Calling Out Mark Podolsky from the Land Geek

[JJ W.]

I created this topic because I'd like to hear from the guru himself - @Mark Podolsky aka "The Land Geek". He boasts on his podcast that he has the best passive income model, and even forces his "guests" to declare that he has the best income model, but I couldn't disagree more - this definitely isn't the BEST passive income model or even the best real estate model. I'm holding your feet to the fire just like you do your guests, Mr. Podolsky, and I welcome you to refute the points outlined below:

1. You made this niche sound cheaper than it is. In order to effectively have enough leads for this, you have to spend money on direct mail campaigns, which aren't cheap. Neither is getting the lists from counties, or the capital needed to outsource and systematize this business, etc. ( this isn't even including the exorbitant fee for your course). That adds up to thousands of dollars with no guaranteed return. The "1,000 % return" you claim clearly hasn't calculated all of these costs. 

2. There's no amortization - it's difficult to obtain loans and private money for land, so you have to have substantial up front capital to make enough profit to live off, let alone get "rich". There isn't enough hedge against risk to make most lenders to provide leverage. If it's too risky for a bank to take on, is it not risky for the novice investor?) The fact that you have to use your own money not only limits the amount of transactions you can do - it also makes this niche MUCH more risky, and increases the chances of failure. Not to mention, this is one of the primary ways that people build wealth - using amortization to buy properties that they could't otherwise afford, in order to quickly build their net worth. Tell me who's wealthier: The guy who spent $30,000 on land, or the guy who syndicates an 8 million dollar apartment deal with NONE of his own money and 45% of the equity and cash flow? Yeah… That’s what I thought.

3. It isn't really THAT passive, unless you make hundreds of thousands to millions (like most gurus), to provide you the seed capital to outsource all of this. You constantly have to obtain leads, manage the notes, negotiate with the sellers, etc. It's not really an investment technique - it's a business.

4. There IS competition - you've made it sound like there's little, which simply isn't true. Even if there aren't people doing exactly what you do, there are land realtors - professionals who will list the property for more than you're offering the seller.

5. There's inherent risk involved: People need a roof over their head. No one NEEDS raw, undeveloped land. Real estate is cyclical, and land is one of the first asset classes to feel the sting of a recession. It's inherently more risky than many other asset types - especially during a recession.

6. You have to do a high volume to make a significant profit. This means more capital, time, and energy is needed to make substantial profits from this niche.

7. There are few, if any, tax benefits. There are four primary ways to make money in real estate:

a. Appreciation (which is risky and speculative in nature, and you're not enjoying the benefits of that because you don't even own the land if you follow your strategy)

b. Cash Flow (which is quite limited in this niche - I listened to one of your youtube vids and the examples you gave were not only pretty unrealistic, but also pretty low profit)

c. Tax Benefits ( there's no depreciation for land, only for real estate assets on a piece of land)

d. Amortization ( as mentioned above, this isn't one of the benefits that land flippers like yourself can enjoy, either)

8. This, by far, is what bothers me the most about this niche. At the end of the day... YOU DON'T EVEN OWN THE ASSET!!! Like seriously, how could you even consider this the best income model? You're basing your future on internet randoms to do the right thing and pay you a few hundred a month for an asset they don't even need (which is a horrible business model by the way - there is a reason that the financial sector hinges on creditworthiness standards. Can you imagine if Wall Street followed your model and just took people at their word that they would pay you? We'd enter the Apocalypse! lol). There are many other forms of real estate that provide cash flow, little maintenance, appreciation, tax benefits, AND allow you to actually own the tangible asset. The cash flow you would make from one piece of land lasts how long, 5-15 years? You can hold onto an apartment and generate cash flow from it FOREVER. There are other property types that you wouldn’t even have to deal with tenants and toilets the same way you would in residential – industrial buildings, for example, are pretty low maintenance.

Anyway, please feel free to respond. I feel like you’re kind of being deceptive to impressionable people out there, and since obviously you weren’t going to bring any of this up on your podcast, I felt compelled to. 

[Max T.]

