Is LAND BANKING a good investment right now? Here's what you need to know.

Is LAND BANKING a good investment right now?  Here's what you need to know.

Is buying land a good investment right now? What are the key benefits of investing in land vs. houses? What impact does market, zoning, and existing condition make? Are land leases a good investment? What is the best way to do due diligence when looking for land bank opportunities?

And, more importantly, is there an easy and affordable way to start building wealth with land banking? Chad Corbett and Marcella Silva (DirtIsGold.com) cover all of this in this awesome alternative to real estate investing video.

View our land banking 101 guide and get the full show notes: https://probatemastery.com/is-land-banking-a-good-investment-right-now

Watch the full version as a video: https://youtu.be/eBppXs5Vizo

Timestampes (Links jump to YouTube!)
0:00 How I got started with Land Bank Investment - Marcella Silva
5:18 Land banking benefits and why it's a good investment strategy
9:03 Why is land speculation risky without proper due diligence
13:03 Are land leases a good investment? Cash flow ideas for vacant land
15:45 Investing in land vs. property in 2022
18:47 Land Banking 101: Due diligence, investor acquisition, and developer negotiations
24:41 Why you should understand land investing in probate real estate
26:32 Criteria for land banking: When to buy, sell, or hold
28:28 When is land banking bad or too risky?
30:41 How Marcella Silva's land banking strategy vs. traditional land brokering
31:54 How zoning and land use impact value of land
36:41 Opportunities in land investing for renewable energy infrastructure

Learn more at www.probatemastery.com

Transcript

0:00

Welcome everybody. My name is Chad Corbet, founder of Magnum Opus project and probate mastery. Today I'm here with a unique guest Marcella Silva who is going to talk to us about land banking. The reason this is part of our ask the experts series we have, plenty of members who do land deals in probate. But we've also been talking a lot about building wealth to go with the theme that we teach of work less, earn more do good. So if you're hesitant to be a landlord or you've gotten burned already, or you figured out short-term rental Airbnb is actually a lot more work than everyone says it is on Facebook and podcasts. And you're just looking for ways to build wealth, especially in an inflationary environment, we've been discussing a lot of those ideas ranging from syndications to doing your own deals, to creative financing to you, name it. This is one that we haven't really had somebody on like a land specialist that you could have access to. So Marcella is running a brokerage model based around her own investment thesis of investing in land and land banking in the path of progress. So we're going to hear her story, how you might be able to use what she is using and how you may be able to invest with her. So if you're watching this wherever you're watching this, there should be a comments box below. If you have any questions Marcella will she'll I'm sure be checking this once it's published and you can engage with her. I usually forget to do this in the beginning and wait until the end, but we'll go ahead and on the front end that Marcella where's the best way. What's the best way for them to ask you a question or send you a message? Absolutely. Thanks for asking Chad and thank you for having me here. Sure. So you can find me on DIRTISGOLD.com, that's my website. You can just enter your information there and get in contact with me or email me directly at Marcella, M a R C E L L a@dirtisgold.com. Awesome. Well, I'm excited to dig into your story and hear your path. We're very people oriented here in this community, and we all like to start with the context of what brought you here. So let's hear that, like tell us your journey from being a software engineer, to being a land specialist, making triple digit returns. Absolutely. Thank you so much, Chad. And it is all about the people helping each other and making this world a better word. So In my journey. I used to be a software engineer working for the government, Lawrence Livermore national laboratories here in the San Francisco bay area. And when I was working there in 2007, the lab went through a major transition. So they completely changed all of their benefits, including their retirement. So at that time, I had the opportunity to either roll over the old 401k program into the new 401k program. Or do something else with it. And I vividly remember at that time, Chad, sitting at my kitchen table, looking at my 401k statement, thinking to myself, 'the only way that this goes up is when I put money into it.' This is ridiculous. I'm never going to be able to retire at this rate, much less create wealth. I mean, when have you ever seen a new story about someone creating wealth with their 401k? Average 401k. It just doesn't happen. They're designed to create wealth for someone else, not the person who owns it. So I decided right then I had to take my future into my own hands. And plus I didn't have any sense of safety or security around my financial future either, even though I had a really good job, it just something didn't match up. Right. So. I decided right then that I wanted to invest those funds into something real and to something that has created wealth for people throughout history. And the obvious was real estate. It's a real asset. You can see it, you can touch it. It goes up in value. And so I started looking for real estate investment opportunities, actually got my real estate license, went to seminars, read books, just educated myself about investing in real estate. And along the way I decided, I really don't want to be dealing with tenants, toilets, and termites. That's just not for me. And I'm not saying that's bad or that that's wrong. People can do well with that. It wasn't for me, I didn't have the time patients or