PODCAST
Vacant Land Profits With Joe McCall
Episode 532: Vacant Land Profits With Joe McCall
Are you in need of simple ways to make money in real estate? In this episode, Joe McCall discusses lease options and vacant land profits. Joe has been in the real estate industry mostly by selling and leasing houses. However, he shifted his interest in lands because the market is hot right now. He also shares how he manages and does business with vacant lands. Simply by sending out handwritten postcards and letters, the response rate for vacant lands is much better than houses. So listen and be amazed to earn profits with vacant lands in the simplest and fastest way possible!
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I’m here with Joe McCall, and we are going to be talking about vacant land profits and all that stuff you have been walking by all this time. We are going to show you how to make some money off of it and add it to your tool belt, so you can get a few more yeses and lesser nos. Before we start, I would like to thank LiveComm.com. They are a mass texting lead generation platform. I’m going to have some case studies over there at the YouTube LiveComm channel. I will show you how I’m using this texting platform to generate leads and keep up with my CRM. Thank you very much.
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Joe, how are you doing?
Mitch, I’m doing well. I’m glad to see you are still doing LiveComm.com. It’s still working for you.
Like any software, it keeps improving. It takes time, and then you get suggestions from people, you add features and everything. It keeps getting more and more robust. I had a good look at it here on my Facebook posts. I like to make recordings when people call for the free recording about whatever topic. You capture their cell phone number and it automatically notifies your salesperson, and then they have a lead to contact that person.
I did it one day on Facebook talking about my new mentoring students that come onboard and I had their pictures. I said, “If you are remotely interested in talking about coaching, then call this phone number for a free recorded message.” I told them that it was a no-pressure gig, and I wasn’t going to sell them anything there. I didn’t even want to sell anything there. I wanted to see if we were fit and if I thought I could help them. I would say that and then they had time to think.
I also told them, “When you hang up the phone, you are going to be getting a link, listen to one of my Tuesday night calls about an hour and a half, see the value, feel the flow, and everything. You will also be given an application if you want to have a consulting call with me. You fill it out.” In 11 days, I had 40 leads and 11 people filled out the application. I’m talking to people and so far it’s made about $30,000 in sales. I’m throwing it out there because if you say mass texting, everyone is like, “I can text a lot of people,” but you need to understand the techniques to use them and that’s what we do over there. We get your brain going.
Are you using LiveComm.com for deals as well?
Yes. We can preschedule text to go out. You can even do a mail merge. Here’s a lesson on text messaging, technique or strategy. If you upload a list of names in the LiveComm spreadsheet where it has a first name, last name, and then a variable like property address, say I want to send out 100 raw contracts to 100 people that are top of my list that I wish I could buy their property.
I will give it a few days to land, and then I will send out a mass text to all of them and it will use their first name. It will say, “Joe, are you interested at all in selling your property at 1234 Main Street,” in that variable column. “I sent you a contract, you probably received it. If you haven’t received it, you will get it tomorrow.” It’s tied in with a physical event so it doesn’t sound like a mass email. That’s one technique.
You are doing some vacant land yourself. We are going to be talking about that. I’m curious to learn how you do it. I will tell you how I do it.
Let’s start with you since you are the guest but that’s one reason I wanted to pick this topic because I’m into it, too. I’m sure there are many different variables. I know you like to do across the country in different markets. A lot of people doing that are making some good money. How are you centering your land business? Where do we start on that topic?
I have done houses for a long time and got started in doing lease options. I still love lease options but it’s a crazy hot market and there’s so much competition for houses. I have had an interest in land because from my podcast, I have been interviewing people who have been doing land. I like how it can be automated and you can have the computer do most of the work for you. I like the fact that you don’t have to talk to sellers until after they get your offer. You are only talking to sellers that have seen your lowball offer and are willing to talk about it.
My teenage sons were interested in real estate. They were at the time, 13 and 16 years old. I thought, “I don’t know if they have the maturity level yet to talk to a seller with a house,” because there’s so much that goes on to that. Also, I didn’t have the time to train them but I bought a few lands investing courses and said, “I will pay you boys to go through the course.” They went through the courses, took notes and we reviewed what they learned.
I went to a bootcamp and my good friend, Jack Bosch, did a great bootcamp. I started talking to some of his students that were doing deals and there were a lot of them there. With land, a lot of people either send a blind offer or a neutral letter. The blind offer says, “Jim Smith, I will buy your 2.5-acre lot in Jefferson County for $2,500. Give me a call if you are interested.” The neutral letter will say, “Jim Smith, if you want to sell your 2.5-acre lot in Jefferson County, please call this number and let us know.” You are going to get more calls with the neutral letter.
“If you want to speak to a live person or Mitch, call here.” A lot of people will call a recorded message because it’s non-confrontational but little do they know that you are capturing their phone number and they are going to get confronted anyways but it’s a good little secondary thing to add to what you are doing.
Let’s say a guy goes out to a bowling alley Friday night. He’s had a six-pack of beer, coming home half-lit, and sits down at the kitchen table to smoke his last cigarette for the night. There’s all this mail on the table. He’s not going to call you at 11:30 PM but he might call that recorded message where you can explain you are a pro but it doesn’t matter what you say because the minute they start hearing the recording, you have captured their phone number.
In LiveComm, you can click on a button for that phone number, get a text saying, “Someone from this number is listening to your recording for,” and whatever you name that phone number, raw land letter, yellow letter. You will know what they are calling and listening to. You give them a few minutes to get through it, and then call them immediately, at 11:30 PM on Friday or wait until the morning before you even see or check it.
I do something similar but in my letter or postcard because I do both, it says, “Call this 24-hour recorded voicemail.” It goes right to voicemail. My voicemail is super short. It’s like, “This is Joe with Dream Big Land. Thanks for calling. You’ve got one of our postcards. There’s a reference number on that letter. If you can leave your reference number, we will send you an offer in the next day or two. Thanks.”
They leave a voicemail and say, “This is Jim. My reference number is.” Most of the vacant lots that we are marketing for don’t have a street address. It’s just a street or maybe not even a street. We need an APN number. Sometimes the APN numbers are long. For every record, I create a reference number. Let’s say, it’s Jackson County. It will be JACK-1750 or something like that.
