How Mark Podolsky Got Started in Land

Video Transcription

Jim: All right. So I’m here with Mark Podolsky. So I just want to thank you first of all for giving me the chance to interview you. You’re a mentor of mine. I started out, I had a side hustle with Bitcoin that led me to look for new opportunities because I got a good start in that, but I wanted to build a more sustainable business. And the way I found out about you was Nick Loper’s Side Hustle Nation podcast and that’s what kind of kicked everything off for me. So I wanted to interview you to learn more about you, learn more about your backstory and find out how you got into this business. From the very, very beginning when you were still working full time.

Mark Podolsky: Yeah. So if we rewind to 2000 I was a micromanaged, overstressed, 45 minute commute and back to work investment banker and it was miserable. Like I wouldn’t get the Sunday blues anticipating Monday coming around. I’d get the Friday blues anticipating the weekend going by really fast and having to be back at work on Monday. So my firm hires this guy and he’s telling me there’s a side hustle, he’s buying raw land, pennies on the dollar at tax deed auctions. And he told me he’s making a 300% return on his investment. So I’m looking at companies all day long and a great company, great company has 15% EBITDA margins of free cash flow, average companies, 10% and I’m looking at companies all day long, less than 10%. So of course I don’t believe him.
So we go to New Mexico together. I got three grand, saved up for car repairs. I do exactly what he tells me to do. I buy up 10 half acre parcels at an average price of $300 each. I flip them all online. They make an average of $1,200 each. It worked, 300%.

Jim: So was this an in person auction that you went to in like 2000… So you were in like Phoenix area? So is this like

Mark Podolsky: No, I was in New Mexico. I drove out there with my buddy.

Jim: Oh, okay. Okay.

Mark Podolsky: And we research the tax deed list. These things are going for minimum bid. And we do a drive out and look at the property and take pictures.

Jim: Oh you did?

Mark Podolsky: Oh, yeah.

Jim: Okay. So this is back before VAs, this is back before like wegolook.com. The two of you actually went out there together and…

Mark Podolsky: Yes.

Jim: Okay. Got you.

Mark Podolsky: And then after the auction, I had these 10 properties, I’d go to planning and zoning and get the plat maps.

Jim: No way. Okay, cool.

Mark Podolsky: So then we would go… We’d buy the plat maps. So we’d have the maps, then we need to buy a subdivision map. So we had the map. And then we’d have to convert all of that digitally to sell it. So I’m taking digital pictures, like are scanning it, back in the day. And I scan-

Jim: Yeah. Right. This is the cool part because I feel like you’ve done thousands and thousands and thousands of interviews and, I’ve heard a little bit about this story because I’ve been to boot camps before, but this is so cool to hear how the first… You were like the bleeding edge of this whole business of selling land online. So where did that guy, your friend, I know his name, I won’t say his name, but where did he get the idea? Where did he get the idea?

Mark Podolsky: He got the idea from a guy who was in the slot machine business.

Jim: Oh my God, no way.

Mark Podolsky: And so the slot machine guy was doing this. He’s like, “I think this is a thing.” Then he told me about it and we started doing it and [crosstalk 00:04:02] working.

Jim: So was this just… So from the beginning it sounds like it was just on eBay, was that pretty much the only-

Mark Podolsky: It was just eBay and then and then Bid4Assets, was where I would just auction off these pieces that rolled in. Now once those two platforms started to dwindle, that’s when we started getting really sophisticated with other platforms and other ways to market the property.

Jim: I got you. Okay. So, when you did that first deal, did you immediately plow everything right back into this new business? That was like-

Mark Podolsky: Yeah. Yeah, absolutely-

Jim: Okay. So when was that? Sorry to interrupt. When was that first like, “aha” moment? Was it when you listed it on eBay and you saw the views and the bids, was that the most exciting moment? Or was it when the sale went through? Was it when the cash you got… When did it turn on for you like, “Wow, I’m really onto something here.”

