Raw Land Investing: How to Find Hidden Value in Dirt, Acreage, and Development Deals

Lou Jewell (00:00)
I tell you right up front, I do not do houses. I do not deal with tenants, toilets, or termites. I deal in dirt. I’m a land broker in North Carolina and Virginia for 30 years, plus years actually, and I’ve spent my career helping people understand something most investors overlook. Land is one of the most misunderstood assets in real estate.

Scott Bursey (00:07)
There we go.

Lou Jewell (00:19)
And one of the causes of that is there is no real estate comps.

Scott Bursey (01:55)
Welcome back to the Real Estate Pros podcast powered by Investor Fuel. We’re here to talk strategy, success, and the serious fuel that drives market movers. Today, we are lighting the fuse with Lou Jewell from MyLandPro. Lou is bringing the high octane fuel that you need to understand the untapped potential of raw land. Forget what you think you know about dirt. Lou is about to show you how to turn it.

acres into assets. Lou, welcome to the show.

Lou Jewell (02:26)
Thank you, Scott. I really appreciate you having me on, you and Mike. I tell you right up front, I do not do houses. I do not deal with tenants, toilets, or termites. I deal in dirt. I’m a land broker in North Carolina and Virginia for 30 years, plus years actually, and I’ve spent my career helping people understand something most investors overlook. Land is one of the most misunderstood assets in real estate.

Scott Bursey (02:36)
There we go.

Lou Jewell (02:49)
And one of the causes of that is there is no real estate comps.

Everybody tries to price land by the acre and that’s not valuable. It’s by highest and best use. What is the potential of that land? And today, tomorrow, and in the future, acreage per acre, you can have 10 acres on one side of the road in a floodplain, timber’s cut, the soil’s frayed, limited road frontage, just a mess. And it’s got a per acre price. And then you can go pull a comp just because it’s 10 acres down the road.

It’s a pasture, it’s got views, the soil’s perfect. It’s got water on it, it’s got ample road frontage, for a subdivision. How can you equate those two 10-acre tracts as being equal? ⁓

So the other thing is there’s no land education in our industry. Even though the National Association of Realtors, we’re 1.5 million strong, there’s an organization called the Realtors Land Institute, which is part of the National Association of Realtors. We’re 90 years old and we have less than 2,000 members out of 1.5 and our designation that I’m proud to carry is accredited land consultant. And there’s 468 of us in the country. Our website’s www.r-l-i

land.com. If you really want a professional to help you go to that website we have 20 chapters all over the country and find yourself an ALC if you can in your area or at least a member of the ⁓ organization.

Also been teaching one of our ten classes of RLI called Introduction to Land Brokers. It’s a basic class. All of our classes are 16 hours. They’re tested at the end. You have to do five million in sales. You have to have a final exam. You have to go have two AOC sponsor you. You have to go before the AOC board and before the final board for it to be approved. But I’ve been teaching that all over the country since 2003 with our chapters. I also created a class for North Carolina Introduction to Land Brokers. Each state has

different continuing education hours. state, North Carolina, has eight, four required, four elected. There was over 300 titles you can take on how to stage a house, how you measure a house, how you house, house, house, house, house. I created the first one in 100 years on land, and now two of my friends have gotten classes. We have three classes now in North Carolina on the subject of land. There’s not another state that even has it. I’ll talk about that later. But we’re putting together a group right now as we speak.

called Land Masters. Our website’s up now, thelandmasters.com, and we’ll be offering our four classes in a bundle as soon as we can get up and running. And we will not give CE credit, we’ll give a certificate, we’re all certified instructors, we have to do update instructor classes every two years to stay certified. And you can take it to your real estate commission and if they say no, just keep taking it back. But anyway, we’re trying to break this paradigm of no land education. I had a young gentleman on my podcast, letstalkland.net,

which I just did my 290th show and I do it worldwide. It’s on Spotify, Podbean and Apple and it’s a radio. I do it at radio station. It’s not videoed. But I had a young gentleman that’s doing a reverse engineering of development, which is really fascinating. And he’s 25 years old and he graduated from University of California Real Estate School. And I asked him a question. said, how many years did it take to get to your past your course? He said, four years. I said, how many?

hours did they spend on land? He said none. He said none. Okay. So I’ve got a sidekick shot. I’ve got a robot, dog.

that because AI is here and this robot dog I got from Universal AI Services out of San Francisco and this thing I can put in waypoints on a piece of land the dog will take me to wherever I’m trying to look for corners. It can go over stairs, downstairs, over rocks, through streams. It can give me an analysis of the land quality. It can give me timber ideas because it’s connected to Chat GT. So I’m using that in all of my advertising now and that’s something

of the future. And lastly, have a book coming out right now through Christian publications. It’s a 19 chapter book called Insider’s Guide to Land Investment. And believe me, it does tell the truth, and the truth needs to be told. Land is the most… Yeah.

