Unlocking Wealth: How to Profit from Land Investments with Brandon Rooks

Dylan Silver (01:33)
Hey folks, welcome back to the show. I’m your host, Dylan Silver. And today on the show, I have a decorated Navy veteran real estate entrepreneur building multiple businesses while growing his investors portfolios. Brandon Rockstar Rooks. Brandon, welcome to the show.

Brandon Rooks (01:53)
Thanks Dylan, thanks for having me.

Dylan Silver (01:55)
It’s a pleasure to have you. I always like to stop off at the top of the show by asking folks how they got into the real estate space.

Brandon Rooks (02:06)
was a long time ago. ⁓ I actually started in the mortgage industry first and had a buddy come to me that had gone over to real estate and they started selling ⁓ turnkey new construction properties to a group called Marshall Reddick out of California.

And he came to me and he says, hey, we’re selling these houses. We need someone that can do investment lending. And I connected with Ohio savings national bank and said, let’s put together a product. And I, I just did a flat 1.5 % and I gave all of the investors a par bank rate, which meant I was, they were getting rates that were beating everybody by like 1%.

in the industry, you know, for investment loans. And ended up getting a lot of investors. I did 50 to 100 loans a month during the early 2000s. And then I got headhunted into selling a ⁓ turnkey new construction 300 unit development down at Lake of the Ozarks, Missouri.

And ⁓ that kind of just spiraled from there. I ended up getting connected to a hedge fund group in California. I brought $86 million in projects to him in Lake of the Ozarks in 07. And then 08, it all went away. I lost about $5 million and none of my investors lost any of their money. I was able to recapture and protect all of their down payments and their things that they had in.

and then it but it killed all 86 million dollars in sales so I lost about five and a half million started all over again from scratch in 2010 and just started selling like ⁓ lots in resort retirement second home type destinations for a buy and hold strategy got reconnected in you know new construction and renovation turnkey projects in 2011 2012

went on to sell about 954 turnkey new construction properties in 2015 to my investor base.

All this is done from no cold calls by the way. I haven’t made a cold call since 2000 This is all clients that know me like me and trust me and have had been following me for years But and then we just kind of flipped the script. I started learning how profitable dirt was and I found a way for our investors cash flow on dirt and That’s what we do now and we can talk about later but yeah, I kind of fell into it by being head-hunted and then just getting really lucky and

You know, don’t get me wrong, hard work, but there was lot of luck at play in how I got into it.

Dylan Silver (04:42)
Did you know when you were

in the Navy that you were going to go into real estate when you left the service?

Brandon Rooks (04:46)
didn’t have a clue. Matter of fact, I was an advanced electronic warfare technician operator. I ran the anti-ship missile defense system, did three tours in the Gulf, and saw combat. you know, what I thought I was gonna do was the electronic field, you know, when I got out of the Navy.

I got so sick of electronics and it bored the crap out of me and I went out of the Navy and I sold MCI long distance at night, cars during the day, and I started with a mobile disc jockey business. So I was actually a DJ psycho of DJ’s Run amok in Northern Colorado for a couple years.

Dylan Silver (05:19)
getting

into the real estate space and then here we are today. You talked about dirt, right? Dirt’s an interesting, an interesting, because I’m looking at it. I’m a wholesaler, real estate agent, aspiring investor, and there’s so many opportunities that you have with dirt, whether it’s building a subdivision, you could put ADUs, affordable housing, you can do new builds if it’s in the right area, even if it’s on outside of the city. Where is your vertical at with dirt and what are you using with dirt?

Brandon Rooks (05:47)
So I started working with some partners that I was helping them pre-sell all their new construction turnkey rental properties in the Carolinas in Florida. And it was about 2018 that they were like, hey, can you raise capital to allow us to start buying more grounds so we can build more product? And I said, I’m sure I can do that. We make it attractive enough to my investors. said, long as I can deliver about a 15 % average annual return to my investors, then.

you know, that’s kind of what they’re accustomed to and what they’re comfortable with. Then I went ahead and did that and we raised $3 million to buy a piece of ground in Charlotte, North Carolina that they had intended on building out. It was going to be 99 townhomes and

