Climbing Mountains and Identifying Opportunities with Real Estate Investor Dan Haberkost

Dan Haberkost: 0:00

I think it's a matter of having started very young and slow, consistent,consistent progress over many years. I, you know, I'm 26 I'm fairly young. But you know, when I was 16, I was managing a farm,a portfolio of rentals. through college, I ran a landscaping company while going to school full time. So now I'm over 10years into running businesses and managing people. So it's really just slow and consistent over time and being focusing on the long term delayed gratification, and being mindful of how I spend my money and my time

Announcer: 0:29

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Jason Muth: 0:52

Welcome to another episode of The Real Estate Law Podcast. It's Jason Muth here along with Rory Gill attorney broker from NextHome Titletown Real Estate and attorney from UrbanVillage Legal I should know this by now, shouldn't I, Rory?

Dan Haberkost: 1:04

Well, nice to meet you, Jason.

Jason Muth: 1:07

Yeah, exactly. We have an amazing guest here this week. He's a really smart guy.He's a young investor. I've researched a lot about Dan, and you guys are really gonna love to hear his story. It's Dan Haberkost. He's out in Colorado Springs, Pueblo markets. Where else are you in Colorado? You're in Colorado City. Is that right?Yeah.

Dan Haberkost: 1:27

Even a little further down the front range down in Colorado City. Yeah,

Jason Muth: 1:30

Yeah, I had to get my geography, you know, in Colorado a little, you know,calibrated because I've been to Denver a couple times. But I've only been to Denver and Boulder.I've never I've never driven south like where everybody is.And I was taking a look to see how far all these cities were from one another just to give you some perspective in Boston.And if you're listening here in the Boston area, Colorado Springs is kinda like Worcester in relation to Boston. It's just a lot bigger. Population's,almost 500,000, isn't it?

Dan Haberkost: 1:58

Yeah, I think we're ready to half a million.Yep

Jason Muth: 2:00

Yeah. And then Pueblo is a pretty big city also, just south of there. It's another 45 minutes to an hour south. They're kind of like Springfield is to Worcester, you know, I'm just putting it in my selfish Northeastern mindset,because, you know, we see these we see the maps, and I just can't judge distance, unless I'm sure they're on the ground. But Dan, you know, your Instagram says that you're into climbing mountains and building businesses. And that is the life all your pictures there are of these massive, gorgeous mountains. And I'm sure that you're finding a great work life balance with all the amazing investing that you're doing.We're going to talk about land investing, talk about building from the ground up, talk about a whole bunch of things that you're working on. And I'd love to talk about financial independence and financial freedom a bit too, because, you know, it seems as though that's kind of what your you've worked toward, or are continuing to work toward, because all the photos you look so like stress free. I see oceans, I see mountains, like what what is your secret, Dan?

Dan Haberkost: 2:55

Oh, gosh. Okay.That's a big question, Jason.But, Rory, Jason, thanks for having me on the podcast. That was fun just chatting with you beforehand. So looking forward to diving in a bit. But yeah, I don't think it's really any secret. I think it's a matter of having started very young and slow, consistent, consistent progress. Over many years. I you know, I'm 26. So I'm fairly young. But, you know, when I was16, I was managing a farm, a portfolio rentals. through college, I ran a landscaping company while going to school full time. So I'm over 10 years into running businesses and managing people. So it's really just slow and consistent over time and being you know,focusing on the long term delayed gratification, and being mindful of how I spend my money in my time. I think that's a high level answer to that big question.

Jason Muth: 3:39

Yeah. I think the hustle is something that is apparent with everything that you're doing as well. I mean,like, you know, you went to college, you graduated college,right? Yeah, yep. Yeah,graduated college. So you've probably been out of school for about five years, four or five years. Four years? Yeah, four years here in Boston, a lot of folks in their 20s and 30s are just kind of building their professional careers, you know,they're working for companies,they're working their way up and finance or tech or education,you know, some folks are working their way up in real estate as well, like yourself, but, you know, I just, you know, Rory, we live in a neighborhood that's very young. There's a lot of young people there, but I just get the sense, a lot of the young people are just kind of taking the traditional route of working their way up, you know,in a typical career, or kind of going through corporate America,like what do you think, Rory?

Rory Gill: 4:22

I mean, I'd say so that's kind of the pattern and practices that comes here through here. But I mean, at that age bracket, people are taking advantage of different opportunities here. And, you know, we kind of call that the traditional way forward. And what we're exploring here today are other opportunities that you might have, if you're particularly motivated.

Jason Muth: 4:39

So Dan, tell us how you got on this path so quickly,early on. I mean, like, you know, in your mid 20s, right now, we can say mid 20s. You said you're 26 - not your not late 20s. Yet, the way I've defined it is that there's early middle late, right? And you want this in your 30s and 40s.Because when you're 46, you're not going to want to say your late 40s your mid-40s.

Dan Haberkost: 4:57

Yeah, fair enough.

Jason Muth: 4:59

Tell us how you kind of figured this stuff out so quickly. And you know, where does that rank in relation to some of your friends? Like, are they doing the traditional route? I know you're probably deep in the real estate world with your community out there.So maybe a lot of your peers are doing the same thing you're doing. But, you know, what,what's your sense with the people maybe you went to college with as well?

