American Land Seller Podcast
Jacob Hart: Mastering Land Investment and Real Estate Innovation with High Point Land Company
Ever wondered how land investment can shape not just your financial future but your overall quality of life? We’ve got land broker extraordinaire Jacob Hart of High Point Land Company to guide you through the journey. From his first rental property fresh out of high school to leading a top-notch land real estate and auction company, Jacob’s story is nothing short of inspirational. He breaks down his philosophy on believing in what you sell and shares his dedication to nurturing agents to build not just profitable businesses, but fulfilling careers.
Our conversation takes a deep dive into the strategic aspects of real estate growth and franchise development. Jacob sheds light on the often overlooked importance of hiring the right people and how meticulous planning can make or break a real estate venture. With services ranging from land auctions to appraisals and farm management, High Point Land Company stands out in a competitive market through innovative and ethical practices. Jacob’s insights into the real estate market provide valuable lessons on cooperation, marketing, and leadership that are essential for anyone looking to thrive in this field.
We also tackle the comparative benefits and challenges of investing in commercial versus agricultural properties, highlighting the stability of farmland investments. Jacob discusses how platforms like Landhub are revolutionizing land transactions through advanced marketing techniques, making land investments more accessible and efficient. Whether you're a seasoned investor or just starting out, this episode is packed with actionable insights and inspiring stories that will leave you eager to explore the land real estate market. Tune in to gain wisdom from one of the industry's leading experts and get ready to rethink your investment strategies.
Jacob Hart
507-259-1065
jacob@highpointlandcompany.com
www.highpointlandcompany.com
Ever wondered how land investment can shape not just your financial future but your overall quality of life? We’ve got land broker extraordinaire Jacob Hart of High Point Land Company to guide you through the journey. From his first rental property fresh out of high school to leading a top-notch land real estate and auction company, Jacob’s story is nothing short of inspirational. He breaks down his philosophy on believing in what you sell and shares his dedication to nurturing agents to build not just profitable businesses, but fulfilling careers.
Our conversation takes a deep dive into the strategic aspects of real estate growth and franchise development. Jacob sheds light on the often overlooked importance of hiring the right people and how meticulous planning can make or break a real estate venture. With services ranging from land auctions to appraisals and farm management, High Point Land Company stands out in a competitive market through innovative and ethical practices. Jacob’s insights into the real estate market provide valuable lessons on cooperation, marketing, and leadership that are essential for anyone looking to thrive in this field.
We also tackle the comparative benefits and challenges of investing in commercial versus agricultural properties, highlighting the stability of farmland investments. Jacob discusses how platforms like Landhub are revolutionizing land transactions through advanced marketing techniques, making land investments more accessible and efficient. Whether you're a seasoned investor or just starting out, this episode is packed with actionable insights and inspiring stories that will leave you eager to explore the land real estate market. Tune in to gain wisdom from one of the industry's leading experts and get ready to rethink your investment strategies.
Jacob Hart
507-259-1065
jacob@highpointlandcompany.com
www.highpointlandcompany.com
Joining us today on the American Land Seller is Jacob Hart, a multi-state land broker and founder of High Point Land Company in Waverly, iowa. Jacob brings a wealth of experience in both land brokerage and real estate investment and is a world-class auctioneer. Auctioneer, his journey began right out of high school when he purchased his first rental property, focusing on building a robust real estate investment portfolio within a walking distance of the renowned Mayo Clinic. Jacob's early career saw him working for the national auction firm, ameribid, based in Tulsa, oklahoma, where he played a pivotal role in large-scale real estate dispersals, selling hundreds of properties at auction in one single day. This experience laid a strong foundation for his future endeavors.
Speaker 1:A proud alum of SDSU and the Worldwide College of Auctioneering Realtors Land Institute in 2017, his desire to create the best land real estate and auction firm in the country is evident in every aspect of his work. Jacob firmly believes that if you're selling something, you should believe in it and invest in it yourself. His passion lies in land investment and training land agents to build not just great businesses but also great lives for themselves. Today, we'll dive into Jacob's remarkable journey, his insights on the land market and his vision for the future of High Point Land Company. So sit back, relax and get ready to be inspired and, as always, we hope you take away something from this episode.
Speaker 2:Welcome to the American Land Seller Podcast with your host, coby Rickardson. Coby is an accredited land consultant and multi-state land broker with American Legacy Land Company. Join us each week as we explore all things land. We bring you fresh insights and expert guests on sales, marketing, regulations, economics and so much more.
Speaker 3:Visit wwwamericanlandsellercom and find us on one of your favorite podcast platforms. Okay, kobe and our special guests let's get started.
Speaker 1:Hey everybody, Welcome back to the American Land Seller Podcast. Super excited today we have Jacob Hart from High Point Land Company. Jacob, how are we today Doing, great Kobe, how are you? I'm doing? Amazing actually. It's just the weather's starting to warm up a little bit. It was a pretty cold winter where I'm at in Nebraska. I don't know how you guys' weather's been, but so we are happy to have the 60s and 70s, even if it's just for a little bit.
