Episode 194: How Mike Deaton Raised Over $1,000,000 for Real Estate

In this episode of the Raising Private Money podcast, we delve into an inspiring journey of financial transformation with Mike Deaton. Mike and his wife, Ligia, found success in a niche part of the real estate market—flipping vacant land. Mik shares their story, educating listeners on how they raised over $1,000,000 in private money and crafted a life they desired.

A Nagging Dissatisfaction with Corporate Life

Mike Deaton was once deeply entrenched in the corporate world, relying heavily on his job for income, supplemented only by modest investments in the stock market. Like many professionals, Mike faced the stark reality of job loss, which propelled him into a period of introspection. Despite contemplating a return to corporate life, he couldn’t shake a persistent feeling of dissatisfaction, urging him to explore alternative income streams.

Inspiration from “Rich Dad Poor Dad

The influential book “Rich Dad Poor Dad” catalyzed Mike and Ligia’s venture into land flipping. Inspired by the success stories depicted in the book, they invested in their education by attending a boot camp focused on flipping dirt. Armed with newfound knowledge and a 12-month timeframe with a defined budget, they embarked on their land-flipping journey.

The Mechanics of Land Flipping

Land flipping, also known as “flipping dirt,” involves purchasing vacant land below market value and reselling it at a profit. Mike and Ligia primarily focus on properties with acreage, leveraging owner financing to facilitate more accessible transactions. They employ a strategic approach to locating potential sellers, utilizing list service providers to gather data on property owners. A particular focus is placed on out-of-state owners, who are often more willing to negotiate.

Raising Capital for Real Estate Ventures

Raising over $1,000,000 in private money is no small feat. Both Jay Conner and Mike Deaton emphasize the critical role of education and trust-building in this process. They highlight the importance of personal contacts and networking, attending events and clubs to educate individuals about passive investment opportunities in real estate.

Jay Conner shares his approach to simplifying real estate financing language and hosting networking events to attract potential investors. Both speakers stressed the necessity of confidence and caution against appearing desperate, which can deter potential investors.

From the Corporate World to Real Estate Success

Mike and Ligia’s transition from the corporate sphere to successful real estate entrepreneurs wasn’t instantaneous. They started by purchasing properties through direct mail campaigns, offering specific purchase amounts like $6,500 or $3,200, with the initial funding coming from their company’s cash flow. For larger deals, they explored options such as institutional and private funding.

Finding Buyers and Building on Success

Selling the properties is another critical aspect of their venture. Mike utilizes a combination of social media platforms, paid listing sites, and an email list of interested buyers to secure sales. Their land-flipping success has paved the way for further real estate endeavors, such as raising funds for multifamily syndications.

The Power of Coaching and Mentorship

Understanding the complexities of the real estate market, Mike offers coaching services through flippingdirt.us. This initiative is designed to provide support and guidance on various strategies within the land-flipping business, helping aspiring entrepreneurs kickstart their real estate careers.

Advice for Aspiring Entrepreneurs

Mike’s advice to those aspiring to break into real estate or any entrepreneurial venture is straightforward: take action. He emphasizes the importance of starting, even when conditions aren’t perfect. Waiting for the “right” moment can often lead to missed opportunities and prolonged dissatisfaction.

Conclusion

Mike and Ligia Deaton’s story is a testament to the power of education, strategic planning, and taking decisive action. From the uncertainties of the corporate world to the liberation of financial independence, their journey offers valuable lessons for anyone looking to transform their financial future through real estate.

10 Discussion Questions Based on this Episode:

  1. What initially motivated Mike Deaton to explore alternative income sources after losing his job, and how did his dissatisfaction with returning to the corporate world influence his decision?
  2. How did the concepts from “Rich Dad Poor Dad” and success stories of land flipping impact Mike and Ligia Deaton’s decision to start their land-flipping venture?
  3. The Deatons invested in education and attended a boot camp before starting land flipping. How important do you think formal education is in the field of real estate investing?
  4. What strategies have Mike and Ligia Deaton found most effective in their land flipping business, especially in terms of locating potential sellers and purchasing properties below market value?
  5. Owner financing seems to be a key element in their success. Can you explain how owner financing works and why it might be an advantageous approach in real estate investing?
  6. The Deatons transitioned from the corporate world into real estate. What challenges might someone face when making such a career shift, and how can they be overcome?
  7. Mike Deaton mentioned raising over $1,000,000 in private money for real estate deals. What are some methods they found effective in raising private money, and how do they build trust with potential investors?
  8. Both Jay Conner and Mike Deaton emphasized the importance of educating private lenders and potential investors. What strategies can be used to simplify investment concepts and build investor confidence?
  9. After building their land business, the Deatons ventured into multifamily syndications. How do pooling assets for larger property purchases differ from land flipping, and what skills or knowledge are transferable between the two?
  10. Mike Deaton offers coaching on the land flipping business through flippingdirt.us. What key pieces of advice would you offer to someone starting in land flipping or real estate investing based on Mike’s experiences and insights shared in the episode?