Mark Podolsky: Okay. So I’m really risk averse. And remember I’m coming from an environment where I’m looking at companies all day long. So, and I have in the back of my mind, what’s the average company’s lifespan? But is it… I think it’s like 80% of companies go under in five years or less.

Jim: Yeah. Right.

Mark Podolsky: And then after that it’s like the rest go out in 10 years. So it’s very, very difficult to build a sustainable company for the long term. Very, very difficult. You can look at Kodak. So from the very beginning I’m like, this isn’t going to work. I never took it seriously, and so I thought to myself… Like I would do the numbers and I was always analyzing the market. I would say to my wife, at the end of the day, this is a 30% margin business. These margins are unsustainable. 300 to 1000%, it’s just unsustainable. But, I’d never realized just how inefficient this market was. And even with all the technology today, nobody still knows what the value of land is so our margins have remained the same. So when I quit my job, I will always thought in the back of my mind, “Well, at some point I’m going to have to pivot with this in some respect.
And even today, 20 years later, I still wake up with the same sort of anxiety. If everything’s going to change, what’s not going to change? And the answer’s still the same. I still think people are always going to want a good deal, which we provide them. And I think people are always going to want a real asset. And today in the midst of a global pandemic, we’ve never been busier because there’s a flight to real assets. There’s a flight to this amazing inflation hedge. And you’ve got an asset that lasts forever. So-

Jim: And the people that own land, they own an illiquid asset. It’s not like you could just pick up the phone and call someone and get cashed out. If people own land and it’s in New Mexico, they’re in Connecticut or wherever, they can’t easily get cash. And so when you mail offer letters out, people are getting a cash offer that they can… For a lot of these people it’s a relief. They’re stuck with some small, tiny parcel that they can’t sell easily. They don’t want to call a realtor, they don’t want to have to call the County, find out how it zoned, the taxes, all that stuff. List it on all these sites, deal with all the tire kickers.
So when you mail offer letters out, to these people you’re throwing them, to some of these people a lifeline, and you’re basically saying, “Hey, I can take care of this problem for you. You can just get a check and walk away and we’ll totally take this problem off your hands.”

Mark Podolsky: Yeah, no, that’s exactly it. That’s the model. And it literally hasn’t changed in 20 years.
So yeah. I think that there wasn’t, for me ever an “aha” moment just because it’s not the way I’m built. And to this day… I had that podcast, The Best Passive Income Model. And I would talk to all these niches. I’m like, “Do I have the best passive income model?” And I still keep asking myself that today. Is this the best passive income model? And I’m flexible like a Yogi. Like I’m open minded to it. If you find something better, let me know. I’ll do it. I don’t know what’s better.

Jim: Yeah. I think one of the things that’s so cool about this niche is that there’s just enough friction in it that it makes it very sustainable. Meaning if you own land to sell land, it’s still very cumbersome and to buy land it’s a process. You can’t really just buy anything. You want to talk to people. So I feel like there’s enough friction on the buy side and the sell side that if you’re in the middle where you can make it easy for people to buy and make it easy for people to sell. You can do well and you can definitely take care of people who have something they don’t want. And then you can also make it easy for people who want something but don’t really know where to get it. You can help them out too.
So going back to when you made the transition, you were saying when you left your job, so that was to do land full time, right?

Mark Podolsky: Right.

Jim: So what was that like when you made the decision? Were you overjoyed? Just walk us through that whole kind of experience.

Mark Podolsky: I was physically sick, so all I saw was what I was going to lose. I was going to lose my benefits, I was going to lose structure. I was going to lose this potential income that was pretty good at the time. I didn’t realize what I was going to gain and all the energy that would come with those gains. And so I was like trying to negotiate with them. I’m like, “Look, let’s just do a consulting agreement. I’ll keep my benefits.” They’re like, “No. You’re either all in or all out.” Like, “I’m out.” And I’ll never forget that ride home after I finally made the decision. It was just a pure relief.

