How To Survive Off Your Land Business (Without Starving To Death)

How To Survive Off Your Land Business (Without Starving To Death)

– What’s up everybody, this
is Jeran with and today I have the privilige and honor of talking to Chris Gibson
from Wild West Land Company out of Nevada, what’s goin on Chris? – What’s happenin? – Man so, what we’re doin today guys is we were thinking
who do we know who uses their land business as their
primary source of income and how do they structure their finances? How do they go about
setting this amount aside for savings and you know, what percentage do they live off of and we
thought like who do we know, who lives full time off
their real estate business that we could ask and dive
deep into that question with. And Chris was somebody
that connected with me a couple months ago, I really
really liked his heart, his integrity and his
character so I was just like dude let’s get him,
let’s get him on a camera and ask him some questions. So yeah bro, tell me a little
bit about your background. How long have you been doing
land, all that kind of stuff. – Yeah so I’ve been doing land since the beginning of September of 2017. So we’re comin up on 10, 11 months now. I dunno I can’t do math but
yeah, I mean the goal right away was to replace my income
and I’ve always kind of really felt like an
entrepreneur on the inside but I’ve ended up in positions
where I’ve been doing you know even manual
labor, digging ditches and things like that. So you know I’ve always
sort of wanted to kinda spread my wings and fly and
I just never found anything that was really my jam. I started because I was
flipping cars for a little bit I heard about the land
business, kinda got involved with some education and you know, just picked it up pretty quickly and started rollin with
it and pushin forward. Well recently a few months
ago my job kinda was. The company I was workin
for didn’t really take off too quickly and so the
timing of it worked out to where I could just kind
of barely support myself at the same time that you know my job was, I was planning on leaving my
job and that sort of thing. So the timing just kind
of worked out really well where I was just barely able to make it but I made it happen and
then you know, since then, since I’ve quit my job, I’ve had more time to work on the business
which has been great because I’ve been making more
money and stuff like that too. So that’s kind of the quick
history of the land business so far for me but it’s just been great. It’s just been, you
know it’s a lot of work but it’s definitely worth it, so. – That’s awesome, that’s awesome. Well first question on the
list that I have for ya man, how many sources of income
do you have currently or are you just solely living
off of your land business? – So right now I’m just solely working, living off the land business
and then my wife is a teacher as well so we do have that income. But I think that the
primary source of income is the land business right now. Are you using her for medical insurance. – Um you know, I will because
she’s going to get that as a benefit through her new employer. Before that we were basically paying out of pocket for medical insurance. – That’s tough man, yeah.
– It is. I found a Christian
alternative called Medi-Share. – Oh I know. – And it’s cheaper but it’s
kind of janky, I don’t even. – We’ve looked into
Medi-Share and there’s I think Samaritan Ministries is the
one we’re really interested in. So we would do that except for the fact that we get free healthcare as a benefit through her employer, so. – Through her stuff, yeah. – No if she, at some point
stops workin you know, because we wanna have a family soon. If she at some point stops workin there then we’ll probably go with
somethin like that cause I, it’s just a better model, I think, than the healthcare industry
which is insane nowadays, but. – So was it just you saw
the opportunity in land and you were like this is
a way for me to get out of the 9 to 5, this is my way out of working kind of dead-end jobs so
I’m just gonna go for it or did you have like a
certain amount of income in place that would kind of tide you over as you built the land business over time? – Yeah well I was working a
job consistently you know, I’ve always worked and
I’ve always had work to do and so yeah the goal at first was well I’m gonna start workin on this cause it’s a way to make side cash. Cause like I said I was
making side cash flipping cars and I realized that there’s
a lot less risk doing this. There’s still some risk
but you can mitigate that risk very well and you can scale it. I only had so many, so
much room in my driveway for so many cars, you know what I mean? So I had like three or four
– Yeah. cars in my driveway at one time and (chuckles) you just run out of room. The good thing about land is, it comes with it’s own
parking spot so you don’t need a place to store it.
