Agents Building Cashflow

EP 155: How to Unlock Land Wealth in Today's Real Estate Market with Kelly Meyer

• Kelly Meyer

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Land Sales Specialist, Kelly Meyer, shares his journey from a brewery business owner to a successful land investor in Texas. He discusses the nuances of subdividing large tracts of land, the benefits of owner financing, and the importance of deed restrictions. Kelly also touches on the lessons he learned from his entrepreneurial ventures, including the highs and lows of his brewery business and how those experiences shaped his current real estate practices. 

Listen to the full episode to learn more about Kelly's unique approach to land investing and gain valuable insights for your own investment journey.

Key takeaways to listen to:

  • Learning the strategy of subdividing large tracts of land into smaller, more marketable parcels.
  • Discovering the advantages of owner financing in land sales.
  • Understanding the critical role of deed restrictions in maintaining property value.
  • Kelly's transition from brewery ownership to real estate investment.
  • Kelly’s personal experiences and lessons he learned from his business failures and successes.

About Kelly Meyer

After a successful 7-figure exit from his first company, he started his own brewery in 2011. Nearly 9 years later, he sold that business for an unsuccessful low 6 figures. He put what he learned by failing into a book titled, “How NOT To Start A Damn Brewery” and began a podcast by the same name.

In the podcast, he interviews breweries from all over the world to find out what went wrong and how the next generation can avoid those mistakes. He’s also sold over 25 million in Texas land in the last 2.5 years at the same time as building his podcast to over 100K downloads.

Connect with Kelly Meyer:

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[00:00:00] Kelly Meyer: You live in San Antonio, the Canyon Lake outside of Sun city a little bit. There was legitimately a guy back in, I think it was like late eighties who built a house out of hay bales. So whatever you think somebody wouldn't do, he'll do it. 

[00:00:12] Randal McLeaird: I did not hear that story. I'm curious where that is. I'm very familiar with a lot of the land that got developed up there and mobile home parks and that sort of thing.

[00:00:21] Intro: If you're a real estate agent earning 200, 000 a year and you want to grow your passive income. This show is for you learn secrets, other agents use, and hear from experts in our field who will guide you on your journey to investing in assets like apartment communities. So you can take your commissions and turn them into cashflow.

[00:00:41] Intro: Here's your host, Randall. Let's dive in. 

[00:00:44] Randal McLeaird: Hey, welcome back. Today's guest is Kelly Meyer is a land specialist here in the Texas market in Braunfels and just outside of San Antonio, where I am. So it was great to talk to somebody that was local to me. Get to know somebody that is right down the road and I haven't actually met guys doing a bunch of land [00:01:00] deals.

[00:01:00] Randal McLeaird: So they're buying large tracks, subdividing and selling those things off. And we talk about the owner finance strategy that he's employing himself and the developer that he's been working with has been using. So if you're looking for owner financing land or that type of strategy of subdividing land, this is a great episode for you.

[00:01:16] Randal McLeaird: Let's talk about the business that he started and then sold. Exit made a lot of money, transitioned into a brewery business, and he has a podcast that is how not to start brewery. So if you know how that story goes based on the title of that, but it's a super interesting conversation to me, because it's a business owner that had an exit.

[00:01:36] Randal McLeaird: That is a great story just in itself. And then also having another business that didn't go as planned and just some of the trials that he went through to exit that, the learning that he had from that and just how he worked on. Getting out of it and the writing that he has done. So great conversation.

[00:01:52] Randal McLeaird: Kelly's a great guy. If you're looking for land in the Texas market, I know that they are selling some his contact information is going to be in the show notes. So if you want to reach out to him directly, please [00:02:00] feel free to do that. And let's jump in and have the conversation. Hey, Kelly. Awesome to have you on the show.

[00:02:04] Randal McLeaird: Thanks for joining me today. I, we were just talking just now about the brewery business that you started. So I want to just touch on the history. What was the impetus for you starting the brewery? And then tell me how you got into real estate from there. 

[00:02:16] Kelly Meyer: First of all, thanks for having me on the show.

[00:02:17] Randal McLeaird: Yeah. Thanks 

[00:02:18] Kelly Meyer: I would say that the more people you talk to their own breweries, you're going to hear a similar version of the story that I had a first career 7 figure exit. I'm invincible. Let's do something fun. Let's go open a brewery. So in 2011, I thought that would be a great active retirement and it turned out to be a fantastic way to set some money on fire.

[00:02:35] Kelly Meyer: But 9 and a half years I spent doing that. 

[00:02:38] Randal McLeaird: So you were just, it was more like a passion project and that's why you stay with it for nine years. Or you're like just pure brute force. I'm going to make this work type thing. What was the, 

[00:02:49] Kelly Meyer: yeah, you sound like a much more even keel level headed guy than I am, and that was my first sort of big failure.

[00:02:56] Kelly Meyer: And I did everything I could to not make it one, not just for [00:03:00] the cocky side of like my thing. Obviously my family's income, I had two kids. Like I want this thing to work. So I stayed in it longer than I should have for sure. 

[00:03:07] Randal McLeaird: Yeah. Yeah. It made us one of those things. I definitely know that side of the ego equation where you're like, I'm going to make this work type of thing.

[00:03:14] Randal McLeaird: Okay. So then you worked on that for a while. I know you have the podcast, how not to start a brewery. So if you're interested in not starting a brewery, go over and check that out. I know you have good conversations with people all over working on breweries. So how did you transition into real estate and why land specifically?

[00:03:30] Kelly Meyer: To be honest, I got lucky and I, run the risk of offending somebody. I don't mean to do that, but I'd never had respect for real estate agents in general throughout my, even the guys that have sold my house. I've noticed being like, these guys can't sell. They don't close. Like I would never do this as a job.