Dan Haberkost: 5:16

Okay, well, I'll try and bookmark each of those questions. To start with how and why and all of that it goes back to those jobs I had in high school and college, right? You know, I manage those rentals,manage the farm, went to school didn't really have a lot of fun in high school, you know, got to college, it was the same sort of thing. I was working 45-50 hours a week along with full time school. And that was frustrating came from, like you mentioned,more conservative, kind of, not poor, but lower class family,you know, four kids. And that's how everyone in my family lived.Everyone just had jobs, followed the rules did the traditional sort of path and, you know, by the time I was 20, I remember this time in my life pretty vividly, I was frustrated,right, you know, are all my friends have been having fun through high school in college,and here, all's I did was work.But I was starting to mature a bit. And it was clear to me I was a bit precocious, I had a lot of experience that most people don't get to much later in life. And I said, alright,what's done is done, I'm gonna finish this degree, I'm gonna go start some kind of business, do some sort of investing so that this pays off down the road,right, so I have freedom at a younger age, and started reading different books and looking into equities and different businesses. And of course, Rich Dad, Poor Dad, just like everyone else read that. And it was just like a light bulb moment. So went and bought a duplex when I was 21, still in college as the first house hack.And shortly thereafter, I came to Colorado to visit my brother.Saw the mountains went home and quit my job drove across the country gave the duplex to a property manager that didn't take much time. It's beautiful here, love the mountains love the continual sunshine. And I bought another house hack while I was out here. And it was at that point. So I had two properties. I was 22. And I realized, hey, if I want to scale a portfolio of rentals, I need to figure out how to make a substantial income, right, you hear about all the low and no money down options when you're reading books, and you know,podcasts and so on. And that's great for a house hacker too.But in the long run, this is a capital intensive business,things are going to go wrong.And it's a lot easier if you figure out how to make money.And at the same time, it was also becoming pretty clear to me that working a job was just not something I could do. So met the the mentor we talked about actually at the local real estate group here. And I would drive an hour south down the Pueblo West every weekend, and I would learn from him, look at his projects, you know, help him with different whatever I could help him with. And eventually we just started doing business together. And that's where I learned to build houses. I'll never forget the first time I was down there, he shows me a house. And it seemed like so overwhelming, right, the idea of building a house and he goes Dan, this is child's play. And I just I it made me laugh. And in hindsight I can. I can agree with that. Once you know building houses is very, very simple. If we're talking just infill specs, we can get to that. But anyways, so started doing business with Rich eventually started my own company Front Range Land and left my job and started buying and selling land building houses. And then that's the active of business that feeds the passive investing. Second question, because you did have a second question as far as peers over the last few years, just probably half the fun of real estate, in my opinion. It's just the people I've met. I've made a lot of cool friends just from doing business with them. So most of my peers now, pretty much everyone I know owns a business, but the people I grew up with not so much definitely been a divergence there.

Jason Muth: 8:22

Yeah, so you kind of move your way into a different peer group when you jump headfirst into real estate investing, you know, especially a new market. I mean, you moved out there. What year did you move out there? Again? Five years?

Dan Haberkost: 8:33

2018

Jason Muth: 8:34

2018. So we're recording in 2022. So four years ago. When you moved out there?Did you have a network besides your your brother?

Dan Haberkost: 8:40

No. And he didn't know anyone. Neither did his wife. So yeah, I hit the ground running. Let's put it that way.I was not complacent. I went and met people as quickly as I could.

Jason Muth: 8:48

Did you rope your brother into any of this?

Dan Haberkost: 8:50

No, he'll come and help me. So some of the houses I bought, he knows foundations really well. So he'll come and help me with foundation problems. Got a few deals that way, but no other than that, definitely not. He's the introvert.

Jason Muth: 9:02

And you're not you're the extrovert.

Rory Gill: 9:03

Yeah, yeah. I mean,you alluded to the fact that you kind of came to this with a ton of motivation, and you needed to find and implement your systems.How did you go about translating that motivation into systems?

Dan Haberkost: 9:16

Oh, great question. Yeah. So it was a little bit of drinking from a firehose learning from Rich, the mentor I was telling you about.And you and I are the three of us were chatting about Brent beforehand, he was in Colorado Springs for years, we hosted the real estate club together here.I took Brent's land course I'd already flipped a few lots I had an idea of direct to seller marketing, but I didn't really know the system or how to put together systems to then hire people to then execute so I was already building houses with Rich had flipped a couple lots but really wanted to scale that on the side. And so I took Brent's course and that really just gave me the tried and true system to execute.

Jason Muth: 9:51

We loved speaking with Brent, he was a past guest here on The Real Estate Law Podcast. I'm guessing that we're going to release these kind of back to back once we're done with the post production, so it's almost like a two-parter.We're talking a lot of folks from Colorado Springs area. And the fact that you took Brent's class is a good follow up to his episode. So, you know, there's a lot of classes out there, you know, people are sometimes reticent to spend money on the class, but the value of spending the money is that you're going to take the class seriously. But you just never know who you know, who do you trust? Who do you trust? Tell us what got you motivated to take that class to take the leap to give Brent,your money? And then what are the results of what you learned in the class and how you've applied it?

