Why Land Entitlement Deals Can Create Million Dollar Spreads for Real Estate Investors

Cody Bjugan (00:00)
I think where most people struggle the most is not necessarily related to my business model. I think it’s just related to human nature in general. Is—is that, you know, if anybody’s been in the education space for any length of time, the hardest thing for me was going and putting my whole career into a program and then realizing how many people never finished the program. And then those that finish the program, how many, how few actually go and will try to execute?

Michelle Kesil (02:00)
Hey everybody, welcome to the Real Estate Pros podcast. I’m your host, Michelle Kesil. Today I’m joined by someone I’m looking forward to chatting with, Cody Bjugan of Allied Development, focusing on land entitlement through education, private equity company, and having land business. So really excited to have you on our show today.

Cody Bjugan (02:25)
Thanks for having us. Yeah.

Michelle Kesil (02:26)
Of course. Well let’s dive in. So first off, for those new to your world, can you share what your main focus is these days?

Cody Bjugan (02:33)
I mean my main focus is Jesus, right? So as far as an individual, my faith, but as far as my business, we—we call it our LDP model, land with development potential. We specialize in—in sourcing off market land that has development potential, getting it entitled or approved for development, and then selling it. That’s—that’s our—that’s what we focus on.

Michelle Kesil (02:55)
And are you in any specific markets or is this nationwide?

Cody Bjugan (02:59)
I mean we’re—we’re nationwide in—specific markets, meaning that if people want to live there, it’s a growing, right, market, more than likely we’re—we are sourcing deals in them.

Michelle Kesil (03:12)
And what made you niche in the land side of real estate specifically?

Cody Bjugan (03:18)
Yeah. So you know I was in the trades many, many years ago and—and—and doing work for home builders and—and so back in—I became a home builder, but then I quickly realized, you know, home builders, if you don’t control the land, you’re very vulnerable. And so then I started learning the land space and entitlements and all that. So that’s kind of how I got into it.

Michelle Kesil (03:41)
And what do you feel have been some of the main keys that have allowed your business to grow and run successfully?

Cody Bjugan (03:47)
What are those, some of the main things? You know, it—I, you know, to be frank, it—it’s time, it’s—it’s pain, it’s trials, it’s tribulations. Like we’ve been doing this 24 years. And so I wouldn’t say we have any magic sauce of why our business is able to thrive, except for knowing that consistency compounds, right? Is that we continue to learn from our mistakes and grow and reflect and—and continue to become a better version of ourselves. But I think one of the biggest things that I think is harder and harder to come by is someone that’s been doing the same exact thing for over two decades and they’ve been consistent, right? And so cause if you—if you are consistent, then your business, if you allow it, continues to evolve.

Michelle Kesil (04:40)
Yeah, absolutely. And how has your business evolved in what is like this current iteration like focused on?

Cody Bjugan (05:38)
Well, I mean, we went from a local company to a national company would be one. Would is be as far as how we’ve evolved. So we do that business model that I mentioned. And then, you know, I mean, now 2019, so what, seven years ago, we started teaching the model. So I’m—I’m one of the only ones I know of online or my company that teaches it. And then—and then we’ll also, you know, back five years ago, we started letting others invest into the model. Right, so now we have funds as well.

Michelle Kesil (06:15)
And when you teach this model, is there a particular framework that you’re walking your students through?

Cody Bjugan (06:22)
Yeah, I mean very much so. I mean, we get raving reviews about our program we’ve put together. You know, one thing about the online education space is a lot of online education companies have a lot of like refunds and chargebacks, and—and ours is non-existent just because of how in depth the program is. And so it’s basically like an eight week program, but then there’s a community and there’s numerous live calls every week. You can get one on one coaching, like it’s—it’s very, very in depth.

Michelle Kesil (06:50)
Yeah, that’s great. Can you share some examples of some of the things that students would learn?

Cody Bjugan (06:56)
I mean, they’re gonna learn our—learn our business model from A to Z, exactly what we do. So what—what even makes a land have development potential, right? So like, you know, like a friend of mine teaches land wholesaling, but that—that’s not having anything to do with the, d, really the development space, right? So we teach, you know, like the five keys, basic high level keys of development potential. Zoning—what is it zoned or what it can be rezoned to? You know, utilities—does it have public utilities at it or near it? How topography affects development, right-of-ways—is there a public right-of-way? Can you get to the property? And then teaching about constraints like overlays—environmental overlays, floodplains, wetlands, steep slopes. So we just teach all this stuff, but then it’s more how to source, find that land, you know, how to get control of that land, get it under contract, how to get it through that entitlement process, you know, getting it approved for development, and then how to sell it, right? I mean it’s really teaching everything A to Z and it’s an extremely in depth, in depth program.

