Try not to make too many mistakes. He said, “Don’t be afraid to make a mistake because you’re going to make some. You can buy a fractional somewhere in the world. It’s a one-off. You’re buying it in it’s one house and you’re buying into that house.” When you get ready to go to sell that house, you got a problem because there’s nobody marketing it for you. Finding waterfront property on the coast is like finding hen’s tea. I mean, it’s very difficult. The key to success is finding something that you love to do, that you would do it for absolutely nothing. You’d do it for free, but you do it so well, you don’t have a partner that’s going to try to tell you how to do something and you know how to do it better than they do. Okay? Because if you have a partner that is going to try to control the deal-

What’s going on guys? Strickland, thank you so much for coming on and being here with us today. I know you’ve been in the business for a long time, but I’m curious to kind of go backwards and see how you got into real estate in the first place.

Well, I graduated from University of Georgia with the major in real estate in 1973. There weren’t very many schools offering majors in real estate back then. Georgia was one of the very few. So I majored in real estate. Then when I got out, I got my real estate salesman’s license, went to law school, went to the University of Georgia Law School, got a law degree. And when I graduated from law school, I got my broker’s license. I’ve never used the broker’s license to create a firm or create a business. I used it by properties and split commissions, that sort of thing. But as I got out of law school, the very first property that I bought, I’ll share with you, it was crazy. I mean, I went home. I was a partner in a law firm right out of law school. And I was walking by the courthouse and I happened to see an attorney handling an auction. It was an estate sale. So I wanted to just watch him to see what he was doing so I could learn something. I was a young kid, 26 years old. I didn’t know anything. I’d only been practicing law 30 days. So I’m watching him handle the auction and he says, “We’re not selling it at this price. Come back at two o’clock. We’re going to take up the auction again.” I think he had somebody else that was supposed to show up and maybe they’d get a higher bid. The property only, this will shock you. The property was $140 an acre when they no saled. Again, I know real estate. So I called my dad and I said, “Dad, I think I can buy a farm that’s 277 acres for about maybe $200 an acre. What do you think? ” He said, “Son, if it’s not any good for anything, you can’t grow crops, you can’t do anything with it. ” He said, “It’s worth that if it’s just good for holding the world together. So buy it. ” And I said, “Well, let me go look at it. ” So I went and looked. I drove out, came back, a beautiful pond with a pasture, Sandy Oak Ridge land around it with a creek all the way around the property. It was recreational property. So I came back and I had just enough money to put down the 10% that was required at the sale. That’s all I had saved up. My wife and I had saved that while we were going to law school and I had $7,500. I put it down on the auction. Keep in mind, I had no money. I didn’t know if I was going to raise any money to close on it, but shoot first, ask questions later. I took the gamble because it was a great deal. So I went to my law partner and he loved it. He bought 77 acres from me. I still had 200 acres left. And so I went to a bank and they loaned me $50,000 so that I could close on the property. I was making a cool $200 a week. I couldn’t have even paid the interest, but he set it up on a one-year note. That was when you had good bankers and said, “Pay me in a year.” I sold 50 acres with the pond for $1,000 an acre before the year was out. Well, that was the day I got ruined because I realized I could make more money with the stroke of a pen than I could practicing law the rest of my life. I made 50 grand and I was only making 200 a week practicing law. It didn’t take me long to figure out the program. So I immediately got into real estate after that.

I love it. I love it. And what does the business look like today?

It’s much more difficult to find good deals. Now they’re out there. You just have to look. You have to know what you’re looking for. Financing is harder to do. That makes it more difficult. People are not making as much money as they should in order to be able to afford certain properties. So it’s just a little bit different market now than it ever has. So you got to be more creative. Always got to be creative in the real estate world. If you’re not thinking outside the box, you’re not going to succeed.

Yeah. Yeah. I guess when you got your first property, you kind of just ran into it. So when you realized from going to $200 a week to potentially 50 grand every single time you do one of these deals, obviously there was a light bulb that went off, but what was the main hindrance that you saw that you were like, wow, this is really what I need to be doing?