Speaker 3:Yeah, we need the moisture. I mean, I'm primarily in the Midwest Minnesota, iowa, wisconsin, missouri currently and it's just been so dry and the moisture is what we're really after. We usually get 50 to 75 inches of snow, cumulative over the course of the year, but the ground's usually frozen so it just runs off in the spring and fills the creeks and rivers and it's gone. But this year it's like oh, we get an inch or two of snow here or there. It's great because we don't have any frost in the ground. So that's well received.
Speaker 1:We'll take the moisture, yeah, no, and definitely the Midwest all over needs some more moisture than what we've gotten this winter. So let's talk about you. Guys are growing like I don't want to say weeds, but you're growing fast and and and strong. Let's talk a little bit about High Point and kind of what your philosophy is on on. You know, like why you're doing what you're doing. What's your secret sauce here, bud?
Speaker 3:Yeah, good question, gosh, why I'm doing what I'm doing. I could go all day about owning Point Land Company, taking on agents when we're ready to and growing when we're ready to, and having a lot of success at it is the client. From that perspective, being the agent and the agent winning in the real estate business just fires me up. And building a team of people and teaching them how to do things in the land real estate business and then having them be able to go, be successful in that and then experience the ownership of land or cash flow or tax advantages of owning real estate and teaching good people that wouldn't otherwise have a resource to be able to go find where to get that information really cranks me up. And then on the client side, I can sell 50 to 100 farms a year if I really had a good team and I was really, you know, fired up on doing that and that alone, like I, I know how to do that.
Speaker 3:I can do that, but I'd rather affect more people positively. I mean, it's the client we get to deal with is owning the farm for a hundred to 200 years plus and the transaction means the world to them and the higher frequency, the more of those transactions I can positively affect people and they're not going to get taken advantage of. They're going to know what to do with the money afterwards. They're going to be helped and led instead of told and controlled. I'd rather do the right thing by those people and if I have more successful agents, I get to touch more of those people and they get to have a better land experience because of it land experience because of it.
Speaker 1:Yeah, and I think I think what I really like about you, jacob, is that you are like the one. You know there's there's so many guys that want to just hold on to the old days of of, uh, I don't want any cooperation. You know, like we don't work, we do it our way and that's the only way type of a mindset, and you know like you're just a breath of fresh air in the sense of your marketing is really forward thinking. Your attitude towards leadership is just really, really impressive. And so talk just a little bit like developing agents is really tough, especially when you're coming at it from the standpoint of I want my guys to be successful not just successful, but huge successes. That's a lot of investment, time, money, energy. Talk about like how do you select somebody and what's that process look like for lining your guys up for success.
Speaker 3:Yeah, that's a great question. Thank you for the kind words. I get asked a lot. You know you could be successful as an agent as an auctioneer. You have been. You know you could be successful as an agent as an auctioneer you have been. You know you've done that. You own these things. And we know that you have cash flow like why are you doing this if it's not for the money? And you know the bigger scale of that is.
Speaker 3:I think the way I take it maybe not everybody's appeal is if you get to do something where it's like if money wasn't a thing, what would I be doing? And if you could go do that every day, then it's the old saying of you never work a day in your life. But with the agents you really have to make sure when selecting the right agent. I mean I've probably had 60 licensees under my broker licenses since I started High Point and like 20 of those haven't worked out. Because it's like oh, you've told me you want to be successful, you told me you want to become rich and then you want to become wealthy. And now you know we're understanding what that means. And then you figure out what it takes to do that and it's like here's the Kool-Aid you know, here's the system, here's the process that's been proven, here's what you got to do. You know, following the track of other agents that have come before you and those you know 20 examples that didn't work out to not only talk about the positive but the negative. The ones that didn't work out, they're just like gosh, I thought I wanted this and I don't want to work that hard. Or I thought I wanted you know this amount of money or this amount of cash flow and I thought it was going to be easier. Or I'm not willing to do those things that you're telling me that it's going to take. So we really try to find people that match a personality type where it's like, okay, they really do want this and they're really going to burn the boats and they're really going to give it everything and they're going to drink the Kool-Aid, they're going to follow the rules. And then you have to pair that, or you have to narrow that down further to where it's like they're a great person and they're going to take the high road and they're going to be in this for a long time.
Speaker 3:And we had a couple agents that became so successful so quick, they just retired and it was like, well, that was a lot of hard work. You know, I'm glad your four-year adventure was great, but you know that was not what I planned. I thought you were going to be here for a long time and help. You know a lot of people so you really got to select the right person. You really got to have a good team behind them that just encourages them on a regular basis and go through a lot of things. Because what you don't realize I mean I worked for a couple of residential brokerages national firms, commercial brokerages, a couple auction companies and it's like it's going to be really hard.
Speaker 3:But then when you, after you get over hard, you know you have a lot of things that happen where it's like you may need to cut some people out of your life that aren't good for you, that are holding you back. You might have to make some changes that are really uncomfortable to your health, to your wellness, to your relationships. I mean you start as a real estate agent. You get approved and then you get trained and then you start going through this process and then you start experiencing success at some level and then from there to get to like everybody can get here, come from here and get here, and then it caps out with an agent.
