Can You Actually Cash Flow Land? | 190

MORI 190 | Cash Flow Land

Did you know that you could actually cash flow land?

And did you also know that with only $10-20K, you could be out of the rat race within a few years?!

THAT is what Mark Podolsky teaches people to do! In this episode, Cash Flow Expert, Chris Miles, interviews Mark J. Podolsky (aka “The Land Geek”) to teach you how you can create great cash flow with a small amount of money.

Tune in now!

And check out some free information on his site HERE!

Mark Podolsky Bio

Mark Podolsky (AKA The Land Geek) is widely considered the country’s most trusted and foremost authority on buying and selling raw, undeveloped land within the United States. He has been actively investing in real estate and raw land since 2001 and has completed over 5,000 unique transactions. Mark’s company, Frontier Equity Properties, LLC is an A+ rated BBB real estate company.

Mark’s core philosophy is “Happy Customers Guaranteed.” He is the host of one of the top rated investing podcasts on iTunes – The Best Passive Income Model and The Art of Passive Income. He’s also the host of The Land Geek Podcast.

Chris Miles Bio

Chris Miles, the “Cash Flow Expert,” is a leading authority on how to quickly free up and create cash flow for thousands of his clients, entrepreneurs, and others internationally! He’s an author, speaker, and radio host that has been featured in US News, CNN Money, Bankrate, Entrepreneur on Fire, and has spoken to thousands getting them fast financial results.

Listen to the podcast here


Can You Actually Cash Flow Land?

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In this episode, I’m excited to have a special guest. I say this a few times I do have interviews on here where I have other people on as a guest. You know that I never bring on posers and fakes. I bring on the real deal here. Mark Podolsky is no exception to this rule here. He was referred to me. Funny enough, I had one of my clients tell me about him. I was like, “Another real estate guy. Sure, whatever,” but as I started to have multiple sources come to me, I realized I got to interview this guy.

He is known as The Land Geek. He even has a podcast named the same. It’s called The Land Geek podcast. You’ve got so many companies and things here. The Land Geek is what you’re most known for. This guy has been investing in real estate for years. He’s been in since Y2K. He’s been investing since then and has done over 5,000 transactions. He’s a highly rated company with this company called Frontier Equity Properties. His big core philosophy is to make sure that people are happy. He’s on a top-rated podcast and has got lots of great things there too. Mark, welcome to our show.

Chris, thanks so much for having me. I’m thrilled to be here.

I’ve got some amazing people here. These people are your peeps. They’re amazing. Mark, tell us a little bit more about your background. How’d you go down this line of work? You cashflow land and the big focus is how we cashflow land properties, not just houses but land, which I’ve never had on before. I’m excited about this topic but tell us how you got started.

I used to be a very unhappy, burnt out and miserable investment banker. I worked with private equity groups doing mid-market mergers and acquisitions, the $5 million to $500 million in enterprise value. It’s nothing crazy. It was miserable. I was micromanaged. I’d have a 45-minute commute to work and back. It was politics and a lack of control. It got so bad for me that I wouldn’t get the Sunday blues anticipating Monday rolling around. I’d get the Friday blues anticipating the weekend going by fast and having to be back to work on Monday.

My firm hires this guy and he’s telling me that on the side, he is going to tax deed auctions. He’s buying up raw land pennies on the dollar, flipping them online and making an average of 300% returns on his investment. I’m from Missouri. I’m from the Show Me State. I don’t believe him. Plus, I’m looking at companies all day long. A great company has a 15% EBITDA margin or free cashflow. Your average company is at 10%. I’m looking at companies all day long with less than 10%.

I’ve got $3,000 saved up for car repairs. I go with him to Nowhere, New Mexico and buy up ten 1/2-acre parcels for $300 each. I do exactly what he says to do. I put them up online and the next week, they all sell for an average price of $1,200. It’s 300%. It worked. I take that money. I go to another tax deed auction. This one’s in Arizona where I live. This is 2000. No one’s in the room and I’m buying up all these properties that nobody wants for nothing or under $100.

In that one auction, I made over $90,000 in cash in the next 6 months. I went to my wife and was like, “I’m going to quit my job and invest in raw land full-time.” She said, “Absolutely not.” She was pregnant at the time. I did it part-time for eighteen months until the land investing income exceeded my investment banking W-2 income. I quit and I’ve been doing it full-time ever since. I love it.

What was it like to make that jump for you? Was it instantaneous or are you like, “Can it be this good? Is it too good to be true?”