[00:03:44] Kelly Meyer: And what ended up happening is that when the brewery was really facing extinction, it was like 2019. My wife was like, I got to get a job. So she got a job for a developer and he's all over the state buying large ranches, subdividing them. And she was like, honestly, man, from a perspective, there's a ton of opportunity here.[00:04:00] 

[00:04:00] Kelly Meyer: This is different. It's not selling houses. Lady's not going to walk in and be pissed at the tiles blue instead of off green or whatever. I did some research on it, looked at it. I'm like, this is actually a fun thing. I drive around on dirt and then I answer questions all day. That's basically my job.

[00:04:15] Kelly Meyer: So when I finally sold the brewery, which was September 5th, 2021, not that I remember, but I got my license and started doing land simply because it was a, an opportunity that was there. And ended up just, I truly enjoy the job and the day to day of what I do. So it was a good choice. 

[00:04:32] Randal McLeaird: Yeah. And so you're structured as your license, but you also invest and you do it yourself.

[00:04:37] Randal McLeaird: Yeah. Okay. So let's talk both tracks there again, on the land side, you work for developer. Is the developer simply doing the large tracks, cut it up, smaller tracks, sell it off, or are they actually putting neighborhoods in doing some sort of infrastructure play, like what are they doing or all of the above?

[00:04:51] Kelly Meyer: Yeah, generally as little infrastructure as possible from an investment perspective, it takes longer to add streets. You can make more per acre, [00:05:00] obviously, but the simplicity side of it is you can chop and sell. And if you have a sales team of professionals and it works out well for them. So there are times that we do some infrastructure as far as electrical and water, but that's about it.

[00:05:12] Randal McLeaird: Yeah. Okay. And so the play what are you guys typically focusing on? What size tracks on the larger plays? Are you going 2, 000 acres? Is it 40 acres or what we 

[00:05:24] Kelly Meyer: purchase 

[00:05:24] Randal McLeaird: usually less than 

[00:05:25] Kelly Meyer: a thousand less than unless we do it. Unless we do it in stages. Yeah, because our wheelhouse is really we sell at the 10 acre mark.

[00:05:31] Kelly Meyer: And so on the consumer side, we want to be able to market anywhere thing, meaning from like the smallest that does well for us is 3, maybe 4 up to maybe 10. And so you do too many tracks and you just, you'll never sell it out. 

[00:05:42] Randal McLeaird: Yeah. Yeah. Okay. So when you go to sell, if you are buying that thousand acres, are you cutting those to like a hundred acre tracks doing mini ranches or are you guys doing, you're trying to get a road in there and actually putting in 10 acre tracks?

[00:05:55] Randal McLeaird: So 110 acre tracks? 

[00:05:57] Kelly Meyer: No. So generally the roads end up being a whole [00:06:00] mess of things. Things and like I said, the less infrastructure we can put in the better 

[00:06:03] Randal McLeaird: for sure. 

[00:06:03] Kelly Meyer: If with 1000 acres, we've usually we've gotten lucky where there's ways to structure it subdivision wise, where you don't have to do that.

[00:06:11] Kelly Meyer: A little thinner tracks, obviously deeper and then even some flag tracks here and there, depending on if the counties let us. 

[00:06:18] Randal McLeaird: Yeah. Okay. All right. So let's walk through. I know you do some motor finance things and you guys offer that. I love that strategy. We're doing on the same family side. Like we talked about, I like it for land as well, because you don't have anything on it.

[00:06:30] Randal McLeaird: If you have to take it back, it's a lot easier process. So let's, talk about the deal flow and how it actually works. You guys are going out, you're buying this property. You're going to subdivide it. For somebody who hasn't done it walk us through the process of the acquisition, subdividing and getting it to where it's able to be sold.

[00:06:48] Kelly Meyer: Yeah. So when the acquisition side, we're trying to find things that make sense in our wheelhouse, as far as the numbers. So you have a spreadsheet, obviously for a lot of things that you do, we have the same model. So we're going to have. A limit of what we [00:07:00] can pay, we acquire it with the idea of subdividing it have an idea at that point.

[00:07:04] Kelly Meyer: Sometimes do an option sometimes not, but have an idea at that point what we're going to do with bringing it down. And then it's just drawn that plat working with the county to make sure we can get it subdivided. Picking numbers that work for us and that, the market's going to support doesn't help to have a bunch of 50 acre tracks.

[00:07:20] Kelly Meyer: If no one's buying anything over 12 in that area. Just understanding the market, which is challenging when you try to do it all over Texas, but it can work. Once it's been planted to the county at that point, can start selling them and with the larger tracks, even sometimes before that, depending on how the subdivisions working and what we're planning on doing.

[00:07:38] Kelly Meyer: Larger is easier, smaller stuff, or, you 

[00:07:40] Randal McLeaird: know, do you guys have in house like engineer surveying? 

[00:07:45] Kelly Meyer: At the end of the day, it's anything you can manage is going to be easier. We definitely have used outside guys. And sometimes, if the counties are working with somebody that they prefer there in that area, that's one thing.

[00:07:55] Kelly Meyer: But in, in general, we do most of it in house when we can. Yeah. It's faster, cheaper. We can control [00:08:00] it, all that kind of stuff. You make changes a lot of times you're gonna have to change it. 

[00:08:02] Randal McLeaird: Yeah, just the way you said it. I was like, Oh, you're drawing lines yourself. Not having no, you can't have me.

[00:08:07] Randal McLeaird: Yeah, I know. I got a crown out. So again, just going through the process. If somebody is looking to do this, you acquire the land or you're in the due diligence phase, maybe give yourself an option period here. And then you are working with the county typically outside of city limits.

