The Land Market: A New Way to Invest in Real Estate | The Unrealest

Kyle Stoner: Hello. If you're joining us, it's a great day. If you want to learn more about buying and selling land, this is the best time. Today, we have a guest who spent many years working with people to buy and sell land. All over the country. So if that's something you wanna learn about, this podcast is for you.

But first, our unreal stat of the day blew my mind. There are 1.9 billion acres of land in the United States, and 40% of those acres are completely vacant. So want to introduce you to our guest. His name is Jamon Jerger. He's an expert in finding rural and vacant land… parcels that are often underutilized or people think they're no longer needed…He's an expert in finding them and buying them. Jamon, welcome to the show. 

Jamon Yerger: Hey. Thanks, Kyle. Nice to see you. 

Kyle Stoner: Nice to you as well. So let's just jump into it. Let's talk about that number. 1.9 billion acres. 40% of it is vacant. When people usually go to buy or sell a home, they're not thinking about just land. Tell me about that market and why it excites you so much. 

Jamon Yerger: Well, there's lots of it! So that's great. And it's about 47% actually. That's a lot of land that's not being utilized. Within that stat, that also might include things like parking lots, warehouses…Amazon warehouses are quite large, but people don't live in them. Then within that stat is agricultural and desert lands, governmental use lands, and then residential and commercial as well. So it does expand the whole thing. So it's a huge number.

Why I'm into land specifically? There's lots of it. And I think the market is more stable in land than housing. I think that's become self-evident in the last two years. The housing market is crazy at the moment and the land has just been even. 

Kyle Stoner: Yeah I've seen that as well. Unless you're talking about places like Jackson Hole, Wyoming, where -

Jamon Yerger: - It's always been a million dollars! Haha.

Kyle Stoner: Yeah. It's like a million bucks an acre or something crazy. Just for the land. 

Okay alright, so let's talk about this. We often have a lot of clients that they're buying land because they want to build their dream homes. Or they want to build mobile home parks, which in the United States, from a zoning perspective,  could be a pain because people often don't want the mobile home park next to their million-dollar home.

So yeah, tell me more about that. What are you seeing in the market? Are most of your customers a consumer or are they investors trying to buy and build things for profit? 

Jamon Yerger: I go across the whole gambit. I have certain sections of my properties that are more tailored to just one consumer, just being one person with a dream, as you say.

[I also have] investors that are looking to maybe do a multi-residential property on it, like apartments. That all just comes down to the different types of zonings and the properties that I have. To answer your question about the trailer parks, we find that we’re having a lot more luck with that type of stuff in the west, in California, San Bernardino County, Kern County.. areas where that type of need is being more catered to because of growing property concerns. I just bought and sold a property that was right next to a mobile home area. It was another 2.5 acres just right next to it. that's like a perfect candidate for investment. And that's what this person did. 

So they just took it over. The water has been brought there, electrical, utilities, everything's there. To get the proper zoning, seeing that one already exists there makes it quite easy. It's growing the opportunity, and also tax breaks.

Kyle Stoner: In California, the cost of living and the cost of property is so insane. I would assume that people think of mobile homes as one of the original starter homes, or affordable homes. It's interesting to me to hear that in California, particularly where the problem of pricing is so acute, they've opened up a couple of opportunities for mobile home parks.

Jamon Yerger: Well, we're not talking like downtown San Bernardino or Los Angeles. We're going past the mountain range, right? Los Angeles West and San Bernardino North, going into the more desert areas. There's lots of land out there that a lot of people are not aware of. It’s the same thing with New Mexico as well. You’ve got Albuquerque, but everything outside Albuquerque is very open to different types of zoning opportunities and what you can do. A lot of the properties out in those areas will be mobile home-esque, whether it's a modular home, which could be on a concrete foundation versus a more modern mobile home, which is what you picture as the longer ones that might not need a concrete base. But they (local zoning codes) still ask it to be “permanent in nature.”  So you just can't wheel it off.

What's interesting in some areas, like California City in Kern County, they're opening up opportunities for mini-homes which is exciting for investment opportunities. 

Kyle Stoner: These are “tiny homes?”

