Real estate land is a valuable asset that can appreciate in value over time. It can also be used to generate income through rent or development. Hailing from Ohio is a real estate investor and Front Range Land CEO, Dan Haberkost!
Front Range Land is a real estate company specializing in land sales and acquisitions in Colorado. It has a team of experienced land agents who can help you find the perfect piece of land for your needs. The company also offers various land investment services, including land leasing, development, and financing.
In this episode, Dan recounts his experience with house hacking- a creative concept of property financing. He shares how this method allowed him to grow his portfolio while managing regular employment. Stressing the importance of short-term sacrifices for long-term gains, Dan's personal journey is riveting with tales of hard work, overcoming challenges, the right mindset and a unique perspective towards investing and business that will surely inspire.
Key Takeaways:
Dan’s background in real estate investing
Front Range Land
How Dan got into land
Selling on terms and selling for cash
Mindset of sacrifice
Interested in learning more about land acquisition and development?
Connect with Dan Haberkost@:
Website:
Instagram:
https://www.instagram.com/danhaberkost/
Facebook:
https://www.facebook.com/dan.haberkost.3/
Connect with Corwyn@:
Contact Number: 843-619-3005
Instagram: https://www.instagram.com/exitstrategiesradioshow/
Youtube: https://www.youtube.com/channel/UCxoSuynJd5c4qQ_eDXLJaZA
Linkedin: https://www.linkedin.com/in/cmelette/
Shoutout to our Sponsor: Exit Realty Lowcountry Group
Do you want something more? More Meaningful Moments opportunities, deeper relationships and memorable experiences? Do you want to make a difference? If you say YES, a career and real estate could be the opportunity you're looking for guiding people to one of the most important decisions they ever made, the purchase or sale of their home can be both rewarding and lucrative.
Exit Realty has a revolutionary compensation model training and technology that provides you with the tools you need to start and build your successful real estate career. Call Exit Realty Lowcountry group today at 843-619-3005 that is 843-619-3005 or visit https://exitlowcountry.com/joinexit and make your Exit today.
Corwyn:
0:02
Do you want something more? I mean more meaningful moments, opportunities, deeper relationships, and memorable experiences. Do you want to make a difference? If you said yes to any of that a career in real estate could be the opportunity. You’re looking forward to guiding people through one of the most important decisions they ever make: the purchase or sale of their home could be both rewarding and lucrative for you. Exit Realty is a revolutionary compensation model, training and technology that provides you with the tools and resources you need to start and build your successful real estate career. Call Exit Realty Lowcountry Group today at 843-619-3005 that is 843-619-3005 or visit join.exitlowcountry.com and make your exit today
Corwyn:
1:10
Good morning and welcome to another episode of exit strategies radio show. I am your host Corwyn J. Melette. Broker on Exit Realty Lowcountry Group in beautiful Charleston, South Carolina. If this is your first time listening to this show, you sir, ma’am are in for a treat. Because our mission here is very simple. That is to empower our community through financial literacy, and real estate education. We’re legacy building, that is what we do. So if you’re out there making things happen with your family, for the generations yet to come, not worrying teaches us to leave a legacy to leave an inheritance for our children, our children’s children, and so forth and so on. We want you to put a hashtag on that thing that says that you are legacy building because that is what you are doing. You can find us on Facebook, Youtube, AnchorFM. You can also find us on Instagram, at our website, exit strategiesradio show.com You can catch us in a number of different places on your favorite podcast applications. We appreciate you listening. Please share this content with your friends, your family, your co-workers, even those in your groups, your church groups, etc guys, but sometimes the message in the word that we are speaking here today is for you. Sometimes it is for someone else that you know. Again, we appreciate you listening. Let’s get started.
Corwyn:
2:40
Good morning. Good morning. And great morning to all of you listeners. Guys. Welcome to Exit Strategies Radio Show. My name is Corwyn J. Melette. I’m the broker/owner of Exit Realty Lowcountry Group in beautiful North Charleston, South Carolina. If you’ve been tuning in for a while, y’all know we say here we tell you what our mission is, which is very simple. That is to empower our community through financial literacy and real estate education. Because we are legacy building that is what we do. Brief shout out to everybody who has been tuning in, who has been watching our YouTube channel, our channel there has been soaring with us for those who’ve been listening to our podcast, either directly on our website, exitstrategiesradioshow.com, or any other of the countless podcast platforms that are available around the country and around the world. And from the bottom of my heart, thank you to our loyal listeners here, right here to Charleston market in South Carolina that tune into was faithfully on WJNI. And you know that I love you. And I’m gonna continue to say that because I do. We have been doing it. I’m super excited. I’m super proud of where we’ve been taking the show and the information and the caliber of guests that we have been bringing in.