[00:08:21] Randal McLeaird: I would imagine you're doing all this stuff in. So it's straight to county commissioners most of the time. Yeah. For approval, as long as you're staying over 10 acres in Texas, then, or it depends on the county, but then you typically don't have to go through like a full replat. It's just a, what's the 10 acre rule? 

[00:08:38] Kelly Meyer: That's the point. So when it's 10. 01 in general, we don't have to go through the plat. So the plat's got to get approved and takes a lot more to get that done. We just had one that we released technically today. We had it on the market.

[00:08:49] Kelly Meyer: We're ready for it, but because of the plat, it took forever. And so we finally got it available to close starting today. 

[00:08:56] Randal McLeaird: Yeah, 

[00:08:56] Kelly Meyer: that's great. 

[00:08:57] Randal McLeaird: Yeah. Nice. So this is interesting. Do you have it set [00:09:00] up in your contracts? Were you able to market those properties prior to you closing on it? 

[00:09:04] Kelly Meyer: You can, yeah, it's just going to be a special provisions thing.

[00:09:07] Kelly Meyer: You can do it. I don't love it. And depending where you are in that plat process and how much you know about the individual commissioner you're working with, it may or may not be a good idea, but 

[00:09:16] Randal McLeaird: there was a 

[00:09:17] Kelly Meyer: guy that kind of saw we were doing it in one area and he decided to copy and we were doing 10 acre tracks and he just decided just a local agent that had bought some acres from us.

[00:09:26] Kelly Meyer: And he decided he was going to subdivide his 30 acres down to two acres. And that was, I don't think it was a year ago, but it was a long time ago and it is still not done oh my god. Yeah. But he sold four or five of 'em on MLS, and so he has those contracts just sitting out there with earnest money, and yeah, I wouldn't recommend doing that, but you can someday, you'll get your 

[00:09:45] Randal McLeaird: land, I promise, someday, right? ? Yeah. 

[00:09:48] Kelly Meyer: Yeah. 

[00:09:49] Randal McLeaird: Alright, so you go through that process and then again, you're going out. Are you fencing, you're not doing any of that type of infrastructure either. Do you guys put any deed restrictions on it?

[00:09:57] Kelly Meyer: Yeah, I think deed restrictions are mandatory, [00:10:00] and I've had people ask me all the time about looking for unrestricted land, and I do definitely come across it. Especially with other developers that do it. And quite frankly, I tell people that I don't work with unrestricted land because some neighbor always screws it up.

[00:10:13] Kelly Meyer: There's a legitimate reason why those deed restrictions are there. They should be light. In my opinion, you should be able to do pretty much what you want. But unfortunately, single wide mobile homes drive down the value of everybody. 400 square foot house, same thing. Nobody wants to live next to a thousand head of cattle on 20 acres.

[00:10:31] Kelly Meyer: So you gotta have deed restrictions. 

[00:10:32] Randal McLeaird: I think to have any evaluation to it. Yeah, like you don't need 20, 000 cars on a lot either. Just like some turns into a junkyard type thing. 

[00:10:39] Kelly Meyer: I was like, you live in San Antonio. 

[00:10:41] Randal McLeaird: Yeah. 

[00:10:41] Kelly Meyer: The Canyon Lake outside of Sun city a little bit. There was legitimately a guy back in, I think it was like late 80s who built a house out of hay bales.

[00:10:49] Kelly Meyer: So whatever you think somebody wouldn't do, he'll do it. 

[00:10:52] Randal McLeaird: Yeah, that's nice. I did not hear that story, but I'm curious where that is. I'm very familiar with a lot of the land that got developed up there and mobile [00:11:00] home parks and that sort of thing. It's interesting because now there's a lot of short term rentals that there's not even really like good water access up there and it's going down.

[00:11:08] Randal McLeaird: Once you subdivide it, you've got this partial in you and the sales team are going out and you guys are actually the ones that are selling this for either the developer or your own personal items that you've acquired, correct?

[00:11:17] Randal McLeaird: Okay. So you sell these and one of the exits is owner finance. Are you guys. Seeing a lot of cash transactions happening on dirt, 

[00:11:27] Kelly Meyer: It changes. So keep in mind, I've only been licensed as an agent since October, 2021. But to give you an example, 2022, I came out and I did, I think it was. 13 million in sales my first year.

[00:11:40] Kelly Meyer: And I made the same amount that year as I did on 11 million last year, because there were so many less MLS transactions and most of those were direct consumer sales that we made. So the market's changed dramatically where it's a lot of people searching on Facebook. For owner finance properties and less of those cash sales that we were getting through agents [00:12:00] in the previous year, but I'm sure that comes back once a interest rates drop.

[00:12:04] Kelly Meyer: I imagine we're going to get a major change to that. We expect that to go back the other way, but, you work with the market. Right now is currently mostly owner financed individual people, which. From the agent perspective is better because I get 6 percent if I bring 

[00:12:18] Randal McLeaird: the buyer. So it's obviously better.

[00:12:19] Randal McLeaird: Yeah. Yeah. So you guys have 6 percent and that's obviously coming out of a down payment that they're putting down. And so how do you structure that?

[00:12:27] Randal McLeaird: If you got a track, that's going for 150, 000, 6 percent of that is coming out. How much is like the minimum you guys are taking and what are you seeing people putting down? Like how much cash are they actually putting into these deals? Is it just the minimum closing costs or do you guys make them come up with more?

[00:12:43] Kelly Meyer: Yeah, in general, we want between 10 and 20%. Okay. And you can do it. I know the developer I work for 30 years and he's dude, there were times when I took down 500 bucks, but because I wouldn't do it anymore. But you can, right? It's just going to be a little more out of pocket and a little bit of risk.

[00:12:59] Kelly Meyer: But I [00:13:00] imagine you deal with this with the houses that you work with too. You rarely are going to get a foreclosure that you're going to wind up selling for less. So the asset stays strong, as long as you don't lose much on the front end, then you ultimately will make money as may take longer to make it.