I use FreedomSoft, which is similar to what you do in LiveComm. They leave a voicemail and automatically add them to my campaign. I know when they call that number, it belongs to that letter campaign or county. The system will automatically send them a text back, “Thanks for calling. What’s the reference number that was on that letter?” Half the time they will text back the reference number and the other half of the time, they will leave a voicemail.
It comes into my CRM and we send them an offer. This is what I was at Jack’s Bootcamp and what this guy does. He sends out the letters. They call the VA. The virtual assistant sends the offer, and then sets it up where three days later, they send a voicemail message through Slybroadcast or something like that that says, “This is Joe. We mailed you an offer in the mail. You should get it in the next day or two. Let me know if you have any questions. Thanks.” That’s it.
It’s a perfect example of how to take physical action and then make a generic ringless voice drop seem not generic.
The system then sends them a text. It says, “Jim, we sent you an offer in the mail. You should get it. Let me know if you have any questions.” The other thing that we do is it’s a cover letter with the contract. When we make an offer, it’s $0.25 on a dollar.
Are you getting that from the tax records or using the tax assessment, or are you doing some comps?
I’m using a service called PRYCD and these guys were amazing. I had them on my podcast. They will get data from DataTree, so they are a reseller of DataTree data. Their software goes out all the time every day and scrapes Zillow, Realtor.com, LandsofAmerica.com, and all the different sites that have vacant land. They will sell that active data and get an average price per acre per county. It also gets even more granular. They will look at it by city or what they call geolocation.
When I pull a list for Jackson County, North Carolina, it will give me all of the records that meet my criteria. My criteria are something like 1 to 10 acres. They have owned it for over ten years and they don’t live in that county. The county that the property is in is different than the county where the tax bill is sent. PRYCD will tell me, “For this property, they are selling for $10,000. You should offer $2,500.” That’s all based on the parameters that I set up but PRYCD does that for me. It’s not 100% foolproof but it will get you 90% of the way there.
That’s why you need to have a couple of days of due diligence and some time in your contract. If they say yes, you can go out there and adjust your price if you are out in the left-field somewhere.
The contract that I sent to them gives me three months to close. At that point, I can look deeper into the property and see, “There’s no access down the side of a mountain. It’s in an HOA that’s restrictive.” I will then go back to them and say, “We did some due diligence and research. We either need to cancel this contract or renegotiate a lower price.” It’s what I will try to do there but the point is though, the lead comes in, and then we follow up with them. We do a massive amount of follow-up. We send them a voicemail and text after we send them the offer.
The way FreedomSoft does it when I create the offer is it gives me a link or URL for that actual contract. When I text them, I will say, “I mailed you the contract. If you want to look at it, click this link and you can view the contract.” It will text them the actual link. They can click it and view the two-page PDF. The last five deals I did, that’s what they did. They didn’t even wait to get it in the physical mail.
They saw the link and said, “Let’s do it.” We’ve got on the phone and negotiated or they had questions, and then I will do a digital signature. I said, “If you are ready to sign it, we can do it with an electronic signature.” FreedomSoft allows me to do that and I will send it to them. They sign it electronically, and then we are good to go. That’s when we start our due diligence.
When you send your contract out or that contract that they click on the link and they see immediately, you haven’t signed that contract yet, has you? They are signing it, they give it to you, and then if you want it, you sign it?
I don’t sign it until they sign it because that’s when the clock starts after both signatures are there. I’m always the last one to sign it, which protects you as the investor. What we are doing is we are trying to sell all of our lands on owner financing, which you are the master of and I’m looking forward to asking you some questions about that to see how you do that.
In the past, we have always flipped them for cash, which is nice but that would be sitting on some nice monthly cashflow if I would have sold them on terms. In our experience, when we are selling a vacant lot for cash only, for every 1 call that we get from a cash buyer, we will get 3 to 5 calls from somebody saying, “Would you do owner financing?” We would have sold our properties a lot faster if we offered owner financing for the vacant land.
Don’t forget that thought but you covered a lot of territories there. I love what you did, paying your kids to do this course. One of the times when we have an acquisition man or someone who comes in who says they would like to work for us or mentor under us, we are looking at them for long-term. We are not doing this for in and out. We think this person might be a player who will be on our team for a long time. We will open up a different avenue.
We will give them the courses for a strategy, tell them to study, and test them out. Are they going to do the research or are they in it? “We will have a meeting in five days and you tell us the highlights of this whole thing and how it’s supposed to work because I haven’t ever seen the course. I’m trying to open up a different highway where money trucks can make some stops along the way and collect some money. I want to know if you want to open up this highway.”
Lease options are great but it's a crazy hot market right now. Share on XIt will make them prove themselves and make them do the time. If they start to prove themselves, then you are opening up a venue for yourself and your course is going to have to pay the partner. We call them partner but pay the acquisition manager or whatever you want to call them to do it but it doesn’t get in the way of my other guys who already have a system.
They are not competing for the same leads. We are not having to mess up the guys and have them talk to each other about it. Open up your lane. “If you want to come up with us, let’s figure out a lane for you to open. We will open up and go that way. If you can handle it, then we will keep the lane open. If you can’t, we will shut it down and wait for someone else to come by.” We have done that many times. A lot of them don’t work out because you learned in the proving ground, they didn’t study a thing. “I’m glad I didn’t waste my time with you.”
Anybody that I hire, I always test them like that. I give them something. I won’t tell them how to do it. I want them to figure out how to do it. I will tell them what I want. They see the end result. One time with my assistant, I had already hired her. She’s already working for me but I bought a course on how to bid on HUD Home Store properties. It’s not HUDHomeStore.com anymore but something else. I said, “I want you to learn how to bid on foreclosure properties on the HUD website.” I bought a course by John Cochran at the time. I said, “I want you to learn how to do it.”
She started doing it. She liked and enjoyed it. We had some cash buyers, and then she would do this for my cash buyer. I found a buyer who had money. She would go bid on HUD Home Store Property. We are able to wholesale these deals. It’s all about asking who, not how. You are not trying to figure out all the details and the steps by steps on how to do it yourself. You are saying, “Who can I get to do this for me so we can all make some money together?”
They asked me about closing, I haven’t been to closing in years so I don’t know. I can find out, the old Henry Ford thing. I don’t know the answer but give me the phone, I will figure it out here in a minute.
