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Show Summary
In this episode of the Real Estate Pros podcast, Brandon Cobb shares his journey from medical device sales to becoming a successful entrepreneur in real estate development. He discusses the importance of understanding the development process, navigating market risks, and the opportunities available in the Nashville market. Brandon emphasizes the significance of mitigating risks in development and the value of building a community through his Mastermind program, where he shares insights and strategies with aspiring developers.
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Investor Fuel Show Transcript:
Brandon Cobb (00:00)
You have to. I think a lot of people that want to get into real estate think that, well, let me put it like this. It’s like pulling up to the beginning of New York City and you got to go to the other side of New York City. And most people just sit and wait for all the lights to turn green at the same time. They’re scared of hitting a roadblock.And what they do is they just sit at the starting line forever and they never start. You gotta go through the process. You gotta hit the stoplights. You gotta hit the traffic jams. You gotta make some wrong turns. You gotta get lost. That’s the only way you’re gonna get to the other side.
Kristen (02:06)
Welcome back to the Real Estate Pros podcast. I’m Kristen and I’m here with Brandon Cobb. He’s the owner of Land Development Accelerator out of Nashville, Tennessee. We’re going to talk all about development today and how to navigate risks and how to do the whole process. So thanks for being here, Brandon.Brandon Cobb (02:21)
Hey, pleasure’s all mine. Thanks for having me.Kristen (02:24)
So what is your background? How did you get into this line of work?Brandon Cobb (02:29)
Yeah, that’s a fun story. I’ll try to keep it short since I know we only got about 20 minutes or so, but I was an accidental entrepreneur. I don’t have some story where I worked a corporate job for decades and had this dream to make it on my own. No, I actually was already living my dream and that was doing medical device sales. It took me a long, long time to break into that industry and I was living my dream. That’s what I wanted to do. Wake up, go to surgery every single day, make a difference in patients life.And I’m not gonna lie, was pretty cool being able to rub shoulders with the orthopedic surgeons and the hospital staff. But what I enjoyed most about it was the fact that I was making a difference in the patient’s lives. I was selling a product that I actually believed in. And then one Friday afternoon in the spring of June, my boss says, hey, meet with me after work on Friday. And Kristen, it was one of those days you’re having a cell strap that went fantastic. And I showed up to that Starbucks, right? It was sunny.
I remember it like it was yesterday. You could smell the coffee, had a smile on my face to tell my boss how great of a day that I’d had and how much money I made him. And before I could tell him any of that, he fires me. And that is what started my entrepreneur journey. I gave myself a six month old tomato and I said, Hey, if I don’t make any money myself, I’ll go and I’ll figure something out. ⁓ but I ended up, selling all my retirement accounts and going all in on real estate. Bought my first flip.
⁓ flip that house, took all the money, dumped it into marketing and started scaling a house flipping business. We built that business up to do it about 40 house flips a year, started doing new construction. One day we had a house that, ⁓ needed to get torn down and we’re like, crap, we gotta, we gotta build new, but we bought it for less than what the land was worth. Ended up making about three times the amount of money on that house that we were flipping houses. And we said, why are we flipping the houses? Let’s do new construction.
And so we scaled that up to doing about 30 new builds a year and said, man, we really need to buy parcels of land where we can do all the builds on it and not just chase these onesy twosy deals. And that’s how we got into doing development. Then we got a knock on the door one day from a big national builder with lots of money said, Hey, we really like your land. We’re going to buy it from you. And we said, no, you’re not. It’s not for sale. Then they made us the offer and we looked at each other and go, yes, it’s for sale. And do you want the one across the street too? We’ll give you that one.
And that’s how we got into doing land entitlement and land development for big national builders like Lenore and D.R. Horton.
Kristen (04:58)
Wow, that’s amazing. And in the beginning, what really drew you to real estate in particular when you were kind of looking for a new path?Brandon Cobb (05:53)
You know, it’s kind of funny. I, I, when I first started, I made all the mistakes. I, like I said, I sold all my retirement accounts. paid the penalty. I thought I had to use all my money to invest in real estate. I was also trying to grow several other businesses. So I thought, well, what can I do as an entrepreneur now that I’m, I’m jobless? I said, well, I had a lot of people reach out to me and ask how to break into medical device cells when I was in it. Maybe I should start a course on how to do that. So I did that.It failed. I really enjoyed the motivational side of thing. said, you know, I’m to be the next Tony Robbins. started a motivational blog that failed. And then I was like, you know, I like the life coaching business and Kristen, you’re not going to believe this, but it turns out not many people want to take life advice from a 26 year old. But then I discovered this vehicle called real estate. And that’s when the magic started happening at first. Like I said, I made all the mistakes.
