How to Turn Raw Land Into Profitable Real Estate Developments

Sean Harron (00:00)
And a lot of a lot of people, I made this mistake so many times throughout my career.

Is just going all in and then being caught with, you know, your hand in the cookie jar or your pants down around your ankles going, I got nothing else, you know, and then losing your project. And I’ve I unfortunately the collapse of ’06, I was in Vegas, I was building million dollar plus custom homes, the market turned. Every single lender I had, construction lenders, IndyMac called all their construction loans due and they turned into federal IndyMac. And

That just took us out by the shoes ’cause we didn’t have reserves. So just that’s the biggest lesson I’ve learned in life is always have reserves, always hedge your bet.

Issa Hanna (02:13)
Welcome back to another episode of The Real Estate Pro Show. I’m your host, Issa Hanna, and today I have somebody who is a visionary who might see a rural tract of land and visualize a great community, might take a neighborhood that’s been down on its luck and transform it to the next up-and-coming thing. Ladies and gentlemen, I’m proud to bring onto my show Sean Harron. Sean, welcome to the show.

Sean Harron (02:39)
Well, thank you for having me. It’s pretty cool deal coming on talking to you. Thank you. Yeah, well I’m

Issa Hanna (02:45)
I’m glad to have you. I’m glad. And so for those of you you know at home that don’t know what I’m talking about in my intro, we’re gonna let Sean give you a nice brief rundown of his business and what he’s doing today.

Sean Harron (02:58)
All right, thank you very much. I basically I’m a real estate professional land developer and custom home and master plan community builder. So I start at the very essence of raw land and work my way all the way through the subdivision process. I do a lot of consulting for clients who are trying to come into the rural environment. They find bigger acreage that it has a bigger price tag, unfortunately. And they say, whoa, wait a minute, that’s too much. They didn’t want to spend that much. We help them subdivide it. We’ve we show them a pathway to be able to subdivide, get the property cut out that they want. Essentially they get it for nothing because after the subdivision, then they can sell the lots off and they make all their money back plus profit. That’s how originally the concept started. I’ve been a custom home builder for 22 years. Well longer than that in in this area for 22 years.

I just finished well I come from a big development background, big commercial infrastructure, master plan community building in Las Vegas, southern Nevada and the East Coast. And the I I don’t like the big game anymore. I got tired of it. It’s a very fast paced game. I’m older, so I like slow pace. So I can do slow pace developments where I don’t have a whole lot of product and

I can specialize in it. I can do complete from subdivision to custom home build to marketing all in one, you know, step by step process instead of massive tract builds. And then we also try to leave a good footprint behind wherever we go. So when we enter into a new area, when we’re talking about doing a subdivision or or or making land more accessible, then we get a lot of, well, that’s you know.

People don’t don’t want to have more people coming into the rural area, which is understandable and I live by that every day. But there’s, you know, you can’t restrict people from using their property, from having the right to do what you’ve done. So somebody pre-existing in a rural area, we kind of help temper that whole process through to make it less intrusive and invasive on their setup, whatever they have. Up here in Northern Arizona where I am, you know, people get a little touchy and

you know, pull guns on you when you go down the wrong road and that kind of thing. So we’re we’re very sensitive to that. And we try to give our clients the best possible affordable footprint for real estate development that we possibly can. And that’s what we’ve been doing for 22 years here in Mohave County in Arizona.

Issa Hanna (06:19)
Definitely. And we were talking earlier and you mentioned how important it was for people to be able to come in at a at a good price point. You know, you want, you know, new home buyers to be able to afford your houses. Can you shed some more light on that?

Sean Harron (06:33)
Yeah, we’re we’re competing in between like the Phoenix market and the Las Vegas market, where both of the median house prices, you know, 450 plus. So here where I am in Mohave County, our median house price is about 295. And that even for the people that are coming in, mostly seniors, retirees, that kind of thing. We’re not an up-and-coming, you know, young, bustling hip hop

community at all, we’re people trying to get away from the fray. So we’re trying to end up with a buildable, saleable product for a good small footprint home in the 225 to 245 range, which is below our local median price. So in doing that, it there’s a lot of challenges that we have to face and a lot of different ways we go about it. And one of them is we do just about everything ourselves. So we we cut out a lot.

I do all the design and all the physical aspects of the work from land development all the way up through the build, and then hand over the project to our customers. So we we try to we we’re not a big machine that’s just looking for 10x growth every day and you know, our our profit expectations and earnings over the year, our annual revenue, you know, we may not exceed

in our building and land development, we may not get over, you know, two and a half million dollars a year. But in those projects, we build we build a lot of value, a lot of quality, a lot of sustainability. And for for an older investor who doesn’t just want to run and gun 24 hours a day, it is really a nice moderate approach and a very nice, easy tempo to have in in an investment structure.