Speaker 3:Don't matter what type of niche they're in, but when they want to go from here to here and like 10X their income, that space right there where it's like, okay, you got to six figures or multiple six figures and you want to go to seven figures or more, bigger money, and then you want to try to do that consistently, like the hardest thing is to get out of here.
Speaker 3:Next hardest thing is to go here. The really hard thing is to stay here and maintain that, because it's like, especially in the midwest where primarily are, you know, colorado like you make seven figures in a business, how many years are you going to do that? You really got to want to do that, um, and feel good about it and think about, think about things that are more important than money. So when you do that and you like you got to find that person in advance of hiring them and training them to get to the top, that's, that's the challenging part, but it's the challenge that I also just love. I mean making those, seeing those people's faces and their families when they experience success and are able to go, do things and have the freedoms and own the land and do the things they've always dreamed about and talked about. It's like, oh man, sign me up If I could do that every day. That's what cranks me up.
Speaker 1:Yeah, that you know like you. I think what's interesting when you're talking about this and you're kind of like well, there was breakage, you know like there was those that didn't work. Like, well, there was breakage, you know like there was those that didn't work, you know there was those that we actually over success and they, like we literally shot them off into a road ditch of success somewhere where they live in Napoli ever after. You know that's just kind of that's kind of funny. But no, I mean, I think that's the thing is. Is you got to also realize, obviously you have. Is that not everybody's going to be your style? They're not going to maybe succeed under you?
Speaker 1:I personally think that that's kind of your philosophy of the burn the ships is really where real estate agents have to like, if you're not willing to just kind of say it's going to work and give up that full-time job or part-time job at one point, you know it's it's really going to be a struggle for you. So that's that's really smart. Now that you know, like, how do you we're we're kind of growing too in our company, but how do you figure out, like identify which state you're going to be in next? I know you're a multi-state broker, how do you look at things? Is it just a personnel option that you have and then you kind of go figure out how to, how to make it work in that state? Or are you kind of deliberately saying I'm going to go after Colorado or Missouri or whatever? Good question.
Speaker 3:We could. Our biggest challenge at High Point is strategic growth. You know, we grew again last year, even though it was a down market. I mean we grew substantially last year again and we could probably double or triple agents by the end of the year. No problem. I mean we have the applications, we have the interest, but we want to grow strategically. You know we don't want to bring on agents that are going to be rogue and bad people. We want good people, long-term success, long-term strategic growth.
Speaker 3:And that takes time. You got to do it right. You got to hire the right people, because if you bring on the wrong person or the wrong set of people, it gets overwhelming very fast. Where they're not following the rules, they're not filling out the input forms, they're not making the drone videos and the property videos and the descriptions of the properties and the directions and all the pieces of the puzzle, if they don't follow that rule, you are your weakest link. So if you're a burger franchise and you have one location that doesn't clean the countertops right and then they get a foodborne illness, all locations are now bad, so you have to treat it like a franchise without it being a franchise, because the people don't want to work for that. They want to work for a boutique and have a phone number they can call all the times of the day and deal with all kinds of questions. But they also want the power of a big national marketing firm and a bunch of strategic growth. So you got to really hold that back because it would be really easy to just go pick up agents. And then it's like, oh, we're not training them.
Speaker 3:Row crop agriculture by volume, a lot of row crop, corn and soybeans, a lot of land auctions, traditional listings are off market 1031 exchange business. Or we have an investor pool that they're buying ground and 1031 exchanging it. So we manage those farms and there's always new folks coming into that and we do appraisals. So it really makes sense if we're going to grow where it's like, okay, can we just do real estate there? Can we do auctions? Can we do traditional listings? Can we do what High Point's brand is? Can we do these seven types of sale method? Can we also do appraisal? Can we also do farm management? Are we able to do all those things or is it going to take a long time to get licensed there?
Speaker 3:And then we also look at the volume opportunity if there's, you know, if, if land doesn't ever turn over there, if we check that state or that part of that state we're going to get involved in and we there's no volume there. You know there's counties. There's counties in iowa, for example, that did not have a transaction all of 2023, you know. So there's like parts of other states that are like that too, where land is held really tightly. If that's the case, we can't put an agent there in advance or even go get into business in that part of the state in advance if we have no competitive advantage. We're only going to go places strategically that we have a competitive advantage and where we know we're going to be successful in advance of being in success in that path. So in doing that, we figure out all those things first and then we go find the agent to fulfill it. And you know there's there's other steps of support, staff and licensing and and all those things.
Speaker 3:So when we go to grow into a state it's going to, it's going to be like okay, can we do 75% agriculture in this other? Is there high quality hunting ground that's going to get a lot of attention, with big deer and a lot of turkeys and pheasants and awesome experience. Or is it a spot where it's like a lot of land doesn't turn over. There's not a lot of auction opportunity there isn't. You know this hunting land piece and it has to fit our brand in advance.