It was not even a couple weeks after they bought it. Ryan Holmes came knocking on the door and said, Hey, I don’t know how you guys got this property, but we were just about to buy that. We want to make you an offer. And my partner at the time, Lindsay Jarvis says, well, no, we’re going to build it out, you know? ⁓ he just, Tim Samuels was from there and he kept on him and on him. kept calling back. Hey, you guys haven’t pulled permits. We really want, we know we’re ready to move on this ground. We’ll make you a great offer. This went on for several months. And then Lindsay finally said, fine.

us an offer and so I can tell you no and we can stop having these conversations. Well basically they walked in with a 6.3 million dollar offer that they paid 3 million for and it’s like he’s like what the hell he goes if we had built the whole thing out we were gonna net about $20,000 a door this ended up netting almost 33,000 door and we never had to build a thing.

So that was what was kind of like the eye-opener. And he’s like, what are we missing? What we were missing was the national builders were building for like $65 a foot.

Dylan Silver (07:36)
I ya.

Dylan Silver (08:29)
Yeah, buying that piece of ground,

Brandon Rooks (08:31)
So bought that piece of ground for 3 million and then Tim Samuels from Ryan Holmes was all over us to make an offer. Kept coming back several weeks at a time and it was several months in and he finally came to Lindsay and Lindsay said, fine, make us an offer so that we can turn it down and we can stop having these conversations. The offer was $6.3 million. We paid 3 million for it.

didn’t put another penny in it and sold it for 3.3 million profit. That was kind of the eye opener at the moment. It’s like, why would a national builder pay so much for this property? Works out to the national builders, their bill cost is like $65 a foot at the time. Ours was around 90 some dollars a foot. They’ll pay top dollar for shovel ready permitted ground.

because it keeps it off their balance sheets and they’ve got their build costs so low. And that was the eye opener. And there was a couple of series of other things that happened. You know, it’s kind of a long story, but Tim Samuels eventually was let go of Ryan Holmes. He was known as the godfather of land in the Carolinas. He knew everybody. And they let him go because he’d been with them for long time. They were trying to cut costs, use someone else that came in that would take his position. When they did that, they signed a one year non-compete.

And they also lost 1600 lots they had under contract to purchase because the sellers like, you know, they went to him and said, look, Tim’s no longer with us. You deal with us. You’re like, we don’t know who you are. We know Tim. We don’t know you. So they canceled and Tim just kind of said, I’ve got an idea. He’s like, I know a lot of other land asset managers that work for the nationals. How about if you guys raise the capital, I’ll bring them up under our team and

will go out and source ground that all of our guys already know how to do and deliver to the national builders. Long story short, because it’s a long story, starting in 2019, we started that model. I started raising capital and funding them as a lender on ground. And they took that one project of 99 lots to they now have a pipeline of over 46,000 lots.

in five states in the Southeast and Texas, worth close to $1.5 billion. And I’ve raised a total of about $85 million total against their operations and their profit margins on average are 50%. There’s more money in dirt than there is in going vertical or rents or any kind of IRR or depreciation or deductions you can get on real estate. I got out of all my doors.

Dylan Silver (10:56)
Cheers!

Brandon Rooks (11:21)
Now all I do is I clean dirt.

Dylan Silver (11:21)
Let’s let’s talk

about let’s talk about how people get into dirt. So if they’re starting out, maybe they’re looking at doing a flip, maybe they’ve got, you know, let’s call it. Let’s call it, you know, 100 to $300,000, whether it’s cash, hard money, however they’re doing it, we can fill in the gaps there. Maybe there’s some wiggle room in that number. Is there a dirt play that they can do with that amount of money?

Brandon Rooks (12:20)
You know, dirt’s highly profitable, but it’s all about the right dirt, the right location, and what you can do with it. ⁓ Getting in at lower amounts, one thing that’s been pretty successful for a lot of people is finding parcels of ground that are maybe a little on the outskirts of the city that they can pick up from a farmer or an owner or someone that’s just got land that ⁓ they…

get it and they just basically subdivide it into maybe one or two or three or four acre type parcels. And then someone can put like mobile homes or ⁓ manufactured homes on them. That happens a lot in Texas, by the way. And I know a few guys that are doing it. And that’s one approach. But when you’re talking about the amount of money it needs to get involved on the national scale, national builders need to be looking at building at least 100 homes.