Back then, finance was a lot easier. If the banker liked you, if the banker knew your family, if the banker knew you were an attorney or a professional, that they could figure you were going to make some money, they would loan you money on a gamble and they would like your partner almost. And those days are gone. So it makes it more difficult. You have to find private money to be able to do that. But one of the things that … I’ll share this story with you. Right after I started practicing law, my partner said, “I want you to ride out to the farm with this certain client.” And it was one of the richest guys in town. And I’m riding in his old beat up pickup truck. He didn’t look like he had $5, but he had millions. So I’m riding with him and he says, “Son, I like you. I’m going to give you the key to success.” So I said, “Well, I’m all ears. I want to know. ” So he says, “Try to hold your arrows to a minimum.” I thought, “Well, that’s real profound.” He said, “In other words, try not to make too many mistakes.” He said, “Don’t be afraid to make a mistake because you’re going to make some. ” He said, “If you’re making good decisions,” and he said, “That’s what you have to do, make good decisions.” He said, “If you’re making more right decisions than you are wrong, you’re moving forward.” Now he said, “If you’re at 51.49, you’re moving forward, but it’s very slow.” He said, “If you can make 60 / 40, you’re going to make a living. If you get your decision making up to 70 / 30, you’re going to be a millionaire. If you get it up to 80 / 20, you’re going to be a multimillionaire.” He said, “But don’t let decision making make you afraid. Go ahead and make decision knowing you’re going to make some bad ones, learn from them, don’t make the same one again and keep improving your ratio.” I look at myself not as a gambler. I’m a calculated risk taker. I look at a program, I look at a product and I say, “If I can make money with this, I know it when I go into it. You make your money when you buy it, not when you sell it. ” So I know if I’ve got an 80% chance of making the right decision, I’ll make that call. If I lose, I lose, but you got to make a decision. You can’t be afraid.

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Know you’re specializing in developing second homes and I’ll let you explain it, but I love the idea and I want the people listening to hear the idea and really chew on it. What exactly are you doing with developing and kind of explain what you got going on?

Well, again, I found a property that a friend of mine called and said, “You need to go look at this property.” I said, “Don’t have any money right now.” He said, “Well, it doesn’t cost to look.” I said, “No, it doesn’t.” And I always look. I mean, my brother-in-law told me a long time ago, he said, “Don’t let being broke stop you from making a good deal. Write the check, figure out how to cover it later.” So I go down and look at the property and a bank owned it. They had foreclosed in it back in 08 and they needed to get it off their books. So I knew I could steal it from them and I love stealing from banks. Jesse James was my hero. So I decided that I would buy this property and I was going to immediately put it into short-term vacation rental, VRBO, Airbnb, that sort of thing. The problem that I ran into was that the market that I’m in, St. Mary’s, Georgia, is not on the national radar. No one knows about it. It’s a beautiful, quaint, historic village on the water, right on the coast of Georgia. It’s a beautiful place, but no one knows about it. They know about Savannah, they know about Hilton Head, they know about Amelia Island, maybe Jacksonville, maybe Sea Island, St. Simons, but they don’t know about St. Mary’s. So when I realized that wasn’t going to work, I thought, well, what am I going to do now? I don’t want to just build and sell houses. I had lots to build on. So I thought I would build the house and sell it on a fractional basis. Now what I mean by that is it’s not a timeshare by any means. Let’s say you actually own the house, but you only own a part of it and what got me to thinking that way was young people today don’t have the same opportunity that I had. When I was 30 years old, I was worth $3 million and I was buying and selling property all over the place. Well, young people don’t have that opportunity to own a second home. We discussed it earlier before we came on air. Everybody wants a second home. Everybody wants a place at the beach or a place in the mountains or a place at the lake. I don’t care how old you are, 20 years old to 60 years old. Everybody wants one. But when you tell them everything’s increased in value so much on the coast, I’ll give you an example. I bought a house on the beach at Amelia Island for $200,000 20 years ago. It’s over a million now. Nobody can afford that. I probably wouldn’t even want to buy it myself. But if you can break that price down to where somebody can afford it, then now they can come and use that home and create memories for their children. Because I raised my children going to a beach house and we created a lot of memories. Well, that’s what I wanted to offer to the younger market. Anybody that can afford to buy a second home on a fraction. For example, you’re buying into a $900,000 house for 170. So your interest is one fifth in that house. You share in the cost, you share in the overhead, all that’s the five owners sharing all that. You get 10 weeks of usage. If you’re working at 30 years old, you can’t take off 10 weeks, but you’ll take off as many weeks and maybe weekends as you can to go down there with your children. If you’ve got a one week there for you to use, then you might come for two, three days. It doesn’t matter. Or you don’t want to come and you want to rent it, you can rent it. If you want to swap it, you can swap it with one of the other owners that has an interest in your same house. It’s very cost-friendly, a way to buy because you don’t have a lot of legal costs. You don’t have a lot of closing costs. Everything’s set up on an LLC, a limited liability company, and you get a share in that company. Now, you actually own it, you get to write off the depreciation, the interest, all that. It’s just like owning the whole house, but you only get a fifth of it. It’s just like you and a couple of buddies going together and buying a house together and flipping it. It’s the same thing. You just having it to keep. You got two or three buddies that you want to buy the house and you want to keep it. So I think it’s a great way for the average person to be able to afford a place that they can call their own. When you show up with your friends, there’s no sign there that says you only own a fifth of it. All your buddies will think you own the whole house. So it’s a great way to go and have a home base, especially if you like the water. My product is on the water. We have a 150 foot dock, so you have access to boats and boating. My market is someone that likes to explore the Georgia coast. It’s 70 degrees here in January the 8th. I hate to say what it is in Chicago or New York or Minnesota. I mean, my God, I would rather be here in the wintertime. So you’ll have some weeks that you can come and stay all year long, whichever weeks you want to go. So that’s what we’re doing. And I think it’s a great way to help people own that second home.