Dan Haberkost: 10:29

Yeah, great question. I would be that way Yeah, he didn't give you a discount? Your friends.too. I tend to be a little bit more of a skeptic. And I'm especially jaded on the mindset,you know, draw your vision board and wish for it to come true and will magically happen. That's not me. I don't agree with that at all. I'm very much a pragmatist. And so that's why I liked Brent's course, because he No, no, he actually offered to finance it for me, but I wanted said, This is just A to Z, my process, my systems, my documents, what I do everyday,what my team does every day. And then at the same time, I've known him for several years. And he's always been very helpful and friendly. And so I, you know, there was that personal relationship that made me trust him. And so I was one of the first people to take it. For a lot of people. That's not an option. Of course, you know, you don't always personally know the person. But yeah, more than to commit. I said, No, no, I'm just gonna pay for it.anything, it was the fact that it was the system and it wasn't

Jason Muth: 11:37

No, that's fair. I mean, Rory, we've talked a lot supposed to be a motivational sort of thing. It was just hey,here is everything. I do A to Z.And yeah, it's been it's been fantastic. I'm 80-some land deals in and then I combined it with learning how to build from Rich and it's just been a great business. So yeah, that was probably the best $5,000 I've ever spent.about you know, doing business with friends. I mean, we have some short term rentals, Dan,and I kind of like renting to friends, but kinda don't,because I'd rather get like full rate from someone I don't know,then feel bad charging what I want to charge to a friend. But I can't get past me I have to rent to friends.

Dan Haberkost: 12:25

Yeah, I found when I've done business with friends that as long as I set expectations the same as I would with anyone else, I have not had issues because I've rented rooms of friends. I've done business with friends in a number of capacities. And it's been okay,because I've been very clear on the expectations.Yeah.

Rory Gill: 12:40

It's not even just about the money. Sometimes you want to make sure that you're you know, you set the the professional expectation and people know you in a different capacity. You want to kind of set that, you know, the professional relationship when you get started. That's more important than necessarily with a stranger.

Jason Muth: 12:55

Dan, you mentioned80 land deals. Did I hear that correctly?

Dan Haberkost: 12:59

Yeah.

Jason Muth: 13:00

Okay. Wow. Do you own all those lots still, or have some you flipped some of those?

Dan Haberkost: 13:04

Oh, I've flipped the vast majority of them. Yeah,right now, they think about just long term velocity of capital is everything. So I try and flip these things as quickly as possible. Some of them I sell on notes. And so those ones I've held a little longer, but especially right now, we're doing business in Florida now,too. We've been doing more assignments to.

Jason Muth: 13:21

Yeah. Define notes.When you're saying a note, you mean that you're holding the property and you're acting as the bank?

Dan Haberkost: 13:27

Yeah. So just think for anyone listening, just like when you get a mortgage,I'm acting as a bank, but on land as opposed to a house.

Jason Muth: 13:34

How's your collections?

Dan Haberkost: 13:36

I had one person default last year, and he still paid off all my principal. So I still profit around that and just resold it. But other than that, yeah, no, no issues there.

Jason Muth: 13:46

I think we asked Brent, that same question.Didn't we, Rory? And he was very similar answer, you know, maybe10% or so was default, or there was one that was defaulting, I think, but then he called him and...

Rory Gill: 13:56

He said it was a low default rate that when people do defaults, he's happy to work with them. And even in those cases that do default, the actual economic repercussions aren't that severe.

Dan Haberkost: 14:05

Yeah, the way that we're doing this most of the time, that downpayment alone cashes us out. And it's all profit after that. And so number one, there's a lot of buy in from that person that you know you're financing to. And Brent's on that side of the business much more scale, I have flipped far more of I think I've originated 15 notes

Jason Muth: 14:23

15 more than I've originated. So let me ask the dumb non-real estate person question, Rory maybe even asked this one. But like, is there a lot of this that happens here in the Northeast? Or is this unique to some other markets? What do you think?

Rory Gill: 14:35

I think this is something that I don't know if it's common, but it's certainly it would work here just the same, the only complication I can think of is actually a more national national basis. If you're regularly lending on land, at a certain point, you have to start to operate and comply with regulations just like a bank would. I forget the threshold initiative, look that up between our conversation with Brent, and with Dan, but there's a certain amount of if you do a higher volume of these loans,then you actually now have to comply with lender regulations and the way you disclose things and the way you go about your collections. You have to pretend your Bank of America and actually based do the same, you know, operating under the same protocols.

Jason Muth: 15:11

So switching gears a little bit. You know, before we hit record, you are telling us about some pitfalls that have happened since we first heard from you where you, you know,let us know a little bit about what you want to talk about at the podcast and some of your goals for the year. So, Dan,tell us what's going on there.