I’m in the middle of that with my assistant, Whitney. She’s amazing. She has been working with me for years. I have been having her take on more responsibility with this land stuff. She’s asking me questions that I don’t know the answer to but I know somebody who does. I’m saying, “Call this company or that guy. Hire these VAs.” The details when you are managing a business, you can’t be deep into that stuff. You’ve got to know who to call and hire to do that for you. Richard Branson owns 50 businesses. Does he know how to go into QuickBooks and do a new entry for something in 1 of his 20 businesses? No. He hires the best people and they do it for him. Does he know how to fly a plane? Maybe he does but he doesn’t know how to fly those Virgin Airplanes.
I wanted to mention this because of the cycle. We do a lot of follow-ups. When we send them an offer, we follow up by text, email, and voicemail. We set a task to send them another offer in 30 days and do the same thing over again. We mail them another offer, text them the offer, leave them a voicemail or email them, and then we do it all over again.
Every 30 days, they are getting an offer from us, a text, email or voicemail and that’s where the real power in all of this is. It’s the same with houses but especially with vacant land. It’s super important to follow up. They haven’t been to that property in ten years. They are not in a hurry to sell it. They get your offer, “I will look at it later.” They forget about it so you’ve got to have systems in place.
It’s all in the follow-up. You rarely buy a house in the first couple of touches. It’s around touch 8, 9 or 10. That’s my experience. When I talk to people, what they tell me is the number eighth touch comes up all the time. We have bought properties that we have been in contact with. The oldest one was four and a half years, which finally caved in.
We have notes on this guy and this guy kicked us off the property when someone knocked on the door and ask him if he wanted to sell that house across town. He was pissed. He’s not a big fan of ours for interrupting his day and asking him the question, “Would you like to sell the house?” When we ask him, “Why did you choose us?” The answer was, “You were the only person that ever took the time to send a real contract.” That comes up all the time.
“You must want my house because you keep on bugging me, calling and mailing me.” “We do want your house.”
Sometimes it takes some time for them to either hit the position where it’s ready to sell or maybe they are waiting on to die, or they haven’t made up their mind if they are going to move there or whatever the deal is. There’s all that thing going through their head. They may learn that their property is not worth the $1 million that they think it is. They keep trying to sell it for $1 million and it doesn’t sell. Finally, they go, “These guys aren’t that bad. I can get it done.”
Your system is well thought out. You can get it all automated if you get all the pieces but it helps to take a course with someone like yourself or Jack Bosch, who already figured out all the pieces that work together. You can go start to get random people, and then everything has been done and tied together right. It is a huge shortcut to go talk to someone who’s already got, let’s call it a CRM for lack of a better word because it’s more than a CRM. It’s making offers from the beginning.
There are a lot of tools out there. None of them is 100% perfect and do everything exactly you wanted to do.
If you wait for perfection, you are going to be sitting around a long time, pulling the trigger, getting some things moving, and then worrying about perfecting it later because it never gets perfected. It will always have a little leak somewhere but it’s not a question of, “How much is leaking out?” The question is, “How much am I keeping and getting?” Don’t worry about the leak. Fix it as well as you can.
You’ve got to find somebody that’s already doing what you want to do. This is my secret in any success that I have had. I’m not that smart to figure it all out. I find somebody else who’s doing it and I copy what they are doing. That’s why I love your 1000 Houses books. You are telling everybody what it is you are doing. It’s not that complicated. It’s not rocket science. There are no secrets in business.
It worked but the hardest part is figuring it out.
Do what Mitch does. If you want to do land, find somebody who’s doing land and do what they do. Copy and rip it off. None of this is copyright.
Pay them to be the consultant and save all the time and mistakes. You are either going to pay the street or the consultant. There’s no way around education. Education is not free. If think you are going to get it free on the internet, you can get a certain amount of free but at the end of the day, when you start drilling down on how to become good at it, you are going to pay the street or the guy who already paid the street.
You are going to pay one way or the other. You are paying for a shortcut. If you are in LA and you want to get to New York, you could take your car and drive across the country. You are going to get there but it’s going to take you a long time or you can buy an airplane ticket and fly from LA to New York and be there in about 4 or 5 hours. At the end of the day, you are going to spend more money driving because you are going to pay for all of those hotels, the mileage on your car, the gasoline, the food that you are going to spend and it’s going to take you a whole 4 or 5 days to get there. You are going to be exhausted.
I liked this land stuff. I have found it so much easier. There’s less competition. We are sending out handwritten postcards and letters. We are getting anywhere from 2% to 7% response rate, 2% to 3% response rate on the postcards, 5% to 7% response rate on the letters. Some of you may think that’s not a lot but when we are looking at houses, we are getting 0.5% to 1% of a good response rate on our postcards and letters for houses. We are getting double and triple that for vacant land.
There are more than most people could buy. The average guy starting up, 2% to 7% will outrun their funding source pretty quick if they are young in the business.
I’m going to share some real numbers from my last two campaigns. We are targeting a market in Northern, California. We sent 1,642 postcards. We’ve got 37 leads, which is a 2.3% response rate. We’ve got four properties under contract. If I go to a calculator, we’ve got 37 divided by 4. We are averaging 1 contract for every 9 leads that came in.
Let’s go a little further on the math. Throw an average profit on top of a deal.
These are in California, so I’m buying them at $0.35 on a dollar instead of $0.25. It’s $15,000, $20,000 profit average.
Times 4, it’s $80,000 if you used $20,000.
We are selling this on terms.
It doesn’t matter. It’s money in the bank that you are earning interest on and they are sending you a check for some principal and interests. You bank it, created an $80,000 out of thin frigging air, and someone is making payments to you on it. If they ever quit, you get to start over again. If they ever put any improvements on it like a barn, house, manufactured home or septic with electric and all that that wasn’t there before, your note liquidates at the drop of a hat after they put some improvements. That’s one of the things I’m always asking the people that want to buy my lots.
I usually have multiple buyers that would like to have it. One, I asked, “How much do you have down?” The second question is, “What are you going to do when you get it?” One guy says, “When I retire in ten years, we are going to build a house on this.” Another guy says, “I’ve already got my plans and the lumber in a warehouse. I’m building a house the minute I’m an owner.” I’m like, “You are the winner.”
With every piece of concrete he puts out there and every board that he erects with his money, my note gets stronger. By the time they finish a house or a barn, I can liquidate this note for par no discount because it’s worth it. The collaterals were so much more than when we started. His balance is irrelevant compared to the value of the improvements that they put on the property.