Yeah. I love the idea. And even if someone could afford the full 900,000 for a second home, what if they want a home? They wouldn’t use it, but also they could have that fifth on the water and maybe a fifth in a cabin. Exactly. Exactly. So it definitely could work for obviously someone that couldn’t afford a second home or someone that could afford the second home, but wants

A couple homes. They want five places to go to. Exactly. Exactly.

Yeah.

That’s the whole idea. And it’s a great way of also using those weeks. By the way, I have another company that I’m tying my houses into where if you have 10 weeks usage and you’re not going to use them all, I can rent five of them for you and almost make you enough money to pay your payment for the whole year. So you wind up with your usage for free. You also have the ability to swap that week with another house somewhere in the world, but through this exchange program that I’ve got created so that we can have a week here or you might have a week in Paris or you might have a week in Italy or wherever you want to go. So it’s a great way to travel. Everybody’s familiar with Airbnb, VRBO, and people share in their houses, right? Well, everybody’s sharing their houses with unknown people. Well, now you’re just sharing your house with four people that you don’t even have to know, but you all own it together. And it’s the same concept, just better.

Why do you think so many investors are overlooking this, I would say maybe niche?

There’s not many places doing fractionals. You might find a fractionals in really luxury resort areas like Aspen and Vail and places like that because the houses are $4 million. You’re paying a million dollars for a fourth interest in it. You don’t own the whole thing. You’re paying for a fourth interest a million dollars. It’s crazy. There’s not many places that have developed something like this that’s the whole development is a fractional development because most people living in a neighborhood don’t want people coming and going in their neighborhood. They don’t want VRBO. They don’t want Airbnb. They’re trying to outlaw them all over the country. Well, my development, I created something different. And the lawyers, I am a lawyer, but I had another lawyer look at my covenants to sign off on them for me. One of the quote expensive silk stocking lawyers that’ll charge you $10,000 for a couple of phone calls. And I had them look at it and I said, “I don’t want anybody living in my neighborhood.” Well, they’ve never heard of that. What do you mean? Covenants, they can’t live there? I said, no, they can only come and use it short term. They can come and stay as often as they want. If they own the whole house, I don’t care. They can buy the whole house at a discounted rate, but they can’t live there as a permanent resident. So that’s to keep people from complaining when people are coming and going and having a good time in a resort area. Think about it. There are not many places like that. Very, very, very few that have been created specifically for fractional sales. Yeah. I got 38 houses that I can do that with. That’s a lot of people.

