How Two Sisters Build Wealth Subdividing Raw Land in Tennessee

JMichelle Kesil (01:31)
everyone, welcome to the Investor Fuel podcast. I’m your host, Michelle Kesil. And today I’m joined by someone I’m looking forward to chatting with. We have Anne Danielson, who’s been making serious moves in the land developing space. So Anne, really excited to have you here today. I think our listeners are really going to take something away from how you’re approaching

developing these lands and yeah, these building projects that you are incorporating with your sister. It’s so beautiful. So let’s dive in.

Ann Danielson (02:08)
Sure, nice to meet you Michelle and thanks for having me. Yeah, my sister and I started, we’re Danielson Land Company and we actually both work remotely. Mary works out of Denver and typically I work out of the Philippines. I’m currently home in Madison, Wisconsin, but our market is in Tennessee and so we are there a couple of times each year, but for the most part we’re able to operate from around the world.

Michelle Kesil (02:11)
Yeah.

Ann Danielson (02:33)
is one of the things that we love most about the work that we do as land developers.

Michelle Kesil (02:39)
Yeah, love that. And for people who may not be familiar with your world, can you give the short version of what your main focus is these days?

Ann Danielson (02:48)
Sure.

We like to buy large rural, raw vacant tracts of land. So our most recent project is 122 acres. And then we do the horizontal development to make sure that it’s ready for builders that come along. So oftentimes that’s in our market, that’s for barn dominiums most often and sometimes just a mini farm. But for the most part, we create buildable tracts

from raw land.

Michelle Kesil (03:19)
Yeah, I love that. What really caught my attention is the way that you’ve been able to, yeah, like take these rural lands and create something special and very usable. That’s not easy, especially in this climate. So what do you feel has been the key to like keeping that running smoothly and making it happen?

Ann Danielson (03:42)
⁓

Well, we’ve really built a strong team and so because we hyper focus on one area in middle Tennessee, we have a lot of really strong people in our corner and we return to our same surveyors and soil scientists and agents and brokers and title agents. And so that really helps us to streamline the due diligence process and the operation of the projects as well. So I think that’s definitely been the key for us.

a lot of real estate professionals. We don’t employ a lot of VAs or acquisitions managers or anything. It’s just my sister and me and then our local team.

Michelle Kesil (04:21)
Yeah, amazing. And as far as finding these projects, where do you find them?

Ann Danielson (04:27)
When we started out, did do direct mail and we were mailing not huge amounts, but a fair amount. And then very quickly we realized that we do prefer larger projects. You know, that if we can do four to six subdivides a year, it just creates the lifestyle and the flow of the business that we want. And so then we kind of started to shift a little bit, excuse me, to targeting.

exactly the kind of land that we wanted and making sure that it was large tracks with large road access and you great topography and no flood zones and and then since we knew that what we were after it was really easy for us to communicate with brokers and agents about what we were looking for and by then because we had the trust of several they would start to bring us more and more deals so we’ve been able to kind of hone in on what we’re after and then that helps people help us too.

Michelle Kesil (06:07)
Yeah, that’s super powerful. And when you develop these lands and they turn them into like farms, like, yeah, can you just walk me through that? Like how does that timeline look?

Ann Danielson (06:18)
Well, typically we like to keep the projects over the exemption, which in Tennessee is typically, in most places, over five acres. The one that we’re on currently, there are a few tracks that are smaller than that.

And it is profitable, but it also does lengthen the timeline a great deal. So our favorite kind of project is when we can buy land over 20 acres, more likely over 50 or 100, and then create tracks that are over five acres each, or five acres, with plenty of road access, making sure that the soil is going to perk. That’s always a really big deal in Tennessee. And then the more public utilities we can get,

but because we are buying rural, we’re also equipped ⁓ to figure it out if we’ve got to do wells and actually sometimes we just built a road and we had to bring in electricity, which is also not our favorite, but we’re capable of doing it if we have to. if we can get a nice, beautiful, big tract of land that typical families can’t afford and then make them into mini farms that they can afford, then to us that’s the best case scenario.

Michelle Kesil (07:23)
Yeah, absolutely. That’s so powerful. And it’s a win-win for everyone, which is so important.

Ann Danielson (07:29)
Yeah, and getting families out of the city. mean, a lot of people, they want to be able to commute. So maybe they do work in Nashville, but they don’t want to live there or they can’t afford to live there. by just moving an hour outside, they’re still able to work. And then also their kids can have a creek, which everybody wants a creek.