Are you targeting mainly land in Texas or are you going outside of the state? What are you doing?
I’m only targeting my county and contiguous counties but I’ve got three acquisition managers and I don’t micromanage them much at all. We give them ideas, get some mailings, go and help them with the basic stuff. Do you teach this system that you talked about?
I’m in the middle of creating a course about it.
1000Houses.com/VacantLand is what the link will be. My guys like to drive in the countryside, and then they see a gate that has a 2-foot worth of grass in front of it, which means no one is going in and out of this gate. They get on LandGlide. They zoom out like a Google Earth situation. It shows the boundaries. It says the number of acres, the owner of the record in the middle, and how many acres it is. They pin it, and then keep driving down the road. When they get home, they start researching these pins a little more to find out, “There’s a mobile home on this one or cattle pens on it.”
If you want to do land, find somebody who's doing land and just do what they do. Share on XWe then start sending out offers that way. They love LandGlide. We find an area or a mobile home subdivision that’s hot. We like mobile home subdivisions that sell 1/2 acre, 3/4 acre or 1 acre lots at least because those dealership lots where they sell mobile homes will sell your lot for you. All you have to do is get it over to each one of those managers and say, “I’m offering to owner finance that 1/2 acre over here for so much down.” Sometimes if the person is strong enough, they will even finance the improvements like the septic tank and the water well with the home if that person that they are selling is at $100,000 double-wide to. They can’t sell that double-wide until it has a place to go.
A lot of people are looking at homes before they have a place to go. That’s one way to find a great salesperson. Our sales guys have always been mobile home guys. Get them off that lot six days a week and they are moving around and making more money. Those mobile home lot sales guys have to take 20 apps to find 1 guy that will qualify. They are going to sell that house 20 times to find the 1 that will qualify. They love working for us because we say, whether they are qualified or not in a couple of days.
You should consider pulling a list of all the vacant landowners in your county and the counties surrounding you. Depending on what your search criteria are, you will be blown away by the response rate on those letters.
I don’t know this because I don’t do it. I don’t micromanage my guys. We bought 25 houses in January 2022. Whatever they are doing, I don’t want to get in and mess that up. I don’t care what they are doing as long as they are buying a house. We are buying 14 or 15 properties, which some of it is vacant land so far in February 2022. It would be neat to bring in an all-in specialist guy and open up that avenue because it’s a different animal. Someone who wants to take the bulls by the horn could be a great associate.
I’m looking at PropStream. In the county next to us where that’s growing rapidly with lots of new subdivisions and home construction going on, there are 9,800 vacant lots. If I narrow that down a little bit, I will probably get out of that 5,000 vacant lots. I’m going to go to ownership info. They have owned the vacant lot for a minimum of ten years. That brings it down to 7,200. I’m not even going to limit it to a certain number of acres. I could if I wanted to as well. PRYCD will let you say exclude any vacant lot with an HOA but sometimes HOA isn’t necessarily bad. People want the HOA because it means that there’s a community that will take care of the streets.
Some of them have HOAs but they are defunct but they will say they have an HOA.
I wouldn’t go through the hassle of excluding that but there is a lot of vacant lands. I had somebody email me from Facebook messenger saying, “I hear you do vacant land. We are looking for vacant land in this one county.” I respond to them. I said, “I can find lots of good vacant land but what are you willing to pay for it?” I told her in this message, “Be very specific. I want to know what you would pay per acre based on what you are looking for.”
It’s a small enough county. She should be able to give me an answer. Once I get her number, what they are buying or looking for, I can go and easily with 1 or 2 simple direct mail campaigns find some deals, wholesale it to her, and make easily $10,000, $20,000 on each one. There’s so much less competition for vacant land than is for houses.
If you chose to owner finance it, you can change that number to $30,000 to 35,000 instead of $20,000 to stretch the gears out. You can add an interest rate on it and pick up a down payment of $4,000, $5,000 or $6,000. You won’t leave with anything. That’s one thing about wholesalers. I can make a lot of wholesalers sick to their stomach because their wholesale fee, let’s say, is around $10,000.
Some of you are wholesaling and making $20,000, $30,000 but dealing in much more expensive properties. I have talked to a lot of wholesalers and it’s not unusual to hear numbers like $8,000 or $10,000 as a wholesale fee for these newer wholesalers. I say, “That’s about what my down payment is. They still owe me $500 a month positive cashflow for 360 months on these little houses.”
If you do the math, $500 times 360, that’s $180,000. I’m still owed interest that the wholesaler is not getting. I picked up $10,000. He picked up $10,000. He has done but I’m still owed $180,000. There’s a reason why you can say, I’m a multi because every time I sell a house, they owe me another $180,000 to $250,000 out in the future.
It keeps racking up. The guys should be able to live off with the down payments. If you are doing 1 or 2 houses a month and you are getting, $8,000 to $15,000 down a house, how many down payments do you need a month to live? You shouldn’t even have to touch your cashflow. You can roll that back into your business.
When you are buying land from a motivated seller, are you paying cash for that? Do you ever owner finance from this seller?
No. What I tell those wholesalers is, “The difference between your $10,000 and my $10,000 and being owed $180,000 out in the future is private money that’s wrappable. If you don’t know how to raise it, then it’s costing you almost on average $200,000 a transaction.” If they pay off early, you are not going to see it but if they don’t, you will see lump sums coming in. You can always sell your property for $10,000 or $15,000 more depending on the price range but you can always sell it for more than what you are going to get for cash or a new loan. I can sell over the appraisals.
In the recession, there were 30 comps in the neighborhoods showing that there had been 70% cash buyers and these houses were worth $27,000 in 2010. The rent said that I could sell or finance them for $59,000. I was selling 100% over the comps because I was offering to finance. The people that didn’t have $27,000 were renting right across the street for $1,000 a month. They chose to give me a down payment and have a payment for $1,000 a month instead of rent payment.
You are using private money to acquire these vacant lots.
Yes, 100%. I have no money in them at all. When I do collect the down payment, that’s my money. I have $26 million in private money. I teach how to raise private money. I put out a book called The Art of Private Lending. I give this to people that have money. I show them how to loan their money and they can make 12%, 14%, 16%, 18% in the State of Texas so that 18% is over that private money.