@JJ W. this is silly. Don't spend money on "guru" programs if you don't want to get burned. So much education is available for free. "Buyer Beware"

[Account Closed]

I bought Mark's course about 2 months ago, I didn't have any experience in this niche before that.  I'm currently in the middle of closing on about 15 different parcels of land that I should easily be able to flip for about 200-300% profit, probably more if I end up using seller financing. I personally haven't met him or even talked to him, so I'm not here to defend him. But, the course has almost everything you will need in it to get started, there are certain little details that you will have to figure out on your own. I also learned a lot from the articles and videos over at Seth Williams RETipster blog, that is a great resource.

I have a full time job, so driving around and looking at houses trying to wholesale them, or undertaking a massive flip project just wasn't a viable real estate strategy for me. This land flipping thing can easily be done in your spare time and with not much startup capital. The goal is to eventually use the cash flow from the land to buy rental properties and build long-term sustainable wealth with real estate. For me, this strategy works and is better than what I was doing before, nothing.

Education is the most important investment you will ever make, and some free information out there is worth the price you pay for it, so be careful. I'd advise anybody curious and land investing to reach out to me, I'll give you the truth and help you get started.

[Mark Podolsky]

Congrats @Account Closed I agree with you as well.. Real Estate information Gurus are about as sleazy as they come.  Buyer definitely beware and there is certainly a reason BP is as big and successful as it is because of this fact.  That being said, not all the Guru's are bad, you just have to do your due diligence before spending time and money.  

[Billy Rogers]

I bought Mark's course last year and have done 6 deals since then using his methods.  The first deal paid for the course.  I don't understand how people who haven't seen his course can say negative things about it.  I've been on BP for several years and feel like I have established a legitimate reputation.   His course simply lays out the steps to doing this business, nothing more.   If you do the work you will get results.   Most people are too scared to take action and instead criticize.   If anyone is skeptical PM me and I'll give the links to the county web sites that show the properties I've bought and sold.   

[Jay M.]

If anyone reading this thread hasn't already made up their mind and is truly interested in finding out more about Mark and his land investing methods, he has a free Facebook group you can join and interact with his students and even some of the other land investing "gurus"/mentors. This niche isn't for everyone and is definitely not 'passive' when first starting out, but for those who are interested in the topic being discussed here it may be worthwhile getting the information from people who are actually actively involved in it.

[Adam Vacon]

Jay M. Have you done land deals in the states? I'm based out of Toronto and am curious to know if this is something worthwhile to do from Canada? Your feedback would be much appreciated. Cheers

[Jay M.]

@Adam Vacon Yes, Canadians can buy and sell land in the USA. Check with your accountant for cross-border and taxation issues etc.  

[Adam Vacon]

@Jay M. awesome, thanks for the quick replay!

[Jay M.]

Glad to help. I've gone through most of the available land flipping courses. A few services that can make life easier while doing this business from Canada include:

Click2Mail mailing service for sending out mailers 

Grasshopper phone service for taking messages and ordering customer toll free numbers

Skype for outgoing calls

Postscanmail mail for scanning/forwarding your incoming mail

Notary123 mobile notary for notarizing deeds from the seller and giving them the payment cheque. They may also be willing to send your deed to the county for recording. 

There are other similar service but these are the ones I've tried and had success with. 

Cheers!

[Ryan Spackman]

@Mark Podolsky

Mark,

Someone else on this thread brought up an important concern when doing seller financing or land contracts: What about the Dod-Frank regulations on consumer lending?  Do you address that issue anywhere?

[Ryan Spackman]

@Mark Podolsky:

Originally posted by @Bill Gulley:

Well, I don't know exactly what Mark suggests, but I see selling with seller financing, in that I know the game very well. Understand that the Dodd-Frank Act applies to owner occupied residential properties INCLUDING land and lots where a single family home is allowed to be built! Agricultural land allows homes to be built. A very good argument can be made to build a home on a commercially zoned property, the use is at a lower restriction and may be allowed, but zoned commercially would probably keep the consumer finance folks away.....unless someone builds a home. 

Being "in the business" can make you a lender doing seller financing, something I'd bet Mark lacks expertise in under the new laws, not to mention the varied state laws as applicable.

If you are "flipping" land to a developer, to another investor, you may be fine as a commercial transaction, but if you just sell the Henry Hopeful, that can very well be a consumer loan!

Gurus sell ideas, they aren't generally good ideas nor are their ideas that new or unique and they aren't the ones getting fined or jailed. Too bad too, I could be liable if I told you to jump from a bridge and you jumped. 