And today is no different. We’re gonna roll out the platinum and red carpet because we got to have both got to make sure we got them fully covered. And I’m going to introduce to you and we’re going to have a real conversation and a good time for our listeners. Grab a pen grab a piece of paper, because you’re gonna need to take some notes on this one because this one is going to be live. This is a dream come true. We have none other than Dan Haberkost, the CEO of Front Range Land. Dan, how are you doing today?
Dan:
4:25
Corwyn I’m great. I love the energy. Love the introduction and I appreciate you having me here.
Corwyn:
4:30
I appreciate you taking time out of your busy schedule. Now you have a heck of a resume. I want you to give our listeners if you don’t mind a brief introduction of who you are, and where you came from. I want you to make sure you drop the sprinkler in there when you started because she had an impressive and amazing to me let’s talk about what your company does and the insight and assistance that you can provide people
Dan:
4:59
sure So quick background on me. I’m originally from Ohio. I live in Colorado but grew up in rural Ohio. I joke that I grew up in a cornfield. It’s not really a joke I pretty much did. And I started working pretty early, everyone in my family works. Nobody really had money, no business owners in the family. By the time I was 16, referencing what you’d said, I was managing a portfolio of rentals along with a farm with my boss at the time, and he’d spent a good portion of the year in Aruba. And I’d be handling things back home. So he definitely got a good deal there. I did that in high school, and that taught me a lot. It taught me a lot about real estate, which I did not want to own. then in college, and worked full time. And I saw my older siblings go to school and accrue a lot of debt. So I said, I’m not doing that. I don’t care what I have to do. It’s working full-time through college and running a landscaping company. Around 20 years old, I was frustrated. I watched friends of mine have a lot of fun in high school, and have fun in college. And I definitely did not. I worked. I worked. I worked. But I was managing 15 Plus guides, and doing that along with school full time. So I thought, okay, worst case, I graduate, I take this experience, and I apply it to some sort of business to get a little bit ahead as an adult. And so I started reading about investing stocks, different businesses, you could start and like just about everyone else it was when I read Rich Dad, Poor Dad, it was just a light bulb moment as I got it. Yeah, then I bought a duplex while I was in college. I was 21. And it was a house hack. But it was around that time too. I also realized I don’t want to stay here long story behind that, but ended up moving to Colorado Springs, love the sun, love the outdoors, and a lot of the same desirable characteristics as the Carolina down by you, and bought another house there. And that was great. I’m 22 and have no two properties. But the low and no money-down stuff is useful for maybe building an active business and a lot of strategies. But for the actual buy and hold, you need cash if things go wrong. What was I going to do? How do I make a lot of money? How do I accelerate my income? Because I still had a job at the time, I met a local investor at a real estate group here, which I actually host now who had been doing land and development for the last 40 years all over the country. And I would drive an hour south to meet him where he lived down in Pueblo West for anyone who knows Colorado, and just help him in his business, learn from him kind of just follow him around, but help him he was building houses at the time, a lot of building houses. And so that’s what got me into the land, I would source lots for him and cite them for 1000 bucks, or he gave me 500 bucks just for the seller’s information. And eventually, I started participating with him in the home builds too. And that’s where Front Range Land ultimately came from. And quite simply, it’s a big funnel going direct to sellers for land all over the country now, most of which we just sell for cash or for terms but then a few properties at a time. The very prime lots will put new construction homes on so spec help spec homes, that’s Front Range Land, it’s allowed me to continue buying property slowly and steadily as well for the buy and hold. So I’m 27 now.
Corwyn:
8:08
That’s 11 years to get my math right. Let me know your time period, man, you have gone from managing a portfolio of properties to running another business and getting back on the real estate side, and starting to acquire and accumulate properties. And then kind of scrapping and saying wait a minute, we’re gonna do this differently. We’re gonna get rid of the tenants and all the headaches that come with them, we’re gonna get down to the basics, which is the dirt, and we’re gonna move forward. Is that what I just heard?
