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Show Summary
In this episode of the Real Estate Pros podcast, host Q Edmonds interviews Brandon Cobb, a land development expert. Brandon shares his journey from medical device sales to real estate, discussing the challenges and lessons learned along the way. He emphasizes the importance of resilience in business, especially during tough economic times, and highlights the value of community and mentorship in entrepreneurship. Brandon also introduces his Land Development Accelerator, aimed at helping others navigate the complexities of land development.
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Investor Fuel Show Transcript:
Brandon Cobb (00:00)
So yeah, I’ve been through it. I’ve had the seven figure losses. I’ve had the difficult conversations with investors before. But it’s not about avoidingthe catastrophes. If you think you’re going to go through your entire life and not lose money on an investment, if you think you’re a better investor than Warren Buffett, it’s just not going to happen. So what it is, it’s your ability to how you handle the situation that ultimately matters and how you react to it. Luckily, I think we did a pretty good job of reacting to it and just communicating with everybody what was going on and then coming up with a plan to fix things.
Quentin (2:08)
Hello everyone. Welcome to the Real Estate Pros podcast. I am your host Q Edmonds. And I’m going say, if you follow me enough, I’m excited to be here today. I always love when I have a new guest on because you heard me say it before, no matter if we’re doing the same things, we all have a little bit something different that we’re doing. Like we have different ingredients that kind of come off as a similar dish, but it’s not always the same. And so I have someone that’s in land development.And listen, knows exactly what he’s doing, teaching others, has his own mastermind. So he’s going to be a wealth of knowledge. And I’m so excited to introduce to some and present to others Mr. Brandon Cobb. Mr. Brandon, how you doing today,
Brandon Cobb (02:53)
Hey, I’m great, man. Thanks for having me on.Quentin (02:55)
Absolutely, man. Thank you for being here, man. So listen, I’m gonna type. I like to dive right in. And so I would love for you to tell the people what your main focus is these days. If you want to give us a little bit of an origin story, kind of how you got to where you are. We love the origin stories. And then man, what part of the world you’re in. We love to know where you are geographically. So Mr. Brandon, so you have the floor,Brandon Cobb (03:17)
I’ll make it really quick. yeah, had you told me 10 years ago that we’d be inventing new housing neighborhoods, I’d have looked at you like you had to head head because I already loved what I did. I don’t have some story where I worked for a corporate company for decades, got tired, and just had finally had enough, had some dream to go start my company. That’s not me at all. My dream was medical device sales. And it took me years to break into that industry. And like, that’s what I did. I ended up getting fired unexpectedly from that company.And that’s sort of where my whole real estate entrepreneur journey became. That led to me flipping houses, to building houses, and to scaling the number of homes that we were building. So I needed to go after larger parcels of land that I could do that and start doing development. And we started getting knocks on the door from a lot of these big national home builders when we started to do that. And they said, hey, we really like your land. We want to buy it. Here’s what we offer it for you. And my partner looked at it. I looked at the contract, looked at each other, looked at the
contract and we’re like, yeah, you can buy it from us. And do you want the one across the street? Like, we’ll sell you that one too. And so that’s kind how we got into land development. came from a need to scale the number of homes that we were doing, the number of lots that we were putting on the ground. And we ended up being able to just flip those parcels of land to Wall Street. So all these big builders, know, Lennar, D.R. Horton, they’re publicly traded companies. They have to make the stock price go up. There’s only
One way to make the stock price go up, that’s to buy more land, build more houses. So they have to buy, they have to buy rain, sun or shine. They’re going to buy land from us no matter what. And so right now, you know, we, we, we do all three phases of development. Phase one is land entitlement. Phase two is doing the actual development. the grading, the roads, the horizontal, the sewer, all that, you’re basically making neighborhoods with no homes.
And then the third is new construction homes. So you know, we do that too. But since interest rates have gone up, our primary two strategies, because the home sales have kind of been crappy, have been land entitlement and land development.