I’m risk averse. I was miserable. I remember even being physically sick of going into my boss and quitting. I remember trying to negotiate a deal where I can keep benefits or consult on the side. I didn’t want to make a clean break because I was so scared. I’m looking at companies all day long so I’m like, “There’s no way this is going to sustain itself.” You can’t sustain 300% margins. The competition is going to come in and it’s going to drive the margins lower. Eventually, this is going to be a 10%, 20% margin business like every other business. I’m going to then have to dust off the resume and get a job.

I have these plans B, C and D in the back of my head like, “Worst case scenario, I’ll go and get another job.” From 2001 to 2006, we all know what happened. I wasn’t smart. I was lucky. It was crazy. Interestingly enough, 2008 rolls around and land is the long-tail real estate. I don’t get hit financially until about 2010. That’s when I had to adjust. I had the million-dollar house, the big cars, a private school, a nanny and a housekeeper. I was living out of control. It was like Parkinson’s Law of Money. That was a whole other story but the company was still profitable even in 2010.

I feel confident that the model is sustainable. It’s a phenomenal niche in the sense that there are no private equity groups in there or hedge funds. The way that I do it and I’ll walk you through the model is it’s a one-time sale and then we get passive income every single month without renters, rehabs, renovations or rodents. We’re not dealing with a tenant so we don’t have any onerous real estate legislation. We’re exempt from Dodd-Frank, the SAFE Act and RESPA.

In that sense, my margins average about 700% to1000%. Competition has come in but essentially what it has done is it’s validated in the market. All ships rise with the tide. There are billions of acres of land in this country. There’s no big money in this niche. You and I would run out of money before we run a deal flow. We’ve seen this since I started teaching because even my wife was like, “Are you going to start teaching people how to do this?” I’m like, “Yes. How much can we buy in a year?” She said, “You’re going to create your competition.” I’m like, “I don’t think so.” We have it and if anything, my business has gone up every single year since I started teaching.

You can't sustain 300% margins. The competition will come in and drive the margins lower. Click To Tweet

There’s so much land, even in the US alone. People might not think there isn’t but we’ve got more land than we’ve got people. There’s always something where you can do it. I’ve been in the investing world for years and heard of one strategy only of how to cashflow land. It’s eventually to sell it down the road or lease it to builders and stuff but that was pretty much it. You don’t see many people doing that. It’s not even as saturated. It’s so small of a market. You answered my one question, which I was going to ask and you already covered it. What happened with the recession? Didn’t it affect you at all?

It did. For about 50% of the notes that I was holding, I had to take back and resell those properties. The way that we do it though, there’s no cost for closure because I use a land contract, not a deed of trust. Essentially in the long-term, it was a good thing because I already got my money out anyways on those deals that they defaulted and then I resold them. I got another down payment and note. The notes were adjusted based on the economy.

It’s a double dip. It’s like a car payment. Instead of a $749 car payment, it went down to a $449 car payment. Instead of 12.9%, it went down to 6%. Either way, the money is still working. I’m getting velocity and I extended out that note, that ROI. In the meantime, Mark’s overhead had to get lowered. That was not fun at all.

It turned out to be a good thing for my family and I don’t regret having to go through it. Keeping my ego in check, I can always look back. Whenever I started to feel too good about myself, I’m like, “It’s not going to last. Don’t buy that $1,000 drone.” It’s business. I’m saving and doing all those things. I use The Profit First Method by Mike Michalowicz. That keeps the emotional side of it very simple.

How does your system work? What’s the process people go through? How do they create cashflow doing this?

Let me walk you through it. Chris, where do you live?


I’m going to look at the tax delinquent list of people that own properties in Texas. All of a sudden, I’m like, “Chris Miles owes $200 in back taxes on this 40-acre parcel in Texas.” I know two things definitively. Number one, you’ve no emotional attachment to that land. You live in Utah. The property is in Texas. Number two, you’re advertising to me that you’re distressed in some way because you haven’t paid your taxes. When we don’t value something, we don’t pay for it. What I do is I look at the comparable sales. For our example, let’s say that 40-acre parcel was selling for about $10,000. All I’m going to do is divide by four and that gets me what Warren Buffett would call a 300% margin of safety.

The most I’m going to offer you is $2,500. I sent you an actual offer of $2,500 for that property. 3% to 5% of people will accept that “top dollar offer.” You live in Utah, you owe back taxes and you know you’re eventually going to lose property so you accept the offer. We go through our due diligence checklist. Number one, I’m going to make sure you own the property. Number two, I want to make sure that there’s legal access. Number three, I want to make sure that the taxes are $200 and not $1,000.