Kristen (06:41)
HahahaBrandon Cobb (06:50)
I lost money, I used my own money, I racked up $98,000 of credit card debt after blowing through $111,000 of savings. That was my retirement as a 26 year old. And that’s when the real learning started. I did over 186 transactions during that time period and eventually figured out how to make some life changing money in real estate. And I say the rest is history. And I tell people that story because I don’t want people towake up one day and realize that they’ve been on the wrong path, right? Nobody’s going to teach you how to be financially independent, but you, you’re not going to be able to rely on a company to do it. You you have to take matters into your own hands. And now, you know, we help others do that via opportunities to invest with us in our affordable housing developments, you know, and, or teaching them how to do that.
Kristen (07:40)
Yeah, I mean, that’s really scary. I can imagine when you’re racking up, you know, debt and spending a lot of money, how did you kind of have the faith that this was what you were supposed to be doing and you could turn it around?Brandon Cobb (07:54)
You know, that’s a great question. will answer that. What allowed me to push through that was being comfortable with the worst case scenario. Now luckily at the time, I was like 26, 27, single, didn’t have any wife and kids, and I live very well below my means. I didn’t have any debt. I’d paid off all my college debt.and I was fine just going and getting another job. So coming to reality that, if this doesn’t work out, I’ll just go and get another job. That was the worst case scenario. I was comfortable with that. So me really defining the worst case scenario and saying I’m okay with this, that’s what allowed me to take the leap. Because quite frankly, I didn’t know if it was going to work.
Kristen (08:41)
Yeah and that’s what I hear people say where you know you’re not it’s not that you’re fearless you’re just you have a good relationship with quote-unquote failure you know you’re gonna be okay.Brandon Cobb (08:53)
You have to. I think a lot of people that want to get into real estate think that, well, let me put it like this. It’s like pulling up to the beginning of New York City and you got to go to the other side of New York City. And most people just sit and wait for all the lights to turn green at the same time. They’re scared of hitting a roadblock.And what they do is they just sit at the starting line forever and they never start. You gotta go through the process. You gotta hit the stoplights. You gotta hit the traffic jams. You gotta make some wrong turns. You gotta get lost. That’s the only way you’re gonna get to the other side.
Kristen (09:28)
Absolutely. And I think a lot of people in the real estate investing world are very curious about development and kind of it’s a natural progression just as you kind of went through. What is the process of even getting involved in this?Brandon Cobb (10:19)
You know, and develop means a lot of different things to a lot of different people. So I’ll simplify it. You know, the development has three phases, believe it or not. And this works for just about any real estate niche. So I just happened to invent new neighborhoods for ⁓ national homeowners like Lenar and D.R. Horton. So we’re in the single family residential space, specifically entry level housing, like those are the products that you can do.but you can do luxury housing, can do multifamily, you can do storage units, any type of real estate commercial. It’s the same approval process, which is phase one, getting the land approved for whatever real estate you’re going to put on it for us entry level housing community. that land entitlement process, that is where we go and we get it approved for the new community. Step two is where the first phase of development happens. This is where
And by the way, you can just sell the paper in phase one. And we do a lot of that. So that’s called land entitlement. We can get it approved. We line up a builder buyer before we ever spend any money on the project. We get it under contract. We go find our end buyer and then we take it through. So very similar to wholesaling in a way. And we take it through and we’ve got it pre-sold. Or we can then raise the capital, syndicate the deal and develop the site. This is where we put the roads, the utilities.
everything in it. We basically create a neighborhood without any homes on it and we can sell the ready to build sites to builders who want to build the homes. That’s phase two. And then phase three is new construction. It’s actually building the homes or building the commercial buildings or building the storage units, whatever have you. So we do all three. But you know, over the last couple of years, we’ve really been focused on the first two phases just because the housing market hasn’t been ideal.