Quentin (06:08)
Yeah. I love it, man. I was listening to you talk and I was writing some things down. You said, listen, 10 years ago, if you would have told me, I would be right here. I would be like, wait a minute, what? What is going on? And man, thank you, man. Thank you for your transparency and just giving us a little bit about being in a medical device sales. Got fired from that. That led to a different path, man. You did some flipping, did some building, and now you’re admitting neighborhoods. You’re resurrecting and making neighborhoods. And so I love the journey, man. And I have…where I normally say this, destiny has no wasted moments, right? Meaning no matter what we go through in life, there are moments that kind of make us who we are today. And so, man, when I listen to you pivot and go through different things and come back stronger and build different things, I would love to know what has destiny taught you? What has it taught you about yourself? Has it taught you resilience? Has it taught you discipline? Like what has these moments taught you about you?
Brandon Cobb (07:04)
You know, that’s a great question. There’s a, I mean, it’s a lot to unpack and what you just said, you know, every tough moment, I know a lot of people out there right now, especially if you’re a real estate entrepreneur, have been feeling it the last couple of years. know, interest rates have done a lot to people in the multifamily space that got caught in the bridge debts. The market’s not been very good to, you know, fixing flippers, right? Their products just been sitting on the market. Whole sellers, you the margins have dried up.you know, commercial real estate, you name it, everything’s kind of been hurt a little bit. But what I’ll say is it allows you to become a better business owner. You know, the tough times that we’ve kind of gone through the last couple of years, what’s that saying that pressure has the ability to form diamonds or bust pipes, right? So it’s an opportunity. I feel like I’m five times the business person since COVID came. I mean,
Quentin (07:52)
Sure. Yeah.Brandon Cobb (07:59)
It’s a joke how easy business was before COVID enacted. So what I think is that you really grow and become better during the resiliency periods when things are tough, because what comes out of those when it does get easier, liquidity frees up, there’s more money flowing around and stuff is moving again. What you find is you make a lot more money because you’re so much better of a business entrepreneur. So I’d say that that’s probably like thebiggest thing and I’m sure I could talk for several more hours on everything else, but I think that’s probably one of the things that’s sort of on everyone’s mind right now.
Quentin (08:34)
No, man, I appreciate that. And what I love about you, you want to educate people and you walk with people through different seasons of their business life and helping people. And so I know the journey for you has not always been easy because it’s not been easy for any business owner. Right. And I tell people, you know, there’s a journey towards success. And sometimes we have to go through adversity. And so I would love to know, have you faced adversity? How to have adversity look for you if you faced it and how did you overcome it?Brandon Cobb (09:03)
Oh yeah. mean, so we probably had 30, 40 houses going and at the end towards the, well, I’ll say towards the Q1, Q2 of 2022. And that was the crazy time. You had the supply chain issues that were starting to bottle up. So if you’re going to build houses, you need all the products to build them. We couldn’t get certain products. Like you can’t get your certificate of occupancy, which is the city’s permission for you to sell the house. Like, it is safe to live in.without a water meter, but we couldn’t even get water meters for a lot of our houses. So you’re kind of just stuck. And it was like that for a lot. And what made it even worse during that time period was we were getting monthly price increase emails from like Lansing and builders first source, all the suppliers that we bought stuff from, because again, supply and demand, there’s no supply, there’s high demand, you know, and demand and shop through the roof. Cause everybody’s sort of panic during COVID in 2021.
Quentin (09:37)
yeah.Brandon Cobb (10:02)
People learn, know, it’s not that bad. It’s okay. And everything just price is shot through the roof. Everybody just flooded back into the market. And I mean, you know, we’re putting homes on the market, getting, you know, 15 % over asking price, multiple offers. It was crazy. And so everyone kind of went all in. Well, that inflationary period happened. And so all of our budgets were shot.I mean, we were significantly over budget and there’s none we could do because we couldn’t just buy all the materials up front, right? That’s not how it works. You you purchase products kind of a little bit at a time, build it, get a draw from the bank and then use that money to get it. while we’re building all these homes in stock and couldn’t build them as fast as we could because we couldn’t get the products, all the prices were going up. So the timeframe to build the homes increased. The cost to build the homes increased significantly.