You can make up to 18%. I go and show them how to do it but that becomes a job if you are going to make 16%, 18% and loan it out yourself. Halfway in the book, it says, “You can start that business, roll up your sleeves, go to work and get your money out at super-high rates or you can keep playing golf and loan it to me at 8%. I will do all this stuff that you need to do since I have been doing it for many years. You can keep playing golf.”
I’m looking for that book on Amazon. I don’t see it. How can we get that book?
It’s at 1000Houses.com. I hold it pretty close to my best. If you go to my site, you can buy it but I’m not putting it out to the world.
That’s how I do my books as well. I don’t put them on Amazon.
Here’s another thing. You find that 10 acres. “We are looking for 10 acres in the corner of a county road, a paved road or lookout at least in a corner.” If you are in the right county and outside the ETJ, which is the Extraterritorial Jurisdiction of a big city or incorporation like San Antonio, we look out in the county where there’s very little regulation if anything at all. Out in the county, we have learned the counties and the areas contiguous to our county that are very easy to deal with. We can divide up those 10 acres by legal description. We don’t have to replot it at the courthouse.
We have to send a surveyor out and say, “This is the dimensions. We want to cut it up into 10 pieces out of this 10 acres.” We want 10 acres or however many acres that they can access their land from the road. That’s why it’s so important to be in the corner so that it helps you access all the parcels that you are going to divide it up into. You don’t have to have any flag lots.
You’ve got a lot on the road and come right in off the road but it’s so deep that you don’t want to sell that big a piece so you make a flag lot, which is a 20-foot easement that goes in, and then it opens up to the acre behind them. They’ve got the lot, and then you’ve got a flag lot that opens up behind the hind that lot that’s on the road. They still get access from the road but they’ve got to go down a long driveway, and then they turn left or right into their acre or park.
We are looking for that and for the counties that are easy to deal with. All you are doing is selling your parcels by the master plot, the 10 acres, and then the piece known as metes and bounds. Replotting could cost $15,000 and plot by metes and bounds could cost $1,500. You take 10 acres and bought it at a 10-acre price, and then sell that at the 1-acre price. You can almost buy that 10 acres at the market and win pretty well. You buy any discount under the market and you are doubling your money.
Here’s another thing. We took 100 acres and made 1/2-acre mobile home lots. We made 120 half-acre mobile home lots because we had to put a road down the middle, which is where all the costs come in. The road was the cost. It goes down as a cul-de-sac. You can go all down with a big cul-de-sac and turnaround. Everyone can get to their lots off this road.
What happens is we had to have a big boy come in, park it and loan us the money for the whole 100 acres, $650,000, let’s say. As soon as we’ve got it busted up into little pieces, 1/2-acre lots, I could go back to my private lenders and go, “Loan me $35,000. How many of these do you want to loan me? I will give you $35,000 to have a first lien on each one of these lots. I’m going to be selling them for $69,000.” I can cash my big boy out by bringing in all my little investors who don’t have that much money.
One guy said, “I want three of them because I’ve got $130,000.” This other person said, “I can only do one because I’ve only got $40,000 but I will do that lot.” We get our big boy out and keep both our private lenders’ money busy but most of the private lenders have smaller increments, and that’s one way to do it. You get a guy and say, “Give me a year with your money and I will buy the whole thing.” It takes a different guy to loan you $650,000. Let’s face it. That’s a whole different and very sophisticated private money guy, especially when it’s raw and hasn’t anything been proven but we have those guys.
We busted up. You take $650,000 and divide it by 120 lots, how much do you need a per lot to get this guy his money back? We go get 120 private lenders their money out, which is never one per lot. Some people will take 3 or 5 but that’s one way to do it. We did it on a 180-acre piece that we busted into 18, 10-acre parcels. We called the water well drilling company. It’s $16,000 to drill a water well but because we were 18 in a row, move the truck over 100 yards and drill another one, move it again and drill another one. We’ve got it for $12,000.
For an extra $12,000, we’ve got the water there and then the electricity that comes to each. We put a pole on each one and all of a sudden, we can’t keep them. Some of them are sold before we even put the signs up because people saw us. When we put the signs out, we sold them in less than 40 days. Here’s the other thing. Forty percent of them will go get their loan because our interest rate on our owner finance is 10% and it matters to people who can qualify for a new loan but for the people that can’t qualify for a new loan, the 10% is irrelevant. They want to know they can make the payment and what’s the payment.
We want to know if they can make the payment. We are both on the same page there. What happens is the 40% or 50% that come with a new loan pays our debt off, and then we’ve got the other 10-acre lots free and clear, and owner financing with no debt. You’ve always got to watch that debt, especially if you are signing with the bank. Banks don’t want to go out on raw land because they don’t like it. You’ve got to find the private lender who appreciates the 10% you are offering him and also, appreciates that you’ve got a plan to get him out shortly through other private lenders, smaller ones. That’s a technique I thought was ingenious.
When you are looking for a buyer for your vacant land, how are you qualifying them? Are you qualifying them very much?
When we qualify them, we are going by Dodd-Frank because if they build a house and put it in homestead, it’s gray but we are not having trouble finding the people that can qualify. Quite frankly, if you put yourself through the paces to meet the Dodd-Frank standard and make sure that you are satisfied and that you have at least a reasonable reason to believe they can make the payment, your foreclosure rate drops down to nothing.
What are some of the things you do to see if they do qualify under Dodd-Frank?
The land stuff is so much easier. There's less competition. Share on XTheir paycheck stubs. You use the old FHA, 43% of your disposable income, which is 50% now but we are still looking at like 43%. We want to see where their income is, where they make their money and the most important question is, “What are you going to put on this property?” The more they put on it, the faster they put it on there. I don’t care if they pay or not if they build something on it. That’s why we put the water and electricity, and built it into the price so that they wouldn’t have to spend their money on that. They can go start the fun part, the cabin or tiny house, barn or whatever it is they are going to do.
Are you using an RMLO agent, a licensed mortgage originator?
Yes. The argument is that you don’t have to do it on raw land. You could get away with it if they said it’s never going to be their homestead. If they say it’s going to be their homestead, then you might want to think twice about not having a normal loan. You should have one or find a different buyer. Do they own a corporation or LLC? Sell it to that.
I appreciate you letting me ask you all the questions.
It’s getting us to the same thing. Our goal here was to talk about private land and how it works, so it’s in the ballpark. Boredom is the death of entrepreneurs. It can get you in trouble. We moved it up a notch, bought 1,700 acres, and broke it into 200-acre ranchettes. We bought 822 acres on a ranch that had a problem. You could look it up in Lands of America. It’s Uvalde County Grand Vistas. That was my ranch until Christmas of 2021.