Kristen (12:08)
Yeah, absolutely. And you’re in the Nashville market. What does that market look like? Because I think a lot of people have this idea that the market is, you know, all bad, all good, but there’s definitely little pockets. What are you seeing in your specific market?Brandon Cobb (12:23)
You know, right now there’s a lot of distress. There’s a lot of foreclosures happening. A lot, had two builders call me over the last two days telling me how much money they’re losing on all their houses. I had three phone calls in the last month from people who were getting foreclosed on trying to raise capital very quickly to stop the bleeding. ⁓ We’ve got a little boutique capital firm called HPG Capital. We raise money for all of our development deals.there’s a lot of distress, but that distress is also creating opportunities in the market and the ability to buy some deals at very good rates. So right now, currently, we’re seeing distress, but everybody seems to be waiting on inventory to pick up and start moving, and that’s reliant on interest rates and with everything that’s happening with the Fed and the current rate drops.
and Jerome Powell getting replaced and hopefully a new Fed chair who’s most likely going to be dovish because that’s what President Trump wants. We’re very, very excited about the future because we think things are going to be turning around this spring.
Kristen (13:31)
Yeah, absolutely. I love to hear the optimism about the market. And with your industry specifically, I’m sure no matter what the market is, there’s always its own set of risks. What are some of those main ones that you run into and you see other people run into and how do you navigate those?Brandon Cobb (13:51)
Yeah, there’s definitely some risks and I’ll kind of point out some of the big ones. The biggest mistake we see people make is buying the land before they get all the approvals. They talk to some city officials, say they want it and then like, let me buy it and take it there. And then it gets shot down or turns out they can’t do what they thought they could with it. Don’t do that. Right. We only put stuff under contract that we then take. So this is our process to mitigate risk. If you do this right here,your miles away from most people who first get started in this. You put the land under contract. We need 18 months in this market. Talk with your local planning director on what the average entitlement time frame is. Use that as your buffer. Get it under contract for an 18 month period. And by the way, if you feel like that’s crazy and a seller’s not gonna do it, you don’t understand development because we’re offering them two, three, four, five times what their land is worth sometimes.
order to stick it out with us and believe me they will wait 18 months if they’re getting twice or three times what their properties were so like you there’s a very compelling value proposition here behind that so they waited out we then get a concept plan done it’s just a sheet of paper with a drawing on what an aerial view of the development looks like super simple we take that to the city we talk to the council members we talked to the planning director and we say do you guys want this yes or no and they say yes we want it excellent
We take that concept plan to our list of national builders and we say, do you want this? And they go, yes, we would love that. And if we like the difference between the price we have it under contract for and the price that the builder’s offering us, we take the next step and we start pushing it through that process. If you do that alone, you will reduce a lot of risk. The second way we reduce risk is there’s costs associated with getting these approvals done. There’s studies and there’s civil drawings gotta be done.
we get a significant deposit from the builder released to us in phases based on approvals, or we just negotiate it with the builder pays for all of that stuff. It’s their development anyway. Why not make them design it? So there’s a couple of ways that we reduce ⁓ risk there. Another is talking with the builders and understanding what products going to go on the land. got an approved plat from somebody ⁓ a few weeks ago.
And it was like 56 townhomes and he’s like, Hey, you know, I, I, I spent the year and a half doing this. I fumbled through it. It’s my first development. And I mean, he had spent six figures on everything, like just went about it total wrong way. And I looked at it and I noticed the townhomes were 11 feet wide. And I said, dude, nobody has an 11 foot wide down on product. You’re not going to be able to sell this. So you’ve got to design something with the in buyer in mind. And that’s why it’s important to lock up your in buyer on the front end and
they need to be a part of the design plan because they’re going to be buying the lots and building the homes. those are the big three risks that you need to mitigate.
Kristen (17:32)
And as you’re developing out land, ⁓ what kind of units, what kind of buildings are you making? What’s a great opportunity right now? know entry-level housing could be a great market.Brandon Cobb (17:46)
You know, it all depends on your end buyer and what they want and what the market, how, what’s that market appetite for that. So we really like working with national home builders. So I’m just reverse engineering what they want. And right now everybody wants a first time home buyer housing product. And the reason is it’s just supply and demand, right? Everyone’s heard about how big of a problem affordable housing is. The reason we like working with national builders, these are publicly traded companies.So number one, it’s Wall Street. They’ve got an unlimited amount of money and they can buy as much land from us if they want. Two, they have to have stock price go up. If stock price don’t go up, there’s a problem. And the only way to make stock price go up is to buy land and build. They have to buy. There’s significant motivation there. Even during the bad times, they still need to buy and build up their reserves for when the market does bounce back.
got land that’s ready to build on. So ⁓ that’s our buyer. Your buyer could be people who buy apartments or storage units or whatever. It doesn’t matter, right? It’s the same process to get the land approved for whatever real estate you want to build on it. But that’s what’s worked really well for us.