And interest rates went on up on us. And, you know, I had factored in double the amount of interest that I needed on a lot of these projects. said, OK, cool. It’s going to be 12 months of interest. I’m going to get 24 months. I’ve always been very conservative. I did not underwrite interest rates doubling in the amount of time they did. If you are in construction, you know that construction loans are not fixed rate. There’s no such thing as a fixed rate construction loan. need you’re getting adjustable rate debt. So we saw our holding costs not double, but quadruple.
because our monthly payments doubled. But then when we finished the home, which is the most expensive time on your loan, because you’ve drawn all the money, we had to hold the homes for an entire year. So our holding costs quadrupled. And as a result, we had some heavy losses on everything. It wasn’t fun to deal with. We had some investors that were involved in those deals. But going forward,
you know, the way out of it, you we had to get better. We started importing materials from overseas to cut costs. We started trimming some of the overhead, doing strategic partnerships with some other GCs on some other projects we were doing, and basically got a lot better at doing business. You know, what I thought and how we had our systems before is nothing compared to what we had to do to really make things work. And we worked some stuff out with some investors, you know.
⁓ giving future equity on some projects and stuff like that. But it was a very, very difficult time. Luckily, all of our land deals continued to do really well. The national builders were still buying our land from us. we had that kind of supplement all the homes that we were building that didn’t do well.
So yeah, I’ve been through it. I’ve had the seven figure losses. I’ve had the difficult conversations with investors before. But it’s not about avoiding
the catastrophes. If you think you’re going to go through your entire life and not lose money on an investment, if you think you’re a better investor than Warren Buffett, it’s just not going to happen. So what it is, it’s your ability to how you handle the situation that ultimately matters and how you react to it. Luckily, I think we did a pretty good job of reacting to it and just communicating with everybody what was going on and then coming up with a plan to fix things.
Quentin (13:23)
Bye.Man, Brandon, thank you so, so eloquently said, and I know people listening, they got a lot from that. So I appreciate you laying it down so eloquently talking about your adversities, how you overcame them, digging deep. really appreciate it, So what’s next for you, man? Like, what is your next goal? What are you looking to solve at scale next?
Brandon Cobb (14:02)
Yeah, so I mean, last spring, we launched the land development accelerator, which is our own mastermind community of people who are wanting to do land entitlements. They’re wanting to do land development. So if you like the idea of converting land into, you know, a 30, 40, 50, 100, 200 home community, then you know, that might be a good fit for you can learn more about that. If you want it learn land development.com. We’ve got our free course, you can go grab the course. But that’s what we’re really focused on, like all the mistakes that we made over the years. Webuild that in, right? The worst thing you can do is not be informed on getting into this type of business. It really helps to be able to lean on a community of other people and a ⁓ mentor and a coach that’s already done it and already has the relationships you need to save money on all the vendors that you’re going to use and kind of knows the way ahead, right? So we coach students on how to do their first land entitlement deal, how to set up their first fund or syndication, because you’re going to need to be able to raise capital for these types of deals.
And for the foreseeable future, like we’re really focused on kind of growing that while we also do our land entitlement and land development deals. You know, I’m excited for 2026. Things are really bouncing back. And, you know, we’ve been sitting on ⁓ some deals that like we’re just holding for the market to really pick up and do good. And I’m excited.
Quentin (15:58)
I it, So man, I’m glad you mentioned mentors. I’m glad you mentioned masterminds because I want to talk about relationships real quick. So relationships, man, from your perspective, how important are they? Have they served you well? What is like your philosophy on building relationships? Brandon, talk to me a little bit about relationship building.Brandon Cobb (16:17)
Yeah, so the entrepreneur path is a lonely journey, right? And there’s going to be a hundred times where you probably want to give up on the way. But what can really help you go through those difficult times is having a community lean on it. I think you’ll have your own mastermind group and it’s very highly rated. There’s power in that. Get around the people that are doing the things that you’re doing or the things that you’ve that you want to do, right? That’s where mentors come in. know, a mentor is someone who’s already done the thing.that you want to do and you’re paying them for that fast forward button and the money to prevent the mistakes. Your community are people that are on the journey with you that can share what’s happening along the way so you don’t feel like it’s just you making mistakes, right? You need to be able to talk to other people who are on the same journey to figure out how they’re navigating certain situations. There’s so much value in that. you know, management communities are a game changer for people’s business.
you know, get around the people that are doing the thing that you want to do or who have already done the thing that you want to do and lean into them.
