last from from the last couple years.

Pete Reese: [18:56] Oh, no. That's very nice.

Dan Austin: [18:57] Just from this year. Used to throw it Yeah. But I was like, dude, I gotta save this. This is some money right here. Yeah.

Mike DeHaan: [19:04] And we've we've joked around, we wanna make a YouTube video and call like the $50,000 bonfire. Yeah. Where we just like take all of it and we just burn all of it. Yeah.

Dan Austin: [19:12] We got some good mail pieces we should burn.

Pete Reese: [19:15] What's up, man?

Mike DeHaan: [19:15] That's fascinating though. So I mean, super basic stuff. I love what you're doing because ultimately, and this is the thing with real estate, and this is the thing that we talk to a lot of new investors and with, know, people in our investor program too, is that it's not rocket science.

Dan Austin: [19:27] Mhmm.

Mike DeHaan: [19:28] Like, honestly, it is consistency using the same methods that are just tried and true that so many other people are doing. And I say it's having the gusto to be able to get through the initial period of, like, trying to figure out how to make that first check, and then getting your systems figured out enough so that you can have consistency in your success, whether that's follow-up systems, offer systems, data systems, all that sort of stuff.

Pete Reese: [19:51] Yeah. And that's constantly improving. Right? It's like Exactly. Never never finished. I mean, you're constantly trying to get better with anything, really.

Mike DeHaan: [19:58] Yeah. Yeah. And and trying new stuff stuff and measuring it. So like you talked about when you increase your marketing spend and your cost per lead was starting to go up. That was a key performance indicator that you were tracking that you recognize and you said, maybe this isn't the right way to go about this. Let's try and figure out how to make this better. So you step back and that is like the definition of being an entrepreneur. Yeah. Identified a problem and you're solving it, and I love that, that's just super great. So what does your team look like as you're running this whole business?

Pete Reese: [20:24] Yeah, let's see, I'll go through my team. I've got a I've built it up to a pretty good pretty good group now. So initially, I've got, I guess starting from the very beginning, I've got someone that basically trims down my list for me, pulls the list from data tree based off of the criteria that I give them, and then they trim out different things, you know, like when there's duplicates on the list, or there's clear things on the list that I don't wanna mail to, say it's like owned by a railroad, or a county, or utility, you know, places that will never sell to me. So Yeah. You know, I have to go through a lot of that stuff kinda manually. So he prepares the list. I also have him doing some other jobs. I've got another team member that as soon as a response comes in, that he is entering the the stuff into the CRM, he's kind of her lead manager and also a due diligence manager, kind of dual roles. So whether it comes in through the mail or someone calls in or wherever the lead comes in, he gets it standardized and put in the CRM, run some basic stuff on the property so we can look it up pretty quickly. And then his job also is like once we get a property under contract, he orders all the due diligence, you know, orders a photographer to go out there.

Pete Reese: [21:36] I've got another kind of overseas team that does some of the basic due diligence on the properties, calling the city and the county for utilities, that type of information, but he coordinates all that type of stuff. Then I've got another team member which we call our acquisition manager, and her job is as soon as the lead comes into the CRM, you know, she's calling them and trying to get in contact with them, go through some basic questions, and then after that initial contact, then I've got another team member that is our property analyst, and basically he takes a look at the property, tries to determine if it's something that we wanna buy or not, and if we do wanna buy it, where the price would be that that would make sense for us, because we put offer prices on our mail, but sometimes we're, you know, it's kind of a shot in the dark, it's kind of based off of and when we see the actual property, like, we may be able to step up more, or we may have been too high. So regardless, we gotta set what value that would be, like either that price would work that we initially send out, or if it's too high or too low, and if it's something we wanna buy, is it like not landlocked, is it not a swamp, is it not on the side of the mountain, you know, like all these different things.

Pete Reese: [22:47] Oh, and then I've got a transaction manager that as soon as the property is under contract, she takes over, and she does all the stuff, you know, coordinating with the title companies, the attorneys. Gotcha. And that's both on the purchase side and also on the resale side, keeps things moving that way. And I'm just pretty much at this point, I'm just kind of making decisions on where we're gonna mail, and I'm fixing problems as they come up, and also determining, you know, like being the final decision maker on the properties, like if we're gonna buy them or not, or like if I Nice. Need to adjust the pricing or anything like that. And you do close on all of

Dan Austin: [23:23] the ones that you decide to purchase, right?