Fun facts that were revealed in the episode:

  1. Mike and Ligia Deaton were inspired by “Rich Dad Poor Dad” to venture into land flipping after losing a corporate job.
  2. They strategically target out-of-state property owners using data from list service providers for easier negotiations.
  3. The couple enjoys an adventurous lifestyle in Colorado, thanks to the success of their land-flipping business.

Timestamps:

00:01 – Raising Private Money Without Asking For It

04:23 – The Deaton’s pivoted from corporate to real estate.

07:31 – Engage in real estate investment through conversation.

12:57 – Offer unique investment, add value, no pressure.

16:55 – Feeling stuck, sought new life through entrepreneurship.

19:22 – Overcame financial hurdles, scaled business, prioritized lifestyle.

22:51 – An analytical approach evolved into trial and error.

26:20 – Leveraging private money for real estate deals.

29:36 – Helping others find land success is rewarding.

29:11 – Connect With Mile & Ligia Deaton: 

https://www.FlippingDirt.us   

30:57 – Desire for financial independence, escaping the rat race.

   

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It is available FREE (all you pay is the shipping and handling) at https://www.JayConner.com/Book 

What is Private Money? Real Estate Investing with Jay Conner

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Jay Conner is a proven real estate investment leader. Without using his own money or credit, Jay maximizes creative methods to buy and sell properties with profits averaging $67,000 per deal.

#RealEstate #RealEstateInvesting #RealEstateInvestingForBeginners #Foreclosures #FlippingHouses #PrivateMoney #RaisingPrivateMoney #JayConner

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How Mike Deaton Raised Over $1,000,000 for Real Estate

 

 

Jay Conner [00:00:06]:

Welcome to another amazing episode of raising private Money. I’m Jay Conner, your host. And on today’s episode, we’re gonna be diving deep with my special guest, and he’s gonna reveal how it is that he’s going about raising over $1,000,000 in private money for his real estate deals. Well, he and his wife, found themselves back in 2016 out of the corporate world, and they were out of jobs. Right? They found themselves actually in a crisis moment out of work, and actually, more importantly, they were out of income. So they had a decision to make. Were they going to go back into the rat race again, of corporate, or were they going to do something else? Well, they researched many different options, and they wanted to live life, you know, on their terms. They wanted to be entrepreneurs.

 

Jay Conner [00:01:00]:

They wanted the wealth. They wanted the freedom. So what did they do? Well, they ventured into real estate, and they found this interesting niche, and it’s called vacant land flipping. So they went all in. They grew their land business into a life-changing engine of cash flow and financial independence. And what did it do? It fueled their newfound life of freedom and control. So we’re going to talk with my guest here in just a moment about raising private money for real estate and also about the land flipping business. In just a moment, you’re going to meet my special guest, Mr.

 

Jay Conner [00:01:40]:

Mike Deaton, right after this.

 

Narrator [00:01:44]:

If you’re a real estate investor and are wondering how to raise and leverage private money to make more profit on every deal, then you’re in the right place. On raising private money, we’ll speak with new and seasoned investors to dissect their deals and extract the best tips and strategies to help you get the money because the money comes first. Now here’s your host, Jay Conner.

 

Jay Conner [00:02:12]:

Well, hello there, Mike, and welcome to the show.

 

Mike Deaton [00:02:16]:

Jay, it’s great to see you again. Thanks for having me on your show. I’m excited to be here.

 

Jay Conner [00:02:20]:

Absolutely. I loved being on your show. I mean, I’ve never been on a podcast that had Fight Club in the name in fact, I think I sort of sparred against another guest simultaneously.