– That’s awesome. So that’s what worked out for me. And yeah initially the goal was I’m gonna make some side cash and
before I even started I was like I wanna do this
as my full-time business. That was kinda the goal goin into it. You know I would say you know
I probably thought about it for a couple weeks and I was like I think I could so something like that full time. And yeah, so pretty much from the get go, that was the goal but yeah
to get back to your question, I did have a steady source
of income for the first six months or so, or more. Yeah around six or seven
months I was still working at my previous job so I had that income and yeah you do need a little bit of money to get started in this
business and it’s probably a good idea while you’re
getting things rolling to continue to work a regular
job and have an income. Unless you have a ton of money saved up, which is cool you know,
then you may be able to jump in with both feet
and commit yourself fully. But I’d say it’s probably
wise to test the waters, try it out, see if you like it. And that’s the beauty of this business is, you can start slow, you know. It’s not like, it’s not like
you’re opening a pizza shop where you have to have a
building and you have to have like a cook and all this other stuff. You can start really
slow buy one property, try to sell it, you know see what happens. See how you like it, learn some stuff. You may not even like it,
you may not even wanna do the business so yeah, I
definitely encourage everybody to keep your primary source of income and then I’ve heard people say, some other people in the
land community say like you wanna quit your job,
like a year too late. You know, you wanna be
really sure, if that, I hope that makes sense, like
by the time you quit your job you wanna be like, yeah I
coulda done this a year ago. For me it didn’t quite work out like that and for me it was kind of a leap of faith of this is what I’m
gonna do and still after I was quitting my other job
and deciding to move and stuff I still thought maybe
I should look for a job in this new area where
I’m gonna be stayin. And you know I did look
for a job for a minute and then I decided, you know what, it’s gonna probably I’m
probably gonna lose money if I work a regular job
because, yeah I’ve been busy with my land business, you know. I’ve been working at
least 40 hours a week. Sometimes less, sometimes more but there’s plenty of
stuff to do you know. I’m constantly learning and trying to make my business better. So that’s the really long version of your, the answer. (laughs) – You know honestly, I’m really glad you touched on that Chris,
because I think that’s one of the best pieces of advice that people who are looking into
starting their own business, getting into real estate.
– Yeah That’s one of the best
pieces of advice that they can hear because something
that really messed me up is after I left simple wholesaling, I was like I’m just gonna go gung-ho and I’m gonna do this
and I didn’t really have a stable source of income
– Uh huh. and it actually stunted the
growth of my land business. It’s kind of weird,
– For sure. I don’t know how this worked
but since I started working with REtipster now my land business is taking off again.
– Yeah. And I have, all I was doing
was like focusing 100%. I don’t know if it’s just starting off or if it’s just like a psychology thing because I have the peace of
money coming in every month but I think that you know,
– Uh huh. there’s a lot of people out there that try to do the sexy
thing and like I’m gonna be this starving entrepreneur right? But that it’s not practical, it’s much better to build something slow and make sure that it’s
sustainable before you quit. – For sure, yeah. There’s definitely something
– I thought… to be said about trying
to grow or trying to scale too quickly, there’s definitely something to be said about that
and it’s just something to be cautious of you know. – Yeah man, 100%. Well let’s dive a little bit
into, kind of exact numbers if you’re comfortable.
– Mm hmm. So what was your like bottom line budget where you were like okay
as long as I can get this amount of money I’m
gonna be okay to justify quitting my job full time?
– Mm hmm. And how many deals did you have to do in order to make that with
overhead and all of that? – Well because I have a mix of cash deals and terms deals, I was
just kind of looking at the overall about how
much am I making per month. And I had around 3,000
or 3,500 a month comin in from terms deals and that’s
gross, that’s not net. So net after advertising
was probably half that, so like 1,500, 2,000 something like that. So basically to answer your question, what I was looking for was, I
wanted to replace the income that I’d previously had. So you know I was makin around 45k a year, so divide that by 12, whatever that is. I was shootin for around 4,000 a month, somethin along those lines.