Scott Bursey (07:36)
up everybody. Lou Jewel

is in the house and Lou on that note yeah your focus on land is just fascinating my friend because it’s it’s completely a different mindset than traditional buy and hold. Let’s let’s dive in. In your view Lou what’s the biggest

Lou Jewell (07:41)
Look out, buckle up.

Land education. Land education.

Core talking points, is

the most misunderstood but not risky, okay? There are no comps for saying. It’s interpreted, not compared, okay? It views what it can be, not what it is. Every property is unique. Just like your fingerprint, your fingerprint, topography, you you can put your thumb up and it won’t match mine, right?

Recreational land has been the hottest thing going on here for years. That’s why you see all the four wheeler companies and out there, the Polaris and so on. Most people are looking for five to a hundred acres for investment. There’s development land out there, subdivision opportunities. So, you know, some of my investors, they’ll come in and they’ll buy a track of land that’s not ready to be in subdivision because the population hasn’t moved to that rural area, okay, as the urban crawl goes. But it’s a good investment along

term and then the potential of it being rezoned and then turned into a subdivision of some type, either commercial. So like W.C. Fields says, if you know the direction people are going, get there before they do and buy land. It’s the old adage.

Scott Bursey (08:55)
And on that note, Lou, if I may just interject real quick because our listeners really want to know this. What’s the biggest, most proven strength you see in the raw land investment space right now? We got to know.

Lou Jewell (09:09)
Well again, you’ve got all of these industries coming in with our new government, know, the AI boom, and they’re going out and buying rural land right now, so it’s WC fields, okay, and building these mega plants and so on, plus the carb dealers and so on. So there’s tremendous opportunities, especially in the commercial side, for those that are smart and understand land. And that’s the problem, how do you understand it, okay? Where do you get educated? It’s either you get with a group of people that have years of experience,

Or

you join and take some of the RLI classes or bi classes or the classes that are coming up You know, you don’t really analyze land you interpret it and that’s the miss number land is not created equal land is not caught does not call you at midnight Okay, like my my hot water heater just broke There’s no legal asset

Mistakes that people are warned about, that’s tidal work, this is real important. Surveyors, contacts, history through the county of subdivisions, how many times the land’s been split. Because sometimes the land’s been split more and they won’t let you split it anymore, okay? These are questions you asked up front.

Due diligence is very important in knowing what to do and what to ask before you pull the trigger, okay?

Ignoring zoning, that’s a no-no. Assuming that all wakers are equal and not checking for water and septic. If you don’t have urban or county-wide services, you’re not going to have sewer. Sewer is 90 % of the cost of utilities. 10 % is water because water goes up and down.

Sewage has to be pumped in low areas to higher levels. And those pump stations are $150,000 to $300,000 $400,000 a station. So it’s very cost intensive. my dog’s shout and my robot dog says, houses need babysitting. Land just sits there and behaves. That’s a dog’s perspective. So.

My introduction to the program, the Land Masters, is built by experienced land professionals, multiple courses designed to help people start and grow land. We’re launching that soon. Look out for it. You can help us promote it. It’s ⁓ thelandmasters.com. This is real world, practical with people that educate, that teach what they know, not know what they teach. We build Land Masters to tell nobody’s teaching land the right way and we want to give people a path to business.

Market insights demand rural recreation hot ranges five to twenty acres path to Grove Most investors do not avoid land because it’s risky they’ve already because no one taught them how to understand it and Once you do it opens up a whole new real side of real estate investment, which is to your group out there If you want to learn more go to my talk show WW

land.net. Like I said, there’s 290 hours and that’s the preface of my book and then I’m doing series books on my interviews, one on soil, one on timber, one on the different aspects of land. So there’ll be a whole series of books following that one.

How many states offer land education? The short answer is none, really. If you’re talking about true land education, not general real estate, very few states offer it in any meaningful way. It’s not standardized, it’s not, most cases, it’s not coming from colleges or universities at all. The real level, the only consistent structured land education system nationwide is the Realtors Land Institute, www.rliland.net. Follow us, come to our inventions, come to our chapter meetings,

network, you’re going to meet the people that really love and enjoy land man and land ladies. It’s open to all. And then there’s we have the land new program fast tracking. can take our classes in 10 days to get your ALC. And then you have to do the additional work.

key point this is not tied to colleges or required licensing it’s elective and professional training. We’re 90 years old we were established in 1945 by the National Association of Realtors. Our first name was Farming Land Institute.