Dan:
8:36
Well, the only clarification there is the land and development is just a way for scaling the income. I am continually buying rentals. But my methodology there has grown in that I only want prime easy, simple properties. I’d rather put my time into the active business and just buy nice real estate to hold
Corwyn:
8:53
Your strategy and your focus on the land piece is essentially identifying properties that are maybe ideal for development for new construction homes or multifamily or what have you, and then acquiring that property or contracting that property and then sell it off as someone who may be ready to do the development. Is that what I’m understanding?
Dan:
9:18
Yeah, the vast majority of the time a couple at a time I will do the vertical construction but mostly just flipping them. Yep.
Corwyn:
9:25
That is awesome. Basically, I think you probably caught the fever and the bugs. I tell people. My great-grandfather was a carpenter I used to follow him around as a kid. He also oversaw properties for BB and did property management for people. And what’s interesting is not the same situation. But as he aged, he’d have gout, had gout and sometimes he’d have flare-ups and just couldn’t go manage the properties couldn’t go collect grants and all that kind of stuff. And as a young kid, he sent me out to do it. I would go collect rent from people. I started probably going to get rent sometime when I was 12, 13, 14 years old, kind of got a bug. Oh, wait a minute, wait a minute, how does one and when we got the bug and we get some understand it. Now we all want knowledge and we’re ready to conquer or accomplish it. So kudos to you. Let’s talk about your strategies. Like when you look at this one, why should people do it? That’s the question, what is your strategy to get over into, okay, we’ll look down on buying properties.
Dan:
10:23
Okay, so focusing specifically on land, land, and development, let’s niche down to that. The reason I like this space is just underappreciated. It’s not nearly as competitive as, say, trying to buy a multifamily at a discounted single family. It’s simple. It’s much easier to do remotely. And there aren’t a lot of big operators. It’s a very inefficient space. That’s reason number one, as far as why land works so well. And then from there, he got to a niche down because the umbrella of land is huge. There’s farm and ranch, there’s recreational land, there’s infill. But especially with the farm and ranch, you get into water rights, mineral rights, and oil rights, there’s a lot going on. And just like anything, if you try and do all of that at once you can get yourself in trouble picking a niche. And for me, going back to the guy I learned from, he was building homes and the significance of the lots that he was buying was that they were completely horizontally developed. And what that means is, all the work was done to be able to once you have your permit, just come in and start building. People misuse the word raw land all of the time. Just a vacant lot is not necessarily raw, raw away. I don’t touch raw land. I haven’t done anything with it. That’s a whole nother business, a whole nother strategy. All the lots that I focus on are infill. And the application of that word means the entitlements and zoning are in place, and water, sewer, and electric are in place, right? It’s ready to go. There are streets. It’s not just some cornfield that needs all of that upfront horizontal development. People don’t get this a lot of time to be clear. I’m going after horizontally developed infill lots. So think about you going down a street in a developed city or subdivision and there are five houses and three vacant lots between those are the infill sorts of products that I go after. Okay, so that’s number one. You don’t necessarily have to do that yourself. Just know what you are choosing and don’t try and pursue huge farm and ranch acreage and infill Rec and infill commercial launch, right? It’s too many different strategies that I would pick right from the beginning. What am I going to go after? From there, you have to build out your avatar, who am I marketing to, and I see this done incorrectly all the time, people come from housing, a lot of times, if you’re gonna get a deal on a single family, it’s probably due to some sort of distress. And they try to take that and apply it to land. And I will tell you, especially down in the southeast, down by you in North Carolina, and Florida, I do a lot of business and the people that sell at a discount are not distressed, they are wealthy and apathetic. For land specifically and think about this, a lot of times they bought it 10, 20, or 30 years ago, they bought it for cash, because the land is rarely financed. And so if they had cash that long ago, they’re probably doing okay now. And more often, it’s that something got away where they didn’t move there. And Bill, they bought that house and are extremely that lot in Florida intending to build a house. And it never happened for whatever reason. So now it’s just a sunk cost. And especially in the southeast, where prices have gone crazy. They bought it at five cents on the dollar 10 cents on the dollar 20 years ago. And so they’re in a place in life, at least the people who sell to us that money isn’t top priority their time is and so if you make it simple and easy, and right off the bat, you show that you’re legitimate, they will sell to you at a discount. Our mailers, all of our marketing is focused on legitimacy and ease legitimacy being number one because think about this, you’re 60, 70 years old, and you’re getting all these calls, texts, and mailers. About your lot in Florida. And who’s the main target of scams? Well, it tends to be older people, they