It was 822 acres. It had a 19-foot elevation and 1,800-foot elevation. Right in the middle, we cut the ranch in half. These 2 elevations had a saddle but to get in a 4-wheel ATV that seats 2 people, 1 in the front with the steering wheel and 1 behind you holding on, took 1 and 15 minutes to go over the saddle, which was the low part to get to the back. There were three occasions that you didn’t know if you were going to live or not.
That ranch had a problem. You couldn’t get from one to the other easily or safely. We bought the ranch at that price with its problems, and then put in 3.5 miles of roads. One from the front gate, right over the saddle in the middle to the back gate. It was an Iron Wolf grinder. It’s a 12-foot-wide cylinder with teeth on it. They lower it down to the ground and it cuts about 6 inches into the ground. It spits the gravel out the back about a golf ball size. They then roll it with a roller behind when it’s done. It’s all caleche up there, so we would make it like a county road. We bought the place for $1.2 million. We spent $300,000 on some improvements and about $200,000 of it was that grinder we put in those roads. We sold it for $2.2 million in 2 weeks when we put it up.
Did you sell the whole thing or individual 200 acres?
This one was flipping at the 822-acre ranch that had a problem. You couldn’t get from the front to the back because it had this mountain range down here but it’s a foothill. They had this problem. These two peaks cut the ranch right in half. It takes you 1 hour and 15, 20 minutes to get there on a 4-wheeler. It had a goat trail going over.
When we finished, you could come to the front gate. In my F-250 pickup truck and get to the back, not even get out of your truck once in fifteen minutes. Up and over and you are there. We recognize the ranch had a problem and figured out what it would take to solve the problem. We’ve got paid for that check. We found out that the wire is on account, 5:30 PM, Christmas Eve, what a present.
It was a little under $500,000 net after all said and done commissions, paid everybody, the overages and the problems we had. We had a $1 million profit built into this thing but we all know how rehabs and remodels go. We would never done a ranch before, so we weren’t going to do anything like this unless it had a huge margin because we figured we were going to learn a few lessons and we did. Thank God we had a $1 million margin so we could still clear $400,000 because if we had to cut it too tight, we would have made nothing or lost some.
What we like though is the pieces that are 20 minutes from town, 30 minutes from the city limits, out in the country but not so far that you can’t find help or that people don’t want to commute because what was this 820-acre ranch was 2.5 hours from San Antonio. It was a hunting place. You are not going to run cattle on it or anything.
The guy who bought it was an avid hunter. He bought it for $2.2 million. He’s going to put $2 million or $3 million in it. His first job was the high fence because he was going to bring in exotic animals. I didn’t even know what that would cost him on 822 acres. On those kinds of properties, you’ve got to hire a guy who only sells $2 million properties or specialists.
This guy was spending $30,000 a month in Lands of America ranches and $30,000 a month in ads but he’s selling multimillion-dollar ranches. His most expensive ranch was $18 million. When he gets paid, he gets paid heavily. He’s in the business. When he showed up, he had his F-350 truck. He had a trailer that was enclosed wrapped with his business name so-and-so ranch sales.
He pulled out a rig that had 4 iPads, 1 for each person. If you sit down, you had an iPad in front of you. He turns it on and already had it all figured out. You see the boundaries of the ranch. He’s showing me how he’s going to sell it and we drive. “You can see your cart and where you are on the whole ranch.” He’s telling us where to put these roads. We consulted with him a little bit ahead of time. “Do you think if we put these roads in, what will we be able to sell this place for?” He helped us.
It was a little scary. I don’t know that I’m going to jump out there and do that again because any bad time, economy, war with whoever breaks out, I don’t want to be sitting there holding that property but for whatever reason, we did that one. I liked the ones you break into smaller pieces. You can sell or finance the whole thing if you have to and everything is going to be all right. War or no war, COVID or no COVID, people are going to value a piece of land away from the city.
I have been thinking a lot about that. I would love to have a 5,000-acre piece of land that I own that has privacy. What hits the fan? I can go out there with my family.
I have 160 acres and lease the 440 around me, so I’m hunting 600.
Isn’t it cool to know that you have a place you can go to get away where a cell phone doesn’t work? You can hide from the in-laws.
I’ve got to correct you right there though. With the San Antonio Tower of America, my place is 45 minutes South of that needle. One of the requirements was my cell phone did need to work. I had a ranch where my cell phone didn’t work and you think that’s where you are supposed to go but the truth of the matter is when you owned businesses, you are almost in knots wondering what these people are doing.
“How many of them need to ask me one question so they can close the damn deal?” I’m in my deer blind all the time, texting and solving problems. It’s more of a comfort to me to be able to connect than it was when I couldn’t connect. I’m much more relaxed that if anybody needs me, they are going to send me a text and I will know if there’s a problem.
It would be nice to have a place you could go and bug out if you had to if a certain political office party decided it’s time to take all of our guns.
It was one of the reasons I did it. It was a place to go bug out and where I could feed my family by myself off the land, at least until the black market developed. For those 30 or 60 days, for everyone to get a grasp and the flow to start finding its way in again, I needed to be able to feed my family, have water, and be able to take a bath. If I have to, I will take a bath in the pond but at least I’ve got water and wells.
I like raw land. Be careful about the intercity lots. I bought a lot of it. They practically gave them to me for $1,000 but the problem was every time I turned my back or left, some people would dump on my little postage stamp lot. If I didn’t go take it away myself, the city was threatening to take it away for a fee, which I didn’t like. The intercity lots in the lesser neighborhoods were dangerous because people would dump on them. Those Southside roofers would come in the middle of the night and drop all their shingles on my little land in less than ten minutes. They raised the dump truck, fall out, and then take off. I’ve got to deal with it.
That brings up an interesting point because I have some friends that do a lot of flipping vacant lots inside of the city and they are selling them to builders. From my perspective, it’s a lot less risky to do that.
Especially since COVID, people are looking harder at getting out of the way of the mass population. They don’t want to be there. That scared a lot of people. The land sales when COVID hit were incredible. Our days on market dropped to four. That’s the other thing I’m using LiveComm for. I’m putting out these signs that say, “Owner finance lots or owner finance houses.”