So it’s it’s it’s been a nice thing. You know, it’s I could retire and go drop dead in a week or I can keep building and I I like to keep building. So that’s that’s what we do.

Issa Hanna (08:31)
Well, that’s actually a perfect segue for my next question. So it’s been a long ride, 40 years, Sean. How did young Sean get bit by the real estate bug? Give us this backstory.

Sean Harron (08:43)
Needing to make an income. I I grew up on the East Coast. My dad got laid off from a big pharmaceutical company. We couldn’t pay the mortgage on the house. So in during high school, I had to go get multiple jobs to try to cover the the the mortgage payment and bills and utilities and groceries and all that. So I was hustling through high school, working three jobs, going to school.

And looked at every possible career path that I could have taken. I wanted to be a professional chef. And then somebody told me, well, you’re married to that job 365 days a year. You’ll never see your family. You’re working through every holiday. And I whoa, whoa, whoa, whoa. Wait a minute. Wait, wait. There’s gotta be a better way. I I like time off. I I like seeing my family. So the ultimate outcome of that was real estate. So all I wanted to do when I got out of high school was get my real estate license and just

get turned loose into into a market. And I did that in one of the most expensive counties in the country. It was Bergen County, New Jersey. And the one thing that wasn’t represented well in that market was first time homebuyers. So I specialized in first time home buyers. I was young. We all related, everything was cool. And from there I took off really fast, had a good career in that until the until the market dropped away. And then I went into building after that.

You know, swinging a hammer is something you can always do. Came back to real estate once the market picked back up. But that’s that’s essentially how I got into it and how I just kept going through it. We we evolve and adapt as we need to throughout time and through economies. You know, you have to be resilient. And that’s that’s the biggest lesson I’ve I’ve ever learned. Is the resilience is really important. You know, keep your ducks in a row, keep your money tight, be smart with your investment.

Don’t outlay all your capital once, make sure you have reserves. I hedge every project I do with reserves in different forms, whether I’m staking in precious metals, in crypto, in other investments, shorter term, I hedge everything. So as my expectations begin to become less and less for for progress, I don’t get into a pinch point.

And a lot of a lot of people, I made this mistake so many times throughout my career.

Is just going all in and then being caught with, you know, your hand in the cookie jar or your pants down around your ankles going, I got nothing else, you know, and then losing your project. And I’ve I unfortunately the collapse of ’06, I was in Vegas, I was building million dollar plus custom homes, the market turned. Every single lender I had, construction lenders, IndyMac called all their construction loans due and they turned into federal IndyMac. And

That just took us out by the shoes ’cause we didn’t have reserves. So just that’s the biggest lesson I’ve learned in life is always have reserves, always hedge your bet.

Issa Hanna (12:12)
Definitely. Capital is everything in this game. And if you don’t got it, it could go really bad really quick. With that, give us a nightmare maybe in the last ten years in this recent market that you had to overcome in your business.

Sean Harron (12:25)
Really just adjusting and getting used to the ebb and flow of real estate. A lot of people just think a lot of investors think it’s always a growth sector if they’re young and just getting into it. It’s not. It it ebbs and flows, it goes up and down. It always has, always will. You know, I’ve been through the moments where we’ve, you know, we got a hundred percent return, flipped the house in six months, made a hundred percent profit.

Walked away, said, this is gonna be like this every day. When we know it wasn’t, and you know, the average over years is four percent return per year period. And if you can sustain that throughout a 20, 30, 40 percent or 40 year investment career, you’re doing really well. If you’ve survived that long. The the nightmare scenarios is where you do get caught without the capital to get through the the downside of markets and and the ’06

through ’08 was the absolute nightmare scenario when everything dropped out. We’ve had similar nightmare scenarios like that where our phones stop ringing in in the brokerage and we don’t get people looking for anything houses, land, opportunity, everything just dries up and goes away. And we’re like, boy, what happened? You know, I I don’t see the big market indicators that are telling me why everybody has run away and tucked their head in the sand. But

It’s obviously that, you know, that’s happened. So just being able to temper the the whole flow of this gig of real estate is is really a critical thing to get to so you don’t have those nightmares. So you can actually sleep at night, you know.

Issa Hanna (14:04)
And we mentioned in our conversation earlier, after 40 years, you’ve got it all fitting together perfect. I I called it perfect synergy with the construction and the ground up. So with your knowledge, you’re able to kind of foresee a lot of things and and you’ve already pivoted from the worst crash we’ve had in in our lifetime. So yeah, kudos to you on that, definitely. And with that,

what does the future hold for you? What kind of opportunities are we seeing on the horizon?