Quentin (17:17)
Absolutely. love it. So listen, Brandon, is there any topic that I have not brought up that you would like to talk about? Or is there any other words of education, inspiration, motivation that you want to leave to people? there either one, I would love a topic that I did not bring up or motivation or both. Yeah.Brandon Cobb (17:36)
No, I mean, you know, for people that want to learn more about doing land development stuff, if you like the idea of adding this to your real estate business, and you know, these are pretty big hits. You this is not for a first time real estate entrepreneur. You know, this is not for like a W-2 person. Like you have to have a real estate business that’s cash flowing. You got some stable cash flow and you want to tack on these largeYou only need to do one of these projects a year, right? We do half a million to one and a half million dollars on each deal we do. I only need to do two or three deals a year. I don’t have to upload the pipeline. So I like the idea of working on a few deals a year with bigger paydays instead of a bunch of deals that have smaller paydays. And it’s really simple. We teach a very easy model. And again, you can go to learnlanddevelopment.com and learn it. But all we really do is we go put the land under contract, right? You know how to do it. You get under contract. We get what’s called a concept plan done.
All it is is literally a bird’s eye view of a community that a civil engineer creates. And we take that concept plan, that idea of what we want to create. We bring it to the city. And if the city is excited about it and says, like we want to see this, we bring it to our list of buyers. In our case, we work with national home builders. So, and if they say, yes, here’s a contract and a deposit, like we want to do this deal and we like our spread, then we move forward with the entitlement process.
So it really is that easy during our due diligence period. We’re getting buy-in from the city. We’re putting it under contract with the seller contingent on getting it approved. So we don’t buy anything without the approval and we line up our buyer. So we’re kind of like wholesaling these larger projects to the builder once we get all the approvals in place. It really is simple. And again, if you want to learn more about that, you got to learn land development.
And there’s a free course called Land Development 101. can go grab it. If you want to learn more about the Mastermind community, if you think that might be a fit, there’s a video on the website. can watch it.
Quentin (19:28)
Absolutely, man. I love it. And listen, you already said it. I just want to make sure I created space. If someone wanted to reach out to you, is there any other way to reach out to you? Do you have any other thing going on? Books, podcasts, anything else you want to plug, man. I want to open up the floor if you need to.Brandon Cobb (19:45)
I mean, so if you’re interested in just being like a passive investor because we raise capital for all of our deals, you can go to hbgcapital.net/waitlist. That’s pronounced Harry Bob Gary. So hbgcapital.net/waitlist. And you know, joke that the dot com was stolen so it is dot net. But on that website, again, you can watch a video that goes over our investing strategy. And if you want to book a call with me to see if this is something that you’re interested in.you know, potentially investing in, know, later on, it’s just to get to know you call. We’re not going over any deals or any numbers. if you like the idea of just investing in these types of deals, not actually having to manage them, then, you know, that might be an option for us. So can check that website out and then we’ve got our own podcast called recession resistant real estate radio, where we talk about everything, entrepreneur, real estate investing, passive, investments, financial freedom, all that fun stuff.
Quentin (20:33)
So listen, I got to say three things to you, sir. First, thank you for your time, You could have been anywhere in the world doing anything, but you gave us your time, man. I appreciate that. Secondly, man, thank you for your story. I believe stories have a way of planting seeds in people. We may not know when it’s going to grow, but we planted seeds and sometimes somebody come water it and then they get a growth. And sometimes you can literally change somebody path trajectory, not even know it, but you still told the story. So I appreciate that.Lastly, thank you for your mind. Thank you for your mindset and your perspective and bringing that to this podcast. Greatly appreciate you being here today,
Brandon Cobb (21:08)
Thanks man, appreciate it.Quentin (21:09)
Absolutely. So listen, y’all heard Brandon, you got the value, looking at show notes, getting in contact with him, but definitely make sure you are subscribed here because I promise you, we’re going to keep bringing up amazing people just like Mr. Brandon. So sir, thank you again and everyone else have a fantastic day.