resources for that. And fix and flipping, that... that's a business of itself. That's not really investing in. It's just, wasn't finding the right thing. And then one day I went to a seminar and I sat next to a lady who started telling you about something called land banking. I was like, what the heck is land banking? I had never heard about that. All these experts I've been listening to, nobody ever talks about land. And the funny thing is I actually grew up watching my parents invest in land, but for some reason I wasn't thinking about it because how do you invest in land anyways, right? And so. I had that natural affinity towards it because of my parents. They actually helped pay for my college because of the land they invested in. They're now retired because of the land they invested in. So I went and learned all about it and it was like an instant gut feeling, Chad. One of those things. This was the right opportunity for me and-your niche finds you, you don't go find your niche. Right? Exactly. It found me when you're open to opportunities. When you put the intention out there in the universe, it's amazing what comes back to you! So I found it, I invested and long story short. I fell in love with the company, retired from being a software engineer to become a full-time land banker and let other people know about this opportunity. Awesome. So let's start with your portfolio. How many land transactions have you done in the end? Like acquisition and disposition and how many are you're currently holding? What's your thesis? Like? Let's just say for the next 10 years, which would be relatively short term and in the grand scheme of land banking, if you really want the big gains. Right? So what's, what's your, your past and what is your forward-looking thesis? Absolutely so, well, let's just talk about the very first property I purchased. Using my old 401k, I rolled it into a self-directed IRA that was back in 2008. So luckily I took my money out of the stock market before I lost it all. Like so many people did again, divine, right. Timing happening again. And I purchased my first property zoning, heavy industrial zoning. So think, warehousing manufacturing, those types of buildings can go on that land. And within the first year of me buying it in 2008, the value of it almost tripled by 2009. Most people think, well, 2008, everything was crashing. That's why land is very different than traditional real estate. When you buy it correctly, when you buy it in the right areas where growth is happening, as growth happens, less and less land is available and it continually pushes the value of your land. I always tell people we're investing in land cause they're not making any more of it. It's a real asset that everybody needs, everything needs. And when again, you buy it correctly in the right areas, the value of it continues to rise and the longer you hold it, the more it's worth. So I bought all of my properties, which right now I'm in escrow buying my 10th property. Amazing 10 acre mixed use zoning, which is like the highest possible zoning you can get out there. And. Every property I'm prepared to hold minimum 10 years, if not longer, because I know how land works as the longer I hold it, the more it's worth I have received amazing offers on my property. One of them I bought for a dollar 15 per square foot, two and a half years later, I was negotiating with the developer who wanted to buy it. They were offering about$7, seven 50 per square foot plus or minus. And I didn't want to sell. That was about a over 600% return in a two and a half year period on a piece of property I've never even seen. I don't do anything with it. That's what I love about land. It's an easy, peaceful investment without me having to do anything. I have enough stress in my life as it is. I don't need to add stress from my investments. So we decided not to sell. Actually my husband wanted to sell. I said, no, we're never going to be able to get a property like this again, just last month. Another one of our investors right next to my land. She's currently in deals on selling her land for$30 per square foot. And that's just amazing. That was 2017. So that's a five years later. I'm very happy. I didn't sell because there's so much growth happening there. The value of my land is like skyrocketing. And that's how land works. Just think about the area where you grew up, what it used to look like, what it looks like today. If you lived in California, chances are there's no more land left and it's running out quickly. So typical average hold time, seven to 10 years. Could take longer, could be sooner. It just depends. And then there's so many different types of developments needed by it. But I currently own about 2 million square feet of land in the most high growth areas of California, which I bought for on average 50 cents per square foot, and could sell easily for 5, 10, 15, $20 per square foot. You can see what the multiples can do. So just you and I here today. So I'm going to play the devil's advocate. Some people would accuse you of being a speculator versus an investor because you don't have a cash flowing asset. What's your answer? So most people think of speculation, land speculation, or land investing as land speculation. And that's typically because they don't know how to buy land crap. I have real estate agents as investors, I've spoken to multiple real estate agent groups, thousands of real estate agents, and not a single one of them knows the first thing about investing in land correctly. And I'm not trying to say that to put real estate agents down it's because land is very different than traditional real estate. The building on top of it, the building. Has functional obsolescence, which continually needs to be fixed up, which needs capital, constantly rotting, tenants. Like I said, tenants, toilets, and termites, the dirt itself. There's nothing that needs to be fixed up. It's easy, but you have to buy it