[00:13:13] Randal McLeaird: Yeah, no, we just took one back. We took a single family back and I showed up and there was like partially burned. And I'm like, man, the neighbor's house next door burnt, caught on fire, caught our carport on fire. And burn the electric meter. So now we have to rewire the whole house. We have to do new AC because the people like took it.

[00:13:32] Randal McLeaird: Water here's gone. Any of that, regardless, all of those things, all of the problems, we're still way in the money and we're about a hundred thousand dollars in equity after we do the rehab and full blown blow out for this thing. So yeah, that's another reason why I love doing the owner finance side of things.

[00:13:47] Randal McLeaird: That's very rare that you get a property back that poorly maintained. 

[00:13:51] Kelly Meyer: Yeah, that's been burned. 

[00:13:53] Randal McLeaird: Yeah, man. Dude, I've got some stories. It's this one is, again, they were good, but I think they just got into a [00:14:00] position where once it caught on fire and I think they had a divorce, all these things happened at the same time.

[00:14:05] Randal McLeaird: So they moved on. Anyway, not about me. All right. So the dirt, so you're getting 10 to 20 percent down. What are you guys seeing on terms? What are you guys typically offering right now in this environment? I know like you go to the bank for dirt loan. It's gotta be a fairly high rate. Yeah. Nine and a half is one of the last ones I did 

[00:14:21] Kelly Meyer: do a bank.

[00:14:22] Kelly Meyer: We typically charge 12 and we've done some stuff lower. It's like any bank, you do a buy rate, buy down or a temporary buy in for less, but 12 has been our wheelhouse. As much as that has been an objection from time to time with some people. The other side of it is owner financing.

[00:14:37] Kelly Meyer: Everyone's qualified. So yeah, it hasn't been much of an issue. 

[00:14:41] Randal McLeaird: Yeah, no, I wouldn't think that would be an issue right now. So 12 percent and then are you guys doing a full 30? Is that a 10 year, 20 year am. 

[00:14:48] Kelly Meyer: Yeah, we do 30 and then just don't do a prepayment penalty. So it allows people to do what they want to do as far as the length and the term that obviously based on the investor, isn't always advantageous because we do have a lot of refis at the couple of year mark or [00:15:00] whatever, like you would expect.

[00:15:00] Kelly Meyer: But yeah, in general. We just let people run with it and it works out well. We don't have a lot of people backing out of it or anything like that or foreclosing on. 

[00:15:08] Randal McLeaird: Yeah. Awesome. Okay. So that's on that side of it. And what are you trying to like personally on your investment side of things?

[00:15:15] Randal McLeaird: What are you trying to either build to? Are you trying specifically to go out and create more notes? Are you like, I still just want to turn a burn and get these things done. Mix of the two. What is it looking like for you? I 

[00:15:25] Kelly Meyer: think it's always going to be a 

[00:15:26] Randal McLeaird: mix. 

[00:15:27] Kelly Meyer: So me personally, I'm at the stage that I'm trying to build as many notes as I can. My portfolio of land financing is intended to be my bridge retirement, which might be a little personal if you don't know, because of the company I sold in the beginning, my actual retirement is funded. I don't have to worry about that.

[00:15:43] Kelly Meyer: But what I do have to worry about is I want to retire at 50 and so I need income there. So these properties, that's the whole design is I'm trying to create enough revenue monthly to be able to not retire, but not have to work. Just do podcasts all day. 

[00:15:56] Randal McLeaird: Like you record, not get in the car and drive.

[00:15:58] Randal McLeaird: Where did you say you went? You went to Tyler. Where'd you [00:16:00] drive up to? I went to Taylor back to New Braunfels and I'm going to a Lockhart here in a little bit. Okay. Yeah. Yeah. All right. Then let's touch on that. Cause I'm curious, like what markets are you guys seeing that this is like popping in because that whole one 23 corridor up like one 31, like that whole area.

[00:16:16] Randal McLeaird: That's where you're driving to Lockhart area like hits that. So you're like, what are you finding is in Texas? Some of the best markets that you guys are in. Give me the secret sauce, man. 

[00:16:26] Kelly Meyer: In general, in my opinion, there's a couple of ways to do it. And what I've seen, at the end of the day, you can almost make it work anyway, quote unquote, in a sense that if you've got a county you can work with then, and they're interested in having subdivision and even sometimes when they're not, but.

[00:16:40] Kelly Meyer: Then you're fine because in general, if you buy 100 acres at a fixed per acre price, you're going to sell 10 acres of that for three to four times as much, worst case two, depending where it is. So then the game becomes how can I leverage that to get that same acreage for even less? And did I [00:17:00] find a deal?

[00:17:00] Kelly Meyer: Is there, a rancher who died and his cousin somehow inherited the property inappropriately and he doesn't care. He just wants to move it. Whatever, right? Yeah, but the areas that tend to have the best kind of like sales figure are the ones that I think we do best in and then it's also outside the city.

[00:17:16] Kelly Meyer: Like you said, less regulations, but I think that. For me, what I see is it's the market outside the market. Central Texas, as an example, I wouldn't want to be in Austin and I wouldn't want to be in Buda, but I'd want to be in Lockhart because that's the third market out and you get better deals and you can go further out than that.

[00:17:32] Kelly Meyer: I just think your sales volume would be a little slower. It has been a little bit slower for us. The further out we go. 

[00:17:37] Randal McLeaird: Yeah. 

[00:17:37] Kelly Meyer: So it's in the middle. 

[00:17:38] Randal McLeaird: Yeah. Yeah. Okay. You mentioned it a couple of times, but I want to know, so what was your original company and what'd you exit? 

[00:17:45] Kelly Meyer: I owned eight fitness centers with my wife.