– Yeah. If I can make that then
I’ll be comfortable. Now to be honest, in the
situation that I was in I jumped out a little bit before that I think and I’d made
– Hmm. some cash deals and so you
know, it’s kind of hard to average out cash
deals when this is like your third, fourth, fifth cash
deal or something like that. So it’s kind of hard to determine is this my actual monthly income? But you know based on what I had sold for terms and for cash I was
just like: you know what, I feel comfortable with
this, the timing feels right and like I said, I still, when I was leaving that
job I still kinda thought maybe I should keep my eyes open for another job, just in case.
– Hmm. Just so I can have that in my back pocket. I actually got a job opportunity. And you know by the time
all was said and done and there was this background
check thing involved. By the time all was said
and done I was like: hey thanks for the
opportunity but at this point I have to decline because
– Why? I would lose money if I were
to take this job at this point. So yeah that was really all it was for me, was just trying to
replace my income because I know that if I have four
grand comin in a month, we can live comfortably between me and my wife’s salary,
(Jeran mumbles) yeah. – So let’s dive into how you structure your personal income and
your business expenses. So obviously as a business right, you have a certain amount of money that goes to direct mail
– Mm hmm. A certain amount that goes to you know, just kind of miscellaneous, like I’m hiring some guy off Craigslist to go take pictures for me
– Mm hmm. et cetera, et cetera. So how much money do you set
aside for like marketing, for just the general
overhead of your business and then how much do you
take home per month from that or are you just primarily
living off of your terms deals? How do you structure? – Right now I’m kind of in the mode of. I do need to tighten
things up and get things down to an exact percentage. I’m a big fan of the Profit First system and really dialing in the numbers. But I heard someone
say (laughs) somewhere, I dunno where I heard this. If you make enough money
you don’t have to budget and so that’s kind of been what my goal has been is, (Jeran chuckles) I’m just like tryin to
make as much as I can and work as hard as I can
to get that income going and I’m like okay this
is what I’ve committed to spending this much on, on marketing. Percentage wise, I don’t
know if I have a percentage but I’m spendin around
between a thousand and 1,500 a month on marketing and that’s what I feel comfortable with. It seems like it’s working for me so far. You know of course at some point I want to dial that in and get like an actual percentage of my income and really budget things
out a little bit better. But you know again like,
if you have the margin in the properties you’re
selling then you’re gonna end up or if you just have the volume, either way you know you’re gonna end
up paying for everything. And as far as mailing costs,
it’s one of the biggest costs in this business obviously. You know I’d just, I mail when I need to. So when I’m ready to buy more property, I send out some mail. I may go a month without mailing anything, cause I have a bunch of
property I want to get rid of and then I may, you know
just recently I sent out like close to 2,000 letters
or more for one month. You know there’s some costs there but I always know kinda what
my income is and I have. I’m kinda flyin by the
seat of my pants in a sense and even with my marketing and stuff, I don’t always track the
data the way that I should. I wanna set things up better
– Mm hmm. and tighten everything up and
really understand the numbers but a lot of it just like, okay this is a platform that works
I feel good about this, I’m gonna continue doing this. I kinda have a mental picture
of what seems to be working and what doesn’t seem to be working. So as far as structuring the finances, were you asking how I
pay myself as well or. – Yeah like did you pay yourself off of a percentage
– Yeah. or is it just simply like
okay I need to make $4,000 a month so, as long as like
– Right. here are these expenses,
– Right. as long as I make 4,000
– Yeah. I’m good and do you take that
from your reoccurring revenue or how do you, do you do it from your cash sales, how do you do it? – Well I um, we have money in
our personal checking account so I guess there was a couple
months where I didn’t really pay myself and then
recently I’m like yeah, I should put some money in
our checking account now. I mean I need to partition
things a little bit better, I do have a multitude of accounts because of the Profit First system and because I wanna set
things up like that. But I haven’t really. – Dive into that for me, what
do you mean by Profit First? – Oh okay, so Profit First is a book. I can’t remember the
gentleman’s name who wrote it, but I’m sure you can Google it real quick or I can do it too but Profit First, it’s a great book and it
talks about taking your profit before your expenses and so
basically the idea is this. Money comes into your main income account and then you would
distribute money to yourself, you would distribute money to
your profit account as well which is different than
your pay, it’s different than your owner’s comp pay
or your owner’s comp account and then you would distribute
some money to taxes and then you can distribute
some money to savings and there’s a couple
other different options. And in the book there’s
outlined some basic guidelines for the percentages of what you
need to put in each account. Now for land it’s gonna
be a little different. So actually one gentleman at
one point emailed the author of Profit First and he’s
a guy in the land business and they discussed and came up
with some different figures. And so I can’t remember
exactly what those were but a lot of it was going back into the acquisition fund basically.