correctly. Whereas most people fail when trying to invest in land, they buy it based off of site. What it looks like. Oh, it looks like it's in the path of growth or price. Oh, this is a great cheap price. They're good. They're good. Friends says, you should buy this land over here. It's a really good. Okay, great. But then you find out down the road that some issue prevents it from being developable. So now you have this piece of land that you can do nothing with. Congratulations. You were a land speculator. You really have to come at investing in land through the correct, looking through the correct lens. If you start with the false premise in anything you end with a false conclusion, so you have to buy it right from the beginning, it has to be developable land in a high growth area. It takes looking at economic factors. What's happening in the city. What's happening with the city government, what's happening with the county, the state, the country, and internationally. How is that affecting my land? And how is the. Happening, multiple different economic factors. People ask me all the time: why don't you guys invest in Nevada or Texas? They just don't have the right. Just the perfect environment of multiple economic factors causing these areas to grow. So you have to buy land correctly. The biggest we remove all of the risks through our research and acquisition department. There's one risk that we cannot control, and that is the investor. Is the investor patient enough to hold that land to fruition. That's where the risk comes in. We don't have the crystal ball to say when this is going to happen, it's typically seven to 10 years. It could take longer. It could be shorter. Like I mentioned. So is the investor patient enough, did they use patient, investible funds to invest with? This is a diversification opportunity for people. I'm not telling everyone to put all of their money, their eggs into one basket, right? It's all about diversification and owning a real asset that throughout history has always been needed? Wars are fought over land for crying out loud, what other, what other investments out there, where do you see that is? Because it's a very valuable asset, but again, you have to buy it correctly to remove that speculation piece of it out of there. You could buy land in a high growth area, but it's not developable for some reason, or the city government is anti-growth. What are you going to do then? Kind of in summary, like you, you turn what some people might label as a speculative by using systematic due diligence to mitigate risk. You look at that as an investment. So you're willing to forego short term cash flow and tax benefits in order for long-term growth and capital gains. Yeah. There are options for land leases too. So cashflow can be an opportunity for. Yeah, that's what I was going to get to next. And there's something as simple as urban camping. One of my friends is actually buying land in California and it pays for itself inside of three months by simply putting it on apps like hip camp and the Dyrt, D-Y-R-T. They are apps where people in camper vans or small RVs actually, they'll pay 20, 30 bucks a night to dry camp and move on the next day. And in highly populated areas with the RV craze that we've seen over the last couple of years, there are ways to create cash flow on vacant land while it's sitting, especially if you're getting that, the generous zoning like the mixed use or had industrial use, like it might not be the most pleasant campground in the world, but nobody's going to care if there's a sprinter van setting in an industrial park overnight. So there are ways that you can monetize that. You can, I mean, for example, if in infrastructure expansion, what big companies look for are yards. So they need to set up a yard for the pipeline or a yard for the electrical transmission projects. And they can, they will lease at ridiculous amounts of money to a park equipment and supplies, and that's typically a five to 10 year lease. So throughout your whole time and fortunes were made on this, you mentioned in 2008 is when you got in the game that one of the big opportunities that come in a recession is in land. And it's because typically in recessionary environment, like the central bank and the government collude to print money, to pay back all the debt that they can't afford to pay and blindly tax people, but to keep the people happy, they offer what? Stimulus. And they offer infrastructure packages and they build transmission lines for electricity. They build highways, they build bridges, they build pipelines. And I know people who have gotten ridiculously wealthy simply by getting in front of a window project or a power line right away, or a pipeline right away or leasing their farm in West Virginia right here. It happened 15 miles from where I'm standing, a farm that might yield ...and if you work 365 days a year running it as a farm, you would probably yield about a $10,000 loss. Just because that's what cattle farming does at small scale. However, instead of having a$10,000 annualized loss, Jr. was able to lease his farm to the pipeline and he messed up. He took the first offer that they gave him, which we all know is not what you do. But he took the first offer. They gave him, they offered him 10,000 a month on a 10 year lease. And it was a hayfield. So he turned a money losing asset that made him work 365 days a year and to a$10,000 a month cashflow and did absolutely nothing. So there are things like that. I wanted to point out that for any critics of this early, early in this like, It's not what you hear on BiggerPockets. It's not what you hear on other real estate investing podcasts. It's not as sexy as the short-term rental method of master leasing and not, you know, blah, blah, blah. But it's more of an investment because it's passive. A lot of people who invest in multifamily, single family, short-term rentals, they run around telling everybody they're a