So that’s going to be about 33 to 35 acres minimum and the price is going to be probably little higher and they need all the entitlements and permits in place. But there is levels of that. There is a book called Dirt Rich by Mark Podolsky. ⁓ P-O-D-A-L-S-K-Y. If somebody was looking to just get in, you know, and do it on their own, I would recommend reading Dirt Rich by Mark Podolsky.

That could be a play. Or what I’ve done with our operation is I already have the connections. We’re already operating in five states. We already have all the end buyers, the biggest national builders in the country that are buying from us. And you can just invest with us and you earn passive income, cashflow. So, and I’ve made it really easy. have a Reg A SEC compliant offering, 10,000 minimum.

Dylan Silver (14:02)
Mmm.

Brandon Rooks (14:11)
You can invest with personal funds, IRA funds, trust or LLC. ⁓ and you know, thousand dollar increments. can add to it. You can do, let your dividends or your distributions add to your, your principal. If you go and look at us on rockstarcapitalfund.com, you can get a lot of information on that, but yeah, there’s definitely plays. ⁓ you could start with just simple subdividing land and selling it off.

you know, partially entitled or partially permitted ⁓ to people that want to put some homes on, you know, one to five acre parcels, especially in Texas.

Dylan Silver (14:47)
Let’s get a little,

let’s get a little granular here. Subdividing land. Funny enough, I was talking with an investor last night who I was talking about a deal that I am looking at potentially. And he was talking about subdividing land. What is the process for that like? So if you have ⁓ a plot of land, know, however many acres that it’s on, you want to go about subdividing it. Who do you reach out to? What is it? What are the steps and what does that look like?

Brandon Rooks (15:56)
You guys start going to the county and the municipalities as far as ⁓ getting that type of stuff done. That means some city council meetings maybe on occasion, depending on the level that you’re gonna do it. But that’s all done by ⁓ our land asset managers and our engineers. I’m the capital raising partner, so I don’t know the specific ins and outs of all of how they do that. But it’s easily researched, right? ⁓ Reach out to your county and reach out to your city on how to get that done.

And you just want to make sure that there’s the right features. They’re going to be able to either have septic or well, or they need to be able to connect to city or water or city sewer. you’re getting it to a point where the zoning allows for it and allows for that type of product. That’s kind of the start. You just had to make sure that you got a clean title. There’s not a clouded title.

have any issues with easements? Like if accessing water means getting it because you got to cross somebody else’s lot, you know, are you going to need an easement for that? You know, those are the types of things to look at, but it’s really, I think a lot of that is laid out in that book that I mentioned. And it’s, it’s researchable. Now on our scale, we’re just working at a whole lot different scale, but all of our national builders, what we go after is zoned for multifamily, single family attached or detached housing developments.

the end product they’re building usually falls in the 250 to $500,000 price point, the most needed segment in America today. you know, there’s just different things that we have to go through. It takes 18 to 36 months to take our projects from start to completion. So.

Dylan Silver (17:42)
Now, you mentioned raising capital. I’ve had quite a few guests who raise capital. I’ve had guests that go from publicly traded markets, Wall Street, to then raising capital in real estate. And I’ve had mixed advice. And one of the more interesting things that someone told me, major capital raiser on Wall Street goes, partners with a contractor, they do a real estate company. He told me, tell everybody that you know, and people that you don’t know, anybody that you meet.

what it is that you’re doing and basically how can they invest with you? And I was like, well, how do I do that? Like, I can’t, that was just gonna turn everybody off. And he’s like, well, you’ll never see them again. You need to raise capital. And I think a lot of people, especially when you’re starting out in real estate, nine times out of 10 people are bootstrapping. People are bootstrapping. But there’s a lot of people on the sidelines, you know, who have money.

and they don’t have economy of time and they would probably love an opportunity to get involved in some of this stuff like dirt that’s pretty niche that’s also I think pretty cutting edge even though it may not be as all over the place as you know maybe some other real estate strategies but it’s it’s niche and cutting edge so in raising capital and if you were to give advice to folks who may be looking at plays what can people start doing to raise capital

Brandon Rooks (19:05)
You know, raising capital comes from a trust factor. I mean, you start with your network that you know. You know, you’d be surprised if you start putting together phone numbers and emails of people that are in your network or that you’ve met or you’ve run into. And that’s kind of the first thing. But then you’ve got to have a clear cut plan and you’ve got to be on on your projections, you know, under promise, over deliver, build a reputation, you know.