[00:17:47] Kelly Meyer: So it was anytime fitness. We were like the, some of the first franchisees. 

[00:17:50] Randal McLeaird: Awesome. You bought into the franchise model or no, I started working for 

[00:17:54] Kelly Meyer: those guys. Let's see, I turned 21. I went on the road. They had a sales and marketing company where [00:18:00] we just went to every armpit in the United States that didn't know how to sell health club memberships.

[00:18:03] Kelly Meyer: And we just came in and created a promotion to do that. And so Vernal Utah, Past Christiane, Mississippi, like just places, you freaking heard of and you wouldn't want to go anyways, they came across this business model at one point in Tennessee. And this guy was like, I have 150 members.

[00:18:18] Kelly Meyer: I don't care if you sell anymore and they were like, how are you making any money? And so he showed him how he did this whole 24 hour concept where people were coming and going and they were like, huh, we're smarter than that guy. Let's create a franchise and they invested heavily in this franchise. And now it's one of the largest fitness companies in the world.

[00:18:34] Kelly Meyer: But we knew the guys in the beginning. So we were like the 30th franchisee and we grew it into eight. And then one day I was like, I can't do this anymore. It's like that first corporate job, right? You make the sacrifices to make your money, to get to like first base. And then you really start to take a look at what the rest of your life's going to look like.

[00:18:49] Kelly Meyer: And you're like, this is not going to be part of the rest of my life. So we sold the company and went a different direction. And unfortunately that direction was not a good one, but 

[00:18:56] Randal McLeaird: son of a, all right, look, I want to [00:19:00] ask you then this is a departure from real estate, but it's business because. I was talking to a friend of mine who during COVID, no, maybe it was after great financial crisis, real estate guy, been buying real estate has tons of apartments, all kinds of stuff.

[00:19:14] Randal McLeaird: But around that time, everything was slow in real estate. So he got into yogurt shops. Like he bought a few yogurt shops himself. He didn't get into a franchise. He was telling me, I'm like, I literally took my kids to one the day before. And I was like, this seems so simple. It's like this little business, there's one employee.

[00:19:30] Randal McLeaird: It's so easy. This is no problem. Relates to the anytime fitness where there's only one or two people there seemingly right. My outside looking in, but talking to him about it. He's no, it's a pain. You have multiple employees because you have to have shifts. And then they break the machine.

[00:19:43] Randal McLeaird: They're just these kids who don't give a crap about anything. And so they don't clean them properly, blah, blah, blah all the headaches that come with owning business. Right. And he's like, I just didn't need the headache. Didn't need the hassle. So I sold them all. He like three X's money on all the little shops that he did.

[00:19:56] Randal McLeaird: But he was like, I'm out. So I'm curious going back to your experience, like. [00:20:00] What was it, if these things, again, outside looking in, I'm like, Anytime Fitness, how many employees do you really have? What's the headache that caused you to be like, I don't want this headache anymore? Or was it more of the upside I can exit, I can take my nut and run and do something else with it?

[00:20:13] Kelly Meyer: Yeah, so there's a few factors. One, we originally said we were going to go to 10 locations. And so from the day I opened the first one as a 27 year old kid, I was arrogant enough to say I was going to do 10 locations in 10 cities. And there came a point that I just, we just both my wife and I, we just ran out of steam.

[00:20:28] Randal McLeaird: But 

[00:20:29] Kelly Meyer: as far as the model, anytime, my opinion, anytime someone sells you something that says you don't have to work and you'll be a millionaire, you should run screaming with your hand on your wallet. Kind of like What you said yeah, there's one manager and there's a few personal trainers. But to be able to keep people happy and to hit the revenue number that you need to be able to keep enough members, you have to have enough interactions and those interactions have to be positive.

[00:20:51] Kelly Meyer: And that guy's got to be in a good mood because if one guy is interacting with 75 people a day, he gets burned out or she, and so, but the end, when we had eight [00:21:00] locations, we had 29 employees, total managers and assistants, and then, office staff. And that is part of what I said is that when I started the brewery, I will never have.

[00:21:12] Kelly Meyer: That many employees again, for the rest of my life, I love person. I cannot stand people. When you get people together as a group, it's overwhelming for me. And that's just not who 

[00:21:20] Randal McLeaird: I am. 

[00:21:21] Kelly Meyer: Yeah. 

[00:21:21] Randal McLeaird: All right. Fair. Appreciate you sharing that because I think of that and I'd look at, you got the Hormozis of the world running around doing what, yeah, I don't know if Alex Hormozi and okay.

[00:21:30] Randal McLeaird: So he used to sell gym everything right now he has this new company and he's all over. Social media and promoting his stuff, but they're running around and there's another girl, she's just buy businesses, roll them up, do this whole model of having a whole co like that's a new thing and not new, but it's like the small Buffett version of, anybody can go do it.

[00:21:48] Randal McLeaird: And so I'm always curious. That's the same reason I asked my buddy about it. I was like, what was your experience, like owning this little shop and it's not free of headaches and it's not so like now with real estate, you get to go out and you get to see the land. [00:22:00] You get to drive around Texas, you talk to clients one on one, and you're building cash flow over time that you really don't have to see.

[00:22:08] Randal McLeaird: Once you've done the note and you've created the note, you don't have to go back to that property and or take many calls from those people, I would imagine, but 

[00:22:15] Kelly Meyer: Nah, in general, if there's gonna be late payments and stuff like that, or your changes of ownership, or Whatever. But yeah, no, no kind of carries itself.

[00:22:21] Kelly Meyer: And like we talked about at the end of the day, I do not want someone to foreclose and lose their money or whatever. But from our perspective, I'm not going to lose money on that transaction and probably we'll make money. 