business owner that invests when in reality, the true definition of what they do is they created a job for themselves. And what they call an investment is a business. So they started a business and they hired themselves to do it. Where investing is when you have an like, it's when you're making money, doing whatever you want to do, you're not actually managing that asset full-time. So what you're talking about to be clear is not a job. It's not technically a company or a business. It is passive and it can be in the true sense of the word an investment. Not so much different than gold. Typically, gold isn't going to cashflow, but it's a store of value that grows over time. I think if you put, if you, if we had a chart of gold to land, I think land is going to win every time it's manipulated way less. There's a, the big financial institutions don't manipulate them the land market, but that regularly it does happen. So for anyone who's considering this, we have a lot of folks in this community who came from corporate America. I took, as I've been using self-directed IRA since 2011, recently I've shared with this community why I actually dismantled my entire retirement plan, because the government moved the goalposts. I saw that coming early in 21. I had everything moved before they finally moved the goalpost in November of 21. I was using self-directed IRAs with checkbook control. And now that's a big question, mark. Right? So I just switched my retirement account over to a QRP or a qualified retirement plan, which allows you to do whatever you would want in this space. And we have recently we had a guest Damian Lupo who actually found the EPRP the company that specializes in these. So for the, for, if you're listening to this and you have some retirement money sitting around, you don't trust the equity values because they're ridiculously even from a historic standpoint. I mean, it's just based on emotion and speculation right now. So if you're thinking what if the skeptics are right? What if it, what if this is a bubble mentality and everybody's saying the price is going up, someone has to be wrong, right? So if you're thinking about what investments can I make, there's no inventory, well, maybe land is different. So let's talk about inventory levels, Marcella, like what have you seen as since 2016, since single family multifamily inventory levels have compressed and prices have risen accordingly that supply demand. What does that look like in the assets you guys are looking at. And like, my assumption is you're getting out in front of them. You're looking for path of progress opportunities. So I'm guessing there's an abundance of opportunities. But within that, I would say a small percentage, maybe 10% would actually be a real opportunity once you've completed your due diligence. So walk us through, well, first let's summarize what your model is like, what your role is as a professional, who might lead somebody listening to this into their first land investment. Let's talk about what that role looks like for you. And then talk about why should they trust the system that you're using to perform that due diligence? Absolutely. Thank you. So my job as a certified land banking specialist is educating the investor about what land banking is, who we are, where we invest. Why we invest how we do it, about the research and acquisition department that we process that we put every single property through. Just to give you an idea out of 30 properties, our company looks at which our company, by the way has been doing this since 1979. We didn't just start this yesterday. About 43 years, we've been in the business. We are experts when it comes to investing in land and the company has, it's not my personal company. They, we have created a system if you will, based off of years of experience, research, data analysis, and correlation of maps and understanding how land grows and understanding what needs to not be on the land. It's not so much about knowing where to invest. It's about knowing what not to invest in out of 30 properties. We look at, we purchase about one that's how strict we are with the criteria that every property. So I educate the investor, investor says, yes, I want to invest. By the way, minimum investment, about 25,000. And then I get a property from our own exclusive inventory. So that property has gone through our research and acquisition department. Our company actually puts their money into it first day, buy the land first. They don't want to risk their money. They don't want to risk their investor's money. That's why this due diligence process is the most critical piece of what we do. And then when I get a property for the investor, based off of the investor's goals and investible funds, then we get them through escrow process is a pretty simple fee, simple escrow process to purchase the property. And then they're the landowner. They get the grant deed, they get policy of title insurance. So the investor is in full control of that land. They're not tied to our company in any way. They essentially hold the pink slip of the land and can do whatever they want with it. And, we don't wipe our hands clean of the investor at that time. That's actually, when our job starts again, We keep our investors updated, letting them know what's happening in the area because it's not like stocks or traditional real estate. It's an imperfect market and because it's an imperfect market, that's why you can get amazing returns. It doesn't run off of comps like traditional real estate does. It's not like the stock market, which is constantly trading every one second or less. Right. The wealth is created during the hold period and you exit when the market is desperate for your land. So imagine owning a piece of land, maybe it's two and a half acres of land, and the developer needs a hundred acres of land. Well, guess what? You're in the middle of that. You own the asset that they need. They can't just run off