All these people are calling and I’m capturing their cell phone numbers. I have the hello message button turned on in LiveComm, so whenever they hang up, they get a text to see all of my inventory that says, “Go to my Facebook page.” Everything is in Spanish in my town, all my websites and everything.
I drove all these people to my website. I found that when I had 3,000 people, I could text that I had a new house. My days on market were nine days and I was getting my 10% minimum down. As it got up to 6,000, 8,000 and 10,000 followers were people that I could text. I have 10,000 followers on my free business page over on Facebook. I don’t even put out signs from my houses. I post the picture and the details of the house on the page. I don’t put one sign in my yard or house anymore. I’m done.
You are sending them to a Facebook page, not your website.
The website was cumbersome that when someone had to get it, you have to load it. It’s real easy to put these pictures and write whatever you want to about your houses on Facebook. It doesn’t cost anything, not even a hosting fee. You train them how to buy your houses. “How do you buy an owner financed house from us? The first thing is you need to drive your family to the house, look around, make sure you like the neighborhood, the front yard, backyard, and everything. If you still think that’s the house for you, call the red phone number in the back window.”
My salesman is sitting here getting 200 calls over the weekend because I’ve got 20 signs around 15 houses. They are getting eight calls but I’m capturing everyone’s phone number. I still have them but I’m only having to deal with the eight that were serious enough to drive to a house and call the red phone number in the back window.
If that doesn’t work, I will send out a text to everybody and say, “Meet me over there for an open house.” What’s happening is we went from nine days on the market texting everybody. As soon as we ran them all over to the Facebook business page, it dropped to four days. It happened the same time COVID hit. I don’t know if COVID were his reason but it was coincidental that was COVID.
I started getting so many people following on the business page. They wanted an owner-financed home. There are not a lot of sites like mine. I’m training them. “This is what you do. If you like the house, call the red number and they are going to take you inside. If you still want the house and have 10% or more for a down payment, then you are going to need to write us a $2,000 non-refundable if you are approved, non-fundable minus your application fee if you are not approved.”
We are also going to need some paycheck stubs, this and others that we are telling them so that people are showing up the house the guy they called the red number in the back window. The salesman shows on the inside of the house. They say they want it. I said, “Next, I’m going to need this.” They hand them a folder and there’s the check already made it out to my company for $2,000. They already know because we have trained them.
Money loves speed. If you want to make a lot of money, you can't just sit around and try to wait till it comes to you. Share on XIf you send a salesman out to your raw land or house, and then they ask for a $2,000 check, they don’t know if they should give that check to that guy or not because they are not sure. After they have been on your site for a while looking at houses and they keep seeing, “This is how you buy our houses,” and then they see happy people with exaggerated keys, holding their keys or signed contracts, happy people with their arms around my salesmen. They are like “This guy is a legitimate business. Go ahead and make out the check. Let’s get those documents and go look at the house. If we like it, we will hand it to him.”
I like putting it on a Facebook page. We complicated sometimes too much, don’t we?
Yes. I was disappointed when they took away my HomesTogo.net site because I worked a lot on it and I had it. Everyone knows how to post on Facebook. I didn’t have to train myself on how my website works, go here, click this and you have to have this file. Go over to Facebook and put it over there.
It makes it easier too to post on Facebook Marketplace if you had to.
Yes, but let me warn you. If you go over there to do this on this business page, they’ve got a lot of fair housing that’s crap. They have their reasons. You can’t have a picture of a White or Black family. You’ve got to have a picture of all the different races there are or they won’t open your site. There are some things that they are sticklers and you have to learn that little nuance. It’s a pain in the ass but you will figure it out.
Once you figure it out, you don’t make those mistakes anymore and then your site is going all the time. Imagine they call your sign, and then they hang up after the recording. They know what to do. That recorded message can be forwarded to your LiveComm number. If you get the details about that house one time when you record it, it’s right there every time. It will answer the phone at 11:30 PM and 6:00 AM on a Sunday. They will deliver everything they need to know because there’s nothing else to ask.
You will have a different phone number for each property.
When that property sells, I don’t even delete anyone out of it. I just changed the name on it to the next address, put it over there, and keep building the list of people that are called the sign because I don’t care what people you called on. All I care about is that they called on an owner-financed house. That’s my client or prospect right there.
By the time you get 10,000 of them, my down payments are averaging close to 15% because there’s a competition that I get to pick and choose from. I find better buyers for my land because I find the person who’s going to build a house on it after he buys it. You can pay the street to figure all this out or a mentor, Jack Bosch, or someone to get to it.
I almost lost an entire career because I wasn’t smart enough to hire a coach. I’ve got burned a couple of times and almost walked away from this business on my first two deals because I’ve got my butt kicked down the street. I didn’t have a coach and I was trying to learn on my own. I wasn’t doing a very good job. I hired a coach right after my second disaster and he showed me how to fix it but I almost quit because of the defeats. I would have quit a business that I didn’t know yet but it was going to be a multimillion-dollar life-changing business for me but because I didn’t hire a coach, I almost quit.
Here’s a point, money loves speed. If you have to make a lot of money, you can’t sit around and try to wait until it comes to you. You’ve got to be proactive and pursue it, especially when it comes to buying properties. You’ve got to be fast. I was a professional student for three years. I was studying course after course. I was spending way more money on education than I was making money.
Put it this way. There are two laws for businesses to succeed. Number one, I will use the G-rated version. Stop farting around because that’s all we are doing. We are spending time trying to build a website when you could build a real simple Facebook page and put your properties on there. I heard the guy say it this way, “If Putin had a gun to your head and said, ‘You get this property online or I’m going to blow your head off,’ you would figure it out. You would go to YouTube and search for, ‘How to put my property online?’ You would find a video that says, ‘Go to Facebook, get a business page, and put it on there.’ You would do it but we are just farting around.”
The second rule is to stop being a sissy. The sissy is like, “We will go and spend $1,000 on a course but we won’t spend $1,000 on direct mail because we are afraid that it won’t work. We will spend all of this money on education but we won’t spend any money on actual marketing or any time trying to find private lenders because we are afraid.”
That’s how you hire the coach because he already can tell you, “It says X and you mail it to X, it’s not going to work but if you mail it to XYZ and it messages LMNOP, that’s what you pay for.” You won’t go out there and fail. You have a lot less chance of failing if you will go do it when someone is already doing it and knows it works. “Does owner financing strategy work?” I already know it works but the question is, “Are you going to work it?”