I’m going to go make sure there are no liens or encumbrances. We outsource all of this to the Philippines. We pay about $11 in due diligence. We get plat maps, pictures and GIS maps. We get everything that a buyer’s going to want. As I’m doing my due diligence, I’m creating my marketing package for the next buyer. I’ve also got a built-in best buyer for your property after I buy it from you. I buy it from you for $2,500. I own it. Guess who my best buyer is? It’s the neighbors. I send out neighbor letters saying, “Before I go to the open market, protect your view. You got the first chance here to make sure that you know who your neighbor is going to be.”

Maybe you’re going to increase your land holdings or whatever it’s going to be so there’s that fear. “Who’s going to buy that property right next to me? We better buy it.” Usually, that’ll sell very quickly but let’s say for example the neighbors passed. We’ll then go to our buyers’ list. I like to sell these properties in 30 days or less. We want to make it irresistible. We’re going to get our money out on the down payment or within six months of the down and then make it a car payment. Let’s say $449 a month for 10 years. It is about 1000% ROI on average.

MORI 190 | Cash Flow Land
Cash Flow Land: There are no hedge funds the way that he does it.


We’ll go to our buyers’ list. If the buyer’s list passes, we’ll go to a little website called Craigslist. We advertise on Craigslist and automate it. I can put out 120 ads with a press of a button using software and all this stuff. We also automate it to another website called Facebook Buy and Sell Groups. Within 30 days, I’ve cast this huge net and there’s less land in this country. We’ll get our down payment and we got this note. I used a software program called that automates collecting the money every single month and the notifications via ACH.

We’re about 90% automated software. We got this one-time sale. We have this recurring passive income and the game we play is, can we create enough note income where it exceeds our fixed expenses and we’re working because we want to, not because we have to? That’s all we do. We keep building this note income every single month and travel around the world if you wanted to. I’ve got three kids so we can’t do that but I’ve got clients who’ve been able to quit their jobs to travel around the world. They retired their spouses. They love having that passive income every single month without the traditional headaches of real estate.

That’s the thing I was going to ask you. You’ve got a nice little process and system that’s in play. You even outsource to the Philippines for a lot of the due diligence work, which for me, must be a headache. I was thinking, “Who could I hire to do that,” but I was like, “You already got it.” I imagine you probably already had a system and the tools for people to walk in and there are already properties they can pick from and purchase.

We’ve eliminated all the pain points in the business. We have our Land Geek VA Program and wholesale property lists. We even have a done-for-you fund. Every piece of pain I’ve had since 2000, I have eliminated for myself and my clients. I work two hours a week in Frontier Properties looking at reports and managing. It’s a machine and that’s what you want as an entrepreneur.

How much money would somebody need even to get started?

I started with $3,000. I got a client, Paul Mendel. He started with $100. Paul has no money. He’s broke. He sends out $100 worth of letters. He gets an offer back and he can’t even afford to do a $50 option at this point. He says to the person that it’s going to take 90 days to do due diligence. It takes a day. During that time, he borrows money to send out neighbor letters for $20. He pre-sells to the neighbor. The neighbor then pays him for the property that he doesn’t own yet. He does a dual closing. He pays off his seller and keeps the spread of $8,000. He made an infinite ROI by sending out letters. You don’t need a lot of money. It’s less than $1,000 to get started.

Here’s a key thing. How soon would someone expect a return, whether it be the full amount of principal back or if they’re trying to get the cashflow from the payments?

It depends on the people. I only want to sell on terms. I have this note and cashflow but let’s say I need cash. I can always go to an investor and sell twelve months of the cashflow to an investor. I get my money out and redeploy it. We’ve created that for ourselves too. We buy up the notes as well for our clients because we’ve trained them. We know that they know how to sell it. Even if there’s a default, they can resell it. There are not a lot of risks. If you want to sell for cash, you could do that as well. Build up your cash reserves and then start doing owner financing. Typically, you want to get your money out on the down payment or within six months of the down.

Within six months, either you get the cashback or you’re starting to get cashflow. That’s awesome. There’s no hassle. It’s always great. I love investing in real estate. I love properties and things like that too. It’s great because you have that connection there but the thing and this is something I’ve learned from real estate too, is first, it’s nice not to have headaches. There are going to be headaches with land too but it’s not the same kind of headaches you’re dealing with. You’re not worried about things breaking down. You got a plot of land. It’s raw land.

No one’s calling me at 3:00 in the morning saying, “There’s a gust of wind and the dirt blew to the East. Can you come down and clean it? Someone stole my dirt.” No one’s coming out in the middle of the night and digging up more dirt.