to Costco to buy a piece of land. It just doesn't exist. So when you're blocking a developer from being able to develop, that's a very powerful position to be in. And so that's when the negotiations start. And like you said earlier, you never take the first offer. Well, not only that, but we will help our investors do the negotiations completely free of charge for the investor. So, I think that answers your question. I think that's a really cool part of your service. I'm assuming when you do that, you'll sign like a non-agency agreement of some type, or a limited service agreement with no fee when you lead them through the disposition. We don't sign anything. They just come to us and it's like, okay, this is the recommendations we offer you. You can take them or not. Some investors decide to do it on their. Some investors, we lead them a little bit and then they continue on. There's definitely no, anything that is in writing that says that we are entitled to any portion of those funds because we're not, they own the land. They have the grant deed. So we have no rights to any of the returns that they would be getting. And we do this because we want our investors to do the best possible. We want to get them far above market value on their properties because again, they're in a very powerful position where the developer needs their. To be clear your team, your brokerage team is going out sourcing opportunities that make sense for the investment model that you're proposing, you acquire and clear title on the land, complete due diligence- I'm assuming that means environmental, civil survey. Just any, any possible you know, land you have a process. And then once that, that process has completed, that assets qualified to be sold to an investor. Is that a pretty accurate summary of the process? Yeah. Well, it, it, with the one little step of we're going to buy the land. So you guys acquire it, then do all that due diligence and then you sell it to your investors. Correct. So you're absorbing that a lot of that, the risk mitigation requirement's, you, you absorb that responsibility versus saying, Hey, just go buy this and then we'll tell you what to do. Right? You take the risk and we'll share our knowledge. You're actually applying your knowledge to it, giving them a clear cleared asset but cleared by your underwriting so to speak. And then they invest knowing that okay. When it comes time, when someone starts making offers, I still have this team has my back. Like I'm going to be able to get professional advice from them without a fee for service on that. Right. Absolutely. So I'm, won't put you on, I'm trying not to put you on the spot and ask you to give up your secret sauce, but I think most everybody in this community they're helping families in probate. And one of the very first people I'd trained who took this class. His name was Roger. He was in Bentonville, Arkansas. Which is you may or may not know the home of Walmart. Right. And when, when you have a hub like that, the hub of the world's largest retailer. Obviously you need highways, train, tracks, infrastructure to come in to get things out. Right? So a family, when I first met Roger, he was, I think 63 at the time, he was extremely call reluctant. Didn't make outbound prospecting calls, heard about probate, really enjoyed the conversation that he found with us. And I gave him a little bit of a pep talk and coached him up to get on the phones. He jumped on the phones the next day. First phone call first day prospecting ever.$7 million commercial out parcel. Wow. The family had no clue what it was worth. They thought it was a couple hundred thousand dollar hayfield. Rodger understood land. Um, He didn't understand probate at the time he was, he was a green. He wasn't really confident in his offer, which is common in the beginning, but he took what he knew about path to progress and, and what he knew about land. And he was actually able to step in and take a piece of land that could have been sold by the family as ag land for maybe a couple hundred thousand dollars tops. And he was able to get, I think it was $7.3 million, and that was his very first probate deal. So for those folks on here who are thinking, oh my gosh, that family, I thought about 10 families that had land and I didn't know what to do with it. Like, you guys have a specific process inside the boundaries of one state. And within that you have a criteria for looking for opportunities. Without asking you to give up your secret sauce. What can you share with folks who are listening to that? If they're not in California and if they want to provide a service and make sure that their clients or customers get the highest return on land, or if they want to buy land from the families, what are kind of the rough criteria that they should be looking for to know whether they should buy this piece of land or. Or list it or if it's wanting to pass on and tell the family to hold onto for a while longer. Oh my goodness. That's a loaded question. And yeah, there, the criteria is huge. It's well, I mean, what, what's the economy of the area? How much growth is happening in the year? What's the projected population growth. Does the government have plans for future infrastructure in the area? When the city is planning to put like an on and off ramp, as an example off of a freeway, you got to ask yourself, why are they doing that? They're likely going to spend. 