Pete Reese: [23:25] Yeah. Unless there's something that comes up in our due diligence phase that was unexpected. For sure. So we'll always send out a photographer and a drone drone photographer and someone to walk the property. Sometimes there are some things that come up that we couldn't tell from looking at satellite images and things like that. Right. And I guess the other important part of the whole process is we've got a we always use like a local broker to help us resell the properties. So we kind of incorporate them into the purchasing phase as well because we'll send them over the information. Say, hey, we're buying this property for this amount, know, are you, what do you think you could resell it for? And anything that we should be aware of in this area because, know, real estate is very local, and one neighborhood can be different than the next, or one area can be different than the next, so sometimes you can't really tell that from your computer screen also.

Mike DeHaan: [24:17] Very true. Wow. Yeah. No. That's awesome. So I guess with that team, so it's like what, eight or nine people about? How many of those are stateside, how many of those are virtual?

Pete Reese: [24:25] It's about half and half. I've got my acquisition manager is here, she's actually from Canada, but, and my analyst, property analyst is from here in The US, transaction managers from here in The US, other team members are from from overseas.

Dan Austin: [24:41] Yeah. Some are set up to us. I mean, your business model is like identical to us except for you're targeting very similar. You're targeting land exclusively where we'll target not on purpose, but land as well. Mhmm. Then that maybe leads me to my next question. I have two questions, but the first one I'll ask, have you ever thought about doing your same business model, but actually looking for residential real estate or some other type of asset class?

Pete Reese: [25:07] I've thought about adding single family homes as well, or commercial properties. I'd love to get into distressed commercial properties. I think that would be great. I mean, obviously, the numbers of properties are not the same as as there are with land, but I think that there's some Sure. You know, each deal is probably has the ability to be a lot more substantial as well. For sure. Yeah. Yeah. Potentially. So, yeah. And we've we've ended up, like, as part of this, you know, sometimes we think we're just sending to land, but turns out there could be a a home on the property, and then we end up working on a deal. So we've done some of those, just kinda like stumbling into them.

Dan Austin: [25:43] So then, also, another question I have is about, like, how long since you're closing on these, what is your average transaction time from close to close?

Pete Reese: [25:51] Our average hold time is sixty days. That's not bad.

Mike DeHaan: [25:54] Wow. It's not bad at all. That's great.

Pete Reese: [25:55] We try to move them really quickly. I mean, the whole goal is to buy at an aggressive price, so then we can resell them at a good price as well, like slightly below market, and just move it quickly. For sure.

Mike DeHaan: [26:08] Nice.

Pete Reese: [26:08] Yeah, we don't wanna

Mike DeHaan: [26:09] toss them.

Pete Reese: [26:09] Mean, I've had things that sell like right away, and we just gotta wait for it to close with the attorney, and like, that's ideally what we try to do, we try to get it under contract within like a week or so, and then it's just a matter of how long the escrow period is. Some properties take longer for whatever reason, you know, maybe we were off on the value, or maybe there's some issue that we didn't uncover during the due diligence, but haven't lost money on any deal yet, knock on wood.

Mike DeHaan: [26:33] Sure, nice, nice.

Pete Reese: [26:34] So, we just gradually reduce until something sells, or if we identify an issue that like, hey, people are having problems accessing this property or something, then we'll call out someone to do some clearing or do some other type of improvement and to make it more marketable.

Mike DeHaan: [26:48] Nice. Nice. Yeah. That that sounds great. So I guess, you know, that's your your typical hold time. How many properties are you typically holding at a time? And like, I guess, financially for that, do you, like, have a base that you're using your own money? Do you have private investors? What does that look like?

Pete Reese: [27:06] Yeah. I'm using my own money at this point. Did partner on two different deals last year, so far this year, I've done everything with their own money. There are partners available in this business, I mean, banks won't lend on this type of thing, and hard money lenders really don't exist on this type of asset class either. So you're either, you know, kind of forced to use your own money or partner with people on deals, and the way the partnership thing works in this business is, you have a good deal, it has to be a good deal, a partner will put up the money and all the money for it, and then you split the deal with them when it sells. You split profits. It's a pretty good deal for the investor, really, because you're just paying for the cost of getting the deal and everything locked up, but you've got no money in yourself, which is pretty good ROI.

Mike DeHaan: [27:55] Right. Have you run into this situation yet where you have sweet opportunities and you can't, you don't have the liquidity for it for whatever reason?