Speaker 3:If it's all small, you know lake lots and that sort of thing, we have to make sure the agent we put there isn't going to be focused on deer hunting land or row crop agriculture. So the steps we take in advance on the backside are a lot. I mean, it's surprising how much research we have to do to make sure when we get that person and we ask them to change their life and burn the boats and go after that, it's like here's why. And if you're not willing to do that, you need to tell us right now because you're not the right fit for it, because we've done the research. We want to make sure you have the stomach to hang on Right.
Speaker 1:Yeah, that's. There is a lot of research that goes into especially laws and everything else when you're entering new states, but having the right people in place that is definitely a start. If you don't mind, let's take a quick break and we will be right back. The American Land Seller Podcast is brought to you in part by LandHubcom. Join us today and experience the expertise of Landhub's land marketing professionals. Whether you're buying or selling, let us show you the way in the ever-evolving world of land transactions. Visit landhubcom and discover what the future of land marketing looks like. Landhubcom where your land journey begins. All right, we're back here with Jacob Hart from Highport Land Company. Jacob, you had mentioned in the previous segment that you guys have seven products basically that you offer. Let's just kind of dig into those seven and and kind of how that's kind of set up with your company. So if you don't mind, yeah, absolutely so.
Speaker 3:When, when I started High Point, it was, you know, if there was a company that did what we do now, I would probably just work for them and you know my week would be a third shorter, I'd work 40 hours a week and, you know, have less gray hair. So we do live auction, online auction, sealed bid sales, private treaty you know traditional listings, online, offline, private, you name it. So seven different ways that we sell farms. And then we also do appraisals for basis establishment and we have certified general and certified general trainers to get the folks trained to do certified general appraisals, not just the residential, you know. They have to be certified general, which is commercial and agricultural, a different level of appraisal, which is a challenge to get them to achieve. It just takes time and dedication. And then we also do farm management.
Speaker 3:So our goal is for people to if they want to buy a farm and they want it as an investment, but they don't want to manage it and they want to make sure they're not getting taken advantage of on the rent side, or they want to have it appraised and get it refinanced and don't want to wait for that appraisal or have it be super expensive and inaccurate, or you know, we just want to be a I don't want to say a one-stop shop, but we want to be an extreme niche of if you are interested in investing in agriculture or hunting land and you want to have the most resources available for for people that actually believe in it and actually own this stuff on their own and trust it and and buy it themselves, we want those, our agents, to be that resource and high point to be that resource.
Speaker 3:And also, if they've owned a farm for their entire life hunting farm or tillable farm, whatever it is you get one chance to sell that right and to sell it well. I mean, it happens all the time where clients they've become clients People go buy farms from other real estate brokerages and then a year later come and sell them with High Point and it's like that family owned that farm for 150 years and you just made 20% on it because you bought it from somebody that didn't have the knowledge or the tools to market it properly. That doesn't sit very well with us as a company, but it's like. That's why these people are hiring us and we wish the people that originally owned the farm would contact us and give us a shot and let us just show them the difference of how hard we try to get them the best price and the best outcome possible for them.
Speaker 1:Yeah, I think that's a really good point. I market to people and say, hey, I don't necessarily think you need to call me to be the end-all, be-all, but I would like a shot, I'd like to come sit down with you and it's one of those things in our part of the world. It's a fine line of you know, like how do we let the local neighbors and everybody be a part of it and also open it up to make sure that we're getting the best price for the property, which is a tough road to, to hoe every you know when you're trying to to get the best value but still be sensitive to the to the neighbor aspect of it.
Speaker 3:Yeah, absolutely. And that I mean like we want. We want farms to stay in the hands of good people. We want people to expand their operations. We want people to buy land and rent it out to local operators and have everybody benefit from it. You know, people get a get a big mouth and a big shield and sword online and think they say, oh, don't sell to investors. But it's like oh, you want to expand your operation and have somebody buy a farm at auction that you can rent. And now you're oh, I'm okay with an investor now that's going to rent it to me for a fair price and farms in another state and is a farmer investor. It just wants to diversify crops. So there's a lot of things like that, where people get a big mouth online and think they can puff their chest. But the reality is the majority of people that are buying land are good people. They want to be in that asset class. You can go make more money in other things asset class wise.
Speaker 3:But I think it's really surprising how easy it can be to get creative. Folks will say, gosh, I really want X amount of dollars an acre for the farm or this is what it appraised for. And then you get a tenant or a family member or a neighbor and it's like okay, there's a gap there. There's a $2,000 per acre gap. The seller will hire us to achieve that gap, even if we sell it to their family member or their tenant or their neighbor, because they it's like this is my investment, I want to be treated fairly on it and I want as much money possible. Hard to blame them for that. These folks over here, they don't want to pay as much because they are in it for their best interest. So it's understandable. But it's like okay, have we looked at all the financing options? Do you have another farm that you can sell out of over there? That makes your operation really inefficient and it's low quality. Let's sell that one for you for too much money so you can buy this one over here for too much money because it's right next door.