[00:22:32] Randal McLeaird: I 

[00:22:33] Kelly Meyer: think one of the most dramatic ones I think was last year. In Cedar Creek, like outside Bastrop, we had taken back a repo and we put it on the market.

[00:22:42] Kelly Meyer: And the guy was like, add some money to it. I think they added quite a bit and I sold it for 70, 000 more than that within three days. So there's a lot of opportunities. 

[00:22:51] Randal McLeaird: Yeah, I mean that area too, again, I've been looking, cause I love the Sagin area. I like all around Sagin and then that's why I was asking what are you seeing?

[00:22:58] Randal McLeaird: What is A [00:23:00] decent price per acre that you guys are seeing in some of these markets that you're actually getting these things if they're off market before you guys come to, because you're saying three times and a lot of the things that I see listed, like actually listed big tracks.

[00:23:12] Randal McLeaird: Their minimum that I see in decent areas, 8, sometimes 12 price per acre. 

[00:23:17] Kelly Meyer: You got to be around like four to five for sure. And those are primarily off market. I've been pitched stuff to being doing what I do. People will send me things that I'm like, Hey, this is a great investment opportunity.

[00:23:27] Kelly Meyer: I'm like, immediately that means that you've overpriced it and it's, it'll be ridiculous. It'd be like, they've, we have a plat already done for the streets. Yeah. That's worth 15, 000. Like I'm not going to pay you 3 million more. 

[00:23:38] Randal McLeaird: It's just stupid. Yeah. Yeah. Okay. So yeah, you are getting, you're sourcing most off market then is what you guys are doing.

[00:23:44] Randal McLeaird: Yeah. 

[00:23:45] Kelly Meyer: To be successful, I think you have to. There's tighter margins. Obviously, you could do it with on market property, but I have looked myself and I have never been able to find an on market property that I 

[00:23:54] Randal McLeaird: thought fit the model. I have had numbers that they don't like. It's Oh, I like that for four.

[00:23:59] Randal McLeaird: [00:24:00] Yeah. Okay. So we talked to them about the business. I'm curious again on the backend, then if somebody's going out, they're looking and they want to set this up as maybe a strategy that they're going to use. What's I'm curious about the nuts and bolts that you use or how you're structuring it on the backend.

[00:24:15] Randal McLeaird: I don't know how many notes you've created personally or how many you and the developer have, but how do you guys manage those? Is there some corner either software or do you guys use a servicer or is that all in house? Like how do you guys manage that process? 

[00:24:27] Kelly Meyer: Yeah. So we primarily, or he primarily does it in house.

[00:24:30] Kelly Meyer: And so he actually has a team that does it less people than you probably think. It's only a few for hundreds of notes, but at the end of the day, I've worked with some of my friends to set them up to do the same thing. And it really isn't that hard to open a check on once a month. For certain people.

[00:24:45] Kelly Meyer: So it depends on the amount of notes you're going to have, but the profit margin for me, I'm at that point where I need 10 personal notes to really hit what I want. And I have two, and then even that depends on the size, obviously. But with those [00:25:00] two, I have them serviced through him and he does it for a fee.

[00:25:03] Kelly Meyer: But at some point I was like, if it would not be a very hard job for the amount I'd get paid back to open 10 letters a month and then send receipts out. So you don't have to use a notesmith or one of the big softwares, but if you're going to do it as a big business, obviously you would have, you'd have a choice.

[00:25:19] Kelly Meyer: You'd have to use a software. 

[00:25:20] Randal McLeaird: It's also much different than single family. So we are doing consumer loans, right? There's mortgages to a consumer are. Much more scrutinized than a note on land, which is essentially an investment because there's no, you're doing commercial loan essentially is how you guys are structured.

[00:25:38] Randal McLeaird: So it's a lot less regulation that you guys have to jump through in order to service those things. But I was just curious. I didn't know if you guys were using something. 

[00:25:44] Kelly Meyer: We still do like disclosures and stuff too, just to. Make sure we're on the up and up. So we have the two rounds of disclosures and then the final closing statement.

[00:25:51] Kelly Meyer: But yeah, I'm not sure we necessarily have to go through all of those hoops. I personally don't because if you don't do more than five a year, you don't have to 

[00:25:56] Randal McLeaird: worry about it. Yeah, he probably does. But yeah. So [00:26:00] you say you need 10. What does that even look like? Are you saying you want to own?

[00:26:03] Randal McLeaird: The dirt free and clear, and then you're going to create a note on top of that. And so that's, it's your numbers. If you do 10 of those or you. 

[00:26:11] Kelly Meyer: Yeah. So personally for me, that puts me somewhere around $15,000 to $20,000 a month in revenue coming in. And being in business since I was a kid have a worst case scenario outlook.

[00:26:22] Kelly Meyer: So I expect five grand of that to not come in, which should be better than that. And then maybe some of those properties come off that I'm going to have to remarket and maybe even fix up. So for me to comfortably say, I'm going to have 10 grand a month in income. I think I need 10 properties to do that.

[00:26:36] Kelly Meyer: And so that's why it's my goal. 

[00:26:37] Randal McLeaird: Yeah. Yeah. And is that 10 total or 10 every year or 

[00:26:42] Kelly Meyer: just 10 properties? So if I have 10 properties on a 30 year note that are producing that level of income, then that gives me some flexibility to do some other things within there. I want to add one, subtract one. If one cash is out and I need to go buy a new one, but if I have 10 active properties, actively producing a monthly revenue, that's what I mean.

[00:26:59] Kelly Meyer: [00:27:00] So just maintaining 10 at all times. 

[00:27:01] Randal McLeaird: Yeah. Maybe having a pipeline of need be or whatever, but. So you're getting 1500, am I doing my math right here? 10 gets you 1, 500. So each one is 1, 500 payment per month. 