Jim: No way, nice.

Mark Podolsky: Now I’m going to do something just a hundred percent for me and I made this decision and I’m going to go for it. And that was really… Up until the point of just them kind of forcing my hand and saying, “You’re all in or all out,” and I’m all out. I was miserable. I was sick.

Jim: Sure. That’s awesome. Okay, so after you started doing it full time, what was that like? Do you remember the first day you’re like, “Okay, now it’s just me. It’s just the land business.” What was that experience like those first maybe six months to a year? How was that for you? Where you just doing the same thing that you had been doing just now full time?

Mark Podolsky: Yeah, I was doing the same thing and I just kept trying to grow it. Can I buy more land? Can I do a bulk deal? Can I sell more land? Are the more places to sell? I just wanted to grow.

Jim: Now were you always… Oh go ahead.

Mark Podolsky: So… go ahead.

Jim: I was going to say, were you always… Like we’re always an entrepreneur at heart, and did this come naturally to you or did you find yourself like hitting ceilings and then having to breakthrough and then it turns you into a different person? Or were you always very self-motivated, self-driven and always… It just came naturally to you?

Mark Podolsky: Yeah, the entrepreneurial thing, the love of it came naturally to me. Now being good at it didn’t, but the love of it definitely did. When I was a kid I was that kid that had the lemonade stand and then I had a little cookie company. Remember those big cookies?

Jim: Yeah.

Mark Podolsky: So I would go around the neighborhood and my neighbor and I… The summer we made like three grand selling cookies to the neighbors and everybody, it was all profit because we’re using our parent’s ingredients. And so then I was the corsage guy in high school. If you wanted to get any kind of corsage or any kind of flowers for prom or homecoming, I was like the mafia, you had to go through me, you couldn’t get it anywhere else. So I made money doing that. So all along the way… My dad owned a wholesale warehouse, so he was an entrepreneur, my grandfather was an entrepreneur. So I had this really nice sort of base of like, this is what it looks like. My dad was a workaholic, so I just thought everybody works hard. I didn’t realize, “Oh, there’s a smart way to work.” It doesn’t have to be me. And that’s how I figured out scaling.
For me, it was very, very difficult because I never had anybody as a good mentor to teach me the skill. I’d actually go out and find a mentor who was like, “Mark, you’re not an entrepreneur. You just got a better job for yourself.”

Jim: Right. So obviously at the time it wasn’t like, now there’s land courses, there’s plenty of people offering, teaching you how to sell land. But when you had to do it on your own how long was it before you said, “Okay, I’m getting bottlenecked here.” And then how long was it before you started to find those coaches and those mentors that can help you take it to the next level?

Mark Podolsky: Right. So from 2000… I quit my job in 2001. 2001 to 2010, man did I make a lot of money. I mean millions and millions of dollars.

Jim: That’s awesome.

Mark Podolsky: But I talk about dirt rich. Like, okay, but I had Parkinson’s law of money, everything that came in, I kept spending and I was having a good old time. So once things started to slow down in 2010 and 50% of my income went away, I’m like, “Man, there’s got to be… I got to figure this out and I got to figure this out fast. I need help.” It was the first time I really took an ego hit. And so I was pretty obnoxious. Like I thought, “Oh, I know this better than anyone.” And I didn’t. So my buddy who sold his company for $360 million, was a really great mentor and his mentor, is a billionaire. So this guy was like, “Yeah, you’re no entrepreneur.”
And so he kind of walked me through everything and how to create processes and systems and how to get out of the business. And I did this kicking and screaming and that whole process probably took five years before I was completely able to get to where I am now, where like an hour a week in the business. I didn’t want to let go of sales. I like sales. I wouldn’t let go of County research. I wouldn’t trust anybody. Due diligence like, “Okay, did you screw it up?” I’d have to check everything three times before I would buy. So I really did want to let go. It took a long time.