Speaker 3:How do we take a little bit extra time instead of just turning the farm and selling the farm, to make it work for the people? The seller and the buyer are both like blown out of the water with happiness and success in their intentions at the end of the day. Take that extra step. Acquire the knowledge to make it possible for the individual.
Speaker 3:However you can do that, and that's one of the huge regions we're growing so fast is like just taking those extra steps for those people where it's like, oh, here comes the enemy. The auctioneer, the real estate agents are going to sell it for too much money. Let's figure out how to make it work for everybody. Sometimes it doesn't, where it's like, hey, they just want too much so it doesn't sell, or these people aren't financeable or don't have the equity to pull it off and somebody else comes along and buys it. But the majority of the time we can work out a win-win. And when people realize that now the people that were once saying we were bad folks are coming back and saying, man, I would never do a real estate transaction without using you guys in the future. So those extra steps are just huge and I think it helps people trust land real estate agents that are niching that business along the way, because they just see that you're trying really hard.
Speaker 1:Yeah, I definitely agree with that, and it just surprises me, though, when you go talk to somebody and you're like, well, we're going to want you know, a couple of weeks at least to get marketing together, get everything ready, to go get your listing out, and people are kind of shocked at like, well, I talked to somebody that said they could have it online tomorrow. How, Like, I don't know how you're going to do that, but yeah, the extra steps and then again, making sure that everybody has a shot is, I think, incredibly valuable to people that are both selling and buying land.
Speaker 3:Yeah, I mean what's crazy is, unfortunately, a huge portion of the people that own the land real estate asset have. I mean our client. The majority, like 85% of the client, acquires the land via estate and they've owned it for a couple of years and been in control of it and their families owned it for a long time. So there's equity that's very high and a low basis in the property. And it's amazing how folks think, okay, I'm going to hire a real estate agent and they think that's going to be an adequate job, as if I hire this folks, these guys over here, these guys over here, and the commission question comes up and folks are you know, they want to get the best deal. I understand that, but it's really if you looked at the magnitude of, you know some of these farms are selling for millions or tens of millions of dollars and even if it's hundreds of thousands, that equity has been acquired over a very long time and if you make a mistake and save a couple percent on commission and hire the wrong company that doesn't know what they're doing, you will lose 10x that equity. I mean just like that, if they can do the marketing and get it online tomorrow I would have a lot of questions as to why.
Speaker 3:And the reality is today more than ever, is there sharks just waiting out there in the water that are going to say, hey, I see that property poorly marketed.
Speaker 3:I'm going to go buy that property, I'm going to bring it to somebody that knows what they're doing and I'm going to make a bunch of money on it. And if you're a seller of a piece of property and you have that opportunity, it's like it's your best foot forward If you spend an extra 5% and it makes you an extra 40% at the end of the day. You want to pick someone good, that really knows what they're doing and has a track record at that, because this is a major real estate transaction with a ton of equity and the difference in that percentage can be hundreds of thousands or millions of dollars. And you got to choose the right person. And a lot of folks they literally don't know land. Real estate professionals are a niche that even matters. They think, oh, it holds a real estate license, good enough. You got to really do that research on the company you're going to choose to sell it and make sure they're good on the company you're going to choose to sell it and make sure they're good.
Speaker 1:Well, and that I mean, you bring up another good point. You know like knowing what you're doing is very important in any aspect of real estate, right? You know like I'm not going to go to Omaha and sell skyscrapers in downtown Omaha because I have no idea where to start. You know, I can figure out a bar in Arnold, nebraska or something like that, probably. But and again it's like, if your specialty is residential real estate, you know, then awesome You're. You know like I'm going to refer a ton of stuff to you, hopefully, if you're good, you know, but you don't have any business going and selling a center pivot in Nebraska. You know, yeah, exactly yeah, I don't have any.
Speaker 3:These folks haven't ever owned anything. You know it's like. If you don't desire to own land, how are you going to sell it to a buyer as an investment If you've never sold a piece of real estate yourself or owned a farm or a hunting track, or you've never done a timber harvest? You've never done that. There's a whole new level of understanding when it's your own neck on the line. If you've had to go through everything farmland ownership or hunting land ownership or rural property how you're suited to be giving better advice to somebody who's buying or selling because you've experienced that entire process. So that's another question I wish sellers would ask is like how many times have you done this personally?
Speaker 3:Have you done it for a client or do you like? If you don't believe in land as an investment, how are you going to sell it to a buyer for too much money or have them go experience that thing if you live in town also? So there's some other things there where, just like you said, if somebody called you up and said, hey, can you go sell my residential house here or my commercial building there, the land real estate agent that takes that deal I would have some questions for them as well. Is there not enough business for you to go win over here? Or why are you taking this, this one, over here? Do you add value there?
Speaker 3:We do some of those deals with. Our agents will do an auction, but it's an absolute auction selling a commercial building to people that own an excavating company or own a concrete company. A lot of times those are our exact same client but skyscraper, apartment complex, that sort of thing. On a traditional listing level. I mean, as an agent, I feel like you should have enough business and enough flow in that you're taking like 50% of the opportunities and when you're really good and you're really trying, you should be referring out another 50%. I mean that's just a random volume number. But if you're not getting 50% of your business opportunity, isn't referrals out? You don't know enough people, yeah.