Yeah. What do you think the most common misconception is about this offer? Well,

They think it’s a timeshare, but it’s not. It’s not even close. And if you’ve got a development … See, that’s the other thing. You can buy a fractional somewhere in the world. It’s a one-off. You’re buying it and it’s one house and you’re buying into that house. When you get ready to go to sell that house, you got a problem because there’s nobody marketing it for you. With my development, I will be marketing these things until I die. I’ll be marketing them with my grandchildren. I’ll be marketing them because they will have a residual income from the rental program, from the weeks that we’re going to be renting. But also, you might want to sell your unit. Fine. I’ll find another buyer because I’m going to make a real estate commission on it just like I was selling the whole house. So I’m setting it up where I will perpetually be, and a company will be perpetually selling these units all the time, buying, selling. So you got to wait getting out of it because liquidity is the big issue of getting in and out of these things. So I’m trying to create it where the liquidity is there as well, even in real estate. That’s hard to do sometime. Real estate can be a long-term haul. So people need to buy it thinking they’re going to keep it as a place that they have called home, let the appreciation go up in value. That house is going to go up in value. If I had a fractional on the $200,000 house that I’m sitting in, that fraction would have been going up to a million dollars. So it would be higher as well. So the house goes up, they got the appreciation. That’s not something you’d have with timeshare. You’re only using that. This is actual ownership, so much better.

Yeah. I love it. I love it. Now, just a really quick word from our sponsor. This episode is sponsored by 10XTV, the secret weapon behind some of the most successful real estate investors in the country. Here’s the deal. Most investors are stuck cold calling, texting, spending hours chasing low quality leads, but the smart ones, they’re using TV commercials to flip the script. With 10x TV, motivated sellers are calling them already warmed up, already trusting them because they’ve seen them on TV. It’s high credibility, it’s high leverage and way less hustle. This is in a theory the owner and founder of 10x TV has been a real estate investor for the past 24 years and TV has been his number one lead channel since starting 13 years ago. Want to find out if your market’s available, go to 10xtv.co for a free audit and see how TV can become your unfair advantage. Again, that’s 10xtv.co. Strickland, I’m curious, speaking of marketing, how you’re finding the properties or the land to develop these properties, what are you doing to actually find the deals?

Well, at this point, finding waterfront property on the coast is like finding hen’s teeth. I mean, it’s very difficult. So I just happened to stumble up on this one because somebody called me and said, “Hey, you need to go look at it. They’re trying to sell it. They want to get rid of it. ” And so I wound up buying it and going in and redeveloping it and sprucing it up, put in a pool, pickleball court, that sort of thing, and getting ready to build more houses. But you just have to get out there in the woods and walk and look. I mean, I’ll tell you, give you a good example. I was driving down I- 95 one day, which runs through the state of Georgia. Actually, before that, I was coming around Highway 17, and I’ve stopped right at I- 95 to get gas. And when I was pumping gas, I happened to look back and I saw a bridge. I had just crossed over a bridge and I thought, “I just crossed a bridge. There’s water going somewhere. Where’s it going? ” I couldn’t see it because behind the gas station was all trees. It was all wooded. Couldn’t see anything. So I got on my phone, which I may look old, but I’m only 39. So I got on my phone and I looked up online who owned the property. Well, it was a bank. I thought, well, here, there’s another foreclosed property behind this gas station. It was 148 acres. And I’m looking at it and I go to Google Earth and I looked at it on Google Earth and sure enough, there’s water there. There’s water frontage. So I kind of hopped the fence and trespassed and went on down there to the waterfront and looked at it, immediately called the bank, went over there the next day and said, “Look, I’m not your guy to sell this for you. I’m not looking to sell it. I’m not a broker. I am looking to buy it, but I don’t have any money. I’ve got to put this deal together. Will you work with me? ” And they’ll work with you if they want to sell it. I told him, I said, “I’ll give you $25,000 down as a earnest money with 60 days due diligence and 30 days close after the 60 days. And at the end of 60 days, I’ll give you another $25,000.” So I’d have 50,000 hard, then we’d go to close it. And he says, “Okay, fine.” So I negotiated him down on the price again. You got to buy right. If you don’t want to make any money, you got to buy right. So I beat him down from 1,005 to about 900 and we signed the contract. As I’m signing the contract, which I had with me, by the way, because I knew I was going to buy it, I’m writing out a check for 25,000. I said, “Look, that 25,000 is just going into escrow until I decide if I want to buy it. You got 60 days due diligence. You’re not going to spend it. ” I said, “I need that money worse than you do. Why don’t you just hold it for me? ” And I was pushing a little bit. And you know what he did? He said, “Fine. Write out two checks. One for today, one for 60 days from now, 25,000 each. I wrote them both out, handed them to him. He stapled them in his file.” Now that’s a good banker. I tied up a million dollar piece of property with zero dollars. Now, that’s the only way to make money. Then I had to go put the deal together, which I did. And so that’s how I found the property. I was out beating the bushes, looking for places to buy on the water and just stumbled up on that because I was paying attention. I saw the river and the bridge and I knew there had to be water behind me. Then I used online resources on your phone, which anybody can use. And you can figure out who owns something and what it looks like from Google Earth pretty quick.