Michelle Kesil (08:09)
Yeah, that’s great. And where do you see most people that want to get into this business struggling the most?

Cody Bjugan (08:18)
I think where most people struggle the most is not necessarily related to my business model. I think it’s just related to human nature in general. Is—is that, you know, if anybody’s been in the education space for any length of time, the hardest thing for me was going and putting my whole career into a program and then realizing how many people never finished the program. And then those that finish the program, how many, how few actually go and will try to execute? And so, you know, the biggest threat, and it’s even a part of the contract people sign when they join our program, is we’re gonna give you all the tools and support and resources, but it’s really up to you. I mean, so many people, it’s unfortunate, but they lack the discipline to—to be consistent to see things through. And so, you know, like in our business, you know, like our average deal, our last 10 closings, our average deal, we’ve made like 2.7 million. And so yeah, the paydays are big and that’s cool and that’s great, but unless you’re willing to put in the work and be consistent, you’re never gonna see those paydays.

Michelle Kesil (10:02)
Yeah, absolutely. And so what have been some of your biggest obstacles or challenges that you’ve overcome and learned through in your journey?

Cody Bjugan (10:11)
Damn. I—I wouldn’t even—they’re endless. They’re endless. I—I mean I—I’m constantly learning every day. You know, but I mean, you know, I had a lot of success at a young age and so, you know, I had a pretty substantial net worth when I was in my twenties. And—and man, I was egotistical. I was—my image and identity was caught up in all the worldly things, all the materialistic stuff, the mansions, the cars, the clothes, and—and thank Jesus, I’m—I’m really am thankful for this. I lost ninety percent of my net worth in the Great Recession. And so it’s just going through things like that where you—you realize—I put it this way, I learned a lot more losing my money than I did making it. And so—so then you know, rebuilding my net worth again, it’s just there’s been a different motivators, right? Like so many people chase money and money’s just empty. Like there’s gotta be a bigger mission than just the money. And so we call it company with a cause, right? So it’s like if you have a cause, like, you know, to me, generosity is where it’s at, right? So if generosity is the focus and the motivator, it just allows you to see your business and financials and—and profits and all that through a completely different lens.

Michelle Kesil (11:44)
Yeah, absolutely. It’s important to have your bigger picture. Why?

Cody Bjugan (11:49)
Yeah, yeah.

Michelle Kesil (11:50)
What are you most focused on solving or scaling to next?

Cody Bjugan (11:54)
I mean, right now we’re just really just focused on, like I said, we—we call ourselves the housing shortage solution. So we’re really just trying to bring as many, you know, approved projects, approved for development projects as we can to our country. To have to make our, you know, our dent on that shortage in our country. Like it truly is a crisis. Like, you know, everybody’s talking about affordability issues. Well, supply’s a big part of why those affordability issues exist. And so it’s not the only reason, so I don’t want anybody to take that wrong, but we’re really just, you know, we’re focused on—on—on being a part of, you know, solving that problem.

Michelle Kesil (12:35)
Right. And what are some of the ways that you’re going to solve this problem? Like what does—

Cody Bjugan (12:45)
It’s by—s, finding more land, you know, it’s by getting it approved for development and—and that’s exactly how we solve it, right? So, you know, you know, every project matters. And so the—the more projects we get through the entitlement process and approved for development, every single one of those projects has an impact on that—on that crisis in our country.

Michelle Kesil (13:07)
Sure. And when you’re looking for land, is there certain criteria that you’re looking for in the places that you’re building?

Cody Bjugan (13:18)
So yeah, I mean, our main clients, I mean, you can—some of our students that we teach, they’ll do small projects like I did over 20 years ago, really in any market, right? But as far as my company, we’re really focused on larger projects. And so, you know, most of our projects sell to the large publicly traded or national home builders. And so if there’s three or four, three or more national home builders in the market, it’s more than likely a market we want to be in. Right. So we’re not trying to trailblaze, reinvent the wheel. We’re not trying to get these builders to go places they’re not currently at. We’re just trying to bring more inventory to where they’re already, you know, building homes.

Michelle Kesil (14:42)
Right. And can you expand more on the private equity portion of your company?