 

Mike Deaton [00:02:35]:

That’s right. Yep. Yep. You’ve been in a fight. So you came on solo, and then you went head to head with some multifamily syndicators. That’s right.

 

Jay Conner [00:02:42]:

Oh, my lands. So, Mike, let’s go ahead and jump in. We wanna talk about raising private money because, after all, this is a Raising Private Money podcast.

 

Jay Conner [00:02:53]:

Also wanna talk about your your land business. So what year did you start raising private money?

 

Mike Deaton [00:03:01]:

We started raising money, for multifamily syndications, and that was back in 2020, I would say. We got into, commercial real estate after we’d started our land business.

 

Jay Conner [00:03:15]:

Okay. So you’ve done the land flipping. You have also done commercial real estate. Of course, my focus is single-family houses. And, whether you’re raising money, private money for single-family houses, or you’re raising money for commercial deals, it’s all the same money. It’s just a matter of how are you going, you know, to structure it. It’s been my experience, Mike, that for most real estate investors that go out to raise capital, there is something that happened in the business that triggered them to start raising capital. Now for me, my first 6 years, from 2003 to 2009, that I was investing in real estate, I relied on the banks.

 

Jay Conner [00:03:54]:

They made the rules. Right? Go to the bank, get on my hands and knees, put my hands underneath my chin, beg, plead, sell, persuade. And then all of that changed in January 2009 when I was cut off from the banks. So that’s my story in a nutshell. I had to find a better and quicker way to fund my deals and to find funding for it. How is it that you got involved with private money instead of using, you know, institutional money for your, commercial deals?

 

Mike Deaton [00:04:23]:

Yeah. It’s a great question. And, it was born out of necessity similar to you, although not the same situation. So, my wife and I, as you mentioned in the intro, pivoted out of a life of corporate and two salaries into earning our own money. And once, we built up our primary business, we decided to get into commercial real estate as a way to diversify our income stream, but also to mitigate taxes. Right? So we wanted the passive losses and the depreciation that came with commercial real estate. So we initially went in thinking we were going to be owner-operators and apply some of our skill sets, which were more in running operations, underwriting properties, and things like that. And the more we got into it, in the multifamily syndication space, which your viewers may or may not be aware of, but it’s more of a group of investors getting together to pool their assets to buy a larger asset than they could on their own.

 

Mike Deaton [00:05:29]:

And so we’re leveraging our dollars to put a down payment on a 5,000,000, 10,000,000, $15,000,000 property, and the bank is providing 80% of the leverage or, you know, in these in these cases, 60% of the leverage these days. And so the more we got into it, the more we found that the critical piece to getting these deals across the finish line was bringing money and investors into the deals. Because back in, 2020, it was right around, COVID was hitting, but there was still a flurry of multifamily activity going. And, there was just a lot of investment happening, and it was a need to get money to the table. So we decided to shift gears and also look at raising money to help close these deals and get them, to the closing table.

 

Jay Conner [00:06:23]:

What are some of your, what are some of your favorite ways to raise private money, to get the word out, to let people know that you have an opportunity, for them to consider and, you know, have better rates of return than they’re getting at the local bank. How have you gone about that?

 

Mike Deaton [00:06:44]:

We like personal contact. And so we started, as most people do, with our friends and family network, That only goes so far for most of us. And, you know, it’s it’s even it’s generally a small network. Right? And a lot of people, especially when we started, a lot of our friends and family, they’re not into real estate, and they didn’t understand what a multifamily syndication was. And so there was a lot of education, and it was a longer-term play to warm up those types of individuals. And so we found ourselves going to networking events and local meetups. We found other investing clubs that we could go to either in person or virtually depending on on what the situation was. We joined real estate groups where we could network with other people, and so we just got out.

 

Mike Deaton [00:07:31]:

And we took every opportunity we could to talk to people. Right? People ask you, hey. What do you do? Well, I am financially free because I invest in real estate, and people get intrigued. And so you start to talk to them about how you can, you know, invest passively in deals and make your money work for you. I think similar a little bit to your story, a lot of people are locked into 401ks or other types of retirement accounts that are very shielded in terms of the investments that you can make. And so real estate is not one of those, and so sometimes there’s even, a broader discussion that that can happen about how to take some or all of that money and put it into a self-directed account so that you can liberate it and use it, as you want, be it real estate or precious metals or or whatever, things like that. But, you know, our our favorite way is just getting out, meeting people, talking, and, adding them to an investor list and then educating them over time. And then when opportunities do come about, they’re prepared and ready rather than a lot of times, these deals need to close fairly quickly.