16, 20, 30 plus million dollars on that infrastructure. They're not going to do that for no reason they're doing it because they're planning for the future growth of the area. What's the zoning. What's the is the city of pro-business city, government. Do they want to grow? What's the existing private public government educational system, medical system that's there. And is that growing? And what are the economic factors causing this area to grow? A bedroom community, or is it a community that's bringing in industry? Is there industries moving in because with industries that's causing employee employment with more employees, that's causing population growth with population growth, causes development, just the proliferation of it. All right. So. There's a ton of factors. What I would recommend watch my land banking webinar, get into the great details of what we do. But you really have to know what to look for. Gotta be connected with the city governments. You have to know what maps to look at to make sure it is quality developable land. It could be land that's landlocked by government land. I can find cheap land in California and I'll never be able to develop it. I saw a piece just a few days ago. I was in Ponte Vedra the really nice golf and beach community between St. Augustine and Jacksonville, Florida. And there was a parcel, quite literally on Jack's beach. So behind the dunes, you have home sites, or the whole beach front Then you have the dune. There was literally out on the sand and to the waterline. I could buy a piece of Jacksonville beach for 8,000 bucks. But it's completely so cheap. What would you do with it? You can't build it's it's on the other side of the dunes. You'll never get a building permit. You'll never get insurance. You couldn't put a temporary structure there. Like you, you have to cross private land to get to so it's, but there's things like that still exist. I mean, there's, there's a development here at snowshoe mountain ski resort. There's an old town of spruce, like 120 years ago. It was an old logging town, but there are no easements to it. So you can buy an acre of pristine West Virginia mountain, top land for like five to 15,000 bucks. And then you can walk in there and camp on it and that's about all you can actually do with it. So there are those tempting, like, oh my God, let's get that! But there are traps. One of the biggest traps I've seen that that is easy to overlook is environmental hazards. So a lot of folks don't know. And in anyone who's licensed, you probably remember this from real estate school. They tried to scare the hell out of us about, brownfields or brown spots. And how hard that is, the claim that dirt and it is that's extremely expensive. But there could also be opportunities in that, depending on who you're you're selling to, you could pick those land, those pieces of land up. Sometimes the, the restrictions that come with the land can be valuable just like with real estate, with residential real estate. I love buying houses with title problems because. Pretty simple. Right? So there's some things that can be remediated, very affordably. Anyway, there's a lot of variables, a lot of ways to go wrong. A lot of a lot of ways to trip up. I think what's cool about what you guys are doing is you're taking generations of knowledge and a systematic approach to. With lots of proof of concept to get triple digit returns over the hold period. But instead of saying, 'Hey client, you need to spend five years learning everything. I know so you can tell me which piece of land you want to buy, and I'll represent you as a buyer's agent' or, 'Hey, look, here's a piece of land, we haven't done much due diligence, but you want to buy it? I'm a listing agent!' You're not doing that. You're providing a very high level of service based on the knowledge you have picked up as a practitioner which is really great. I think it's, it's an awesome model. You mentioned if they wanted to learn more about what that process looks like they could go to your webinar. Is there a simple URL where we can point them to, and we'll drop this in the show notes to guys, but is it on the dirt is gold.com. Is that. Yeah, dirtisgold.com look under webinars. Can click there or they can enter their information on the page there and I can send them their upcoming webinars. It's pretty simple. Worst case scenario. You spend a little over an hour learning something new. Best case scenario, you get an awesome asset that's going to help you create generational wealth. Let's talk about the size of this. So if someone's here listening and they're like, oh, I got 50 grand from that old 401k that I still haven't done anything with it when I left my job, like what if somebody has 25,000 bucks? What might a deal in that price range look like? Versus, what, if somebody has$3 million that where they had built up a big equities portfolio, they're nervous as hell because they look at Yahoo finance and they're like, oh my God, who's right! Is it a, Is it a bubble or is it going to go on forever? Someone has to be wrong. Right. But for those people who are thinking, what is an inflation hedge investment with as much risk mitigation in place as possible? Hey, this sounds kind of interesting. Let's talk about what it looks like to be on the lower end versus the higher end of that then as the whole time, any different is the finance strategy any different, and any, anything you can share with us there about the range of opportunity available right now? Sure, absolutely. So. Land can be used for all different types of things from housing, which most people think about when it comes to land to commercial or mixed use. Like I mentioned, I'm buying a mixed use property mixed use by the way, is like the highest possible zoning higher than commercial. And the reason why that is with a mixed use zoning, you can have a commercial space, then an office space, then a residential space, you have a multi-level space. So instead of owning one acre land, now you own. 3 4, 5, 10 acres of land cause you're literally negotiating for floor space. That's why mixed use is so critical. And actually California has implemented laws that every city has to implement mixed use zonings to create these live work, play types of developments to cut back on carbon emissions, people driving. So that's all to our benefit. That's like the highest one. That's going to be a bit more on the expensive side. You're talking probably if we can get one, if we can get