Yeah, I love it. I love it. What mistakes do you often see people in this niche make that you think could be easily avoided or mistakes that you’ve made in the past that you think could have been easily avoided?

Going in with the wrong people. Don’t have a partner that’s going to try to tell you how to do something and you know how to do it better than they do. Okay? Because if you have a partner that is going to try to control the deal and you know more than they do about how to market it, how to sell it, you need to stay in control. I brought in people to be partners, but I don’t make them partners. I keep my entity totally separate. I do joint ventures. Never do a partnership. Partnerships never work. There’s always somebody that’s going to get upset. Somebody’s doing all the work, the other person’s not. Somebody’s getting all the money, somebody’s writing it off. No, I’ve got one business that’s mine. If you’ve got a business, fine. I’ll joint venture with you. Your company and my company can go together and buy something, but you run your business the way you want to. I’ll run mine the way I want to. That way you can do your own write-offs, do all your own everything. So staying out of partnerships is the main thing. Do it as a joint venture. That’s the only way to make it work. That way, they don’t care what you’re writing off in your business. If you’re writing off a car or whatever, it’s your business. They’re writing their business off however they want to. You can’t tell them how to run their business. They can’t tell you how to run yours. So I would stay out of those kind of situation.

Well, when it comes to the word success, everyone’s got their own definition for it. Everyone strives for it differently. Everyone measures it differently. Sure. How do you define the word success? How do you strive for it? And how do you measure it in your day-to-day life?

I heard in undergraduate, actually in University of Georgia, I heard a speaker one day say, the key to success is finding something that you love to do, that you would do it for absolutely nothing. You do it for free, but you do it so well that you’re highly paid. Now that’s key to success. You do it for nothing. You do it for free, but you love it. So you’re doing it so well that you’re going to be highly paid. I do what I do because I love it. It’s not about the money. The money, that’s immaterial to me. If you put money making first, you’ll never make enough. I learned a long time ago you got to have five things in order. I call them the five F’s. Faith is number one, your relationship with the Lord. Number two is your family, your relationship with your wife and your children. Three is friends and family, extended family and your friends and network. And then fourth is your finances. And no, fourth is your fitness, keeping yourself healthy. And then the last one is finance. So if you got the first four in order, the fifth one will take care of itself. So you don’t have to worry about striving for some number. It doesn’t really matter. Money will chase you down if you got it in the right order.

I love that. I love that. Well, if you had to … I’m going to challenge you with the next one. If the whole business went away, all the properties go away. I’ll let you keep all the knowledge you’ve learned over the past so many years. Right. I will give you enough money to comfortably live for six months. What would you focus on first to rebuild?