 

Mike Deaton [00:08:33]:

And so there’s not a lot of time to make these financial moves or to get yourself educated where you feel comfortable enough. So it is a for us, anyway, there’s know, like, and trust factor that needs to be built up, and that takes a bit of time.

 

Jay Conner [00:08:48]:

Sure. Well, one word that you said a moment ago, and that’s a key word, in my way of going about raising capital, and that is the word educate. So we have 47 individuals, private lenders, loaning us money on deals. And interestingly enough, Mike, is not one of those 47 private lenders ever heard of private money. Didn’t know what it was. And so what did I do? I put on my teacher hat. Do you remember my teacher hat? Right?

 

Mike Deaton [00:09:18]:

Yes. I do.

 

Jay Conner [00:09:20]:

I put on my teacher hat, my private money teacher, and I just started educating people in our network on what private money is, and how they can earn high rates of returns safely and securely. And I would do it 1 on 1. I will I also joined Business Networking International, so I got to tell my story, the short version of it every week. And, and I also put on, what I call private lender events, or luncheons, and I, you know, invite 20 people and buy them lunch. I’d have my attorney there, my realtor, my CPA, my credibility team, if you will. And then I’d, you know, take 30 minutes, do a presentation on what private money is and, you know, how to get involved in that type of thing. So, you know, different different ways of what I call getting the word out. But, you also said something so true, and that is your network, after a while is gonna run out.

 

Jay Conner [00:10:19]:

And so, you know, I practice and teach as well how to grow your network very, very quickly. And you just mentioned, as well about joining some meetup groups, investment clubs, and etcetera. One thing that I hear new real estate investors or real estate investors that have never raised capital before, they asked me how to start. And I tell them all the time, well, you got to start by owning the real estate between your ears before you start investing in real estate, which means you gotta get your mindset right. We’re not chasing, begging, persuading. You know, when we used to borrow money from the banks, they made the rules. Mhmm. Any kind of institutional money, they set the interest rate, etcetera.

 

Jay Conner [00:11:00]:

But here in this world of private money, we are our underwriters. We get to set the interest rate. We make the rules, the parameters. And so what advice would you, from your own experience, would you give to someone who’s never raised capital before, but they’re wanting to?

 

Jay Conner [00:11:20]:

Maybe some mistakes you made along the way that you corrected along the way.

 

Mike Deaton [00:11:26]:

Yeah. It’s a great question because it is it can be daunting for a lot of people who get into this world of raising private money. And so I would say 2 aspects, one of which you touched on. But first, I would say, really, just get yourself educated. There’s a language of investment that happens, whether you’re in single-family homes as you do or, in larger multifamily deals. All of those are spoken about in a certain way, and I call it a language. Right? There are financial terms that get used. There’s just the deal structure itself.

 

Mike Deaton [00:11:59]:

There can be waterfall structures. It can get complicated. But, you know, the best thing is for if you’re willing to get it if you’re ready and wanting to get into it it’s get yourself educated so that you can speak confidently and intelligently about different aspects of the business. It’s also you just mentioned as well, the majority of people haven’t heard of these real estate deals regardless of what they are unless they’ve maybe seen on TV people doing, you know, these sexy flips or things like that. And so as best as you can simplify the language without oversimplifying the process or the investment, the better off you’ll be in being able to explain it. And then, you know, you hit on a key tenet. It is about educating and presenting potential investors with an opportunity. There’s no you know, you don’t wanna come across desperate or chasing a deal or in need.

 

Mike Deaton [00:12:57]:

It’s about, can you serve that person with an investment they may have never come across again that’s going to most probably yield better results than if they’re just in a money market CD or if they’re in an index fund or if they’re, you know, subject to the gyrations of the stock market, which, you know, we just went through yesterday, in fact, elements like that. So I would say those are probably the 2 best first starting points just, you know, get yourself familiar so that you can speak confidently and intelligently. And then when you approach conversations, approach it as adding value or helping that person and presenting them with an opportunity, and it’s up to them whether they choose to take it or not. I mean, we don’t want to apply any pressure on anybody to join a deal or not. It’s we want people to come in when they’re ready, at the time that they’re ready, and with the comfort level that they’re, ready and willing to come in.