We have 1,968 members out of 1.5 million. We have 764 accredited land consultants. So land master’s job is we’re gonna help educate the balance. If we can get 1 % of the 1.5 million, we’re getting our job done. 50 states require real estate education, but it’s all residential focused. There’s no state in the country that requires that you actually understand land or sell it.

They look at us as a nuanced business. Land’s a nuanced business, okay? And they also, in my research, I feel they’re afraid to get too involved in it because there’s so many issues with land and liability potential that they just don’t want to get involved in and not teaching it. How do you train the instructors to teach a class? In North Carolina, you’ve got 90 hours of class, then you’ve got three 30-hour classes, and they’ll throw a slot up, teacher will. Land is the most complicated of all real estate transactions.

you ask the instructor why and they say well let’s talk about square footage of a house because they’re not trained to answer the questions. It’s really a shame I tell you. You guys out there beware.

you especially if you’re first starting out if you’re just getting into land investment and investment that you guys speak of highly you know take my take my words seriously because it’s important it’ll save you money it’ll save you making mistakes it’s the more educated are the more you understand things and the resources of people that you network with is key too I mean I have a survey I’ve used for 30 years I have a soil scientist I’ve used for 30 years you know I build these with

I have attorneys that only do land closings. They’re not in court doing tort and you’re trying to do a land closing. Land education is fragmented. There’s no standardized path. That’s why we build land masters to actually teach people how to understand land in the real world. The real estate education exists in all 50 states, but truly there’s no land that’s scattered, okay?

Simple podcast version. When I look at land, my due diligence comes from a few key things. Access, zoning, utilities, soil, topography, and what the land actually used to be, okay? And then I build from there.

If you miss one of these, you can turn a good deal into a bad one real fast. They’re all important. And my book is coming out. I really go through all these elements that you need to be aware of. So that’s a great, be a great primer for anyone that’s looking for a good source of land education. Road frontage, recorded easements, very fine deeds, access, not just use access. Old farm roads, you’ll pull a deed and it talks about an old farm road going across the property. Well, where is it? There’s no meets and bounds.

But I had a forensic surveyor on and he talked about the old agricultural maps. And you take a piece of land that’s been in timber for 50 years and you don’t know where the road is because there’s adjoining properties behind this landlock. But the deed calls for this old farm road. Well, where is it? Well, he goes to the agricultural extension department, gets a copy of the old ag maps. Now he can source it and recreate it and do meet some bounds on it and now solves that problem.

Stuff like that

Roach frontage and recorded easements, they’re different. Some banks, they have widths of access. I did a development in a little town, the county seat of Stokes County in Danbury, 108 people as of last week. And it had a 10-foot east, access to a 46-acre parcel. There was a post office on the entrance on one side and the volunteer fire department was on the other side. The owner of the post office would not work with me because he didn’t want to mess up his lease.

And the fire department gave us 20 feet and we were able to develop the property.

Road frontage and recorded easements, once verify deed access. It’s not just used access. mean, using it, you know, you got adverse possession after 20 years. It needs to before a bank’s gonna lend it. And one of the key things to that is when you’re investigating property, pull the title policies, because that always shows the exception. Some of those have been remedied, but sometimes they’re not, and that’s a good place to start. Or if it’s complicated and you’ve got another opportunity to buy something else, move on. You don’t need to aggravate yourself with a piece of property.

when you have other opportunities. County zone classifications as these towns move out, extraterrestrial territorial jurisdiction called ETJ, a lot of people are not familiar with that concept. That’s for a township like Pilot Mountain of 1,400 people. We have a one-mile extension of our city limits that we control the zoning. Now we don’t provide services, we don’t annex them, they don’t pay city taxes until we get enough rooftops and enough money to justify that because now we’ve got to put in more to the sewer.

police and fire services, okay? So that’s a great area to anticipate, especially ⁓ development in the future. There’s a go study of these ETJ areas and what the town or the community, they all have master plans for the future and that’s a great resource to look what’s needed. I just sold 10 acres. I’ve had the property listed for 25 years up here at our intersection to tractor supply. And one of the things that they brought up at the town meeting was the fact that was in our master

plan for expansion for the town. it fit right in. was the deal breaker or the deal acceptance. Rezoning and restrictions, zoning classification, minimum lot size, restrictions, homeowners association rules if you get involved. Zoning tells you what to do, restriction tells you what you can’t do. Utilities, water, public, whether you’re going to be able to have public water or if you’re going to dig wells.

Energy for years. I’ve told people they bought a thousand acres and built a house on it that the utilities will bring their services to them free Which has been true up until a couple years ago when I sold a couple 14 acre track for $45,000 and we found out that the utility company was charging them $12,000 to run power to their home site What a nice surprise that was and nobody tells you anything and they won’t quote it So be careful on your utilities access when you’re looking to develop land, okay?