Jamon Yerger: Tiny homes. Exactly. They're opening up three special economic zones for that and from there they can do mini homes. They have different requirements. They can be as small as 500 square feet. It's really interesting stuff and you just have to search out some different areas and what they're looking for to expand their city taxes and opportunities for the residents.

Kyle Stoner: That's awesome. So that reminds me: I have a couple of friends that are in this (tiny home) space. What they've been doing is going to areas like this and building out small parks but only putting them on Airbnb. So there's specifically an Airbnb park or space, and they cater to that market. Have you seen that?

Jamon Yerger: I have not seen it personally. I know of it. That would be a property that they own outright and they subdivide it, right? Or the plot is already big enough and they bought off different sections.

So then they control that area and they can do what they want with it. If it's in an area with an HOA, or, maybe within certain city limits, then they have different types of covenants and regulations on the Airbnb items. It all depends on what that area is.

But I would say that opportunity is like finding a nice five-acre plot, and subdividing it (if you can, if the local area allows you to subdivide) down into one acre each. And then throw tiny homes on it, so that you make a little cul-de-sac for yourself. And they can just kinda choose. It’s cabin-esque, right? 

Kyle Stoner: Yeah. The ones I've been seeing, it's like they're using these A-frame prefab cabins. They're putting them in a semicircle around either a small water feature, a manmade pond, or a campfire. It almost becomes it's like a mini commune. You can rent it out with your buddies. There are a lot of things you could do. It's fascinating to me.

Kyle Stoner: Let's talk about the biggest misconceptions. As we've talked about this, what I'm hearing from you, is that you’ve got to think about zoning, getting water out there, getting electricity out there… There's an infrastructure that has to go around this. Connecting with someone like you can help somebody to get over that hump. But let's talk about that a little bit. What are some of the basic things that someone has to think about when they're buying a piece of land?

Jamon Yerger: As you mentioned, people have a vision. When I'm selling a piece of land, I'm trying to cater to that vision. So every area has its own thing for it. When you're thinking about what you want, is it gonna be an off-grid cabin? Or is it gonna be a luxury custom home? Is it gonna be a place where I just go hunt and I don't need utilities at all? Am I going to run my ATV out there? Which is very popular in the western part of the United States and desert areas. The first thing you gotta think about, in addition to your vision, is being very clear about what your next step is.

What are you trying to do after that? What's the next part of your vision? If it's a luxury home, you don't want an outhouse. You have to figure out whether you want a septic or a well. Is it public connection to the sewer? Do you have a public connection to electricity? Where's the nearest electric pole? And can you get that service in? Is the internet important to you? If I'm a guy who's been working a nomadic lifestyle for the last 20 years, the internet is very important to me, so being up in the middle of the woods to work and not being able to get connected is terrible for me. Especially if there's no 5G. 

So that's the kind of thing you need to think about. If you're looking at the property and you're thinking, “Wow, I got 10 acres here. I really wanna cut it into four different pieces, 2.5 acres each.”

You still have to look into zoning and see what their minimum acreage is, because it might only be 5. So a lot of people will sometimes buy a 10-acre, cut it down to 2, sell it off, and keep the rest for themselves. Then they can say “This helped me pay for some of the things I'm going to do.”

So to recap, in addition to your vision, you really wanna know what's important to you. Is it public water versus needing to dig a well? You’re going to have to have some type of test before you can verify if you can have septic. And if you can’t, then that property's gonna be very hard for you to put a house on.

Kyle Stoner: So explain to me exactly: you're an expert, you're doing this every day. What is it that you do to help people figure out these challenges when they buy or sell land?

Jamon Yerger: When they're looking and they're approaching me for land, I usually have all this stuff already mapped out on my website, americaacres.com. I don't put everything on there, like who they connect with and how much it's going to cost because that's a legal liability.

Then people might be like, “It said $1,500, I'm here to connect to the water, but it's actually this (amount).” With those local connections, you need to hire contractors and stuff like that. First, we put all the information on there. When someone approaches me and they say, “We're really interested in this property, I really need to find out more about the septic system or how much it costs to connect to the public water.”