 

Jay Conner [00:13:48]:

One thing you just said a second ago, you said you didn’t wanna come across as desperate. Well, the reason you didn’t wanna come across as desperate is because desperation’s got a smell to it.

 

Mike Deaton [00:13:57]:

It does.

 

Jay Conner [00:13:59]:

Yeah. I tell people all the time, the worst time to be raising private money is when you need it.

 

Mike Deaton [00:14:04]:

Oh, my gosh. Yeah.

 

Jay Conner [00:14:07]:

When you need it. And, you know, some of our private lenders, you mentioned, you know, it takes a while for them to come around and warm up to it. I mean, I’ve got some private lenders that heard me talking about private money and private lending 3 years before they, you know, started or they hadn’t retired yet. And they didn’t have the they didn’t have the funds available. Well, let’s switch gears, for a few minutes, Mike.

 

Mike Deaton [00:14:29]:

Sure.

 

Jay Conner [00:14:30]:

You got you got into flipping dirt. You are a dirt flipper.

 

Mike Deaton [00:14:35]:

I’m a dirt flipper. Yes.

 

Jay Conner [00:14:37]:

So, when did you get involved in this, and why did you get involved in Flipping Dirt? And then we want to dissect your business model as to what that looks like.

 

Mike Deaton [00:14:48]:

Alright. Let’s do it. So you teased at the beginning of the show, 2016. I spent decades working for, large high-tech companies, top 5 in the world, running their operations and supply chains, had, you know, regional roles, traveled the world, and was on the w two career track. I had had the misfortune of sitting on the side of the table that was laying people off, fairly regularly. And in 2016, I found myself on the other side of the table and, amid a layoff. And so the the role that I had we were living in Dallas Fort Worth at the time, and I was working for Microsoft. And their headquarters is in Washington, and they were moving their operations, unit, was kinda scattered out across, the region, and they were consolidating that up in Washington.

 

Mike Deaton [00:15:42]:

Didn’t wanna move up there. So really kind of on the side, had agreed with my boss that, hey. If there’s a if there’s a reduction in force or a layoff coming, I’d be happy to be on the list. I’ll take my severance and kinda move. Well, in that same summer, my wife actually, was working for a healthcare company. They also were relocating. They were based out of Fort Smith, Arkansas, and had a Plano office that she worked in, and they decided to close that office and move things there. We didn’t wanna move to Fort Smith, Arkansas either, so we both found ourselves out of work.

 

Mike Deaton [00:16:13]:

And in our situation, we didn’t have any other sources of income. We didn’t have investments other than, you know, in the stock market, but we didn’t have cash-flowing investments like real estate, rental properties, or anything like that. And so when that when our jobs went away, our income went away. And, you know, thankfully, we got severance packages. We had savings. We weren’t living paycheck to paycheck, so we could reflect on our situation. And, you know, my knee-jerk was to get right back into the corporate, world. I had interviews with Apple Amazon and Tesla, and all of those are West Coast-based companies and, or they had units in towns that I didn’t really wanna go live in.

 

Mike Deaton [00:16:55]:

And, I just really had a nagging, gnawing pit in my stomach about the thought of going back into working for someone else. What kind of company culture was I gonna step into Was that I was already traveling about 50% of every month to visit different locations and, just really wasn’t living my best life or the life that I wanted to live. And so, you know, fortunately, we took a moment just to pause and to sit down and think about what we wanna do with the rest of our lives. And in that moment, we decided, let’s, try something different. As a precursor to all of this, I had been revisiting Rich Dad Poor Dad, so it kind of awakened this concept of getting more on the cash flow side of the equation, the quadrant as he calls it. And, so I have been thinking about a few things. I’ve been listening to podcasts like this that talk about great ways to invest and or start businesses. And I heard on 2 different podcasts some other people that were doing land flipping.