Dan Haberkost: 15:25

Absolutely. So I mentioned I'm in Florida now.And that was a pivot that I was not expecting to make. But I'll paint the picture here, because this just went very poorly. So I'm flying home from Florida. I was on a vacation. And you know how you when you touch down, you suddenly get service and your phone blows up? Well, I have all these messages from people, that couple that we're going to buy land from us one that I do business with one of my contractors, something is very wrong in Pueblo West. Turns out with no warning, nothing, they completely shut down new permits to build in Pueblo West. And I had six slots, I'd already closed on three more under contract to buy, four those that I have closed on, we're under contract to sell. So you know,I've got 105 grand sitting in these lots, I'm expecting to make gosh, I want to say 40,something off those four sales,and then three more I'm supposed to buy and then a couple builds I intended to have going before the end of that quarter. And that just all came to a screeching halt. So that is just an example of one of the many things that can go wrong within the world of real estate. So I got home, I kind of reassessed.I talked to the Metro District,which is the organization that oversees the distribution of water taps. And that was the issue entirely. It wasn't a lack of land or anything else. It's that, hey, we're in a desert out here. There's been a long term drought. They're running low on water rights. Now, what did I do? Well, first thing I did is I started talking to buyers seeing if there was anyone we could get a couple of the lots sold to.But at the same time, I immediately got marketing going to a different market down in Florida that I was aware of that had many of the same kind of driving factors and demographics moving there with lots of infill lots, so we're doing business down there now. But what ended up happening in Pueblo West is as information came out of the metro district over the next couple of weeks after the shutdown, it was January 20something, it became clear that they were going to open up at a higher price. And they were going to restrict the amount of total taps. So I was able to sell off most of those lots at a lower price was did not make nearly what I thought but that really brought the market to a halt. So I still have three more lots for sale there. I got one build, thankfully going down there that was grandfathered in.That's going to be just an excellent deal because they further restricted supply. But I'm just considering that market to be just about done. They ended up opening water taps April the 12th. But it's a restricted amount. So as far as flipping land, I'm not marketing down there anymore. I'm trying to get one more build going down there this year because again,the spreads on a simple three-two 1500 square foot down there is ridiculous but yeah, so aggressively expanding into Florida right now.

Jason Muth: 18:00

Into Florida. Okay,so diversifying away from Colorado. What parts of Florida?

Dan Haberkost: 18:05

Down in the Greater Fort Myers area. Around

Jason Muth: 18:06

Sounds like you're really doing your homework on there, there's a couple markets with lots of infill lots lots of it's interesting because Florida and Colorado are so different in many ways. But at the same time,Pueblo West had first time millennial homebuyers and retiring downsizing middle class baby boomers. And that is exactly the demographics moving into the markets. I'm marketing to three closings there this week, down in Florida. And so really, it's the same thing just on the other side of the country, because I'm also dealing with thousands of infill lots that already have utilities, just like I was out here.demographics, which I think is a really important lesson here.You're focusing on growing areas, like you're not forcing it. I mean, one of them happens to be where you live. And your part of the reason that's growing, you moved there as well. But yeah, I mean, this is I think it's a great lesson,like, you know, look up like the public information is available,be smart, like, you know, where are the jobs going, where the people going, and then, you know, try to react to that market sounds like that's what you're doing.

Dan Haberkost: 19:02

There's a massive migration going on right now.And especially with all the uncertainty in the in the real estate world, in the financial world in general, right,interest rates are going up, as I think about it, think about the big picture, you know, my parents, which represent middle class, baby boomers very well,they're still going to retire,they still want to go somewhere cheaper, they still tend to be more conservative, so they want to go to somewhere more red, and they want to go somewhere warm.And so I mean, as I think about it, it's really hard to imagine a scenario expected to slow down but I don't expect people to stop moving to Florida, stop...the migration that's going on is going to continue unless there's something crazy like a major war or a major pandemic or something like that. So I feel comfortable or more comfortable, sleep better at night going into those markets where those people are moving.

Jason Muth: 19:48

Rory and I have talked a lot about kind of the demographics of who's buying homes right now, first time homebuyers. You know how it's a millennial generation really looking to start to establish the roots and I'm Gen X, your parents are boomers. You're millennial or Gen Z?

Dan Haberkost: 20:01

I'm the last last year of millennial.

Jason Muth: 20:04

Yeah, so the millennial generation is just giant, right? It's bigger than the boomers and people need places to live and nobody's building anything and people are running out of water. So, I have a feeling that you know, people like yourself who are really taking advantage of the situation not taking advantage in a bad sense, but taking advantage of being proactive. of building a business around it are going to be the big benefactors, you know, in the ensuing years to come,especially as you look to pivot.You know, one interesting thing,like the fact that you're going into Florida, you know, tells me that your head's on a swivel,you're not just looking at what's happening, you know, in your immediate area, and then the fact that you had a big roadblock come up in Pueblo West, it sounds like you kind of had a backup plan. Maybe you didn't have a backup plan. But you know, you worked your way into a backup pla

Dan Haberkost: 20:52

Yeah, well, it was already on my mind. And it really just forced me to do what I knew I should have already done, which was diversify a bit into a couple different markets.So that was already on my mind,it just took a big kick in the teeth to get me to go do it. But yeah, to your prior point, with a simple three bed, two bath,1,500 square foot ranch in these growing areas, I'm very comfortable building a few of those at a time.

Jason Muth: 21:14

Rory, what do you think of this strategy?

Rory Gill: 21:16

I think it's great. I mean, having he said that Florida has a place like this,meaning that it has similar traits to the front range. If you look at it pretty superficially, having that the flexibility and seeing that there are similarities between those markets that look very,very different. And also understanding that you what makes Florida very attractive today might actually change over the next five years or so. And then there might be a different pocket of the country that is promising. But always being having the agility to move and make the next step I think is,you know, a great strategy and having that staying informed about everything that's going on, and all the different trends. If I could ask, I wanted to ask, you know, what's this all for? So you are still relatively young. You've found some good systems, you've done more transactions, by far the most people would do in their lifetime. So what's the end game for you? What are your goals?What are you hoping to accomplish? And then what are you hoping to do with that freedom?