Again, this is vacant property meaning that there is a sewer pipe, and there's water on the street maybe for this property, but you can't just put your property on it. They are like, “I have water!” You have to subcontract a contractor, get out there, and dig that hole, so then the city, county, or local township can come out and then connect it for you.

When we get that far, I say, “Hey, I can go and give you some recommendations of the area that I know.” I always recommend people get three or four more quotes and not just use me. I have no skin in the game because I’m not a contractor/ I always suggest doing your homework and having a conversation. Do you get along with them well? Stuff like that. So that's usually how we help them. After that, we get 'em through title and we go through that whole process. And usually after that they're happy campers afterward. 

Kyle Stoner: And how much do you typically charge for that?

Jamon Yerger: I charge nothing. It's just a part of the work. 

Kyle Stoner: So you're sitting there as the land owner, typically? 

Jamon Yerger: Oh, I own all my land. I'm an investor. 

Kyle Stoner: Okay so you're an investor and through your website, you're selling this land out to who? Whether it's a consumer that wants to build their dream home or it's someone that is an investor trying to do a mobile home park.

Jamon Yerger: Absolutely. Parks or commercial or home builders…anyone. My position is “I have a vision of what another person's vision should be.” That doesn't mean I'm putting words in their mouth, but when I look at something and go, “I see this as an ATV getaway.”

They may never put a house on it, and all they're gonna do is gonna go out to their property. They're gonna camp, they're gonna throw up some tents, and they're gonna go ATVing around. That's it. 

So I calculate how much I can buy it for and what it will cost for me to sell it. With a property like that, I would only sell it for under 10 grand because they're never gonna put a house on it. It's an add-on to their life, so it has to be low enough for them to move in. I do all the due diligence before I buy properties they have plea deeds.

They've gone through the title. I get all the spec specifications, the zoning, and whether is septic available or not. Where's the closest electric pole? The corners. I even do videos of all the properties myself. So before they even buy, they can just get on a video and look at it and with a drone shot and everything.

So that just all is done as a part of my company culture. That just happens. So when it gets to them and they see a property for $10,000, it's just $10,000. Or in, in addition, if they're gonna go through the title, then there are title fees and stuff, everything else like that, 

Kyle Stoner: Got it. No, that's helpful. 

Jamon Yerger: We also offer finance as well.

Kyle Stoner: Yep. I wanna buy a piece of land that you have whether I'm a consumer or I'm doing it for commercial reasons, you offer financing. Yes. And how does that financing compare to, right now we're seeing all this crazy news around very high interest rates?

I assume that we have some of the same issues lo getting a loan for land. But how does that compare with buying a simple home? How is it different? How is it the same? 

Jamon Yerger: Let's see. Usually buying a home, you're gonna go through some type of bank, right? My properties for the most part are about under $40,000.

I don't have a lot that, that is above, above that. I have none that are above that at the moment. I'm doing something called owner carry. So I self-finance the property and there are two ways to do it. One is, I self-carry, meaning that I carry the loan itself. So I'm putting, you're gonna gimme, it's a 10,000 property, you give me $2,000, we're gonna finance.

$8,000 and I usually have a maximum of 48 months. And but Okay. And the interest rate, which can vary. I always tell people, if you can get a loan from the bank, you're gonna do better off than working with me over four years. Cause I'm self-caring. But I do offer also at the same time if they wanna pay it off in 12 months, I do it as a same as.

Kyle Stoner: Okay, so there's no prepayment penalty. 

Jamon Yerger: No, none whatsoever. So I usually do, I'll do those types of things. So some customers go, “Look, I just don't wanna sell 10 grand.” And I go, “Hey, no problem. We'll do 12 months.” And then at the end, you'll get your title insurance and everything.

And so the last payment will be put in escrow and we can put it through the title. Because a lot of the properties that I buy usually are people looking to do something with it. Title insurance is very important for that, where if you're just looking into desert squares, a lot of people go, “I don't need the title, I'm just gonna be driving it over.”

That's just the additional fee at the end to make sure that, they pay for the escrow and the title insurance. We're all done. So that would only be the additional fee on the 12-month cash financing that we offer. There are other plans. If they go, “I need something that needs to be a little bit longer, 24 months, 36, 48.”