 

Mike Deaton [00:17:58]:

And they would talk about what kind of crazy returns they were getting, like triple-digit, you know, 2, 3, 4 x their money on deals, and it sounded great. And so I had invested in some education, and I hadn’t used it though because I was all in in my corporate career. I was busy traveling. And when I wasn’t traveling, I was, you know, working late at night and doing things. And so my wife and I decided to give that a go. And so we signed up for a mentor program, went to a boot camp, got some education, and we set ourselves a time and a money frame. So we said, you know, let’s give ourselves 12 months to see if this works. We were skeptical if, we’d never really heard of this other than a few success stories.

 

Mike Deaton [00:18:42]:

And, we gave ourselves a budget of some seed capital to get our business up and going, and, we plunged in. And sure enough, we did a few deals, and the returns were amazing. And we had a bit of a there are many different ways that we can get into, here in a bit on how you can go about flipping, but one of the primary ways that we leverage is we own or finance a lot of what we sell to so if we were to sell you a piece of property, we’d agree on, hey. Let’s, make a $450 a month payment. We’ll do that for 72 months. Some people are interested in it. We don’t typically work in interest. We do it a little bit differently.

 

Mike Deaton [00:19:22]:

And then over time, you stack enough of those up. Well, soon enough, we had all of our expenses covered, so we stopped having to dip into savings. Our next hurdle was replacing our old w two incomes. We got that hurdle. And then we started we just kept scaling and growing our business, and, you know, it’s more quickly delivered us a lifestyle that we envisioned way out in the future if we were ever gonna get there. But, we decided actually, in that same year, we downsize. We sold our house, and we decided to rent. We decided to move to Colorado from Texas to Colorado because we wanted to enjoy our life today and not save for retirement, get to 65, maybe be able to retire, maybe not, maybe be healthy enough to enjoy hiking and getting out in the mountains like we like to do.

 

Mike Deaton [00:20:14]:

And so we did a lot of things in that at that moment, but it worked out, you know, for the best. And it’s been a wild ride and a great ride.

 

Jay Conner [00:20:26]:

So when you’re when you’re flipping land, flipping dirt, is this land acreage, or is it lots? What kind of dirt is it? Mhmm.

 

Mike Deaton [00:20:39]:

So it can be anything. We focus in a little bit more on acreage, maybe 5 to 10 acres as 80% of what we do. We do some smaller. We do some larger, but I would say our bread and butter is 5 to 10 acres. It is as simple as it sounds. It’s really as they say in real estate, you make your money on the buy. It is buying property at a certain percentage below what you know the market is selling for. So you do some comp analysis in whatever market or submarket you wanna be in.

 

Mike Deaton [00:21:10]:

You then go out and approach property owners and say, hey. I’d like to buy your property for x amount, or you can just say open-ended, hey. I’m interested in buying your property. If you’re ever interested in selling, reach out to me, and start negotiation. There are different ways to go about that piece of the process. But, essentially, you buy below market value so that you know immediately you could sell it in that next minute and make a margin on it. And, you know, we just have a formula that we follow. We don’t typically buy properties above a certain percentage, of what, the comp is so that we know we have, a decent margin in there that’s worth our while.

 

Mike Deaton [00:21:48]:

And, yeah, it can be it’s vacant land and you know, a lot of people do it different ways. Like I said, we focus on acreage. Some people focus on residential lots, so they’re buying, you know, a tenth of an acre or a quarter of an acre. Other people do a little more value to the property. So you can buy 100 acres and divide it up into 25 acre parcels, or, you can go full vertical on it. You can entitle it to a certain type of structure. You can then build that structure. People do build to rent.

 

Mike Deaton [00:22:20]:

They do, you know, build to sell, or you can rezone things commercially. We don’t typically mess with that. We just like a very simple business model. There’s really fat, juicy margins in there, and, we just kinda stay in that zone. It’s low touch, and so we keep the business model as simple as we can. We save the complexity for, commercial real estate deals.

 

Jay Conner [00:22:41]:

There you go. So what are your favorite methods or methods of locating these potential sellers, and how do you communicate with them?

 

Mike Deaton [00:22:51]:

Mhmm. The way we do it is once we pick a market and there are all different ways to pick a market as you can imagine. When we started, I was super analytical. Just comes from my background and a little bit of my personality, and we were looking at you know, I had a spreadsheet and a matrix together. We’d look at a county and understand, how many how many parcels of land are there in there, what type of velocity of sales is happening, does the county have, really approachable electronic means of doing business, all these kinds of things. And, today, we don’t really do too much of that. We really just do more of a trial and error. We just got out into a market.