one, 300,000 plus. Then commercial or very rare to find. Very few and far between I'm not even going to give a price range there cause that's pretty much gone. Then we have industrial zonings. So everything from Amazon warehouses to cannabis grow facilities, to manufacturing, to just the traditional distribution center that you're talking probably minimum 70, 80,000 plus to get one and a quarter acre plus. And then residential, if you can find it. Cause you had mentioned this earlier with all the residential development that's happening. Residential land is very hard to come by, especially in areas where it's much more affordable and California just passed a law that we need 2.5 million new homes by the year 2030. That's four times the amount of homes that have been built over the past eight years. And if you live in California, you know how much that is, it's mind blowing, how much it's needed. So getting into land that maybe isn't zoned yet for residential, that can be maybe around a 50,000 and that could be rezoned I'm the reason that's a huge equity gain, probably around 300% just on the rezone of what the city would rezone it. And then we have what is causing the largest land rush in California's history right now, which most people have no clue that it's happening and we're all going to pay for it. It's a global situation and it's kind of showcased in the picture behind me. Our transition away from fossil fuels and towards alternative energy that is now happening globally, and California has statements in place that say we need to be 100% alternative energy by the year 2045. Plus what about all those electric vehicles now that governments are mandating? And I don't know if you've seen the news, but the people like general motors and Mercedes were going to stop making gas, powered cars, electric vehicles only. Where is that energy going to come from? The amount of land needed on that is mind blowing. So minimum 25 grand to get into energy real estate land that is in the number one location in not just California, but the United States for where these massive utility scale projects are coming in. And. Yeah, that's a minimum 25 grand on up. So someone with the $3 million mark, you can get all different types of zonings diversifying your land portfolio, someone with the $25,000 mark, you're looking at alternative energy projects and that land is basically zoned agricultural because they don't want to put these massive projects on land that is zoned for traditional community development, they still need that land for the community development. So hopefully that answers that question for you. I'm glad you brought that up. Cause I think one of the biggest opportunities in land is in renewable energy. One of the challenges, I don't think the policymakers understand or whoever the hell is giving them advice is, we are almost 10 years behind on energy infrastructure right now, mainly substations and large, like the 500 plus KV lines. We're behind. And we, I mean, we, you see rolling brownouts in California and Texas, like we see it already. Now when you force transportation onto that grid, as well as everything that's already on it without removing anything off of it where do they think that's coming from? And sure you can build a solar field, but we have, we already have, there's already an abundance of stranded solar utilities. So somebody bought the land. Somebody paid a premium, somebody built the solar utility on it. Now there is no substation. Now there's no transmission line. So because, and, and going back to what you said, you, you should have a long-term mindset. If you plan to invest in this space, there was power poor policy decisions are driving, are going to create spikes and asset prices. And this is one of those examples. So if you can find, and I'm sure you guys are looking for land near electrical infrastructure, that again, The one of the biggest challenges they have is how the hell do you get $150 million substation in the California desert when you're 10 years behind. So looking at existing infrastructure and land acquisition around it will most likely result and a great opportunity to sell to a solar developer in the future or to the actual municipality the land is in then when they start developing their own micro utilities. So sometimes I think where we're headed, I think eventually they will realize we don't have the labor force to actually build transmission lines as fast as we're going to be required in order to meet these demands of these 2030 goals. I think that the direction we're moving in is micro utilities. And I think you're going to see these pop up beside of factories. That piece of land, all of a sudden becomes valuable because that's where their electricity comes from for the expansion, or that's the reason they could build that factory because they didn't have 10 years to wait. They wanted to be in this market on this shipping corridor, they need to build, but they can't get electricity. So they're going to put in gas, power generators, or they're going to build a solar field or a combination of so I think there's a lot of opportunity and. 20 years. Certainly in the next 10 years, based on some of how forcefully policymakers are trying to apply alternative energy into an economy that really just wasn't built for it. There are a lot of retrofitting that has to happen. So I imagine you guys are going to find a crazy amount of opportunity in future green energy. Production sites. It's like what happened in Renton, Washington when Amazon built their first warehouse, that land was a joke. I mean, it was like on the lake, it was valuable, but anything and like down, like in Renton, maple valley, that stuff didn't exist. Trees and junk. Right? And now you can't touch it. It's almost unbuildable unless you buy and tear down. So I see a lot of opportunity in this space. I think, especially considering, the environment we are in, a lot of land transactions are done