Dan Haberkost: 22:08

Oh, yeah, great question. Well, first and foremost, so I'm far past this,but the first step was just being able to get out of my job,and be able to comfortably have all my living expenses covered,oh, and okay, I hit that a few years ago. And then from there,well, I wanted to be able to travel around help people that are important and to help family if need be, and, okay, I'm still working on that to some degree,but you know, my parents retire next year, they don't have a lot of money. So a lot of these builds, I'll have them put up the cash from the just the lot,and then I'll double their money for them, or that sort of thing.And so I'm really enjoying doing that, and very close to my parents, at this point in life.My little sister has Down Syndrome, no one else, my family has money, it's gonna take a lot of money to take care of her later in life. And then also,you know, there's the slightly more selfish side of it, where if you're good at something,it's, it's fun to work at it,right? You know? Why does LeBron keep playing basketball? Or, you know, why do people who are very, very good at something and make obscene amounts of money,keep doing it? Well, because it's fun to do something you're good at and build it and see how far you can take it. And I also have been enjoying developing good people. You know, my acquisitions managers are great,and I enjoy coaching, teaching and mentoring them. And then just the people I meet through the business has have been a lot of fun too. But, you know, in the long run again, somewhat selfishly, I do want to, you know, buy a house up in one of the nice mountain towns, and then have one down in Naples, or somewhere nice like that, too.And that's not going to be cheap. So, you know, there's that too.

Rory Gill: 23:33

I noticed you've been pretty transparent about your business, on your website and everything, including giving numbers out of what these different transactions look like. Does that ever cause any awkwardness with the people you're doing business with, you know, the rental, the tenants,any rental income, even friends and family, just as does that level of transparency cause any issues for you?

Dan Haberkost: 23:55

You know, fingers crossed, but it hasn't up to this point. People that know me personally would know better.I'm very straightforward. And I always have been, and that's not going to change. You know, if I get on enough podcasts, I'm sure I'll get some sort of negative feedback at some point, right?If enough people know who you are really, you know, you're you're dealing with a bell curve. And so you'll get the extremes, but not not up to this point.

Jason Muth: 24:15

So Dan, let's talk a little bit more about the land business. And you definitely have that in common with a past gas. And that's really the foundation of what you've been doing. What kind of legal issues have you found along the way,like anything that has come up?Anything that surprised you anything that you expected?

Dan Haberkost: 24:31

Well, the first thought I have there is more just solving problems to get deals. So quiet title, I'm not sure what the laws are in Massachusetts, I know them in Florida and Colorado. But if I or if somebody goes and purchases a property tax lien sale, right, so in Colorado, you have to buy the tax liens for three years, they still don't pay it off, you apply for the treasurer's deed, they try and contact the owner one more time.If they don't they deed into your name via a treasurer's deed. The issue is if you don't do a quiet title, then that prior owner or any one that had liens, or any sort of say was owed something by the owner can come back after you. So understanding and knowing how to do the quiet title process has gotten us a bunch of deals. Same thing with probate, we have probate attorneys that we send people to immediately and I've gotten a number of deals through probate. So I don't know that that's necessarily what you are asking but understanding the legal process involved in transferring title and solving different issues involved with title has gotten us a lot of deals.

Jason Muth: 25:30

Rory, what is quiet title?

Rory Gill: 25:31

Quiet title is a it's a lawsuit, you take it to the court, and you sue and you ask the court to determine who the rightful owner is. This happens when it is common for a whole bunch of reasons. But in this context, when a city or town sees his property and then deeds it to somebody else this is the court is overlooking to make sure that the city or town did it correctly, that you are in fact are the, you know, the rightful owners of the property.And you really need to do that in order to find a downstream buyer who's willing to buy that land from you who's willing to build a house on on it, a lenders willing to lend on the land. They need the assurance that there's not going to be an old owner coming out of the woodwork to clear that the property is there. So a quiet title is a court action that determines the owners.

Dan Haberkost: 26:13

Yep. And to expand on that you can sell these properties or buy these properties without a quiet title, but you're not going to get a title insurance, or you're not going to get title insurance on it. So if you're honest and transparent with the person you sell it to if you try and build a house on it, that's a dangerous route to go, right,because you don't have title insurance.

Rory Gill: 26:31

It's a similar concept as you can sell a property that has a squatter in it or a tenant who's not paying,but it cheapens the property because the downstream buyer is going to have to turn around and evict the tenant. This is similar where you're you're evicting the old claims on title through quiet title action, so it just it diminishes the value.And this is one way to add value to so by clearing up the title is a way of adding value to the property the same way as getting rid of a problematic tenant the same way as fixing an old roof.These are all different ways that you can - if you have the skill set and the resources, you can improve the value of property. Yep.

Jason Muth: 27:07

Is it is the same way as having a lot that has sewer or gas or electric or anything all ready to go for it ready to build. Right?

Dan Haberkost: 27:17

So water tap, for example.

Jason Muth: 27:19

Yeah.

Dan Haberkost: 27:20

Yes, it's very important.