– Hm. So yeah, long story short is the goal is, the goal is eventually to be
to nail down the percentages that feel right and then
distribute those percentages and then what’s left over can
be your operating expenses. Oftentimes you know we think
we need things that we don’t and so I think that’s the
main goal is understanding: you can make things work on a budget. If you don’t have the money
you shouldn’t spend it, cause you don’t wanna,
you don’t wanna spend your operating expenses first and then at the end of the day you’re
like: oh where’s my pay or where’s my profit?
– Hmm. Cause that’s not the goal of being a business owner.
– Yeah. You don’t want to own a business
where you don’t get paid and a lot of people do
that, they say no I need to reinvest in the business. I need to pour this
money into the business. It’s not a bad thing, but
could you do it cheaper? – [Jeran] Hmm. – And that’s the, the
question that you have to, you’re forced to ask
yourself when you’re like oh I got $500 dollars left
for these operating expenses. Obviously there’s a lot
of tailoring to your needs that needs to happen there
for your specific business. But yeah it’s just good to kind of have and all those are set up in
separate accounts by the way. So like I have an income checking account, an operating expenses,
tax savings and then I for my owner’s compensation, I have just my checking account. So I just dump it into
my checking account. Oh and then obviously the profit account as well.
– Mm hmm. So profit is different than,
than your owner’s compensation. So at the end of the
year you wanna be like, yeah we I paid myself, I paid
Uncle Sam, the bills are paid and here’s this chunk of money
that we made as the company. And then out of that you
can give yourself a bonus, whatever you feel like you wanna do. – That’s awesome. – So to answer your question, what I’ve been doing
lately is I’m just like, okay I’ve been makin
some decent cash lately I’m gonna just put 4,000 a month or so into our checking account
because I’ve noticed that since I wasn’t doing that the checking account’s going down. It usually was stable
– Hmm. but like we’re spending more than is going into our personal checking
account right now. So I’m like yeah I need
to supplement that, I need to pay myself in other words. So that’s kinda what
I’ve been doing lately. It’s not an exact science
yet, I think that as I figure more things out, figure out how to like tighten up these numbers and figure out what percentages I actually want then I’ll be able to tighten
that up and get better at it. A lot of this, excuse me,
one challenge I’ve faced is, everything is always so new. And it’s constantly
evolving, so it makes it hard to really nail things down and say: this is what I’m gonna make in a year. It hasn’t even been a year yet, it’s been 10 months.