Sean Harron (14:34)
Well, I’m I’m into a large, well, not not large, a mid sized development right now. I have 33 five-acre lots in a very depressed area of Northern Arizona that is surrounded by the most incredible natural resources as far as trails and beautiful vistas and mountains and things to do in the Grand Canyon and Lake Mead and all the things that go with the Colorado River area.

I’m currently working on that. I’ve got all my lots developed, I’ve got everything mapped and and all my roads in. I’m working on developing an RV park that’s gonna be very ecocentric, where it’s primarily for eco ecotourism. And then we’re going to we’ve been working with the county and other entities trying to develop roadways to get people more access to trails and

the natural environment so we can build that eco-tourist kind of climate. And that’s just taken a lot longer than I thought it would. We get a lot of pushback from people that don’t want change, don’t want their their secret little pathway to be used by anyone else. You know, they want to keep it secret and like, well you can’t. It’s it’s nature. It’s beautiful. We have to we have to allow people to come back here. That’s you know, so we’re working on that. I’m working on

designs right now for very affordable housing. We’re looking at all the kinds of different methodologies of building where we’re doing alternative building, panelized wall construction to streamline the construction time on on a job. We’re going into alternatives like container homes, which sometimes they work out and sometimes they’re just a mess, but they do have a lot of structural substance.

Not exactly the cheapest way of getting into the market, but it does give you a very interesting product when you’re done. We do I I started a building institute here locally where I teach primitive building methods. So we do earthbag homes, walipini agricultural structures. We get into a lot of agriculture and we’re doing that out at this project. As we go through this, we’re trying to tie it into nature, is really the the main point of what

our messages now and we hopefully can do that in a slower time frame than what I had originally expected. And that we’re able to actually deliver a real good project by the time we’re done. I’ve never failed on a project. I have a good, real good history. I don’t have one single bad complaint from any customer I’ve ever built a home for. So I’m hoping to keep that record.

Issa Hanna (17:51)
No, definitely. And I’m pretty sure you will for sure. With that, people just getting into the real estate business and looking at you and saying, “Hey, I I wanna be there 40 years down the line and and see this vision, you know, or have this knowledge that you have.” What kind of advice do you have for people just getting started?

Sean Harron (18:10)
I think the the best thing in the competitive world of like getting into real estate, if you’re getting in from the real estate sales side, find a niche. Find a niche that’s not overly filled, you’ll do fine. In real estate investment side, try to do something that other people aren’t doing. Don’t overprice and oversell, come in with realistic expectations. Anything is possible to

to get done. You just really have to have a plan before you get there. And you have to have a plan that sustains you through it. That’s the biggest advice. I have spreadsheets and cash flow summaries and projections, and and and I chart every single dollar spent and every lot sale and every home build. And I forecast beforehand and then compare as I go along. My last project, I hit it dead nuts. Every single milestone and sales point, I hit

right on the money. The one I’m currently on, I keep moving stuff out another six months. Push that down. So it’s just really being flexible. That’s the biggest advice. So you get into it. Don’t look for the most difficult thing. Don’t look for the highest profit thing that everyone else is chasing. Look for something that’s just a little bit different, a little bit off Main Street, a little bit something that

Issa Hanna (19:11)
I’m like okay.

Sean Harron (19:31)
somebody’s looked at and said, “That’s just garbage. I don’t want to get involved. There’s too much work.” If you dig through the the surface of garbage on some stuff, you’ll find gold underneath. And it’s just really a matter of that. It’s almost hunting and and it’s a quest to to rub the rub the dirt off of some things and really get a new view on on what it is you’re looking at as an investment.

Issa Hanna (19:54)
How about for the real estate agent or the builder that’s, you know, just opened their company and and needs customers, needs clients, what kind of advice do you have for them to get these relationships cultivated and and grow their networks?

Sean Harron (20:08)
It depending on what target segment of the market you’re going into, it it changes dramatically. You always find a layer of resistance for the existing structure that’s there. Like if you’re in real estate, you’re gonna be an outsider until you prove yourself and until you have the the credentials to actually get in front of people and say, “No, I I’m the best salesman, I’m the best realtor, or I’m the best builder.”