I don’t know if many people know this but the real value in real estate, even with properties is in the land. When you’re looking at appreciation, it’s not the property that appreciates because you depreciate a physical structure like the house because of the materials. As they’re aging, it is becoming worth less. It’s the land that I should increase. It is not the property when you’re looking at making money off the appreciation. That brings up another point too. I brought up depreciation. There are tax breaks with normal real estate investing. What kind of things can you do with the land on the tax side even?

You can always go to an investor and sell 12 months of the cash flow to them. Get your money out and redeploy it. Click To Tweet

If you want to look at a flaw in the model, compared to traditional real estate, land does not depreciate. Ted Turner would say, “Buy land. It’s the only thing that lasts forever.” You can’t destroy it. The way that you can do this to get any kind of tax benefit and the way that I would buy it is through a Qualified Retirement Plan or a QRP.

My buddy Damion Lupo has created this program called Total Control Financial where you can do a self-directed IRA. I don’t think it’s as good through a self-directed IRA as a QRP because of the frictional costs but through one of these tax advantage accounts, you can buy a raw land and build up your passive income in your notes or gains. You’re tax-deferred and tax-free. You can put up to $53,000 a year in one of those vehicles compared to traditional SEP, Roth or 401(k). That’s how we would do it.

That’s one pretty cool thing. That brings up a great point if someone’s got IRA money. I get people all the time like, “What do I do with this?” I’m like, “Either cash it out and take this cashflow or put it into something that you could reinvest and grow, which that potentially could do, especially if you’re starting to make some pretty amazing returns.” It is like the poor person’s way of like, “I’m going to go and invest,” which is savings.

What I do with my QRP money is buy land notes because it’s the one asset I know the best. It’s passive. I’m not self-dealing and the returns are amazing. I grow it tax-free through the Roth.

Gives an example of what somebody did and what they’re able to create with that. What kind of cashflow? I wouldn’t get them to retire necessarily, not from day one but let’s say somebody had $20,000 or $25,000. Do you know of a person to whom this scenario happened?

Tom Willis started with me years ago. He’s got a full-time job. He works about two hours a day as a side hustle in raw land. At our last boot camp, he told me that they were over $10,000 a month in passive income. It’s pretty good for a side hustle.

How much money do you even invest to do that?

He started with way less than that. I want to say he started with $5,000.

How many years?

Two years. Scott Todd started with about $25,000. He is Fortune 300 executive. He sees the writing on the wall and his team is going to get outsourced. He’s an IT. It took him 17 months and 3 days for him to replace his Fortune 300 income and be protected. He’s out over $30,000 a month in passive income. I want to say it took him about two years. That’s the guy doing it full-time. When I say full-time, that’s about ten hours a week. With the systems and the automation, he doesn’t have to be doing it. He’s building his machine.

He’s also your co-host on The Land Geek podcast.

He’s the personification of what you can do in this business. I’ve been doing it for so long so I’m almost not relatable but here’s a relatable guy. He came out of Corporate America. He did it and is super laser-focused. He did it part-time while he was at his job and then took off and protected his family. Scott’s a good example. Rachel and Sean Mueller are at about $5,000 a month passive. They’re able to quit their jobs for $5,000 a month. They don’t have kids and travel the world. They do this with their inexpensive laptop and internet connection and do deals.

MORI 190 | Cash Flow Land
Cash Flow Land: We want to make it irresistible.


Do they at home or do they have a team to do it?

They do it on their own. They didn’t use any of our tools. Sean’s a software guy so he created his stuff.

I’ve had some of those slides too. They already have their massive spreadsheets. I’m like, “I developed mine over the years and yours already beat mine in a couple of hours of your little nerding around.”

That’s one of the great things about coining myself The Land Geek because I attract these smart engineering types that are systems based and geek out on all that stuff. I’m like, “Look at what you created.”

I appreciate your time. This has been awesome and very informative. It got me super excited for myself even. If somebody wants to follow you or learn more about what you do, how you do it and want to connect with you that way, how would they do so?

The best place to start is Get our passive income blueprint and our eBook, How to Avoid the Three Fatal Land Buying Mistakes and start listening to the podcast. We do it twice a week. We have a round table podcast and then somebody like you, an expert guest. That would be enough information to know if this is right for you or not.

It’s been very valuable having you on here. If my readers aren’t excited, at least, I am but I know they are too. Mark, thank you so much for being on our show. Everybody else, thank you for reading. Cashflow is what creates freedom. It’s about acceleration, not accumulation, as you’ve always been taught. Make sure you get out there. Have a wonderful prosperous time. We’ll talk to you later.


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