have an especially big barrier up where they’re nervous. Is this legitimate, so all of our marketing and processes are aligned accordingly? I’m ranting a little bit but the point being you really need to identify your avatar for the type of land or for any asset if you’re going to market directly to the seller. Once that’s built out again, we align our mailers and cold calling accordingly. From there, it’s just a matter of getting good at negotiating. And make sure you build out your processes and checklists around due diligence so that you don’t miss anything. Every market is different. There are subtleties and nuances from place to place. As far as different parts of the country where norms are different. My North Carolina realtor gets nonrefundable earnest money upfront every time when he sells a lot for me. There are markets I’m in where that’s never going to happen. We’re just selling to mom and pops and that’s just not how the norms are there. So things just vary from place to place. disposition for us is mostly selling on the market with realtors, which has been useful because he found a really good realtor. And then they can be your second set of eyes on the acquisition side too, because they know they’re gonna get the listing, it’s kind of a high-level overview of how I go through the business and how anyone can.
Corwyn:
15:09
So you touched on a few things there. Dan, that really stood out to me. And the first one is that, essentially what you said, this is a different animal. Everybody looks at real estate investing with a single lens look and says, Okay, what this and primarily that lens is developed off single family residential. And when you start getting into different aspects on the residential, coming through to commercial, and land is typically considered to be a commercial, depending upon the volume, it’s a single residential lot, okay, as residential, but if it’s a large portion, acreage is something that could be developed and is considered to be commercial, but you got to have a different lens for it when it gets to dirt alone, you got to look at it differently. If you don’t have the same rules if you don’t apply, you hit a number of things in there that differ for our listeners, this is important, you need to understand that it’s not the same animal, it’s not the same beasts when we’re talking about investing and looking at residential properties, those processes, numbers, and all those things, and the outcomes are going to be far different than what you’re going to see over here is going to be different. You mentioned property hacking. And essentially what you’re doing here to understand is something similar to that. But you also sometimes are able to position some cell finance deals.
Dan:
16:31
Yeah, absolutely. And whether you’re selling for cash, selling on terms, or building spec houses, it just needs to align with whatever your goal is, if you want a big pool of annuities, in effect, just they become really annuities paying you every month. And selling on terms is a great way to create that I have gone more the route of selling for cash, because I am more just looking at Front Range land as a way to increase my capital to invest, buying holds, but I have friends doing it all via seller financing, and you can end up with a 50 100 grand and notes coming in every month. So it just depends on what you’re trying to accomplish. But in effect, it’s really simple. You can do it, traditionally, where you go through a title company, they prepare the note and deed of trust that well, depending on the state you’re in, the title transfers into the buyer’s name, and then you have a lien on the property. So in effect, just like when you buy a property with a mortgage, just the other way around, you’re the bank. That’s one way to do it. Another way is just a contract for deed or land contract. Be careful here and make sure you’re on top of your paying taxes and any fees and dues because the property stays in your name. But ultimately, what that allows you to do is sell it via a contract where you don’t transfer the title to their name until they’ve paid it off completely. Again, make sure your books are up to date, you’re tracking this clearly. And you’re staying on top of any and all fees or assessments on a lot because it’s still in your name. And then you need to know how to properly have a deed prepared and recorded to transfer to their name. Once paid off. That’s another way to go about it. Of course, the first way is more common, and more people are going to be okay with that. But then you have to foreclose, if they stop paying second-way contract for deed, there’s a simpler process, you’re not going to be able to go through a title company, every title company I’ve ever talked to says they will not insure the title and execute the transaction if they aren’t actually transferring ownership into the buyer’s name.
Corwyn:
18:24
I bet you that it probably differs from state to state depending on where you are, check into that with a real estate attorney, or title company in the state where you plan to transact. I won’t say where you reside. If you’re buying properties like you are Dan across the country, then obviously that would differ from state to state. So you may actually be able to do contracts for deeds in our state, I do see some contracts for deed transactions. So that is very interesting. You kind of touched on a number of things. I appreciate you despite your busy schedule today even talking about this. But you also kind of mentioned house hacking and property hacking. Elaborate on that people look at it from different angles, different perspectives. At the end of the day, it is being creative in real estate. So talk about that.