There are states and counties that you don’t want to owner finance. I will be the first one to tell you that I can’t help you in New York, California or Downtown Los Angeles, not for you. If you want to live in Los Angeles or a new business somewhere in Georgia or some fly-over state where we have some laws where you can get someone out of a house if they don’t pay, I will teach you how to do that. You can do it in Los Angeles.
As a matter of fact, that’s what I like about your course on Virtual Wholesaling. If you learn to do business virtually or from another city, you have created a real business. You are going to be forced to because of the distance. You are going to build a real business where you are working on your business, not in your business.
What do we want business and money for? If you think about it, the only thing money buys you is freedom. It won’t buy you happiness. When someone dies in Florida and you live in Texas, you find out the day before the funeral if you have been successful and have the money, you can buy that expensive next-day ticket. You can get there but you are not going to be happy when you get there. Tell me what courses or coaching are you offering. I always like to spend a little time on that because you spent your time here. I want to let people know what you’ve got. You are going to go to 1000Houses.com/VacantLand. We will find out about everything. He’s about to tell you. Now, you can get more information.
I’m in the middle of creating my class. I’m teaching it live. As soon as it’s done, we are going to sell it but we are taking people through, holding them by the hand and telling them, “We are going to show you how to pick 3 or 4 different counties.” We like to go after the cheap lots that are at least 1 hour or 2 hours away outside of the city. We are looking for land that’s worth maybe $10,000. We are buying it for $1,000 or $2,000. That’s where we like to start.
We want to start in the rural recreational land where somebody is going to go ride their four-wheelers, shoot their guns or go camping. We are going to pick 3 or 4 counties, pull a list of motivated sellers, send them a simple handwritten postcard or a letter and then send them an offer. We are not going to talk to them until they see our offer at $0.20 on a dollar. I’m averaging 1 out of every 9 offers but on average, you will be about 1 out of every 20 that will say yes, which is way better than houses.
I’m not even talking to them yet. Once we get it under contract, we have 90 days to close and we are going to sell it on owner-financing. You may want to flip it for cash and do a double close on it. If you don’t have the $2,000 to buy it but you found a buyer that’s going to pay $8,000 in cash, that’s a $6,000 profit. We have a title company that we work with nationwide that will double close or you can get money from Mitch.
You can go get some credit cards at 0% introductory offers and buy a whole bunch of lots. I bought my first 100 houses on credit cards because the houses in that city right there behind me in 1996 on the lesser parts of town were $8,000, $10,000, $12,000, $15,000. “Give me $10,000 off this credit card,” then I will buy it. “Give me $5,000 off this credit card,” it would do the remodel in 1996. You are talking to those prices where you can buy these things on a credit card.
That’s why I love this because we are starting small. We are making a couple of $100 a month if you are selling it on owner financing terms. If you are going to sell it for cash, you are getting $5,000, $6,000, $7,000, $8,000 sometimes more but these are simple easy deals to do. There is a huge demand for these properties. You may think, “Who would want to buy a property?” When you go to that site that Mitch gave, which is 1000Houses.com/VacantLand, that will redirect you to a page where it can at least do an opt-in to get more information.
If you think there’s a lot of demand for people to pay cash and make $8,000 or $10,000, wait until you start offering seller finance at $5,000 to $7,000 more. You are going to get flooded because more people can’t make payments than there are that can write a check for $8,000 or $10,000.
I have a student in one year who is already getting $10,000 a month in recurring revenue and income from his notes that he sold for vacant land. That’s $120,000 a year and it’s mailbox money.
How many people would be better off at $10,000 a month than they are now? The audience’s hands are going to go up. You would own your own life. You are self-employed and have 2,600 hours a year to improve yourself instead of someone else’s business. It’s worth it. I love you, Joe. You are always a great guy who comes with the content. I love that about you.
Get to 1000Houses.com/VacantLand and check out what Joe has to offer. If you are looking for a coach, check him out. He’s been around a long time and knows what he’s doing. I know him to give a damn about what he’s teaching and his students. You can’t say that across the board. Check him out. Thank you so much, Joe. I appreciate you.
Thanks, Mitch.
I would like to thank everybody for reading. There are over 540 show archives. If you are not tired of me yet, keep clicking on the next one until you can’t stand me because there’s more of me over there and interviews than you will ever watch, all on different topics. Also, I would like to thank TaxFreeFuture.com. If you do not have a self-directed retirement plan, please check that out.
Make sure you fill out the little microform there. We promise not to hound the heck out of you with it but you are going to get 32 little video vignettes open up to you and it’s going to open your eyes to what a tax-deferred or tax-free savings account can do for you. It’s a retirement account. It’s unbelievable and it’s also going to show you the most interesting thing, how to take a little tiny amount of money like $200, $100 or $150, and turn it into big money. It has to do with selling your position and contract.
Important Links
- 1000Houses.com/VacantLand Fill out the form to get more info
- Tax Free Future Consultation form 1000Houses.com/TFF
- 1000Houses.com/Livecomm
- 1000Houses.com/100
- 1000Houses.com/101
About Joe McCall
Hi, I’m Joe. I know what it’s like to feel stuck — like you can’t get any traction when it comes to your income or lifestyle. I was there, and I knew there was another way. My life changed when I discovered real estate investing and lease options.
Within just three months of doing lease-option deals, I was making more than I was in my job. So I quit my job and have been doing (and teaching) lease option deals ever since. Over the years I’ve flipped well over a hundred deals and helped my students flip thousands more.
Doing deals has given me the margin and freedom to travel around the world, golf with my boys, or go jump in the pool with my girls at the drop of a hat. Whether living in Prague for three months, Czech Republic, or travelling across the US in an RV… lease options has allowed me to have the freedom to live life on my own terms.
Though we still do many deals today, my greatest joy is helping others discover the power of lease options! That is why I have put together my free class on lease options, as well as a free book.
Joe has flipped over 100 deals and helped students flip 100’s more. He loves doing deals and coaching students to do the same. He has been fortunate to receive more student testimonials than he can count.
He invests remotely in multiple markets. He loves creating automated marketing systems.
While living in Prague, Czech Republic (twice, for several months) and traveling across the NW corner of the USA in his RV for 3 months, his teams have flipped multiple lease options and regular wholesale deals – without him seeing the house or talking to the sellers or the buyers – ever.
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