A lot of people have a great idea and then go open up a reg D, you know, or like a ⁓ proprietorship or, know, a partnership or something like that. And they throw out all these fantastic projections and then they don’t hit it, you know, and I’ve seen that happen so many times in the industry. seen, I always tell people a pro forma looks great on paper, but let’s see some proof behind the pro formas and

Make sure that whoever you are working with has some knowledge, has some experience, has a track record. So sometimes you got to do that on your own, even if it’s small, you know, even if you just do a ⁓ fix and flip or you do a wholesale deal and you have success and you can show your projections, your numbers, that’s a start. And then it kind of goes to, Hey, maybe just a couple of people come in with you on the next wholesale deal. Let’s do this. You find a couple of people that invest.

You have the track record, you show what the returns are. Now it’s easier to start raising capital. didn’t, you know, I, right now I have about 85 million in assets under management under my Rockstar entities. I have probably another 10 million under management under private note capital. And it didn’t happen overnight. You know, it has happened since I started raising capital around 2017, 2018. So it’s, it’s taken a while to get to this level.

but it just started to skyrocket. You know, was like real slow, slow and then boom, performing. then, you know, so here’s the thing people, all want that get rich quick. They want to make money overnight. That’s not how it works. And if that’s the approach you take, it’s going to make it that much harder for you to raise capital because people are going to sense that and just be genuine, be honest, start small, you know, do a couple of deals, have a track record and then

Dylan Silver (21:06)
Yeah.

Brandon Rooks (21:31)
put something together that is airtight. ⁓ A Reg D is a great way to start. It’s how I started. But then I got to a point and level where it made sense for me to merge all of my Reg Ds into a Reg A because now I have more SEC compliance. I’ve got to do financials and send them up every six months. I have to do a third party independent audit every year and send that to the SEC. It just builds a little bit more investor confidence. But it’s

I’ve been fortunate.

Dylan Silver (22:02)
It’s not

like you just run into ⁓ large sources of capital. ⁓ Talking about land and the

Brandon Rooks (22:09)
Mostly

mom and pop investors. Most of my investors are under $100,000 investors. Most of them. So 560 of them.

Dylan Silver (22:18)
Yeah, take that.

You know, talking about opportunities on land, there’s different developmental plays, right? So most people are going to look at subdivisions if you’ve got acres and acres, but also there’s RV parks. I’m also seeing now modular homes. ⁓ And then I forget what the other opportunities are that I’ve been storage facilities, right? So there’s some. Yeah.

Brandon Rooks (22:43)
commercial aspect. Yeah, car washes,

storage facilities. You bet. I’ve got a buddy that does really well in that space. He just gets ground ready for car washes and self storage and makes a ton.

Dylan Silver (22:53)
You know?

With those deals, in many cases, you don’t have the same level of, would, for lack of a better term, headache that you might have dealing with tenants. And in some of the other cases too, like if you do RV park where they own the RV, right? So they’re only renting the land, right? Your maintenance is minimal to none, right? So they’re taking care of whatever.

their area is, right? So it’s not the same thing as owning an apartment complex, owning a bunch of single-family homes. So these land plays with people needing affordable housing, like needing. And then on top of that, you have less maintenance. And then with the storage facilities, it just feels like everyone needs extra space. At least it feels that way to me. When I’ve moved, every time that I’ve moved, I’ve been like, I need a storage facility. And then I just don’t end up canceling it because I’m like, well, I’m using it. It’s only, how much am I paying for that thing?

Brandon Rooks (23:49)
You

Dylan Silver (23:50)
Yeah, let me just keep it because I have all this extra stuff and then you look up it’s two years later and you’re like, maybe I didn’t need it the whole time, but you never canceled it.

Brandon Rooks (24:01)
I, you know, it’s a huge business. I’ve never owned a storage unit, ever. If I’m not using it, it goes away. It gets sold or it gets left behind or it gets given to my kids or something like that. But that’s me. So, but I know that the self storage industry is a huge industry. And I know that a lot of people have made a lot of money in it. So.