Jason Muth: 27:22

Rory, it's a sensitive topic we've already beat a dead horse.

Dan Haberkost: 27:25

Oh, four months later, I can laugh about it.

Jason Muth: 27:27

So okay, let's talk about some work that you're doing with Brent, though,because you know, we heard that you were doing you mentioned you're doing a course with him or or starting up a project together. I know our conversation last week on the podcast, which we haven't heard yet, but you'll hear you know,when it comes out was focused on land deals. And we knew that you did some land deals as well. But the more we learned about you,the more realize that you're building from the ground up also on some of that land, which is not what I expected from someone that was going to just be doing land deals, infill, infill land deals and whatnot. So tell us what got you going with building and then talk a little bit about the work that you're doing? With Brent?

Dan Haberkost: 28:04

Yep. Oh, great question. So that goes back to meeting Rich, who I've talked about a couple times, and, you know, it really is a very simple process if you buy the right land. So understanding the difference between, you know,for example, in Colorado, out east, there's people buying huge tracts of land, and doing all the work with engineers and the county to to bring in or to get zoned and platted and then bring in utilities, you can make a lot of money doing that. But that's a huge process. It's very capital intensive, it takes a long time, and you got to be patient, and you need experience or someone experienced on your team. What I'm doing is I'm going and finding land where somebody already did that. Take Pueblo West, for example.McCulloch was the guy who did it, same guy who did Lake Havasu, he just did Pueblo West a decade or so later. He was falling around the Army Corps of Engineers as they dammed up the Colorado River and putting subdivisions right next to these big reservoirs in the desert,right. And so he put millions of dollars, and many, many hundreds or thousands of hours into taking a huge tract of land and subdividing and bringing in water, sewer roads, all that.And fast forward to today, I'm going and picking out nice lots water, sewer, gas electric,entitlements done, ready to be built on and building on those so they're quote unquote, shovel ready. And so it really comes down to number one, knowing your avatar or your end buyer and building a plan that's appropriate to it. Number two,hiring the right GC, you mess that up that can mess up the whole project, you do it right,it can be near like passive,really having just bought the right land, and you do those things correctly. And it's really simple if especially with the contractor, if he if his incentive are aligned with yours, if expectations as far as who's doing what are properly set up front, you know, Cabaret,the one I thankfully got in right under the right before the shutdown in Pueblo West, and that's going to close July 1. I probably spent six to seven,maybe eight hours on that by the by the end of the project. So if you set it up right, it can be fairly passive. And so with the land business, I just have lots coming in at 30-50 cents on the dollar. Some of them we flip some of them, we assign some of them, we seller financing, and then the best ones will build on. So Brent and I, to that question. He had a lot of his students asking, well how do I build? How do I build? And I had a lot more experience with that than he did and then I was one of his first students just on the land flipping side of things. And so we decided to come together and create something that would appeal to either of us, you know, 5-6-7years ago, right? Like I said,at the beginning of this conversation, The Land Sharks worked so well for me because it was just a simple practical system laid out from A to Z. And so he and I are creating a,created a course that is the same thing, but how to build on that land. So yeah, that's what we have put together. It's, I Build Freedom, is what we've named the course. And we're excited about it, because I know that this sort of thing works.Because I'm an example. I'm a product of it, right? I traded a year of my weekends to learn how to build going down and seeing Rich, you know, an hour south of me every weekend. I would have much rather have just bought a course that was would teach me that. So yeah, that's what he and I have done together.

Jason Muth: 31:16

Is it ready to go?

Dan Haberkost: 31:17

Yeah.

Jason Muth: 31:18

Yeah, I build freedom. Yeah, love it. I was gonna say it says a lot about you, as someone that moved to the market, you know, wanted to meet a lot of people that you didn't know, you know, you didn't have a whole network of friends from school or anything there. And then you, you know,gave away your weekends to continue your education, and learn how to do this, you know,because we were very motivated to do it. Were you, during the week, were you working like your W-2 job at that time?

Dan Haberkost: 31:44

Yeah, yeah, I left W-2 employment in 2019.

Jason Muth: 31:48

Wow, and haven't looked back. Talk really quickly about that, though, because W-2employment really helps in qualifying for financing in certain situations. What did you find when you no longer had a W-2 job?

Dan Haberkost: 32:00

Okay, so that's a great point. Because when you leave your job until you have two years of tax returns from your business, it's going to be very hard to get traditional financing. Now, there's debt service coverage loans out there, and all kinds of non-QM are non-qualified mortgage products. But if you want the low rate, 30-year amortization,you know, no balloon payment,just simple loan product, it is much harder in that first couple of years once you've gone self-employed. So that's a good point. And so whether or not you should stick with or leave the W-2, that's going to come down to your what you're willing to do personally as far as effort and time, and then also what you're willing to tolerate.Because I have some friends, I think all my friends with jobs,they're all engineers, which probably tells you something about me. But anyways, you know,I have several engineer friends who enjoy their job, they buy real estate on the side, and they're perfectly happy. So if you can do that, there's nothing wrong with it. It's much easier to get loans when you have that W-2. But you know, personally and a lot of other business people I know, just don't have any need to work for someone,so.

Jason Muth: 32:58

Yeah. So you make that switch. And then those first couple of years after you left, like what types of financing were you going through? You were doing cash deals for the land, right?