Speaker 1:Well, and I think that the big thing is is getting over that anxiety of you know, it's okay to refer it out, because you're really not saying no to business, You're just doing the absolute best for that client that you can't, you know. And then, um, but yeah, that's, that's very smart. Um, Jacob, if you don't mind, let's just take another break.
Speaker 1:And uh, if you got one more segment in you, yeah let's do it All right, we'll do a, we'll do a quick break and then we will be right back. The American Land Seller Podcast is brought to you in part by American Legacy Land Company. At American Legacy, our seasoned agents set us apart, providing unmatched service with a personal touch that goes beyond expectations. With a wealth of market knowledge and a diverse portfolio including farms, ranches, development lands and recreational properties, we forge lasting connections with clients through honesty, integrity and transparency. Visit us at AmericanLegacyLandCocom and find the land that defines your legacy.
Speaker 1:All right, we're back with Jacob Hart from High Point Land Company. Jacob, you and I were talking just during the break and you had mentioned something in the last segment that I kind of wanted to drill into. You had talked about if you didn't own property, it's tough to sell it. Like, if you didn't own property, it's tough to sell it. I mean, it's really tough to have the idea of the value in your head. If you've never had skin in the game type of thing and I know you are an investor, you've invested in several different properties If you don't mind, just tell us a little bit about, like, what the investor side of you is, kind of not only seeing now, but where your history is and stuff like that. Sure.
Speaker 3:Yeah, I mean I started buying rental properties. Gosh, I had to be like just after 18. I mean, I remember going. I went to the most expensive neighborhood, you know where all the rich people lived, and I knocked on their doors like a lot of doors and just said, hey, this is my name, this is where I'm from. I desire to be successful. Can I have two minutes of your time? How'd you get here, how'd you get this place?
Speaker 3:And the majority said I own real estate, I own rental properties, I own farms, I own commercial buildings. I do all that. And it was amazing how much time they gave me. I mean, like knocking on their door, like sometimes I left. One time I left with like a like a cheeseburger, like a like a gourmet, beautiful cheeseburger and lunch. You know ladies, like, oh, you know, good luck, here you go. This is some, you know, leftover sandwich. So they're really nice.
Speaker 3:But they told me, like consistently, I do this, but I also made more money than it. I had a couple of them. They were like you know, I'm a physician and I've made more money in real estate, or I'm I own this business and I make all my money in real estate while I'm sleeping or in appreciation, or that's where my tax benefits come from, so all that. So you know, my parents were, they had rental properties and they were entrepreneurial and they had a couple of different businesses while I was growing up that my sister and I were pushed to work in and didn't really have a choice. So that really taught us like a good work ethic but they were pushing us towards. You know, make sure you learn about rental properties, make sure you learn about real estate, all that. And then I did the door knocking thing and they told me the same thing. So for that I started buying rental properties and then that gave me like cashflow and knowledge and equity and all that. And I mean I heard no from every bank in town, I mean probably 15, 20 of them. And then I figured out how to buy them with like contract for deeds and how to work through that and then got into commercial and then got into DSTs and short-term, long-term, you know, airbnb, vrbos, different states, all that. And then at some point land was like really, really of interest because I'd gone through.
Speaker 3:When you learn more about something you learn about, you don't learn about more positives. You usually learn about the negatives that were not the headlines. So the rental properties and all forms and the DSTs and all that were just like okay, I would like to maintain control, I would like to maintain tax benefits, I would like to maintain guaranteed cashflow and that's where land is an investment tillable farms, timber farms, rural rental properties, stuff like that where it was like okay, I want most of my in the future, I want most of my eggs in that basket, because I learned that you can build more houses and more apartments and more commercial and vacancy rates are a thing. There was a town one time I had a bunch of rentals in and it was a town of like 100,000 and they built like 5,000 apartment complex units there in no time and we went from having 100% occupancy to we couldn't give the places away Two, three months free to move in. You get a whole three-bedroom, four-bedroom house, whatever. No tenants, no applications, no, nothing.
Speaker 3:It's like okay, maybe our tenants should be based on food or should be based on fuel or should be based on products that either grow or feed other products, and there's a scarcity of that. Coming down the line that, I think, is I mean, if you read about agriculture or recreational ground and the scarcity and the demand that's going to happen. But if you look at it it's like, okay, start there, start with bigger cap rates, start with more management, start with all that. And then you look at this for the long-term hold this land thing is. There's a reason Hedge funds, corporations, big money, big, big money. That's why they're buying. It is extreme hedge on the long term because it's crazy what's going to happen in the future in the crystal ball of agriculture and recreational real estate.
Speaker 1:In my opinion, Well, and I think you can like to your point, I think you can look at like all the other forms of real estate and you can see the roller coasters that have happened. Whereas you take a 100-year trend on farm ground and it's pretty steady up, you know like there's maybe a few corrections, but we're talking about a correction is like a percent or a half a percent over an entire year, after you have a raging increase, you know like, and so you just really have that stability and in a 10 year snapshot you don't know of any instance where you're, you're not really up at the end of it and the maintenance is pretty low if you have the right tenants on your properties.