– Oh yeah. You know I mean I could say, okay look in the last two months I
made 25,000 in cash sales. I could do that and sort
of extrapolate it out like okay that means I should
make roughly a 120,000 a year, something like that but there’s just a lot of new things always, you know, so it’s hard to understand
exactly what you’re making until you’ve been doing it for a while. I hope that answers your question. – Yeah no that really does, cause it’s um, I really like the way
you’re going about it because it looks like you’re just, you’re trying to figure
out, like I’m a big fan of the 80-20 principle
– Mm hmm. And so it looks like you’re looking for the key leverage points
– Yeah. that you’re like, okay if
I do this, this and this I’m winning and that’s good enough. And then just you know,
– Yes. so it’s awesome man, yeah. I’m gonna check out that book,
it seems really interesting. – It’s a great book. – A couple more questions
before we jump off here. How do you feel about debt? Like do you use debt in your business are you like extremely
anti-debt, what’s your, what’s your take on debt? Is there ever a place for it? – Uh the only debt that
we have, I’m a big fan of Dave Ramsey and you know I
think he teaches smart things. And so you know, my
wife’s car is paid for, my truck is paid for, my
truck is 18 years old. I’m gonna keep drivin it. I have a jeep that’s a 96 Jeep Cherokee, I’m gonna keep drivin that thing. So I like things to be paid for and the only debt we have is for our house which is totally reasonable. You know at one point I thought, wow if I start making a ton of money in this business, I’ll
just pay the house off and we’ll save like 200,000 bucks. You know in interest or whatever the, maybe it’s a 100,000 something like that. But the problem with that
is, if you spend that money you don’t have that money to invest and so if you can make more
than five and a half percent which is our interest rate currently. If you can make more than
that per year on that money then you should do that. So I totally understand that as far as buying new cars, things like
that, we don’t really do that. We’re not fans of debt at all and so I don’t think you need to go
into debt for this business because there’s a lot of people out there with money who want to partner on deals and stuff.
– Yes. And so, and so, I mean
you can literally like make deals happen by bird dogging. By finding properties,
by finding those deals and finding an investor
who’s interested in that. There have been people
that’ve started off with actually like zero dollars
in this business before. So that doesn’t mean that it’s easy. I mean obviously if you
have $100,000 sittin in your bank account you’re gonna be able to accelerate your business
a lot more quickly. Now I think you may learn a lot more by going slow, by bird dogging deals, by not just dumping all
your money into random land. I guess that’s what I was saying about the scalability thing earlier. Just to kinda jump back to that is you learn things along
the way so it may be smart to buy a property and
then you know sell that property and then try to buy another
one and decide what you like. One thing I did is, I
bought a few properties that I realized a few months later, I don’t really like this property. I wouldn’t buy this again,
it’s not sellin that fast, it’s not gonna make me very much money. Just not exciting. So sorry what was the question
again? (Chris chuckling) – So. – [Chris] Let’s get back
to it, let’s bring it back. – Yeah no, so the question
was just about debt. So like what’s your opinion
– Yeah. on utilizing debt?
– Yeah. – Yeah so again you don’t
need to, you don’t really need to borrow money generally. Partner with somebody or just
find the deal for somebody. Maybe you can find the deal,
do the work, sell the property and just split it 50/50 or
whatever you guys can agree to. So I wouldn’t go into debt for anything other than maybe a house, personally. – Well, that’s such wise
advice and it’s very counter-cultural in our day and age but there’s one guy that
and everybody kind of puts this four-hour workweek lifestyle as like the bread and butter, it’s like the cream of the crop of what you can develop
for yourself right. There’s one guy that I
know who’s actually done it and he’s a staunch, like all, he spends like half the year traveling and he’s like a
multi-millionaire and he owns all these different businesses
that he set on autopilot, the whole thing.