with cash. Even with developers, a lot of times they'll buy with cash and then use leverage, they use the land, the collateralized construction loans. So I don't think that rising interest rates will hurt this asset class nearly as bad as it will single family multifamily commercial. I think it's more insulated in a lot of ways. A lot of folks I think would argue that, well, there's no tax benefits to owning that, but the reality is the tax benefits to owning residential property aren't that damn beneficial. Yeah, I have to have leverage and pay mortgage interest to get the mortgage interest deduction. You have to do CapEx or you have to put money out or let the property get in worse condition to get depreciation. But then when you sell the depreciation is recaptured. So what the hell was it worth anyways? It's a tax deferral game. So a lot of people who are just coming into the real estate investing career, they give too much, too much weight to those tax benefits of that we see in improved real estate where, you know, the tax benefit of this is you pay capital gains tax on massive gains, and you do nothing. And that's a pretty nice tax benefit. Like instead of getting taxed at 49% combined, you might get out with just a 20% tax. Now in the state of California, you're probably not going to if you're a resident. But for someone who's a non. Investing in California. The other thing that I just saw it, and this is I have not dug in and read the law, the bill, but as I understand it from headlines that I saw while I was at a conference this week, California has proposed a 25% tax on anyone flipping out. It was basically anyone flipping properties inside of, I believe it was a 24 month period. I don't know the details on that, but I, yes, I have heard about it and I'm not exactly sure. Cause again, that's not. Yeah. Well, it my question was going to be, does that bleed over into your space? Does it, does that also apply to land flipping or is it just for residential property? I unfortunately haven't had the opportunity to go dig up the bill and read it, but I did see that last week, so California is trying to cool down the housing market and stop the wealth gap and the affordability problems. But I doubt that spills over into land. I really doubt that it does. So if that's the case, then that's one more point for land, right? It becomes even more attractive towards land than residential real estate does. Well, so there's a couple of like, w we've shared with you guys, how you can connect. I think that, you can refer clients to Marcella for anyone who's licensed. There's an opportunity for you to get your best. You don't have to be licensed. So there's an opportunity for you to get your best clients or contacts into these types of investments. For instance, maybe it's your mom or your dad who's sitting around heavy in bonds and stocks and, you can do your own research, but those traditional ways that our parents built wealth aren't likely to hold up in the new economy we're heading into. So diversifying, I think, is now more important than it's ever been in history. And looking at past performance of any investment class and thinking that's going to be carried forward into the future, I think it's foolish. We're leaving an industrialized society, moving into an information society and our government systems, our infrastructure, our education, all that's left is behind. And there's some people on the leading edge. If you look at what billionaires are buying right now, what are they purchasing? If you follow the money and this is not anything brand new, this is for almost the last decade. Chinese foreign nationals have been purchasing what? Farmland. Bill gates, Bezos, everyone else, buffet. What are they buying? Farmland and anything that has fresh water. So they know, they see, that you have a finite resource that is going to be in more and more demand. These are people who are making decisions based on multi-generational wealth accumulation and preservation, but it might not be in their lifetime even that we have massive food shortages and water shortages, but they have literally more money than you could spend in multiple generations of a family. So what they believe, from a multi-generational wealth

preservation standpoint is: 43:55

land, especially land with fresh water, is the most valuable thing that they could possibly put their money into as a store hold of wealth. So none of us are probably playing at that level where we're buying, hundreds of thousands of acres of active farmland in Kansas. But it doesn't mean you can't play the game. And so you could refer people, you could refer yourself if you're interested. You can go to dirt as gold.com. You can watch the next upcoming webinar. I'm sure you're willing to have a conversation directly with them, and get your questions answered in the comments here. If you guys have any questions or comments for Marcella or go to her site and reach her there. And, uh, anything else you'd like to say in closing, Marcella? Just a real quick, the picture behind me, that solar field, that's Warren buffet, nine square miles. Right in the center of where we're investing, I'm placing investors right next to him. So yeah. Follow the money. If you want to be wealthy, do what the wealthy do. They invest in assets that will grow over time. They're not playing the up and down game of speculation. So land is easy. It's a peaceful investment that doesn't cause me stress. And thank you so much for sharing all of your knowledge today, Chad. I think you're very well-rounded in everything that you do. So I really appreciate you bringing me on here. Thank you to everyone who's watching this today, and I look forward to helping you with land. If that's something that you feel would be helpful for you! Awesome. Well, thank you so much for being here and letting us pick your brain and we'll see you in the community! Awesome. Thank you so much, Chad. Much appreciated.