Pete Reese: [28:02] Thankfully, I've been able to balance it out pretty good so far. I mean it's always fluctuating, know, the cash flow and I'm always looking at it like what closings we've got, what ones that I'm gonna be buying, but so far everything's worked out pretty well as far as that goes. Trying to get into bigger and bigger properties, like I've got a couple of them buying right now which are, one of them is $365,000 and then I mean I think it's gonna sell for you know like $7.25 to $7.50, You know what mean? And then we've got another one that's like 450 that I think is gonna sell for 900 plus, so those are good deals I don't wanna pass up on, but then I've gotta, you know, really plan out, I hope these other deals close, so then I can buy these ones, you know? And if not, find a partner that'll be that would split the profits with me. But

Mike DeHaan: [28:50] Yeah. It's fair. That is the challenge with this business too, and we we've talked about this a lot is just like it's always a cash flow problem, especially if you're, you know, the other land flipping, house flipping, honestly, even wholesale real estate these days, especially because we face so many situations where we're having to help people find new residences or rehome tenants, things like that. You know, you still have a huge overhead on marketing, but it takes sixty days, ninety days sometimes for these deals to close because you need to help the resident find somewhere else to go, which takes time in this current environment. Right? So

Pete Reese: [29:23] Yeah. On paper, it'd be like, okay. This one's gonna close in thirty days, this one's gonna sell in thirty days, it's all gonna work out, but it never works out, and it's always kind of like, I mean it always works out, it does always work out, but I mean, it never goes initially as you planned it. Nope, never. You're always juggling things last minute I guess, and it's not really that stressful when I'm at the point where I'm at right now, but like initially when I started, especially when I didn't really prove to my wife it that this whole thing worked, you know, I'm like, need another 50 And thousand to buy this she saw it, it worked, and the business model was great and everything, and she trusts me more now, so.

Dan Austin: [30:01] Yeah, that's toughest group to please. The spouses, you gotta prove yourself over and over again.

Mike DeHaan: [30:07] Yep. Yep. Yep. Absolutely. So no. It's awesome. You're you're doing some cool stuff, man. I love it. And like, honestly, it's kinda like looking in a mirror with how your business operates, you know, like That's funny. And and like I said, you know, tried and true methods. It's if you like wanted to go to residential or commercials like that, it would be carbon copy. It's so easy to just like take Teams in place.

Dan Austin: [30:27] You know the systems.

Mike DeHaan: [30:28] Take the systems, and just change your underwriting a little bit. Right?

Pete Reese: [30:31] Yeah.

Mike DeHaan: [30:32] So I guess, before we go into the last questions here, I'd love to just like get your input on if there was someone that wanted to get into this, right, and they were like interested in the land flip and kinda what you're doing, what's the number one place that they should start?

Pete Reese: [30:46] Well, I've got this new thing going on my website, turningprofit.com, where I'm doing income report, which basically I detail out, know, month by month how things are going, you know, like exact revenue, exact properties that I bought and sold, how much we made on each one, what went well, what didn't go well. So I think that'd a good place to start to kind of learn what the business is about, like maybe what's possible and what's not possible, maybe some of the limitations you might face, but I think that's a good start, turningprofit.com, so

Mike DeHaan: [31:17] Cool. Yeah. Perfect. Yeah. Reach reach out to you. I can export that. Awesome. Right on. So just to wrap things up here, Pete, I would love to go into our last three questions. So we'll start with the group favorite. What is your craziest real estate investing story? And this can be a good story, bad story, big win, crazy cat lady story, whatever you got.

Dan Austin: [31:40] Bought land with Sasquatch on it, he actually owns Sasquatch's Yeah, sure no,

Pete Reese: [31:44] I might own some properties this That'd past be interesting. It would be. I don't know, I've got a couple of really, really cool stories. I think maybe one that I'd like to highlight is something that kinda lit the fire for us on real estate investing, getting started with that a number of years ago, way back when I guess, is that in the first property that we bought as like, okay, we're gonna flip this property, was a property, I think we bought it for $7.50 or something like 750,000, it was in California here, it was kind of a luxury flip before the real estate crash and everything. And at the time, you know, financing was so easy. I mean, we bought it with an eighty twenty financing, which is eighty percent first and a 20% piggyback second, you know, like you could close concurrently with that, and they don't do those anymore, not that

Mike DeHaan: [32:33] I know.

Pete Reese: [32:34] At least.

Dan Austin: [32:35] No better.

Mike DeHaan: [32:35] But it

Pete Reese: [32:35] was so easy back then, and it was like stated income, and all this kind of stuff, know, very easy loan to get, even for that amount. And then we sold it, we closed on it, and then instantly we got approached by someone else who had lost out on the bidding for the property, and they wanted to buy it, and then we ended up reselling it, making it about $75,000 profit in thirty days or something like that, just enough time to close it, and then after it closed, my loan broker called up and said, hey, what happened with this property? The company took back my commission because we didn't even make a payment.