Internet, that’s getting more popular now, even in the rural areas, they’re doing a good job in getting this higher net. Of course, you’ve got, go start a satellite access now. So utilities don’t affect usability, they affect value. Soil, perc tests, septic stoop ability, soil types, limitations, no perc tests, no house, it’s that simple, or no construction, okay?

And just remember, land is a home with no walls. Topography, that’s important, slope.

buildable areas, drainage, you may look at a piece of property and say I can do 20 units on that property even though it’s got a regular topography. You look for accessibility, you look for features, views, water, etc. But then once you do the soil test, which you should always do first, you’ll find out maybe you could only do half of those. So you’ve to reconstitute what your plans are, which changes all your figures, know, your bottom line, your capital, your investment.

slope, of lay orders, drainage. Wetlands, that’s a misshuntered thing. That’s areas where you have hydroponic plants, there’s 106 varietals. The Swamp School in Raleigh, North Carolina, Mark Selinger, he teaches classes. He has hydroponic plants that he grows for restoration.

But if you’re in an area that has Venus fly traps, for example, of one, that may lend itself that that part of the land is in a…

wetland designation. They can come out, they can verify that. You may have a piece of property that’s selling for $5,000 an acre and you have five acres that’s in wetlands, you may get $30,000 $40,000 an acre for it once it’s certified through mitigation banking. These are all areas that are important in looking at the overall picture. And companies like Mark Selinger and they’re around the country, they’ve already mapped most of the wetland areas. So they’re resource that you can go to and verify

if you think or…

have a company that does the same thing. Survey, boundary confirmation, encroachment, you got overlaps, you got, I call it areas of confusion. When two deeds, know, one was done in 1928, one was done in 1943, and one went clockwise, one went counterclockwise. And you know, the old surveying methods, they used to pull chains, you know, and now your surveyor goes out and sets up a control point to the satellite and walks around with his instrument by himself

doesn’t bunny hop. I’ve done it for years and determined. So there’s a lot of issues with surveys again. lot of the county government mapping offices still in the old days a lot of the surveyors would bring a copy of the survey not to be recorded but just give it to them and put in their files. So that’s another great resource when you’re looking for history of property because you know if it’s not platted which every survey from now on should be platted recorded.

in the courthouse because that’s a permanent record. The owner dies, the family doesn’t know where the survey is, the surveyor dies, nobody knows where his work or her work is. So, you know, that’s another resource. then flood zones and environmental, That’s FEMA flood maps, I’m sorry. Of course, wetland delineation and buffers, usually around any water source, even if it’s a small trickle, it’s gonna have a 50-50

foot

riparian buffer, which means you can’t disturb the vegetation or cut trees within 50 foot of the center of that water source. So when you’re laying out a subdivision, you have to take all this stuff in consideration because you may have two acres of just ⁓ non-useable land just because of riparian buffer.

The other thing too, when they survey some jurisdictions, they center to the center of the highway. So those parties or multiple parties are paying taxes and some survey to the property line. You sell a big four or 500 acre track with a lot of road frontage, there may be 10 or 15 acres that’s just road frontage and you’re a farmer. It doesn’t do you any good. Why are you paying $10,000 $15,000 an acre for it on something you can’t use? These are things to look out for.

Heist and vest use, that’s the key to value. That’s the key to feasibility of what it can be used for. For residential, recreational, for development, subdivision potential, future growth pattern. The real value in land is not what it can become, it’s what it is, okay? Your signature line is.

Land due diligence isn’t complicated, but it’s detailed. And if you skip a step, you’ll expose yourself. Ultrasound, vision, you need to know quick. Access, zoning, utilities, soil, usable land. That’s the foundation. Everything else builds on that if you want. So that’s kind of my overview. You have any questions?

Scott Bursey (24:26)
Lou, you were all killer and no filler. Thank you so much for being on the show here today.

Lou Jewell (24:32)
Yeah,

you’re more than welcome. Thanks for the opportunity. And any of your listeners, my phone’s always on, 336-669-1405. My email’s [email protected] I welcome anyone. I don’t charge for helping people.

Scott Bursey (24:35)
It was our.

Outstanding having you here. Everybody, Jewell.

Lou Jewell (24:52)
Thank you so much.

Credit to Land Consultant.

Scott Bursey (24:55)
Absolutely. Thank you so much once again, Lou. And to our listeners, we appreciate each and every one of you. If you got value from today’s episode, please subscribe. We’ve got a lineup of exceptional guests just like Lou, who are making huge moves in the market. Until next time, keep your standards high and your vision clear. We’ll see you in the next episode, everyone.

Lou Jewell (24:57)
You bet. Thank you, Scott.