And you’re always going to have that that competitive resistance layer that you have to get through. And you just really have to sustain through it. Don’t quit. Don’t think that you’re not good enough. Don’t think that you you know you’re not as good as the next guy because the next guy may not really be that bright at all. In real estate business, I found that the majority of people I’m dealing with really

don’t know half of the stuff they pretend they know. And and that’s that’s really, I find the opportunity in between that. And I just whoop whoop whoop. I dodge and go and I zip. And what what people sometimes pass over, I’ll slow down and take another look at it and go, “Okay, wait a minute. Something’s going on here. I can do something with this.” It’s just I I have a lot more, a lot more options because I can I can strip something down to bare ground and rebuild it

where other people are looking at the costs of hiring that out and doing. So the more you can self-manage, the more you can self-perform. You’re not going to get the 10x growth factor if you have that approach, but you are going to get a sustainable existence and you’re going to have a good life and you’re going to make a lot of money through your career. But you’re not going to become a millionaire overnight. If you want that route, there’s ways to do that, but you got to be cutthroat and you got to get right in the middle of the fray and you got to have a lot of capital and a lot of momentum and mojo.

If you’re connected, it’s great. If you go into big cities, you don’t need to be so connected, I don’t think, because everybody’s anonymous in a bigger urban environment. You get into more urban settings and you better know somebody if you expect really quick growth because they’re just gonna step on you.

Issa Hanna (22:17)
Yeah. It’s like a secret club that you gotta prove yourself to get in. Exactly you could complete the school, but you gotta have the knowledge. And one thing I’m getting from you is the way you speculate. And the good thing about our business is you can speculate numbers, especially with when you’re experienced in the game. You can speculate almost to the T. What are some things that you look for when you’re speculating? What are like numbers wise?

Sean Harron (22:22)
Exactly, yeah.

It depends. If I’m doing a land development, I’m looking at the rate of sales for raw lots, what the improvement levels are, what the acreage size is, what do I need to put in the market that’s going to be competitive and get absorbed quickly into the market? Those are my main factors. So that’ll change my position from doing a 10-acre subdivision to doing a 40-acre subdivision, depending on are 40 acre lots selling better? Are they selling for more?

Are they more desirable? That kind of thing. And same thing with houses. General layout things I’m always looking for to add in as amenities in all the houses I build. Not keeping up with trends necessarily, but trying to design everything where it’s comfortable for my client base, which you know, it may be mostly retirees, some starters. So I just pay attention to

what their needs and wants are and kind of shape everything to that. Those are my biggest factors when I’m trying to determine how much I’m putting into a project, how I’m gonna break it down, what level of finish, like if I’m doing a remodel or building a home, what level of finish am I going to put into it? Am I gonna overbuild the hell out of it and put travertine tile everywhere? Am I gonna put, you know, top line appliances and fixtures, or do I need to step this back? And a lot of people make that mistake. They watched, you know,

home and gardens designer TV and they they want everything all posh and beautiful like a resort and the reality is there’s your profit margin just went out the window. So those are the biggest things in cash flow. You just gotta really know your market, what you’re getting into, what it’s gonna cost you, how long is it going to take you to get there, and who ultimately is going to buy it. And hopefully there’s a lot of them at the other end.

Issa Hanna (24:22)
Definitely. So if somebody’s seeing this, watching this at home and they say, “You know what? I’m over here in Arizona and that’s a guy I want to build my house or I want to buy one of his houses,” how can they reach you?

Sean Harron (24:33)
I’m available on my main website for my current project is dolanland.com which is dolanland.com And that’s my whole Turquoise Estates project, which I’m currently developing. And then I I have a construction company. Or the best way is just email or phone call. My email is Sean

S-E-A-N @ Mohave M-O-H-A-V-E O-F-F-G-R-I-D. [email protected] And my phone number is 928-715-2224. And I’d help anybody with any questions, help them get through anything. We have great opportunity out here. I am currently looking for people and partners with some chutzpah that want to jump in and make a difference

in the world who want to build a development with substance. I I’m tired of going it alone. So I’m looking for people who are willing to jump in, buy some lots, do some joint venture on builds, even stake infrastructure so I can build my infrastructure system out faster. I have great returns, all over 13% return in a two-year time frame. So really over 26% return over two years, 13%.

I I factor everything in on a on a real good basis so people understand that know exactly what they’re getting, what they can expect. And we work really well together with with everybody we we do business with. So that’s my spiel.

Issa Hanna (26:03)
Definitely. And if you want quality, you want somebody who cares and you want somebody who has experience, make sure to contact Sean because he definitely has all three of those things. Sean, I’d like to thank you for coming on the show. I love picking your brain about all this stuff. I I could go for hours, but we’re out of time. So thank you so much for coming on the show. I appreciate it having you.

Sean Harron (26:26)
Thank you very much for having me. It’s been fun just talking about it. Very good.

Issa Hanna (26:30)
Definitely.

And to the viewers at home, if you guys enjoyed mine and Sean’s conversation and want to see more just like this, make sure to like and subscribe. I talk to people every day that could bring us different knowledge on every facet of the real estate world. Until the next time,