Cash flow. You got to have cash flow. And let me answer that question off of reality. In 2008, I was developing a property that I had sold $16 million worth of lots in. And when 08 hit, the whole world came to a stop. You weren’t old enough to realize, but it literally, the water was turned off. It was just like somebody stopped and turned the water flow completely off. Banks went under. I had banks that I was banking with that went under. Well, when they go under and FDIC’s not loaning any money, not letting anybody make loans, you can’t go move your loan to somewhere else. Your whole project goes under with the bank. The bank goes under, their shareholders go under, all their customers go under, and your projects go under. So I lost right at $20 million worth of equity in properties that I had worked 45 years for. It was the greatest transfer of wealth in the history of the world at the time. And it was planned, by the way. It wasn’t by accident. That was a planned move. It wasn’t a bunch of loans that were made that were bad loans. There were some bad loans because they opened floodgates. They let greed take over. Everybody was making crazy loans and getting all the money that they wanted to get. And the banks were making money. Everybody was making money. But they were planning that to let them run wild and then boom, pull the plug. When they did that, I lost over 20 million in equity. I had to start over. I had zero. I went from $150,000 a month income to zero. I’m not exaggerating, to zero. Well, all of a sudden you got to figure out what are you going to do? Well, I thankfully was an attorney and I could go back to practicing law. And let me tell you, I didn’t want to do that. I hadn’t practiced law. I had six lawyers running the roads for me, closing loans. That’s what got me into real estate because you got to have a base of operations, you got to have cash flow. So I had that. And then when I got out of the law practice and I was doing developing full-time, all of a sudden I didn’t have it. So I had to go to work with other lawyers. And so I called them up and said, “Look, I know you need lawyers to close loans, especially refis, refinances.” And so I was doing refinance closings for a cool $300 a pop. And I thought, Lord, what am I doing? Why am I backing up? It’s okay. Money was no … It wasn’t that big a deal. Everybody said, “How’d you get by with losing all that and not get all upsets?” Wasn’t mine to begin with. I was just supposed to be a steward of it. So that really didn’t bother me. It bothered me and I wasn’t a good enough steward to keep it, but it was outside of my control. I didn’t have any control over the way that they shut everything down. So I started practicing law again. And then after that, I built up a cash flow. By the time COVID hit, I was making 40 grand a month at $300 a clip. I was working 18 hours a day, six days a week, but I didn’t mind working to get myself built back up. Now, once I had cash flow going again, I started looking for more deals. And I found them and I put deals together and I kept putting deals together. I’m back where I was.

Yeah. Yeah. I love it. I love it. Where can people reach out to you if someone’s interested in learning more about buying a fifth of one of your

Properties

Or just learning more about it in general?

Yeah, I’d be glad to share with anybody. Let me tell you, I answer my phone. Okay? I’m old school. If my phone rings, I’m going to answer it. My phone number is 912-486-4477. And my company, my development, is Cumberland Palms. That’s just www.cumberland, C-U-M-B-E-R-L-A-N-D, Palms, P-A-L-M-S.com. We’re right at Cumberland Island, if you’re familiar with that national park. Cumberland Island is literally right across the river from my dock.

Awesome. Awesome. I love it. Any final advice for investors that are looking to grow, scale, or maybe simplify?

Yeah, let me share another story. I had an old guy that was a friend of my dad’s, and he had 6,000 acres of timberland, drove a pickup truck that was beat up and wore overalls. You wouldn’t have thought he had $5 either. And I asked him one day, I said, “Mr. Lincoln, how did you acquire so much land?” He said, “Well, son,” he said, “I’m going to tell you about real estate and how to make money in real estate.” He said, “When people want a price for their property,” he said, “They don’t want to change that price. It’s hard to get them to change their price.” He said, “But if you get your terms, you can change their price and they don’t even know it. ” He said, “All I can tell you is don’t be as scared of buying something, even if it’s a million dollars. If you can get your terms, buy it. ” He said, “If you can get it for $500 down 500 a week, buy it. It doesn’t matter if it costs a million dollars.” He said, “So anything, anybody that will own or finance to you, buy it. If they will offer owner financing, buy it. ” And that’s how I recovered. I made $400,000 on one project when I was practicing law to recover because the owners didn’t want to do the rehab of these four townhomes that they had, and I bought them on an owner finance basis, went in, rehabbed them, then flipped them and made $400,000 because they didn’t want to do the work. Yeah,

I love it. I love it.

Owner finance is a great thing.

I love it. Strickland, thank you so much for coming on. Everyone, thanks for watching, and we’ll see you next time.

Yeah, I’ve really enjoyed it. Thank you. By the way,