Dan:
19:12
Sure. Just to make a clear differentiation here. Front Range Land is an active business for dramatically scaling my income. Now we’re moving into the topic of investing, right actually buying and holding property over the long term and so house hacking is a great way to do that. Especially when I was just getting started and still working a job. A big reason that I was able to leave my job and get Frontrange land up and going is because I was house hacking. I bought a single family here in Colorado Springs in 2018. And it was a four-bed three bath split level. I lived upstairs from the master. I rented out the two extra bedrooms upstairs for 700 a month each. And then the basement again it was a split level so there was another living room, a back entrance, bathroom storage all that and a basement. Beyond that. I rented that for nine $100 a month. So my mortgage was worth $1500. And I had what is that? 1600 coming in a month? Why was living in it? I’m sorry that math was terrible. I have $2300 a month.
Corwyn:
Yeah. $700 Each upstairs.
Dan:
Yeah, I forgot the other $700 Yeah, so I had $2300 A month coming in on a $1,500 mortgage while I was living in the property, they covered my gas, utilities, and food for the month along with the mortgage. And that gave me the freedom to leave my job, get my business up and running, and fail for a little bit. Because all my bases were covered. Did I like having people in my house? No, I didn’t, I didn’t at all. But you know what, I’m glad I did it because it allowed me to get my business going. And I would every year, buy another one, move to it, and do it. Again, that’s allowed me to build a portfolio. And it allowed me to take the risk of leaving my job and getting my business going. And so it was uncomfortable. I don’t miss that I stopped doing that last year, I bought a nice house. And I don’t have anyone in here with me. But again, short-term sacrifices up front can pay dividends in the long run. And so that was well worth doing. And now I have some great rentals too, just from that.
Corwyn:
21:08
That is awesome. Because you know, oftentimes we think about House hacking, and we’re all over the place and scattered thoughts as relates to it. That’s one way to do it. Some people buy the property and get it staged out really nicely. They live scarcely, if you will, as far as personalization and all that stuff. And then they short-term rent, it may be weekends and they travel, they go stay with their parents or with a friend pool, we can rent their house out or something of that nature on a short-term basis to make some cash to offset either their expenses, sometimes they look in certain markets, and areas, they’re able to completely patent all the way, man, you may just do it. And that is a wonderful start. And a way to get started in real estate investing. And a lot of times, you know, again, you’re uncomfortable, pretty positive, you’re very comfortable.
Dan:
21:56
That’s a great way to say it. There’s an analogy I want to make. So I remember when I was 19, I talked to the financial advisors I met and ran into him just small talk at work. And he told me, he goes “The money, this is on average, but the money you invest in your 20s is worth more than all the money you invest the rest of your life on average, because of the way compounding works”. And so in a concept that really stuck with me is that okay? Short-term sacrifices. Right now if I do this, right now, I’m gonna set myself ahead for the rest of my life. That was part of what I kept in the back of my mind. In those four years when I was renting out the rooms in my house, I didn’t like it. But it’s the short-term sacrifice for a long-term gain, as opposed to a lot of people having short-term fun at a young age and then having long-term struggles, because they did it in the wrong order. Keeping that top of mind was helpful.
Corwyn:
22:48
That’s a conversation and we could probably carry on forever. Because all of this stuff is really mindset. It is about shifting the mindset. Dave Ramsey says this thing about living today, like no one else. So tomorrow, you can live like no one else. And the reality is if we make the sacrifice early like you did, and do certain things, then later on in life in our 30s, you haven’t even gotten there yet. But your 30s and 40s and 50s. Man, your life is gonna look completely different. Because you made the initial sacrifice. And oftentimes, we, As a people and our listeners, guys, this is a conversation to have at the kitchen table with family to have with your children to have with your parents, because we often trickle down a mindset that is contrary to the mindset, Dan, that we’re talking about. We trickle down the mindset of consumption, which is, hey, I want to go travel, I want to go do this, I want to do that. Well, you didn’t do that. Like you say your friends had fun while they went to high school in their early years in college. But you were doing something that changed the narrative for you. So I’m pretty sure they’re in the hustle and bustle right now. Trying to figure out a career, what that’s going to look like. And you have already gotten your career, you have a business. And for the most part, not seeing is the act of business. But I’m pretty sure you’re able to work it how you want to work it and have the advantages. There are kudos to you for doing so. For our listeners, guys. If any of this isn’t possible today, please come back. But then I don’t want to leave today without asking you about how do you raise capital for this? I may have the money. Yeah, great. But if I don’t, how do I tap into and get capital for this type of venture?