Mike DeHaan: [33:10] Oh no, it's a loan broker, it didn't get paid, oh man. Yeah, nothing bad

Pete Reese: [33:14] about that, but he got a lot more business down the road,

Dan Austin: [33:18] and that was good.

Mike DeHaan: [33:19] Can it

Pete Reese: [33:19] be this easy?

Dan Austin: [33:21] Yes and no.

Mike DeHaan: [33:23] Yeah. It's funny, lenders get weird about stuff like that. We did one last year, we bought it, we went to do our walkthrough after we bought it and the tenant was like, oh, you guys bought this property? He's like, I wanted to buy this property. I've been telling the property manager that for like a year, but he never relayed that to the seller. And I was like, Oh, well, we bought it now. And he goes, Well, do you guys want to sell it to me? We're like, Sure, sure. It'll be it'll be you know, we bought it for like $1.09. Like, it'll be $2.50. He was like done. Wayne got preapproved the next day, did this whole thing. We held the property for, was it long ago? Sixty days tops? No. Not even. Think it I think it was like, yeah, it was it was under a a month because we never made a payment on it. Oh. He went and he went and yeah, remember because we went to get the payoff and the lenders were like, we can't can't give you a payoff. We haven't like put your loan in the system yet. Yeah. Yeah. Exactly. I do remember that. And I was like, but you like, you need to. Like, this guy's trying to buy.

Pete Reese: [34:17] Yeah. Exactly. He'd sell this thing. Yep.

Mike DeHaan: [34:20] Yeah, yeah. So, no, that that's a cool story though, that probably sets you up to be in a pretty good spot going forward without most sudden liquid cash.

Pete Reese: [34:27] Yeah, it gave me a ton of confidence and just, I guess it just opened my eyes to kind of the possibilities in the business. Sure. You know, thinking thinking a little bit differently, because we didn't even do any we were gonna do some minor renovations to the place, but realized you could make money without even doing that. Yep. So it was kind of nigh over.

Mike DeHaan: [34:44] Yeah. Exactly. Yeah. And I think that's kind of the goal for people is, you know, you get that one big deal, that one big opportunity or like a big month, whenever that is, like that can be enough to change the course of your business in your life, right? Is it just sort of gives you that confidence and it gives you the ability to start scaling. But getting to that can be a bit of a grind.

Pete Reese: [35:04] Yeah. I mean, do you have another minute? I can tell you another cool story, which just happened.

Mike DeHaan: [35:08] Yeah. Absolutely. Yeah.

Pete Reese: [35:09] We just bought this property, and it's a five acre piece of land, kind of in a in a major city on the Northeast, and it's kind of like a mini development property, so probably about 15 home sites, something like that. But as soon as we closed it was cheap, like it's not the best area, but it's a developable property. It was cheap, think $20,000. Soon as I closed on, I get an email from someone saying, we are putting a pipeline through this area and we would like to pay you for a 50 foot easement. I mean the property's along the highway, so in order for a subdivision to work, you'd have to have some pretty big setbacks from the highway anyhow, so we were planning to not use this area that they wanted to put this pipeline through, and he wanted to offer me like $18,000 just for and of course, I'm in the middle of the gushing, so I think I'll be able to get them up some, and I'll be able to cover the whole cost of the acquisition just from Easement of it. Little strip of land and letting them put this pipeline through, which won't affect me at all, So Right.

Dan Austin: [36:11] Yeah. Here's thing is I always tell people you gotta play to win. If you're not the game, those opportunities don't present themselves. And then on top of it, you have to be open to other you have to be open to other options or opportunities. When you bought that land, that wasn't that wasn't even in your mind. When you bought that house, you weren't thinking, Oh, I'm just gonna try to flip this. But you were you're open to the idea of like, well, maybe I'll just take the easy money and run.

Pete Reese: [36:33] I mean, that's right.

Dan Austin: [36:34] You have to play to win.

Mike DeHaan: [36:35] Yeah, yeah,

Pete Reese: [36:35] yeah, you got to

Mike DeHaan: [36:36] be in the game. Right? Yep, exactly. I was gonna say you put yourself in those positions to win, which I think is super valuable, and that's one of the things that holds a lot of people back because they don't take that initial risk. They're never even in that position to win. Awesome. So perfect. So next question, what is one piece of advice you would give to a new investor looking to get started or to a experiencing investor looking to take their business to the next level?

Pete Reese: [37:01] Well, new investor to get started, definitely pick one model, and just go all in on it. It's easy to, in this, in real estate investing, it's easy to see how people are doing so well in all these different business models and everything, but you're really not gonna have success unless you really focus in on one area, or in everything you can about the model, and just go for it.