I have seen some of Mark's promotions, looks like plain old land speculation, another news flash, you can get stuck with raw land for years, it is not a liquid asset and is less marketable than a residential property. :)

This is the comment I was referring to.  I have read that it didn't apply to vacant land, but I'm not sure exactly if this is the case or if as Bill states, the possibility of a residency makes it apply... 

[Scot Savarese]

I'm curious too. I haven't heard Mark mention Dodd Frank at all in his podcasts. I sure hope he either found a good lawyer to make a loophole or isn't breaking the law.

[Mark Podolsky]

Since raw land does not contain a tenant raw land investors are exempt from Dodd-Frank, RESPA and the SAFE act. 

Just Google raw land investing and Dodd Frank for more in depth legal advice. 

[Bill Gulley]

And that's what I mean about compliance, spoken like a misinforming guru, "tenant"  has nothing to do with financing! 

Dodd Frank specifically includes any parcel of land where a residence is allowed to be constructed including residential lots! It is the expectation of of land use, you'll need to Google the American Appraisal Institute site for appraisers to understand "highest and best use" then have your attorney go to around page 1152 (I think) of the DF Act, read that section on new  construction. 

Expected use is the key, if you  have 5 acres or even 10 and that area is generally single family dwellings on similar parcels, it can then be  considered for residential development. 

If you have a farming area, where there are 20/40/60+  acre tracts (size does matter) where that size supports an agricultural business, then most likely it will be deemed "ag" and as a commercial loan exempt from the Act. Any parcel zoned commercial can be  exempt so long as a residence is not to be constructed like slicing off 5 acres from a 100 acre tract from a farmer/rancher. As everyone should know, zoning restricts use  from a less desirable use in an area set a side for a more restrictive or higher use, but allows a higher restrictive use in an area that has less restriction.

Example: Mary owns 5 acres along a highway in a developed area, the land is zoned for commercial use. Mary wants to move her mobile home in and live there. Her intended use is higher or more restrictive, (single family dwellings is the highest restrictive use, it doesn't allow many other land uses). The land has a lower restriction, being commercial  it allows many different uses (and those are broken down  even further such as "office" "retail" "warehouse" etc. the uses allowed have less restrictions compared to residential). Generally,  unless there are additional restrictions set locally, Mary  may move in to that commercially zoned area since her residential use is higher than set by zoning.

Now, if Mary starts a trailer manufacturing operation, building utility trailers, she will most likely be out of compliance  with the commercial zoning, since manufacturing is "industrial" use which is the lowest use category (light and heavy industrial and those are broken down to specific operations as well). While Mary can move in and actually  use the property with higher use restrictions (residential use) she cannot have less restrictive uses, like manufacturing, in an area that has a higher zoning classification. 

The Dodd Frank (SAFE) Act dodged the bullet by identifying the actual  use or intended use of land rather than simply stating uses by zoning restrictions. There are many areas that are not zoned, allowing  anything that is not otherwise illegal, and a residence may be built in such  areas.        

Another issue: Mary is buying 40 acres with seller financing,  her intentions are to build a home, barn  for horses, have some chickens, a garden and 4 head of cattle. While her intended use is agricultural her loan is not a commercial loan but residential. She carries on no significant  commercial purpose. How "commercial" she may be by  selling a few eggs or a cow or teaching horseback riding will be determined by IRS regulations, "being in the business" of something rather than a hobby type enterprise. If her ag income is not significant she will not have  a commercial loan and the Acts may then apply. (Loan classification 101).

One day in Rome doesn't make a Roman, say Mary sold a prize bull for $120,000 and netted  $80,000, that exceeds her regular nursing income of $60,000. That all took place in one year or  tax period and that doesn't put Mary "in the business" of cattle ranching as her income can then be viewed over a period of time (ultimately 3 to 5 years).  So, Mary still isn't "in the business" and her loan is not necessarily commercial under Dodd Frank.

As to "land investors" being exempt from Dodd Frank, no, not at all as to financing land to a "homeowner" and if the land sale is for  residential purposes RESPA applies as well. It depends on who the buyer is, finance to a developer  or another  real  estate operator and you'll have an exempt loan, do the same financing to Mary and you'll have a residential loan.

One last word of caution, "investors" or "operators" are "dealers" they are not Harry Homeowner, the exemptions for Harry aren't the same for dealers. If you can live off of three deals a year as an  operator in real estate, good for you, you're exempt probably. Check with your State Finance Department and ask how you will be classified as a dealer/lender in wheeling and dealing !!!!