Dan Haberkost: 33:06

Yes. So land cash deals. Let's see Hazelwood. I got a partner on it. Shasta is owner financing. Pando got a relative to co-sign. And then yeah, so those are the three I bought, when I wasn't bankable,I bought two while I had a W-2job. And I just bought another one this year, or last week. So I have six properties. That one I'm now very easily bankable with last two years of tax returns.

Jason Muth: 33:30

That's awesome.Figure out how to do it. Not,can you do it. Right?

Dan Haberkost: 33:33

There's always a way. I've heard so many people talk, especially you know, last year, you can't get deals in Colorado Springs. That's stupid.You can always get deals, it's just like with cars, right? I just bought a car last fall at a huge discount. A used car. Why?Because there's always a percentage of people that have some extenuating circumstance where if you're quick, and you have cash, or you can get cash,they'll sell it at a discount because money is not the most important thing. You know, the the house we got at 3% Owner Financing permanent mortgage was because he was rich and old and didn't want to deal with the headache he created. You know,the car I bought, you know, five grand off market value that was in perfect condition. Why?Because it was, you know, in a small mountain town too far away from the major metros, and they just needed to sell it quickly.There's always a way to find deals, really anything.

Jason Muth: 34:59

Yeah, even with, you know, inflation and insurance rates going up and situations changing. You know, you got to just dig, you got to figure it out. And there's always a way there's no way you're right,there's always somebody that has to sell it for whatever reason.And if you're there at the right place the right time. You know,you don't have to do this all day, every day. But sometimes timing is all about it sometimes just ingenuity being creative.Yeah, that's great.

Dan Haberkost: 35:22

I just guess I think of a spectrum, right?There's always a good and a bad.So as much as people complain about being able to find deals today. Well, okay, this is now changing, but for years getting low interest rate loans has been very easy, right? You know,finding great tenants has been very easy. You know, there's a yin and the yang. If it was 2008Well, deals are everywhere but getting money is really tough,right? You know, nobody wants to lend and getting tenants they had more options, well depends on the market, but a lot of markets they had more options.You know, right now it's hard to find employees but if we had another 2008 It's gonna be easy to hire excellent talent cuz there's gonna be a lot of people laid off. So you can cry about it, you can deal with it. And you know, that's that's how I look at everything.

Rory Gill: 35:59

You'll never have a market where you have cheap and easy financing and deals everywhere. That's not gonna work.

Dan Haberkost: 36:04

Yes, thank you.Yeah.

Jason Muth: 36:06

So before we get to our follow up questions, you know, what's next for you this year? What are your some of your goals to close out? 2022?

Dan Haberkost: 36:12

Yeah, so because this year was a big unexpected pivot, I'm really pushing still for those original goals because I got a big kick in the teeth.And so there's much more expensive markets down in Florida that I'm adding to the marketing list. I have a buddy who's basically a data engineer,and he got me some very niche lists that are not available publicly available publicly that I'm marketing to. And these are lots where there's several, you could make a 100k spread on these. So I'm really pushing to get that going and get get that scaled, so I can still hit my goals there. Just bought a nice house up north in Colorado Springs. So moving into that finally kind of be done with renting out bedrooms in my house, right. I've been doing that for years as a form of delayed gratification. So that's exciting. And yeah, I need to sit down and reassess. Because the goals I had set as far as a number of builds have been,well, I can't do it in Pueblo West. So going down to Florida,and two weeks here, I'm gonna meet some contractors and see what it would look like to get some builds going there. So unfortunately, that was a little more general answer. I prefer to have more specificity but things are in transition right now. And then more on the fun side I want I'm going to climb the Maroon Bells and do the Maroon Bells traverse i don't know I'm sure any of your listeners who've been to Colorado know what that is. But that's been on the list for a few years.

Jason Muth: 37:26

We didn't talk much about your hiking but you're always hiking at least on Instagram you are so it is a passion of yours obviously.

Dan Haberkost: 37:32

I mountain bike,snowboard, hike, I learned to surf I love extreme sports I love nature. So yeah, I mountain bike almost every day,

Jason Muth: 37:39

Our perception of Coloradans Colorado. How do you say,

Dan Haberkost: 37:44

Coloradans?

Jason Muth: 37:45

Our perception is that you all do that everybody does all those things on that list.

Dan Haberkost: 37:48

That's what I like about Colorado Springs is it does tend to be that most people live here because they want to live here. And everyone's active and in shape,and tends to be pretty fun and just excited to be alive. So I do like the culture here, at least relative to Ohio.

Jason Muth: 38:02

Is there a perception of Bostonians that you know of or now

Dan Haberkost: 38:06

Boston, I would just think of being far more like to the point direct, which is how I communicate naturally,I did have to calm down and be less direct and less of a driver and a little more relaxed and a little more small talk when I moved out here. I've definitely changed the way I speak.

Jason Muth: 38:22

Yeah, you are correct in the way that you would assess Bostonians. You know, we get to the point. We don't have time. Yeah.

Dan Haberkost: 38:29

That's that's how I communicate naturally. I've had to reign that in a lot.