Speaker 3:Yeah, and especially when you don't have time, when you have a business or you have a job or some other obligation children or traveler or whatever you spend your time doing Okay, you get a 4% or 5% net rate of return on a farm and you get a check once a year and it's paid upfront in advance of the tenant ever going onto the property. It's like you, you can go find another deal and make up the other 5% or the or the tax benefits of depreciation or cost seg or whatever you're going to do. You can go find those deals and just make. You could probably just make that cashflow up in appreciation or in your other business over here where you don't have to worry about all these other management problems or vacancies. I mean I could sell you a 10% ROI commercial ground all day, but I can't guarantee that the tenant's going to be there by the end of the lease.
Speaker 3:You know it's like the commercial crisis that's going on right now with like office buildings and other commercial property. It's like I mean I've had tenants, I've had vacancies on commercial property for like 18 months. What's that show up Like? How does that affect the return over the five-year hold or the 10-year hold. You know it's like you don't plan for that vacancy rate. I've never seen a farm vacant or not able to be rented. In the you know row crop agricultural crops that are primarily in the Midwest there's usually really good tenants, I mean always. I have no experience. I'm sure there's one out there, but I have zero experiences of not being able to rent a farm.
Speaker 1:Yeah, and I think like well, it's interesting, I've heard from several different people that like, the real estate bubble in the commercial market, like right now, is like four or five times worse than the 08 housing bubble was you know. And so if you know like and to your point, like, not only do you have not a very hard time finding tenants for your properties with farm ground, but you also have a higher quality of tenant a lot of times than you know, like most farmers that I know are going to leave a particular piece of property way better than when they got it. You know it's going to be better when they leave it.
Speaker 1:And so that's another positive attribute to farmland ownership, I think.
Speaker 3:Yeah, yeah, and I can't give you know, financial advice and do all that. I'm not licensed to do so and don't pretend to be. But the farmer is running his business. It is out there. It's in his or her best interest to do the best job for the farm. Long-term tenant in place. We put a fair rent on it. They want to take care of the farm because it's in their best interest to get the highest yield and to continue to have that farm in their operation for efficiency and buying at scale of bulk products and inputs.
Speaker 3:So it'd be like somebody going into a commercial building. It's not only somebody going into a commercial building. You put Verizon as a tenant in or Subway or Edward Jones or whatever as a tenant in or Subway or Edward Jones or whatever Anchor. So there's like corporate Anchor or Big One, and then corporate structure, tenant, guaranteed lease, all the things. And then there's like the step down of the pretty good tenant that's got a good business and then there's a tenant that's tough and doesn't have the backbone financially or doesn't have a lot of corporate structure. So, depending on what type of tenant that you have, again you're dealing with probably a corporation instead of an individual If you have a problem, good luck getting a hold of anybody that can make a decision, or you have somebody that doesn't have the financial support.
Speaker 3:With agriculture, especially, and with renting hunting land, I mean, there's just so many options. I could talk about it all day. Agriculture, especially, and with renting hunting land, I mean there's just so many options. I could talk about it all day. But the farm is backed by the government. It's backed by subsidy-growing products. So if a farmer doesn't make it, I understand it's hard. I understand there's weather, I understand there's inputs. I understand all these things. But in land and in farming there's always another crop. There's always a better way to do it, different, or a different way to do it better. There's always an opportunity to do something with a piece of land. It's like okay, I can't rent it out, can I put it in a CRP? Can I put it in a WRP? Can I log the timber? Can I put up a solar field? Can I put up a wind farm? Can I extract the dirt and sell all the topsoil? What are the options With a commercial building?
Speaker 3:It's like only A quality retail or only B quality industrial and only these tenants in that area. You just have far less options to get creative if you really need to and a lot of times you're not dealing with if it is a strong backbone. You. You're dealing with a farmer that's running a business and they're really good at that. If they're successful at all in farming, they're great at it to make it. In today's world, in commercial man, things change so fast to where that tenant can go out of business, where there's liability there, where you've got to worry about people and breaking into your property or falling down on the ice or the roof leaking or the. I mean I had a giant AC unit go down the other day. It's like those things are like 25 grand. You know, if I have a tile line get plugged or you know a tree go down, it's like, oh, the farmer has the equipment to help me out. The tenant, the tenant's never going to help me out with the $25,000 AC unit. I know that.
Speaker 1:That's a good. That's a really good point, too is that you know. A lot of times you don't even know there was a problem. The farmers just take care of it, the ranchers just take care of it. They don't even call you.
Speaker 3:Yeah, I bought a farm a couple months ago here and I told the tenant hey, I know the driveways need to be widened so you guys get bigger equipment in there. I know those trees out back need to get scrubbed up and you know that rock pile get pushed back a little bit. You know here's what we're planning on doing it. And he's like no, you don't have to do that. If we're renting ground from you, we'll take care of it all. I I prefer we take care of it and we'll let you know when we're done. And I was like no, we'll treat it like our own. We appreciate your rent and outground to us, we'll take care of it, not a problem at all. Let us know if you find another farm that you'd like to be an investor on.