Jim: I got you. Especially because this is like… It’s not something that other people were doing at the time. It’s not like operating a hamburger stand where there’s tons of those businesses. You’re in a unique niche. So to just give up. Not only you’re having to step back, but also you did things in a proprietary way and there are probably things that you maybe you didn’t feel comfortable sharing at first, but it sounds like you got mentoring from a billionaire, is that right?

Mark Podolsky: Well, no, his mentor was a billionaire.

Jim: Oh, okay. Got you.

Mark Podolsky: He was worth 300 something million.

Jim: Oh, okay. Got you. Okay.

Mark Podolsky: His second project, what he’s doing now, he will be a billionaire.

Jim: No kidding. That’s very cool. That’s awesome. So then when you said, during the boom from like what 2001 to 2010, I remember you told this one time at a boot camp where you said you would buy, I think it was 40 acre parcels from the railroad company. Is that right? And then you were selling… So who would you sell them? Would you just put them online, like…

Mark Podolsky: Yeah, I’d put them online.

Jim: And was it just cash buyers or were you doing term sales at that point?

Mark Podolsky: It was mainly cash up until about 2007.

Jim: Oh, okay. Got you.

Mark Podolsky: And then I started doing terms and figuring that out because after… I was doing it for… There’s a lot of cash and like this is a hustle. Like this has got to be a better way to do this. So that’s when I figured out terms.

Jim: So were you buying it from the railroad company, is that right?

Mark Podolsky: Yeah. Yeah. I borrowed a million dollars from them.

Jim: What you borrowed the money from them?

Mark Podolsky: In order

Jim: Oh, I got you. And then did they ever care, did they ever get wise? Like wow, this guy’s like totally killing it. They didn’t even care?

Mark Podolsky: No, they didn’t want the land. They wanted the minerals.

Jim: Oh, okay. Got you. So you would sell the land, but what the minerals were…

Mark Podolsky: The minerals were not included.

Jim: Oh, okay. Got you.

Mark Podolsky: They wanted the minerals. But we had a geologist go out there and investigate it, and the guy’s like… I’m like, “Should I buy the mineral rights?” He’s like, “No, there’s nothing of value here.” I’m like, “Okay.” So we didn’t.

Jim: That’s awesome. That is such a cool story. Because I was going to ask you, so two questions. One, your most profitable deal, and then what’s your favorite deal?

Mark Podolsky: Well, the most profitable deal is

Jim: And you don’t have to go into specifics, but just generally speaking.

Mark Podolsky: That first Nevada deal to this day, I made $5 million on one deal. So that was my favorite deal.

Jim: Wow. So wait, what was the deal like how many…

Mark Podolsky: I was buying these properties from the railroad for 30 to 50 bucks an acre, subdividing them into forties and then selling them online and making 300 to 500 bucks an acre. Some 500 bucks an acre. It was a machine.

Jim: Yeah, yeah. That’s awesome. So that’s probably the most profitable. Was that also your favorite one too? I assume.

Mark Podolsky: That was my favorite one, yeah.

Jim: So did you know when you first entered into that agreement it would be that profitable or was it a nice surprise? Like wow. Like this is-

Mark Podolsky: I dipped my toe in the water. I tested the first section, about one section. I’m like, give me the worst section you have. I wanted to see, can I sell the hardest to sell land? And I did. Now, after I tested it then. I like, if I can sell this. And there was a market for this land. I’m like, what’s the most I can buy within this price range? And that’s when I did the big deal.

Jim: Oh, I got you. That’s awesome. That is so cool.
Yeah. I’m so glad you shared that story. I’d heard like a little… I heard some of it at a boot camp, but that’s amazing. So that was up in Nevada. Very cool. So then, since then, obviously now you’ve worked your way out of it, but what is your passion now with land? Is it still teaching or is it… Is that the big interest in it?