 

Mike Deaton [00:23:33]:

It needs to have a decent amount of vacant land in it. It can be remote. It can be a city. But once you’ve picked a market, you can identify them so the county knows who all the property owners are because they’re collecting property taxes, and so they’re the root source of all that information. You can either go to the county websites directly and a lot of times, they will have that information. In most cases, you can’t download or extract that information very easily. So there are list of service providers that work in the real estate world. It’s not just vacant land.

 

Mike Deaton [00:24:06]:

They support realtors and brokers, and there’s all these, data analytics that you can purchase lists of, property owners. And so we subscribe to one of those. We can filter it out. We can say we want vacant land only. Even within vacant land, there are subcategories. If you wanna go commercial vacant land or agriculture or residential or rural, there’s there’s different ways to filter that out. You can typically look for out-of-state owners, which are a lot of times more approachable because they’re far away from their land. They may not be visiting it very often.

 

Mike Deaton [00:24:41]:

It may become more of a burden to them because they’re having to pay taxes on it every year. Maybe they inherited it, and they just don’t know what they wanna do with it. So there are different ways to go about it. Once we get a list of those property owners that we want to then contact, the way we do it is a direct mail campaign. We usually just send them a letter. We will make them a specific offer. We’ll say, hey. We would love to buy your land.

 

Mike Deaton [00:25:03]:

We’re willing to make you an offer of $6,500 or $3,200 or something like that. We give our, we give a mailing address. We give an email address, phone number, however, they wanna get back to us, and so it’s a numbers game. We fine-tune our offers such that we get 2, 3, 4 percent of people responding to us that are interested in selling their property, and and, we’ll do a deal. So that’s, in a nutshell, a little bit of how we go about it. Other people do it in different ways. They call or text. There are different methods to go out and reach those property owners.

 

Jay Conner [00:25:41]:

Sure. And on most of these, on most of this vacant land, that you buy, are you taking it down? In other words, it’s your company or LLC or whatever. Is it actually purchasing the property?

 

Mike Deaton [00:25:56]:

Correct. Yeah. We have an LLC, and we do all the purchasing directly, and then we sell it as if it’s our property.

 

Jay Conner [00:26:04]:

Gotcha. So, in most cases, how are you funding, the purchases? Through your own money or private money or the sellers taking back a note with owner financing or all the above?

 

Mike Deaton [00:26:20]:

It can be all of the above. We generally purchase with our own money. We have enough cash flow coming in that we’re able to fund a lot of our deals. Sometimes we’ll get a deal that’s a bit bigger, and we have in later in these years started exploring bigger and bigger properties. And so we’re talking 6 7 figures where we will leverage either institutional money. We haven’t done a deal totally with private money, But the land business in particular is perfectly suited to use private money or any type of leverage because, as I mentioned earlier, the returns on these deals are in most cases, you’re making you know, you’re double, triple, quadrupling your money on a deal, so, you know, a 100 to 200% ROI. Well, you can take on private money and pay somebody 15% return on theirs or 20% return even and, still enjoy healthy margins. They’re getting an amazing return that they’re not gonna get anywhere else, and so it suits itself to be able to use that.

 

Mike Deaton [00:27:20]:

We’ve also never lost money on a deal just because we buy them at a price that we know we’re gonna be able to turn it around. And so the risk profile is super low on, anybody losing their money or not getting the return that they expected.

 

Jay Conner [00:27:35]:

And then when it comes to selling, what’s your favorite way to find buyers? Are you offering owner I think you mentioned you’re offering owner financing to your buyers. Where do you find your buyers?

 

Mike Deaton [00:27:46]:

We use social media a lot, so we love the free platforms. Facebook has a great marketplace. They have buy-sell groups. Craigslist is another great place where people look for land. Zillow is great. There’s a lot of people looking for land. Alternatively, there are some paid sites. So you can go to, like, land.com, landandfarm.com.