Dylan Silver (24:22)
And growing and then you mentioned car washes, you know, industrials, another one that that people are getting into, I think, I mean, and we’re gonna see more and more of this with the automation. I mean, I don’t know when it started to be a fad that you just go through all these car washes like automated, and you just trust that everything is going to go right, but now they’re everywhere. And then they’ve got the, you know, the just a nice experience. And now they’re everywhere. I’m thinking, well,

Brandon Rooks (24:27)
convenience.

Dylan Silver (24:48)
This is an interesting real estate plan. Another thing too, I don’t know if you’ve seen any of this is pickleball courts. I’ve seen pickleball courts go up in every area. It feels like where they’re putting in like luxury apartment complexes. And so it’s like not just pickleball, but they’ll have a whole like facility. And I’ve seen and you may have seen this to like our luxury RV parks, not not low end, but like luxury will have

a restaurant, they’ll have attractions, they’ll have an area. And all these land plays that we’re talking about, it may seem like, you know, who’s really doing that to someone on the outside looking in. But then once you get to where you’re at, and even from my vantage point, having guests like yourself on the show, it’s that red car theory. It’s like, well, now I’m seeing land plays everywhere that I go. I’m in Texas, so it’s not like we’ve got a shortage of land. And you’re just seeing opportunities everywhere. And then new opportunities. I learned about

Modular homes last week and thinking about how that’s potentially going to change, you know American housing

Brandon Rooks (25:53)
Yeah. All real estate starts with dirt. All of it. So that’s one of the reasons that I’ve, you know, I sleep really well at night. ⁓ knowing that I got into the space that, you know, they’re not making any more of it. And then the guys that I fund and the partners, we were partners at first. Then when we decided to make Rockstar more of a lending operation, the attorney’s like, look,

you guys can’t be general partners anymore. Like, well, why not? You can’t lend to yourself. I’m like, okay, I got it. So a lot of lessons learned, right? But we’re strategic partners and there are borrowers and I only work with them because I know their track record and they’ve amassed, you know, they’ve brought on some top executives into their operation that have worked for national builders before and have left to come over to their operation. They’ve been growing it. They’re being…

approached by huge private equity groups and institutional type investors and they’ll likely go public and which is good. That’ll be good for all of us and they’ll go public with the Southeast and then they’ll say boom we cash out let’s go do this in the Southwest let’s go do this in you know the Midwest and then what’s great is the relationships they built with all the builders is

Those builders are like, when are you gonna be in Tennessee? When are you gonna be in Alabama? When are you gonna be in Arkansas? And they’re like, as soon as Rockstar raises more money. pressure’s on me, you know? And ⁓ so that’s kind of where I’m at. I’m at a point where I’m trying to tap into people that see what has been accomplished and what’s feasible and how they can get double digit annual returns every year, passive income. And all we’re doing is just funding basically the creation.

Dylan Silver (27:24)
waiting on you.

Brandon Rooks (27:45)
of dirt that’s going to be, you know, turned into affordable housing and workforce housing across America.

Dylan Silver (27:52)
Brandon we we are coming up on on time here. Where can folks go to learn more about rock star and maybe to get in touch with you?

Brandon Rooks (28:00)
You can go to rockstarcapitalfund.com. You can also email us at info at rockstarcapitalfund.com.

Be careful when you look, there’s a lot of Rockstar Capitals across America and ⁓ we are, you gotta make sure you put the right email address or the right web address. It’s rockstarcapitalfund.com. I think you can also find us at rockstarcapitalgroup.com. think my team had bought that domain and it moves over to us as well. But real easy to reach out to us, info at rockstarcapitalfund.com or just go to our website, you can put

you know, in the investor portal or contact us and watch a little information on us. It’s a very easy process for us. Accredited, non-accredited investors, 10,000 minimum. You know, you invest all online. We use DocuSign, we use AppFolio as our management. And again, we’re a Reg A SEC compliant offering. So I’ve got to send up financials and audits every year to the SEC. And so far our track record has been impeccable.

You know, it’s we’ve been delivering anywhere from 12 to 16 and a half percent to our investors since inception. So beat the stock market every year.

Dylan Silver (29:25)
If Wall Street isn’t working for you, reach out to Rockstar Capital, right? Brandon, thank you so much for coming on the show here today.

Brandon Rooks (29:30)
You

You bet. Pleasure. Pleasure to be on.