Mark Podolsky: No one’s ever really… And after they buy a piece of land from me. They’re never going to say to me, “Mark, you changed my life for this 40 acre parcel.” But people that have been able to retire with their spouses, quit their jobs, replaced their income, spend so much more time with their family, they’re emotionally so grateful. And it to me, like I can die in peace professionally. There’s nothing better than having this really tremendous impact on somebody’s life. And quality of life. So that’s definitely my passion. I love it. I love the fact that I’m so clear on what my vision is. I want people to get out of solo economic dependency, which means if they’re not working, they’re not making any money because there’s so much risk in it.

Jim: Oh, absolutely. Yeah. And for me, I’m doing land part time, but it’s something that using all the things that you’ve taught me and your team has taught me, I’ve been able to build up steady income. Now I’m finally taking some money out of the business. So it’s definitely something that I’ve used all the things that you’ve taught. I’ve implemented them, I’ve improved them. And yeah, it’s nice to have that stream of cash flow coming in every month.
And it’s also just something that like in the Shawshank Redemption, Andy Dufresne is tunneling out of his jail cell. Like every night he’s scraping a little bit more and a little bit more. And that’s so motivating to have that. That you can help buyers that are stuck. You can help sellers that want to buy land, but they don’t know how, or they don’t have enough to just buy cash and you can teach them that, “Hey, I can owner finance for you.”
And then also you can work your way out of, like you said, solo economic dependency and you can make it on your own. So for me, it’s been awesome. I love doing it. Yeah. It’s just such a better fit. When I first had my little, my Bitcoin business, it was so motivating for me to know that if I help this person out, I could make a little bit of money and it was money that I earned that I made, that I got to keep for myself. And when you’re able to do that with land, it’s also very cool to be motivated by helping other people, but also helping yourself instead of just doing a job you don’t like, and then hoping they recognize you and then they’ll give you more work that you’re not really crazy about.
So it’s a very, very cool thing to be a part of. So, going forward, are you always going to be associated with land or what’s next for you?

Mark Podolsky: Yeah, I love land. I love the land business. I love teaching it. Working on the second book, to scale your land business. And I think that certainly there probably will be a point in time where I might pass the baton on to someone else with the training. But I’m never going to retire. I love to work. I love to create value. I don’t know how that would evolve at this point, but I have a lot of interests. So who knows.

Jim: So you’ve written Dirt Rich. Second book?

Mark Podolsky: It’s going to be… I don’t know, maybe it’s like Dirt Richer or Dirt Free, how to scale your land business.

Jim: But how do you… Do you have anything like in the pipeline? Do you have ideas like, “Yes, I definitely want to write more books.” Or, “I want to do more different things.” Or you’re already doing what you want to be doing?

Mark Podolsky: Yeah. I’m already doing what I want to do, but I’m sure there’s always more mountains to climb.

Jim: Right.

Mark Podolsky: So, who knows.

Jim: Got you. Okay. So before we wrap up, you always end with a tip of the week. So I got to ask you, I’m flipping the tables. What’s your tip of the week?

Mark Podolsky: Boy, my tip of the week.

Jim: See, it’s not easy when you’re on the spot.

Mark Podolsky: No, it’s not. There is a app out there… And I’ve talked about this in the podcast, but I’m really loving it. It’s Airtable. If you’re not using airtable.com, you’re eating gruel.

Jim: So how do you use Airtable? Because I use it for my business, but how do you… Like what do you use it for? What types of things do you use it for? Just business stuff or your personal stuff?

Mark Podolsky: No, all business stuff. The whole business is processed out, mapped out. We’ve got for our CRM. Our whole CRM is built in Airtable. All the inventories in there. It’s phenomenal. It’s phenomenal.

Jim: Awesome. Okay. Very cool. Okay, well I’m going to end the interview there, but thank you so much for coming on and sharing that with all the people that are going to watch this.

Mark Podolsky: Yeah.

Jim: And just hang on, I’ll be talking to you soon. One sec. Thanks.

Mark Podolsky: All right.