Michelle Kesil (07:31)
Enjoy.

Yeah,

for sure. I love that. It’s really like creating a positive experience for the entire family.

Awesome. So I know like every operator also has a moment in their business where maybe things felt more real, maybe like a deal went sideways or you just had to pivot fast. Would you mind sharing one of those moments for you?

Ann Danielson (08:11)
Sure, I’m in one right now.

Michelle Kesil (08:12)
Okay, let’s

go.

Ann Danielson (08:15)
Actually on this project in particular there was a power line and easement that ran on the south end of the road and so it would have given power to every tract and the county decided that they wanted to move it and so they’re discontinuing this easement and in order for us to bring the power back we now have to bring in the electricity ourselves. So it’s a

huge difference in terms of cost. It’s not so much in terms of time, but it wasn’t planned for and when we initially underwrote the deal that was not in the picture. luckily we have the margins and it’s going to be fine, but it is a hiccup and it’s really frustrating, but we just try not to get too frustrated, know, try not to get too…

wound up about it and just, you know, baby step our way through and make sure that we can still create a quality product for the buyers and feel good about what we’re doing. But just say, yeah, that’s going to be delayed and we’ve got to take a little bit of a hit.

Michelle Kesil (09:10)
Yeah, absolutely, and that’s the kind of stuff people don’t talk about enough.

Ann Danielson (09:15)
And yeah, there’s always something.

Michelle Kesil (09:17)
Yeah,

what would you say for someone that’s newer in this space and maybe is interested like on the land side of things? Yeah, like any advice on how to get started and what they can do.

Ann Danielson (09:32)
Yeah,

absolutely. I mean, I think the power of land is I also own some rental properties, but I am not really a fan in terms of what it takes to manage them. So

the reason to go to land obviously would be just to not have to deal with the tenants and termites and toilets that everybody talks about. And then to get started, there’s a lot of quality programs and.

education courses that they can take for sure. Mary and I do do some coaching, but we don’t really do it from ground up. It’s more just like if somebody’s interested in our market or they want our expertise or they like our philosophy, it’s really different than a lot of other land investors and developers. Then they reach out to us, but I think there are some definitely you need the groundwork of.

to learn how the due diligence happens and how to find a good market. All of those things. It’s vital. Yeah, you wouldn’t… You can rarely go wrong in land unless you don’t know how to underwrite a deal and know what you’re looking for.

Michelle Kesil (11:01)
Yeah, yeah, I think that’s really important. Do you have like resources maybe for someone who’s new to this?

Ann Danielson (11:08)
Yeah, actually the person that we respect the most in the space and he’s ⁓ a really old and… no, he’s not old.

Michelle Kesil (11:16)
wise.

Ann Danielson (11:17)
wise and middle-aged and not old at all, but he’s been around for a really long time is Seth Williams. And I would say that ⁓ if anybody who’s in land would consider him a class act and super knowledgeable in this space, he does have a program that gets land investors off the ground. There are several and definitely some are better than others and some are more for

Michelle Kesil (11:21)
you

Ann Danielson (11:40)
people are into infill lots or they maybe want to wholesale or they want to double close. And so those aren’t things that we do. We are really straightforward and we do purchase the deals outright. And then, yeah, we’re not double closers or wholesalers or any of that, but there are plenty of programs for that if people are for sure.

Michelle Kesil (11:48)
Yeah.

amazing. So let me ask you this, what are you most focused on solving or scaling next?

Ann Danielson (12:08)
Yeah, for us scaling is the size of the deal. And so I really want us to continue to do some bigger deals that aren’t more complicated, which is definitely also possible in land. One of the things that I think we’re going to tackle this year is doing some partial timbering on a project. It has some very valuable hardwood on it. And we would never clear cluttered or anything like that. But we can maybe find a way to do some partial

timbering that will also allow us to create some buildable tracks because it’s very heavily wooded. So that isn’t something we’ve done before but it is something that I want to learn and try this year.

Michelle Kesil (12:45)
Yeah,

amazing. And is there any big goal for the business as well?

Ann Danielson (12:50)
Well, I’m retiring from my W-2 this year and I’m retiring my husband as well. that’s a pretty big goal that we’re achieving. I would have retired a little bit before, but because I have kids who are 17 and 18, my youngest will graduate this year. And I teach in an international school. once they’re both in university, in one year from now, am all the land, all land all the time.