Cody Bjugan (14:47)
Yeah, so you know, five years ago, you know, cause you—I had mentioned, you know, we’re innovating, meaning we’re national, but we’re doing it from one location in Scottsdale, Arizona. That’s where the innovation comes in through utilizing technology and—and—and different things, which I don’t need to go into today, but we realized if we’re gonna do that and we’re gonna scale, we can’t scale at the level we want to if we only use our capital, right? And so we decided to open our first fund five years ago. We’ve now done numerous funds, and—and so now what we do is we—it’s for accredited investors only. Minimum investment’s a hundred thousand. And this latest fund we’ve launched is an evergreen fund. And so what happens is it’s—it, you don’t, your—your capital is gonna continue to roll. One thing I don’t like as an investor, because I’m invested in stuff, is I go and invest in something, it does whatever, and then I get my capital back and then I gotta figure out how to reinvest it. Like I don’t wanna figure out how to reinvest it. I just want it continue to roll. And so this latest fund is an evergreen fund. And then what we do is we just pay a straight up 15% preferred return that’s distributed quarterly. And so you get your pr, actual preferred return distributed quarterly. And then you can choose to take your distribution or roll it and allow it to compound. And so it—it’s a really simple, straightforward fund that—that we’ve got a—a ton of interest in and, you know, capital coming in, you know, daily or weekly. Yeah.

Michelle Kesil (16:20)
That’s great. What advice would you give to someone that’s wanting to get into this industry and hasn’t started yet?

Cody Bjugan (16:27)
You know, a lot of people are attracted to my business model because of the paydays. Be—and you look at the risk where we control real estate, we don’t own it, which mitigates risks substantially. And then the amount of capital that’s required. When people look at our niche business model, it’s extremely attractive as far as the return on investments and the risk and—and versus the substantial paydays, the risk-reward ratio. But and so every, you know, people flock to it. But I guess what I would say is related to my education company. Is our education company is not how we build our wealth. Okay, our education company is something we’re doing to help serve our legacy as far as helping other people. But I have no desire for people’s money to be a part of my education program if they don’t actually have the commitment of willing to put in the work. Right. And so it’s just if you’re not willing to put in the work or if you feel like you’re entitled to something or you’re just looking to—put in the bare minimum, like this is not for you. Right. Like, you know, I’m sure there’s other things out there that, you know, you can go and have a little bit of success with—with—with less effort, you know. And so it’s like if you want the big paydays, you gotta be willing to put in the work, you know, so. That—that, th, that, I guess, that’s what I’d have to say.

Michelle Kesil (17:56)
Sure. And as far as your education program, is this something that anyone can just join or is there a process for that?

Cody Bjugan (18:07)
I mean, yeah, anybody can be, I mean, they’re gonna go through a process, right? They’re gonna get on a call with our team. We’re—you know, we’re gonna chat with them, they can ask us their questions, and there’s people we have denied that even if they’re willing to pay us, we didn’t wouldn’t want them to join the program. But for the most part, I mean, really anybody can join. I just wanna make sure they’re fully committed before they do.

Michelle Kesil (18:32)
Yeah, absolutely. And what are you looking forward to as far as any goals or opportunities that you’re excited about?

Cody Bjugan (18:43)
You know, I’m—I’m really, I’m more focused at this point in my life. I don’t—I don’t—I don’t mean to—I don’t mean to preach here on your show, but I am a—a man of faith. I do believe in Jesus. And so, you know, one thing that motivates me each day that I journal about is—is like, whether it’s on podcasts or whether it’s on stage or whether it’s through my online personal brand, like I’m constantly just planting seeds about my faith because my faith is—is the foundation of my life. And I’ve tried life without it and I’ve done life with it, and—and I just can’t—I can’t imagine my life without it.

Michelle Kesil (19:26)
Great. Well, thank you so much for sharing all of that.

Cody Bjugan (19:29)
Yeah.

Michelle Kesil (19:29)
Before we begin to wrap up here, if someone wants to reach out, connect, and learn more, where can people find you?

Cody Bjugan (19:36)
So the—my team actually gave me—I’m gonna give you two different links, okay? Because some shows I’m on, we end up talking a lot about investing, a lot of some shows we talk a lot about education. On—on here today, we’ve talked about both. So I’m gonna give you actually two links, okay? And so if you want some free training as far as what we do related to our education company, we have some free training what you can go for free in and check out. You just go to vestright.com/fuel. So based on your guys’ company, right? So vestright.com/fuel, and you go there and you’ll get some free training that’ll teach you more about our business model. If you’re looking to invest, right, then you would go to alliedlandfund.com/fuel. And if you go there you can learn more about the investment opportunity.

Michelle Kesil (20:32)
Perfect. Well thank you so much for sharing that and your time and coming on here today.

Cody Bjugan (20:38)
Thank you so much for having me.

Michelle Kesil (20:39)
Of course.

Michelle Kesil (20:39)
And for the listeners tuning into the show, if you got value, make sure you’ve subscribed. We have more conversations with operators like Cody who are building real businesses. And we’ll see you on our next episode.