– Mm hmm. But his biggest thing is that
he is extremely anti-debt. He is like, because he says
– Yeah. what you don’t have,
what you don’t factor in when you leverage is on
paper it might make sense, you might be able
– Mm hmm. to justify it but there’s
a lifestyle component. When something goes wrong
– Yeah. You’re stressed out and you’re stuck. And if you want freedom,
– Yeah. it’s better to have less money
– Yeah. in terms of scalability
and have it paid off and have control over it. – So one thing that I always
look at because I think that there’s usually
something to learn is, look at the extremes of
any situation or business or whatever and one dude
that is pretty extreme with the whole like
living thriftily lifestyle but also living a great lifestyle is a guy that calls
himself Mr. Money Mustache I can’t remember his real name
– Yeah! but he’s been on Tim Ferriss I think, but he was like a software engineer. He and his wife made a ton of money and then they just put it into like a 401k and now they just chill
and do whatever they want and they do some work on the side. But they live a very free lifestyle cause they’re very thrifty. Like a guy like that with
a couple million bucks sittin in the bank, it’d be easy to go out and buy an expensive house. This dude like doesn’t,
I don’t think he owns, no he may own a car but it’s like a car that he paid less than 10 grand for and you know he rides his bike
to work and things like that. So I think that living below your means is one of the best ways to get ahead. One more thing I want to throw out there as well is
– Yeah. you know I heard a statistic recently that on average, asian people or I think it was specifically Japanese people save 50% of their money for
retirement or for whatever. Europeans save like 30%
or something like that. Americans on average save negative one percent
(Jeran snorts) of their income. That means they’re spending
more than they’re making and that’s a really great way to be, you just owe your entire life to the bank, all the time.
– To somebody else. – Alright man, so final question for yah. In terms of the future
of your land business, are you looking to just go hardcore on terms and try to
create a passive income as much as possible or do
you like the mix of both? What is your strategy for the future? – Generally speaking I prefer cash. And so I’ve tried to price
properties accordingly and it seems to be, it
seems to be working well. When I do a terms deal
it’s a much higher price and you know, I think that I’d really like to just do terms deals on properties that I really like or
really nice properties because I may end up with them again. Other properties that I don’t
really think are that great or that I may not want I just
try to sell them for cash. But I think it’s good and
healthy to have a mix. I think it’s, it is nice
having that monthly income that’s steady, so I’m not
opposed to doing terms deals. I just anymore, I don’t
want to play the long game of a hundred down and hundred a month. I wanna get the property paid for if I can on the down payment. So I wanna, I want that
to cover my cost there. So it’s usually the high down,
like medium monthly payment or a medium down, high monthly
payment type situation for me where the money’s coming
in relatively quickly and it’s not spread out too far. But it just seems like it’s easier to accelerate this business
and grow that chunk of money by selling for cash at this point. Basically when you’re doing terms deals you become a lender and
usually banks are lenders cause they got a ton of money
and they only need to make a few percentage points on it.
– Hmm. So you know I don’t have time to wait for the money to come in sometimes and I need that cash to
reinvest and buy more property. So it seems like it’s just better for me to you know, even if I make
as little as 25 or 50 percent on a property at times,
it’s money that’s coming in that I have right now, the deal is done, it’s way less work than a
terms deal because right now I have a couple people
that they consistently forget to pay or their account’s messed up and I’m like hey what’s goin on? Oh yeah we’ll take care of it and they do but I just don’t like, I just don’t like having to deal with that. – Yeah man, naw that makes sense and it’s something that
I hear pretty frequent. Having a mix of both is kind
of the best case scenario, so. – Yeah. – Well Chris, thank you
so much for your time. I really, really
– No problem man. appreciate it and best of luck
– Yeah. to you, keep me posted on your journey. – Appreciate it man, thanks.

4 Replies to “How To Survive Off Your Land Business (Without Starving To Death)

  1. I would be curious to see what the percentage allocation is for the Land business using the profit first system. Would you be open to sharing those numbers?

  2. LOL…You can tell that you guys have NO CLUE what it is like to have kids…I would like to partner with you on a deal though…

  3. Question s, what was his starting capital? How long did did take to make his first sale and how did he he choose the area to target?

  4. Looked into Medishare and Samaritan, ended up going with Liberty Health Share which did not require any church paperwork or attendance. Can't imagine needing their money and them checking on my church attendance to get it.

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