Land speculation is not for greenhorns, it is not uncommon for an owner to sit on a parcel of land for sale for decades! There is no guru book  or course that teaches the real estate spectrum necessary for land speculation, you better begin by learning the fundamentals of real estate and master the basics before trying to  deal in the raw land market!  :)     

[Billy Rogers]

here's an article that discusses the dodd-frank issue -  http://retipster.com/dodd-frank/

[Bill Neves]

Thought I'd add this, although I personally don't have a dog in the hunt....

I have a friend in the Phoenix area, who got the course and is making 6 figures doing this. Since we're friends, he showed me his lists and mailers, spreadsheet and checks received monthly. He's totally happy doing the empty land biz. I'm happy doing mobile homes but it appears that the land biz works for those who work it.

[Billy Rogers]

Mark's course is definitely legitimate.  I made over 50k in gross profits last year doing this, all cash flips.   I do wish to reiterate that it does take a lot of work and a lot of time.

[Mary Roberts]

I'm concerned that these guys have some kind of co-marketing tie-in with Rich Dad Poor Dad. I do not believe that Rich Dad Poor Dad offers valid systematic advice. It seems to me that the landgeek guys are upselling more and more, which will make them indistinguishable from fraudulent sellers of flipping strategies.

[Cody L.]

Jay Hinrichs your post reminded me that I still own a ton of land in "California City" where this 'scam' has been going on for 40 years?

I assume they've sold it off on account I haven't paid property tax in forever.

[Jay Hinrichs]

@Cody L.  100 years plus for most of the upper inland empire land plays.. and yes most likely someone bought it at tax sale. there are companies that churn this stuff for a living most based in LA.

[John S.]

As mentioned in the earlier threads, you can do land investing yourself.  Heck, everyone on biggerpockets can do real estate with "no money down."  It doesn't mean anyone will do it.

I have followed Mark's strategies and bought his toolkit.  Did I make money?  Yes, I made 1000% return on my first run at it.  FYI, the return was hundreds of dollars so its not like california flipping which would be thousands of dollars in return.  You know what spurred me to go further... investing in his program... nope that didn't help me at all.  Mark Podolsky gave me a phone call and that inspired me to do it.  Now, I did get lucky and I haven't done much since I started.  I do think I can do a better job but its a personal issue to stop procrastination and push forward with your goals.  Too bad, land investing is not one of my goals right now as I continue to look at buy and hold investments.

If you read these forums, a bunch of people have invested in Fortune Builders and other so called "guru" courses but these courses inspired them and now they are making a killing on their investments.  It doesn't work out for everyone but with persistent and hard work I think we can all do it :-) 

[Steven J.]

Phew, what a whirlwind in this thread!

[Charles C. Glover]

I know @Mark Podolsky personally, have met and worked with his team.  He is a kind and gracious guy, and his model has helped a lot of people.  At his meet ups, he shares about the pitfalls of ambition for financial gain, inspires people to live meaningful, generous lives. 

This post was perhaps a case of contempt prior to investigation, with hardly a cursory view for perspective.  

[Chad Nixon]

I went through Mark's course and I learned a good deal. I am a graphic designer and never even thought I could make money in real estate until I took Mark's course. Mark states that he will give you your money back if you are able to find a deal and document all the steps within a certain amount of time. 

I was able to find a deal using his method with no money down and wholesaled the property within the time limit and made $8,000. I emailed the images of the deed and my steps to him as well as a testimonial video and guess what? He refunded the amount I paid for his course. Now he doesn't use lawyers for his property that he buys but I do in NC. 

To me, he is a stand-up guy. Yes, it wasn't easy but I learned more from him that I would if I just went through the internet trying to piece together information. I was able to call 5 counties and get all the tax CSV information for FREE never had to pay. I now use a hybrid of what he teaches for land and houses in North Carolina. I still call counties in NC and get the information for free. Now I haven't tried this method in other states but it works in North Carolina.

[Dan Roma]

Mark, is a cool guy. I have reached out to him on occasion and he has helped me with my questions, at no cost! Land isn’t for everyone though. If you aren’t doing your due diligence, it can bite you. Make sure you know what you are buying and Mark is a businssman and wants to help people succeed. Nothing wrong with that in my book.