 

Mike Deaton [00:28:06]:

Each state has its land offshoot, I think. And, you typically have to buy a subscription. In a lot of cases, you can buy a low package or premium package. We use those occasionally, but we have our most luck on the social platforms. Since we’ve been doing this for 8 years now, we have a large, email list that people that have been interested in land, and so we will also offer generally, as a first look when we get a property, we’ll offer our email list kind of a VIP, access to deals that come. And, it’s it’s it’s a bit more controllable in that way than relying on Facebook or somebody to change their policy, month to month where you can advertise land, you can advertise land. You know, there I don’t like to be at their mercy, but there are billions of people on the platform, and so it’s it’s a great way to to reach a lot of eyeballs.

 

Jay Conner [00:28:59]:

Well, Mike, you coach real estate investors, on the flipping dirt, flipping land business. So, let everybody know how they can learn about that.

 

Mike Deaton [00:29:10]:

Yeah. You bet. We have a website https://www.FlippingDirt.us  where you can get a lot of information. We have a specific section on our coaching program. But in general, yeah, we started, last year. We had a lot of people asking us how we do what we do, what we’re doing, could we help them get started. We had enough of that organically that we said, let’s just put a formal program together. And so we have a structure where we walk people through the end-to-end process.

 

Mike Deaton [00:29:36]:

We love getting our hands on it, and the great thing about land is that it’s so flexible. If you have time and no money, if you have no time and money, if you have time and money, there are different strategies to go about coming about it. So we love to get in there, help people determine the exact strategy that’s gonna work best for them and then walk them through the process. And we stay by their side for 6 months or more just to make sure things get up and running. It’s it’s incredibly rewarding as I know you enjoy doing it as well. When you can touch people’s lives and transform their quality of life and liberate them into, you know, enjoying cash flow or big returns or getting things like that and opening up the doors of freedom, there’s nothing more rewarding than that. So we love buying and selling land, but more than anything, it’s transforming life. So, it’s it’s, been a great ride so far.

 

Jay Conner [00:30:29]:

So Mike’s website is  https://www.FlippingDirt.us . Be sure and visit that website. He’s got, information and, and, strategies there for you to take a look at, contact information, and, reach out to Mike and his team, and, explore the possibility of flipping some dirt. Mike, parting comments, any final words of wisdom or advice?

 

Mike Deaton [00:30:57]:

Gosh. You know, I don’t know exactly your audience, but for us, I mean, I can say I dreamed of doing something on my own for years or decades, not wasn’t front and center in my mind because I got caught in the rat race. I got caught working a job that somebody else was paying me for. I got caught overleveraging myself. Right? I had a mortgage, had car payments, had, in my early days, had a lot of debt that I was able to get out of, fortunately, but kinda trapped myself in a situation. But I would say for anybody out there the biggest thing you can do is just start taking action. Right? As I mentioned earlier, get an education. There are so many groups and so many ways to follow people like Jay.

 

Mike Deaton [00:31:45]:

You can follow us on our social accounts. There are people out there talking about ways to get started. So if it’s something that has, you know, itched, in your mind, just scratch that itch. Take action. Get started. There are so many different ways to go about doing it. As I mentioned, if you have no time and money, money and no time, or whatever combination you can come up with, there are ways to get started. I would just say, don’t wait.

 

Mike Deaton [00:32:13]:

Get started. You know, it’s, life is gonna life is short, and, you pays to take this action today.

 

Jay Conner [00:32:21]:

Awesome. Thank you so much, Mike, for joining me here on the show. Again, that URL is www.flippingdirt.us. Mike, God bless you.

 

Mike Deaton [00:32:32]:

Jay, likewise. Thanks for having me on the show again.

 

Jay Conner [00:32:35]:

You got it, my friend. And there you have it. Another amazing episode of Raising Private Money. So glad you decided to join us. If you happen to be listening on any of the podcast platforms, be sure and follow me so you don’t miss out on any upcoming episodes. If you happen to be watching on YouTube, be sure and subscribe and click that bell so you don’t miss out. I’ll be looking forward to seeing you right here on the next episode of Raising Private Money.

 

Narrator [00:33:03]:

Are you feeling inspired by the knowledge you gained in this episode? Then head over to www.JayConner.com/Moneyguide.  That’s www.JayConner.com/Moneyguide, and download your free guide that shares seven reasons why private money will skyrocket your real estate investing business right now. Again, that’s www.JayConner.com/Moneyguide to get your free guide. We’ll see you next time on raising private money with Jay Conner.