Dan:
24:38
Sure. Let’s start with the Front Range Land, the land and development side of things for land deals if you have a good deal, in that context, a good deal is 30 to 50 cents on the dollar, good deals. There are endless amounts of people that have financed it. I’ll tell you upfront, I gave away way too much not knowing what I was doing, but that’s okay, got the deals done. I learned And I wouldn’t worry too much about that if you get a good deal. And there’s really a spread, and it’s somewhere where land is selling, just posting on Facebook asking around your network, I’m sure you can get it funded. And then beyond that, there are hard money lenders that will finance land deals, if it’s low enough, I did that a few times with a hard money lender out of Denver, friends, and family, just to re-emphasize that potential lines of credit, again, I’m talking if you’d have no liquid cash. Beyond that, let’s say you do want to do the new construction home. Well, again, if you have a good deal where the build cost is well below the actual appraised value of that end product, then a lot of lenders will finance the entire construction. As long as you have the land bought outright. Again, maybe you’re down in Florida and one of the markets that desperately need new homes, you can partner with someone to get the land financed, and then go to the local hard money lender and get the construction finance, you can’t do this without a ton of money. I mean, you still need reserves, you need cash to carry the debt service, but you don’t need a ton on the buy and hold side of things are a big part of the purpose is you’re using an owner-occupied loan, and so you’re putting three to 5% down or 0% down if you’re in the military. As far as rentals, you’re not going to do that sort of loan, there are a lot of options. I bought one on 100%, seller financing 3% permanent mortgage, and that’s out there. If you find an older seller who owns it free and clear which there are a ton of right now. Those are just a couple of options as far as financing beyond just having your own money.
Corwyn:
26:36
So, Dan, I want to make sure I get your contact information out for our listeners. So I’m gonna start there, and then I’ll hit you with what I call a mic drop question. How do people get in contact with you?
Dan:
26:46
Yeah, Dan Hamrick costs on Facebook or Instagram, and just danevercost.com
Corwyn:
26:50
For our listeners, guys, y’all need to reach out to Dan. I’m gonna start there. But then I’m gonna hit you now with what I call a mic drop question. And unfortunately, you are probably still working on that because you are well ahead of the curve. But for a lot of our guests, were there further things about this back then? So if you didn’t know something, but maybe earlier, when you started, that would have completely changed his trajectory and where you are right now? What would that have been?
Dan:
27:21
You can make millions of dollars in any of these niches within real estate. The key is to pick one, pursue it intensely, iterate, and get better. And just do that over the long term and you will be successful. The biggest thing that people mess up is they try and go in too many different directions at once to try and do eight different things. They jump back and forth. You can make as much money as you want. Just pick one thing and get better and everyone else at it.
Corwyn:
27:44
That was it, man, I love it. Dan, thank you so much for being on the show today. I really appreciate you again, taking time out of your busy schedule. We have definitely blown through our time. I cannot thank you enough for the nuggets and jewels that you’ve shared. For our listeners today.
Dan:
28:00
Thanks for having me.
Corwyn:
28:01
You’re welcome for our listeners, guys. As we quickly wrap up today’s show. Y’all know what I say? Y’all know how I feel. And we always like to put it this way and always keep it real. And that is I love you. I love you. I love you. And we’re gonna see you guys out in the streets. Guys, that was a great show today. And we thank you so much for taking the time to listen to Exit Strategies Radio Show. My name is Corwyn J Mellette. Yes, that is me. And I thank you from the bottom of my heart for tuning in for today’s episode. Exit Strategies is my fate. It is how I give back to our community. It is how I foster goodwill. spread the good news and trustfully help you get great results. Guys, as I always say to you, as I always say to you, I love you. I love you. I love you. And we can see you guys out there in the streets.