I go, “Great.” And I can plot them out. All the different options. It's a conversation. We don't really have dead-set numbers. And if you get more money, we always encourage you to pay as much as you can. That just happened with a client of mine just about two days ago. She just went and paid off her one property. She's financing three properties with me.

She said “Look, I wanna get a trailer on this one. I just wanna pay it all off.” So we just went through the escrow and title, and she's got a title for that place and she just decided to pay it. 

Kyle Stoner: Amazing. This is so different from what we usually deal with at Unreal Estate. 90% of the time it's people buying and selling a home, whether it's a big home or a small home, they're getting a traditional 30-year mortgage. What you're talking about is very different. What is the biggest misconception about buying and selling land? 

Jamon Yerger: I think the biggest misconception about buying land and selling it is the expectation about what it's worth and what you could do with it.

For one person, a property is useless and for another person, it is very useful. So it's really in the eye of the beholder and how you encapsulate it. I use your website to sell all my properties, at least where you guys cover.

And the biggest thing is taking great pictures and creating that vision. Nine times out of 10, the agents that work for large companies simply put up a Google satellite image or they might be driving by at 40 miles an hour, going “click click!”

Kyle Stoner: They don't wanna give it the care because it’s just land. They don’t take any time on this.

Jamon Yerger: Also because their motivation is 3% on one side. Or they can capture the 6% on both sides if they get both.

So their motivation on a $40,000 property is just ugh. So when you put that care into it, the motivation changes for a lot of people. I think that's the biggest misconception: a lot of people get onto our website and they look at all the land and you just go, “Wow. I didn’t know that I would want it.”

Kyle Stoner: Yeah, that’s a really good point. First of all, not everybody has the type of imagination where they can look at a square on a map and they can start to imagine all of these different things.

So unless you have that in mind, or if somebody can set it up the right way, it's difficult to get there. In all sorts of online real estate, what we found is that pictures matter a lot more than people think they do. And video. We've been seeing a lot of videos recently using 3D. There’s so much tech out here now for 3D tours and things like that. And we always try to encourage people to spend the extra because we offer the service too. Spend the extra $250 or $300 and get some really good photos done. Trust me. It more than pays for itself. Because you know that everybody's looking at all the stuff on their phone or their screen. It helps you to imagine it better when it's laid out for you in a beautiful way. 

I have any more questions for you. You talked about how you've used us (Unreal Estate). Maybe we can get into that more. It sounds like a big part since you've used this for so many of your sales, a big part of what you're doing is selling without a traditional real estate.

We're a brokerage, but we don't charge those fees. Can you tell me more about that? Selling land using an automated system like this where you save on the commissions. 

Jamon Yerger: It's not only the commissions, but it's the control that your company gives me, where my team can upload the correct type of descriptions they can get in the back end themselves. And also changing and updating the product in real time is a big thing for me. And again, yes, a flat fee is great. You put the money down, you pay for the services that you need, and you're good to go.

That gives you a lot of control. The motivation of getting someone to sell it is really in your hands. You're not just putting it in some real estate person's hands and saying “I did my part.” The point is that a real estate agent has some motivation to go the extra mile for that 3%.

This is a great thing for me because I have the most control over my product, I have a very transparent fee, and if I need extra help, you're there!

Kyle Stoner: Awesome. To recap, it sounds like buying land has some real sort of peculiarities that are different from buying a traditional home.

Number one, you've gotta think through all of the sorts of stuff we take for granted. The water, the sewer, or the electricity and connecting with someone like you who's selling this and can help you through that process can make a difference. The other thing I'm hearing is, it's an interesting space where because the property requires some imagination and also it's not priced so high, real estate agents aren't necessarily incentivized the same way to spend the amount of time needed to sell that property. It sounds like you're a particularly great fit for a flat fee and in selling a home without that sort of traditional service. So those are the takeaways. 

Jamon Yerger: Yeah.

Kyle Stoner: First of all, thank you for visiting with us today. 

Jamon Yerger: My pleasure. 

Kyle Stoner: I've learned a lot and I hope that our listeners did as well.

Jamon Yerger: You got it. It was nice talking to you.