[00:27:12] Kelly Meyer: Yeah, I actually have the two that I have right now. One's 2, 200, one's 1, 700. I'm just like rounding down because I like to do that for my personal numbers in my head.

[00:27:19] Kelly Meyer: No, 

[00:27:19] Randal McLeaird: I'm just thinking 2, 200. So how big is that parcel that you sold? 12 acres. 12 acres. Okay. So the payment and how does that 12 acres, 30 years, what is that? 200, 000. How much did you sell that thing? 

[00:27:33] Kelly Meyer: Yeah. 199, I think that's what it was. 

[00:27:35] Randal McLeaird: Yeah. Awesome. 

[00:27:36] Kelly Meyer: And the one I just closed one. Technically last Wednesday and that one was 189 and I think the payments ends up being a like 1750 a month on something.

[00:27:46] Kelly Meyer: Yeah, man, that's solid straight P and I to the pocket. It's one of those things that when I lost the big money and put the big hit on the brewery side, especially with the brewery, though, it's a very creative industry and it sucks a lot of your time and energy. [00:28:00] And when I left, I swore I would never do one thing again that defined me.

[00:28:03] Kelly Meyer: I have the podcast. I wrote the book. I'm writing another book. I do the real estate. I doing the investing. I never want to have one thing that I'm doing as a person. And so all these little things are fun for me. I just enjoy having more things going on, I guess. 

[00:28:16] Randal McLeaird: So, the book. Tell me about the book you wrote.

[00:28:20] Kelly Meyer: The book was actually called how not to start a damn brewery. It was originally where the podcast came from. That book was me. It was in 2019. I actually sat down and made a list of all the things we'd done wrong in the brewery to figure out if we could fix it. And my wife said, screw you, I'm out of here.

[00:28:36] Kelly Meyer: And I turned that list into a book basically. And then after I released the book, I was like, there's a lot of F words in here. There's a lot of anger. This is my story. And there are so many other breweries that have the same story. So the podcast is me reaching out and letting them do what I got to do with the book.

[00:28:51] Kelly Meyer: And it's been very educational, but it's also, if you really try to go look, like everyone researches success, but there's just not a lot of [00:29:00] people researching failure. And so I think I've created kind of a body in knowledge to have wow, what can go wrong? What can you prevent from a real world perspective?

[00:29:07] Kelly Meyer: And so I'm really proud of how the podcast has turned out and what kind of the plans for the future are with it. 

[00:29:12] Randal McLeaird: Yeah, nice. That's awesome. Let me ask then, is there something looking back or through the conversations that you're having with the other owners of these breweries that stands out as. Okay, that works.

[00:29:24] Randal McLeaird: This doesn't like clearly there's got to be some people having success breweries all over San Antonio. I maybe I'm wrong. I don't know. But what is it that makes 1 successful and 1 not? I know you have a whole podcast on this, but man, I just, 

[00:29:37] Kelly Meyer: well, 

[00:29:37] Kelly Meyer: that will be a lot of 

[00:29:38] Kelly Meyer: what's in the 2nd book. I can tell you.

[00:29:41] Kelly Meyer: I don't say it's frustrating, but I would say it's probably the main crux of what I'm trying to talk about is the definition of success. And we could probably spend an entire hour talking about that, but that is ultimately what we deal with in the brewing industry as the biggest problem is that what you perceive as success, butts and seats, [00:30:00] cans on the shelf at the grocery store, those things don't necessarily translate to profitability.

[00:30:05] Kelly Meyer: I can tell you wholeheartedly. That there's not one in San Antonio that's translating profitability at this particular time. Let's not say they won't. So anyways, what can you do? The biggest problem you run into across the board, I think, is this facility cost for people. And that is partially due to scale.

[00:30:21] Kelly Meyer: But at the small scale of what people are interested in from a brewery perspective, unique, interesting, esoteric, owners on site. They can't make enough beer to pay the rent for all these Crazy commercial landlords, which I'm sure you're not one of them, Randall. So you have to worry about that, but, 

[00:30:34] Kelly Meyer: That's been the biggest problem in a lot of breweries.

[00:30:36] Kelly Meyer: I've interviewed that have died recently. That's what happened. It just went up and they weren't profitable for, and they sure as hell aren't profitable at three times the rent. 

[00:30:42] Randal McLeaird: Yeah. Got it. That's interesting and unfortunate at the same time, because there's a lot of them and it seems like a cool business to be involved in.

[00:30:51] Randal McLeaird: And I don't get to make your own beer, do your thing, hang out with your friends, but 

[00:30:54] Kelly Meyer: There were parts that were fun for sure. I definitely don't look back on it and say that it was the whole thing was a disaster. And I did [00:31:00] become a better person because of it. I will honestly say that you may not like me now, but I was way cockier and way more arrogant when I'd sold the first company for millions of dollars as a kid.

[00:31:08] Kelly Meyer: I needed a kick in the nuts to be a little easier to be 

[00:31:11] Randal McLeaird: around.

[00:31:11] Kelly Meyer: Around. I guess. 

[00:31:12] Randal McLeaird: Just humble you a little bit? 

[00:31:13] Kelly Meyer: Yeah. 

[00:31:14] Randal McLeaird: So how has that translated into like now what you do with the real estate sales? What did you carry forward? You seem super happy being able to do less and earn money, like in less in the sense of, okay, look, if I check these boxes, it's going to take me a lot less effort on an ongoing basis to earn the money.

[00:31:36] Randal McLeaird: And I can spend time with friends, family, whatever. Is that a fair assessment or is that way off? 

[00:31:40] Kelly Meyer: Yeah, so one of the problems when you have people who enjoy, I would estimate that you're probably similar when you enjoy the chase, you enjoy the clothes, enjoy the deal. It's tough to walk away from one like opportunities that are there.