Kristen (19:02)
And you know, a lot of what you do is dependent on approvals and other people kind of pricing things out for you. How do you find the best amount of good land, the best parcels? What is the percentage of the ones that you actually move forward with and the ones that you kind of abandon maybe?Brandon Cobb (19:23)
Oh, I mean, you got to dig through a lot of dirt to find the gold. You know, this is not a game where you just buy some software program, click a couple of filters and you got a perfect list that you can go and it’s ripe for development. You know, you’re rezoning these parcels for higher density a lot of times. These are conversations you’re having with the city. You’re trying to figure out what the highest and best use of this land is. So we hand build all of our lists because we know the areas that our buyers are in.and we know what they want. And one of the things that we really do, if you’ve ever pulled up a parcel map before, it’s like a giant puzzle and all the parcels are the little puzzle pieces that fit together. We’re looking for those big puzzle pieces that are kind of around all the other smaller little bitty puzzle pieces. That’s what we’re going after. You know, we need things like sewer access. There’s no software program that can tell you that. The sewer is what gives you the density.
to the project. You can create a lot more homes if you have sewer access. So stuff like that. So it’s very nuanced what we do, right? We’re hand building all these lists and then, you know, we’re, we’re direct to seller. We’re going on, we’re knocking on doors, you know, we’re calling them, anything we can do to get in touch.
Kristen (20:39)
And I know right now something you’re really excited about is the Mastermind community that you’re building where you can kind of share these tips and tricks. Can you tell us more about that?Brandon Cobb (20:48)
Yeah, we launched land development accelerator this spring. was huge success for years. We had had a lot of people reach out to us asking, you know, hey, are you teaching how to do this land development stuff? You know, build these houses. I’ve followed you for years and you know, we just kind of thought it was a distraction. said no, but finally this spring we said, okay, let’s open a few slots up. You know, again, like we’re not trying to build some huge coaching company. Like we really enjoy ⁓ what we do and the students that we work with are very picky about who we work with.But yeah, it’s a community of land developers, people who are building neighborhoods, inventing neighborhoods, doing ⁓ entitlement, development, ⁓ new construction, and it’s a lot of fun. We really enjoy being able to give back ⁓ to the students who are first getting started in this. And yeah, it’s nice to see them not repeat the same mistakes that we made over the years.
Kristen (21:40)
Yeah, I mean, that must be really fulfilling to be able to give back and kind of share your knowledge.Brandon Cobb (21:46)
Yeah, it’s a lot of fun. It’s like anything in life, right? You want to be able to give back in some way, form. Parents like to pour into their children when you got kids, and we really enjoy pouring into the students.Kristen (21:56)
That’s amazing. Tell everyone where to find you, to find Land Development Accelerator, and where to find your mastermind as well.Brandon Cobb (22:04)
Yeah, so we serve two different types of folks. You know, if you’re wanting to learn how to do this type of business, if you’re wanting to build houses, if you’re wanting to land entitlement or development, we got a free course. You can go grab it at learnlanddevelopment.com. ⁓ Click the button below the video. It’s free course. It shows you everything about how to find the land to do diligence, even how to raise the money on the land. So we spent a lot of time on that course. There’s also some good interviews with some developers and city council members and stuff like that.The second people we serve, if you’re an investor, just want to passively invest and you like the idea of investing in affordable housing neighborhoods that Lenore and DR Horton are going to buy, then we might be a good fit for you. So you can go to hbgcapital.net to learn more about that and book a call if you want.
Kristen (22:48)
Incredible. Well, thank you so much for being here, Brandon.Brandon Cobb (22:51)
Thanks for the opportunity.Kristen (22:53)
And thank you everyone for listening. I hope you learned a lot, got some inspiration maybe for your own trajectory, your own business. Definitely check out Land Development Accelerator. It looks like they have some amazing free courses and free resources for you. And yeah, we will see you back next time. Bye.