Jason Muth: 38:33

Yeah, that's awesome. I mean, let's get to a final questions. And then we could tell everybody how we can learn more about you, Dan, and I'd love to have you back on the podcast once I Build Freedom is up and running a little bit more. Maybe we'll get you in Brent on together you can talk about your collective successes.So we ask the same three questions, everybody on the podcast just to get to know you a little bit more as we close things up. The first one is if you get on stage for half hour and talk about any subject in the world with zero preparation.What would that be?

Dan Haberkost: 38:59

Correlation does not mean causation. That's probably the most abused thing in the world, in politics and business in everything. I always listen to Tim Ferriss and in his he says if you can put a billboard on the highway that everyone would see, what would it be? It would be correlation equals with a giant red X through it causation, because that just drives that drives me nuts. So no, it's not real estate specific. But I'd give a whole rant on the explanation that correlation does not equal causation.

Jason Muth: 39:24

Wow, a 30 minute rant on that. That's quite a rant. I can't wait to hear that.

Dan Haberkost: 39:28

Oh, I just hear it abused all the time. It drives me nuts.

Jason Muth: 39:31

We all have those phrases. Yeah, that's a good one. Yeah. Second question. Tell us something that happened early in your life or career that is impacting the weather you're working today.

Dan Haberkost: 39:39

The biggest thing is just growing up without money. That being a big fear point for my parents, then hearing that and then feeling that at a young age definitely has influenced me to this day.

Jason Muth: 39:49

Yeah. And finally,what are you reading or watching or listening to these days?Could be anything in the world?

Dan Haberkost: 39:55

Yeah. On the real estate side, I'll give you a couple of answers. I do love Steve Trang's podcast, because they go in depth in detail what different real estate investors are actually doing in their business. Very practical, very actionable. I've gotten good tips and ideas from that. So I've enjoyed that. And then just Sapiens and Deep Simplicity are two books that I highly recommend everyone read. They are not real estate specific.But there's often concepts that are applicable across many different things. So there are things you can take out of there for business and real estate.Both of those books are excellent. And not often recommended.

Jason Muth: 40:27

Rory, I think you threw Sapiens in our Audible, or I did.

Rory Gill: 40:30

I think you did, but I listened to it. Because Oh,you did actually listen to something.

Jason Muth: 40:34

No, I didn't. So if you're saying I threw it in there and you listen to it,that's probably how things work.

Rory Gill: 40:39

That's how it mostly goes. Yes.

Jason Muth: 40:40

Yeah. Okay. Yeah. So Dan, if people want to get a hold of you, and by the way,thank you for all your time today. I mean, like you said,you'd like listening to podcasts and hearing people's stories.You're one of them now. I mean,like, you know, this is the story that you love hearing but you're writing that story. And I think a lot of people that are listening to this podcast, are hearing you know what can be done at an early age and even if you're older if you're your 30s or 40s, this is still hoping that you know the best time to start it is today. And not to be cliche. But the next best time to start it is tomorrow, right?Yeah, just get done with this stuff. So Dan, how can people get a hold of you?

Dan Haberkost: 41:15

Yeah, Instagram or Facebook, Dan Haberkost. And then danhaberkost.com. I outline some of the projects we're doing. I Built Freedom is on there. So either those work.

Jason Muth: 41:23

Quick to get back.I've messaged you on Facebook,you wrote back immediately. And I just LinkedIn requested you.And I saw the confirmation for that right before we hit record here. So you are very in-tune with technology and what's happening in the world today.And it's nice to hear you pivoting and your business growing. So that's great, Rory,where can people find you?

Dan Haberkost: 41:43

Easy to find.Take a look for me at NextHome Titletown, nexthometitletown.com or UrbanVillage Legal urbanvillagelegal.com.

Jason Muth: 41:50

And if you're listening to this, and you find yourself in Colorado or in Pueblo or West Pueblo and need some water, you're out of luck.But if you want to go check out some of Dan's developments, you know, he lists some of the places on his website, I did some land that you have for sale as well that I found my way to I believe. So. You know, just go to your website. And you can learn more about Dan. And there's lots of great information there. And then I Build Freedom. Is there a domain yet for that, or no?

Dan Haberkost: 42:15

There is. Yeah,ibuildfreedom.com

Jason Muth: 42:18

Ibuildfreedom.com all right. Awesome. Dan, thank you so much, again, for spending some time with us here on The Real Estate Law Podcast. We greatly greatly appreciate it.And thank you for listening. If you've enjoyed this episode,please subscribe to the podcast.If you're listening on YouTube,you can just hit the subscribe button. It's probably down below our faces. You can give us a review on Apple podcasts or Google or wherever you listen to this. Spotify. And we love comments. So if you have comments for us, you can just leave them below. You could reach out to me directly,jason@nexthometitletown.com And we'll get right back to you. So on behalf of Rory and Dan, thank you so much. Thanks for listening, and we'll see you next time.

Announcer: 42:54

This has been The Real Estate Law Podcast because real estate is more than just pretty pictures. And law goes well beyond the paperwork and courtroom arguments. were powered by NextHome Titletown,Greater Boston's progressive real estate brokerage. More at nexthometitletown.com. And UrbanVillage Legal,Massachusetts real estate Council serving savvy property owners, lenders and investors more at urbanvillagelegal.com.Today's conversation was not legal advice, but we hope you found it entertaining and informative. Discover more at realestatelawpodcast.com. Thank you for listening.