[00:31:52] Kelly Meyer: That being said, when I started the real estate job, the first couple of months sucked. Actually, so I got licensed October [00:32:00] 21st and I did not create any deposits into my checking account until January. Of the next year, I put 25 grand in my account that month, and I made over $300,000 the rest of the year.

[00:32:12] Kelly Meyer: Literally a year after I sold the brewery, I had made more than I had made as far as salary in the brewery the preceding 5 years. And I worked less, I was happier, I didn't miss my daughter's soccer games once. I was able to do all the things in life I wanted to do. That job did create not just more revenue, but it also created a happier lifestyle.

[00:32:33] Kelly Meyer: Absolutely. 

[00:32:33] Randal McLeaird: Yeah, it's nice. I will say to be able to go to all the events and all the things, like I talked to my wife about it. I'm like, it is lifestyle design. If we make less or more or whatever that looks then I don't know. You talked about defining success a minute ago. To me, it's can we spend time with our family and have all the events that we need to go to, we get to go to?. You said one other thing you were talking about before we wrap it up. Yeah. You started writing. Okay. And there were a lot of F words, [00:33:00] right? You were angry. So how did writing help you either cope with the anger you had or translate into the lessons learned? And I ask this just because there's a lot of podcasts that I listen to lately and a lot of books in general about If you write it out, you clarify your thoughts, you're, you get on the page and you're able to move on.

[00:33:24] Randal McLeaird: So in general, has writing assisted you in doing that and how has that helped you going forward? 

[00:33:29] Kelly Meyer: Yeah, there was a lot of frustration with Bri and just trying new things. We had all these pivots and catastrophes trying to fix through them and it wasn't working. So one big thing that writing allowed me to do is to get everything organized, where it had a timeline that I could say, I learned these things, I experienced these things, and now I can put this in a book and I can move on to the next things.

[00:33:54] Kelly Meyer: And so that gave me a lot of freedom in that sense. It did, editing the story also helps [00:34:00] because as you go write everything down. And then you go back and edit it, you're like, that's not exactly how that happened or that's not really what I felt. I wrote that for poetic justice or whatever. And so it helps clarify what had happened as well.

[00:34:12] Kelly Meyer: And so that you don't have some of those kind of crazy thoughts of the way it went. And it was a fantastic exercise for me. I think it helped a 

[00:34:18] Kelly Meyer: lot. 

[00:34:18] Randal McLeaird: Yeah, it's something that I want to start doing. Oh, I really want to start writing some of these stories out. Some of the things that have happened, because, Like I've done it in the past.

[00:34:25] Randal McLeaird: I don't know. I've done it in the past. It's not a therapy session or anything, but it definitely helps. It's therapeutic for a reason. And then it also clarifies your thoughts. And like you said, you can put it down and then put it to the side and you're like, okay, that happened. I did that. And then move on.

[00:34:37] Kelly Meyer: Yeah. Like I didn't want to be as mad as I was. I wanted to be able to share a positive story. And I guess in some ways that's one advantage of the podcast too, and this book and all of it. Now I'm at the point that. I was actually a year ago, almost like a year and a half ago that I took a look at the podcast and took a look at the message and what was I asking?

[00:34:55] Kelly Meyer: What was my goal? And I realized that I could either continue to complain all the [00:35:00] time about how distributors don't push product and their rents are too high and the cost of goods sold doesn't make any sense with the actual retail price. Or I could talk to people about exercising the emotions that they had.

[00:35:12] Kelly Meyer: And we can look for a reason to do it the right way. And the things that make sense. And we can ultimately make the industry better and that I made a transition and I'm happy that I did. I think it's made the podcast better. Definitely made me happier. 

[00:35:24] Randal McLeaird: Yeah. Find the solutions. Yeah, it is. Whatever the status quo is may suck, but then, be part of the solution.

[00:35:31] Randal McLeaird: It's what it sounds like you transition that into and like, how can you make it work so that People don't have to experience what you experienced. 

[00:35:38] Kelly Meyer: Yeah. That's 

[00:35:39] Kelly Meyer: kind of the idea. So yeah. Learn from what we did and do better. 

[00:35:42] Randal McLeaird: Yeah. Yeah. Hey Kelly, man, it's been awesome catching up. Just get to know you here and what you're doing with the land sales.

[00:35:47] Randal McLeaird: Definitely want to hit you up and talk to you about some deals and maybe we're in the same neighborhood. I don't know if you play pickleball or golf, man, we got to get out and do something or hunt. Maybe you hunt. What do you get into? 

[00:35:58] Kelly Meyer: I am the least [00:36:00] stereotypical land salesperson in the state of Texas in my opinion.

[00:36:02] Kelly Meyer: I'll go hunting, but I'm really just going for the whiskey. No, I do have a four wheel drive vehicle, but it's not a truck and it definitely is not a dually. But yeah, no, I've absolutely, I would love to hook up and pick your brain as well. And I think there's a lot of opportunities and synergies that we can come through together.

[00:36:18] Kelly Meyer: So I'm looking forward to talking to you in the future for sure. 

[00:36:20] Randal McLeaird: Awesome, man. Again, thanks for jumping on. It's good catching up, meeting somebody close to home that I haven't met before. So good luck out there and close some land, man. 

[00:36:29] Kelly Meyer: Yeah. 

[00:36:29] Kelly Meyer: Thanks. 

[00:36:30] Kelly Meyer: Me too. 

[00:36:30] Randal McLeaird: Catch you. Later. 

[00:36:31] Outro: Did you know that 80 percent of the agents we speak with got into real estate in order to gain passive income so they could obtain financial freedom and become work optional?

[00:36:39] Outro: If you want to stay up to date, the best way is to make sure you're subscribed. So if you haven't done that, go ahead and do it now. We'll catch you on the next episode. 

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Randal McLeaird

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