Mike DeHaan: [37:24] Yeah, I think that's that's huge advice. Totally. Yes, especially right now, like, this is one thing, you know, we we talked about go bunnies briefly before, but I tend to knock on people a little bit in there, because so many people don't have like their syndication business. And then they're also like, well, I also want to have like an Amazon store. Oh, I also decided now I want to get into wholesaling residential. Yeah. I also

Dan Austin: [37:44] Yeah. It's a brand shit.

Mike DeHaan: [37:46] Now the big thing I was trying to do is like, oh, they're trying to buy like small businesses from like mom and pops. So you have all these people that have had full time businesses that are successful, but now all of a sudden they're trying to buy like manufacturing businesses, or these other

Pete Reese: [37:59] Yeah, sort of and I get sidetracked on that too. You know, last year we bought a motel.

Mike DeHaan: [38:05] There you go, exactly. Yeah, right, there you go.

Pete Reese: [38:07] So, I'm guilty of it like anyone else, but I realize sometimes when I do it, and then it's just a matter of refocusing, and just focusing on your core business, so.

Dan Austin: [38:16] There's a opportunity being opportunistic and taking advantage of a great opportunity in shiny objects in general. But sometimes that line is super fine.

Pete Reese: [38:24] Yes, I know.

Mike DeHaan: [38:26] And I'll also say, you know, when you have a successful business like you do, Pete, you have the ability to go and look at other things. Right? Whereas a lot of people when they're they haven't earned it yet. They haven't made real money. They don't have a business that's operating successfully. And they try to use that as like a way to elevate their own personal finances. Like, that's the kind of I think.

Pete Reese: [38:46] Yeah. Yeah. Agreed. Awesome.

Mike DeHaan: [38:48] Perfect. So last question, where can people find you, follow you, and reach out to you if you'd like them to do so?

Pete Reese: [38:54] Yeah. Attorneyprofit.com. We're starting a podcast launching it with my wife and I. My wife is part of the business, she's kind of the back end side of things, but she's a really good, she's had a lot of good insight about things, so we're kind of co hosts on it, and just gonna be talking about real estate. Sweet.

Dan Austin: [39:10] I'm excited to listen. When does it drop? When does your first episode drop, do you know?

Pete Reese: [39:14] Yeah, it's supposed to be at the end of this month, So Nice. Cool. Yeah. We've got a team kinda working behind the scenes on. It's taken way longer than I wanted it to, but Everything does. Yeah. July.

Mike DeHaan: [39:24] So perfect. So that's that's end of November. So by the time this one comes out, we'll be a couple months into your

Pete Reese: [39:28] your Yeah. Show. So That'd be great.

Mike DeHaan: [39:30] Yeah. Everyone should definitely go and check out the Turning Profit podcast. And go and reach out to Pete, you guys. He is a wealth of knowledge. He's doing some really awesome stuff. And I can tell that you're you're playing the game big time.

Dan Austin: [39:42] You're killing all of that.

Mike DeHaan: [39:43] Yeah. Awesome. So thanks so much for coming on, Pete. And thanks so much for listening, everybody. Please go and leave us a five star review. Also, you should go to incidentinvestorprogram.com and check out Dan and I's group coaching and mastermind program. It is growing aggressively here. Have some people that are doing some really big deals. Actually, I'm really excited about some of the stuff people have going on. We have someone that just got their first solid financing deal on like a 12 unit complex.

Dan Austin: [40:11] It's like

Mike DeHaan: [40:11] just sick turns are gonna be printing money. So instantinvestorprogram.com, guys. Go check that out. Besides that, thanks for listening, and talk to you guys next week.

Pete Reese: [40:19] See you.

Mike DeHaan: [40:20] Thanks for listening, everybody. Please make sure you subscribe and leave us a five star review wherever you listen to your podcast. Also, please make sure you go and you share this with other people within your network. We are really trying to grow this thing, and the best way for us to do so is by you telling other people to come check us out. You can also follow us on Instagram. I am at Mike underscore Invest. Dan is at investor man Dan. You can follow the podcast at collecting keys podcast. And if you wanna learn how to make real money as a real estate investor or you want to grow your already existing real estate investing business, please go and check out instantinvestorprogram.com and book a call with either Dan or myself, and we will see if you'll be a good fit. Thanks for listening everybody, and talk to you next week.

Speaker 2: [41:04] Thanks for listening. Please leave us a review on iTunes or wherever you get your podcasts, and check us out at collectingkeyspodcast.com for tips and guides on starting your own real estate investment and wholesaling business.