Michelle Kesil (12:56)
Amazing.

Yeah.

Ann Danielson (13:18)
Well, Mary and I grew up with a kind of towards the city in Madison, Wisconsin, but my dad had a lot of land up north and he made us work it and he made us learn about it and he made us understand who you sell to and what makes land valuable. So we grew up in the woods and hunting and just like a little bit of a rugged childhood. So it didn’t really impact us as adults. We both went on to university and did our own thing. And then during COVID, I was considering

buying some more houses for rentals and then I heard about a land investor and I thought you know what this is actually in our wheelhouse and it’s something we can do remote and something we can do together so that’s how we started.

Michelle Kesil (13:56)
That’s so cool, I love to hear that.

Ann Danielson (13:58)
Yeah, it was our third deal that we started doing subdivides. So I think that we were also really quick out of the gate to move from just, you know, land flipping or land investing to more of the land development side.

Michelle Kesil (14:11)
Yeah, absolutely. And why did you choose Nashville area or like close to there?

Ann Danielson (14:16)
Yeah, it’s mostly because we love water and we love mountains and we love farms. We also love a state that has no income tax. And then we looked at the U-Haul migration patterns and some other market data to realize that that was a hot.

place for people to be moving to, five years ago. And then it has remained so. So when we started working there, we were working the entire state and we liked it.

And then even from there, we decided middle Tennessee is the best fit for us just in terms of the topography. And we don’t have to deal with the Appalachians or close enough to the cities, but not right. Not not in too hot of a market. Chattanooga has gotten really, really hot and Knoxville has gotten really, really hot.

So yeah, it’s kind of like a Goldilocks. We found our spot and we’re just going to stay here for as long as we can.

Michelle Kesil (15:44)
Yeah, amazing. Now, I know a lot of people listening to the show are earlier in their journey or they’re just looking to level up. And I think they could really benefit from hearing this when it comes to building relationships and growing your network. What has made the biggest difference for you?

Ann Danielson (16:03)
Yeah, we, as soon as we know that we really enjoy working with someone, whether it is a contractor or an agent or a broker, we always treat everybody with a lot of respect, but we also return. So they do a great job of looking out for us and we make sure that we treat them in kind with, you know, make it worth their while. So one of our brokers has five kids and so he really enjoys going out and doing the mowing himself and he brings his kids out.

So we’re happy to celebrate their birthdays and they take picnics out there and everything. it does feel really good and I think because we do have human relationships with the people that we work with, it goes a long way.

Michelle Kesil (16:42)
Yeah, you can’t fake it. Relationships are everything in this space.

Ann Danielson (16:46)
They

are, yeah, our reputation, we’re really careful. Like even on that project that I just described, we’re gonna take a hit to make sure that the electric is all where it needs to be. It’s important for us that our name, I mean, we’re the Danielsons, that’s our name, and we wanna make sure it stands for something.

Michelle Kesil (17:03)
Yeah,

absolutely, that’s super integrity.

Alright, so before we wrap up, if someone wants to reach out, connect with you, maybe collaborate or just learn more about what you’re doing, what’s the best way for them to reach you?

Ann Danielson (17:21)
Sure, well we, I’m glad you asked that. On Facebook we are Mary and Danielson and we just kind of operate as one person because one of us is always awake. know Mary’s got on the US time zone and I’m in Manila. So it’s kind of great because when people do reach out they know that they’re gonna get one of us and one of us is always awake or like a 7-11 that way. So Facebook is great. We do have an e-mail

sisters at DanielsonLandco.com so anybody can reach out and email us and then that’s the same as our website which is DanielsonLandco.com so yeah we really like to partner and we like to connect with other investors and whether they’re you know experienced or new there’s always something that we can learn and grow from.

Michelle Kesil (18:08)
Amazing. Well, listen, I appreciate your time, your story and your perspective. We need more people in this space who are doing things in this right way and this innovative way. So thank you again for being here.

Ann Danielson (18:21)
Thank you, Michelle.

Michelle Kesil (18:22)
Yeah, and for those of you tuning in, if you got value from this, make sure you’re subscribed. We’ve got more conversations coming with operators just like Anne out here building real businesses, and we’ll see you all in the next episode.