Speaker 3:I've had a lot of rentals Not a lot compared to a lot of folks, but I've had enough to see it at scale. I've never had that happen in any other asset class of real estate. It just doesn't happen. I mean, I have people like they'd paint or replace something they broke, but you're not going out of their way to make your property better. It's about them, not about you.
Speaker 1:And then you know, yeah, just goes back to say is like, most of the time when they move out it's not as good as it was when they moved. So there's investment that needs to be done. All right, jacob, I'm going to put you on the spot. Past year or two years, we've seen quite a few records in farm grant sales. Do we have some more records coming in 2024 here, or are we going to take a break from that for a while? Do you think?
Speaker 3:I mean I think we were the first one to sell a farm in Iowa for $30,000 an acre. They were bouncing around in the 20s and it was amazing who was buying and who's still buying. We sold the farm the other day to a 30-year-old female as an investment and it's like people think, oh, investor, and all these big corporations and all this. It's like let me show you some investors, look how cool these people are and what they're doing, what they have going on. So farmland, hunting land, recreational ground, rural real estate, if interest is going to be 7% plus and corn is going to be $4 or less, and pork and you know all these input prices being crazy, it has to come down Like it is overpriced and it has to come down. But the thing that is looming back there all the time is the scarcity factor or the people that are involved with a 1031 exchange. I mean we sold like seven farms in the last 72 hours over the course of the weekend and six of them were 1031 exchanges out of other real estate, primarily farms adjacent to cities or road projects or solar projects or wind projects, or 1033 exchanges out of Corps of Engineers stuff. So, to answer your question, I don't know that we're going to see it in 2024, but I bet we'll see it again before 2034.
Speaker 3:You know, I think land in general is going up and down as it goes up because of a scarcity. From a scarcity standpoint, we have less farmland, less hunting land, less of this high-quality product that grows food and fiber every day. So like you can't build more of it, and if you do build anything, you're building on it and taking away those acres. We're losing a million acres a year in farmland certified cropland acres a year in the US, and I bet we're losing double to triple of that in recreational ground. So it's done pretty well outside of the 80s and that crisis.
Speaker 3:But that was a debt leverage problem and a commodity problem. Could we have that again? Sure, but there's so much more equity in the dirt today, the amount of people that have loans on land today they're primarily owned without debt. Big interest rates, low commodity prices. I don't know that that crashes like it did before because that was a debt leverage problem and cash flow went away because of the trade issues and the supply and demand issues of the crop. So I don't think, to answer your question, that it's going to be in 2024, but I bet we will see it again before 2034. For sure.
Speaker 1:That's a fair answer yeah.
Speaker 3:I mean if I had the crystal ball I would have all the money in the world. But the reality is, if you're consistently advancing, consistently taking care of good farms, they're going to bring good value if you need to sell out of them, whether the market's up, down or sideways. I mean we thought there was going to be a huge crash and a huge buying opportunity and all these investors had tens of millions of dollars waiting on the sidelines for us to go help them, put it into farms to buy or identify. Then it was like oh, oh, who thought land would double or triple? Because the government would give away all this, you know, random money that was warranted or not? Um, so you don't know it's going to happen, but everybody that's bought consistently over time, I mean I know they're still up today.
Speaker 1:Yeah jacob, how can we get a hold of you if we're looking to to buy or sell some land in your part of the country?
Speaker 3:Yeah, absolutely, highpointlandcompanycom all spelled out. Otherwise, we got 40, 45 agents in Minnesota, iowa, wisconsin, missouri and Colorado. Do land auctions, sealed bid sales, traditional listings, appraisals, farm management, you name it. We have some very high quality people. But highpointlandcompanycom and if you ever have a question about how to find an abstract or what that's going to look like or how to do something on a piece of ground, our YouTube channel, which is just High Point Land Company on YouTube, is really trying to educate people on the topic and make them feel comfortable with the biggest transaction of their family's lifetime. So those are the places to find us online.
Speaker 1:Yep, I've I've watched several of your videos. They are very informative and, yeah, so I will put all that in the show notes so if people want to check that and then they can, they can get ahold of you guys so well. Thank you so much for your time. I know time is valuable and I appreciate you taking the time to hang out with us for a while today. I hope any 24 is good for you. I hope you do double your size.
Speaker 3:We hope so Also. I appreciate the opportunity very much, kobe, and wish you nothing but but happiness and peace and prosperity. All right, thank you sir.
Speaker 1:And we will see you all down the road.
Speaker 2:As we wrap up another episode of the American Land Seller podcast. Thank you for joining us. Visit wwwamericanlandsellercom and find us on one of your favorite podcast platforms. If you would be so kind and you enjoyed today's insights, please like, subscribe, rate, follow and review us on whatever app you are listening or watching on. Connect with us on social media for updates until next week. Kobe wishes you success in your land endeavors.
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