January 15, 2024 • 55 mins
How does the intertwining of ranching, real estate, and personal transformation shape our understanding of the American West? Dive into this thought-provoking year-end review with Colter DeVries on the Ranch Investor Podcast. Embarking on a reflective journey, DeVries, a seasoned broker and engaging host, weaves together three key themes: ranch syndication, insightful guest experiences from 2023, and emerging trends for 2024.
His exploration into ranch real estate is rich with details about land value appreciation and investment dynamics, set against the backdrop of a rapidly evolving ranching culture in the American West. DeVries doesn't shy away from the complex ethical and emotional layers of gentrification and cultural preservation, offering a nuanced perspective on these critical issues.
Moreover, this episode delves into DeVries' personal narrative, charting his own challenges and the evolution of his business strategies in response to an ever-changing market. It's an insightful blend of professional acumen and personal growth, casting a fresh light on how economics, culture, and the timeless tradition of ranching intersect in today's world. Join us for an episode that promises not just to inform but also to inspire.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Colter DeVries (00:00):
So he's made a good career probably averages
$200 million a year in sales.
That year was far beyond it.
Welcome to the Ranch Investorpodcast.
I am your three year host,colter DeVries, a credited land
consultant with the Realtor LandInstitute and accredited farm
manager with ASFMRA.
(00:21):
I'm excited to bring you theexperts on a weekly basis to
hear what's trending, what'shappening, what's going on in
Montana, wyoming, the West andranches across the United States
.
Intro (00:33):
The Ranch Investor podcast is the most downloaded
and informative industryspecific content that intrigues
while entertains.
Colter DeVries (00:42):
The Ranch Investor podcast.
I'm going solo today, so you'vegot me Colter DeVries and I've
never done this before.
A year end summary, just adissertation on my thoughts,
views, values and beliefs A soloepisode.
But I see it's trendy.
(01:03):
So I like to be a hipster andI'm going to do what the other
podcasters are doing and do a2023 summary.
And actually I'm excited totest this, to challenge myself
to produce a solo episode.
Even being the naturally giftedsalesman that I am, it's tough
(01:26):
to just shoot from the hip,speak from the heart, not worry
about being canceled, and give afull opinion, hold no punches
dissertation.
As I said, this is going to beme talking about three things
(01:46):
today the syndication that I'vebeen working on, the guests of
2023, and the trends that I seefor 2024.
I want to start by saying howfortunate I feel to have this
podcast, to have it last threeyears.
(02:08):
As you would imagine, if itwere 60 downloads a week, it
wouldn't be worth doing.
It wouldn't be worth my time,the cost involved.
It's not good marketing for mybrokerage business.
It's more about buildingcommunity.
I've come to find, and the mostfeedback I receive is actually
(02:33):
from people just like myself whoare trying to figure out a
better way to finance a ranch,to invest in ranches and to
become the syndicatorsthemselves.
Actually and we've had a coupleof guests on who have done that
We'll get into that in topicnumber two some of those guests.
I'm going to continue on thissyndication why I think it's
(02:58):
important.
We, as mentioned several timeson the podcast, across the
United States we have seen landvalues appreciate so
significantly that the holdingcosts are higher than the annual
yield.
That's almost going backwards,like in a negative bond for some
(03:24):
of these ranches.
So it's obvious that the marketis saying that a lot of these
are not utilitarian assets.
These are not cash producingvalue in that way.
Value cash producing assetsproducing value in some other
way and I think we all can agreethat the value those type of
(03:48):
ranches and I'm talking aboutWestern Wyoming, Western
Colorado, western Montana,anything where you can see a
mountain and drive to town andget a latte those are very hot,
very popular, sexy and and youknow I have begged the question
before what is a ranch?
Is it?
(04:10):
Do you have to have livestockon it?
Does it have to be supportingan operation that supports one
family?
I mean that that would be likea 400 head ranch in most places
in the West arid West, so thateliminates probably 80% of quote
unquote ranches.
Does it have to be all aboutcreating a lifestyle around
(04:39):
cowboy and generational ranchersand homesteaders?
I think the definition of aranch is it's there, isn't one
and it's ever changing.
It's subjective, it's personal,and I think that's beautiful
because we do see, we like tosay that branches seem to be
those types of ranches seem tobe much like fine art.
(05:04):
Beauty is in the eye of thebeholder and it's completely
speculative what that art isgoing to be worth in the future.
I bought a print recently ofthe famed Kevin Red Star Indian
artist here in Montana, actuallyin my hometown, actually a
(05:25):
neighbor to my parents ranchtwice, once on the south side,
once on the north side, and so Ihave this personal connection
with Kevin Red Star's workbecause I know him personally.
But I didn't want to lose myass buying a print, I wanted to
make sure that held its valueand I think that's how the
(05:49):
majority of Western ranch buyerstreat it is.
They want to have a personalconnection, they don't want to
lose their ass, they just wantthe enjoyment out of it and they
want to make sure that they'regoing to be okay when it comes
time to liquidate it.
So I personally now cananecdotally say that, yeah, I
(06:10):
think ranches trade a lot likefine art.
So when that happens, the caprate approaches zero, right,
maybe even negative.
When you're holding, costs areare more than the annual yield,
and that's going to happen.
When you have largeimprovements house Taylor
(06:33):
Sheridan's equestrian system orwhatever he's doing with horses
on on your place that's going todrive the cap rate below zero
and that's okay.
We know that there is a lot offrustration across the United
States about, about land valuesand that's coming from the
(06:53):
populace, the locals, and Ithink we should validate their
feelings as well.
I mean, that's that's me.
I am the populace.
Fifth generation Montanarancher who lives in a gentler
is from a gentrified area, redlodge, where prices are
astronomical.
If you were to buy a ranch Inthat area it would take at least
(07:19):
150 years to pay it off withlivestock.
That's a good thing.
Friction and economics.
Economics move money from areasof low yield to high yield.
That's the study of movement ofcapital, not just money capital
from areas of low yield to highyield, which means we humans
(07:41):
have to constantly be creatingvalue, real value.
That's the beauty of capitalismand free markets.
Going back to the feeling, thesentiment of those being
gentrified and I I use the wordgentrification and cultural
appropriation.
So when Taylor Sheridan creates30,000 new buyers flooding to
(08:07):
Montana for a ranch to livetheir dreams as a cowboy which
is okay, that's that's yetanother beautiful thing that we
get to pursue our dreams andthat's not for anyone else to
tell us what our value should be.
So when they do that, Ijokingly say that the locals are
(08:28):
, you know, the ranchers like mydad are.
They're being culturallyappropriated.
And I do that to throw it backin the face of DEI, which we'll
get into DEI topic number threetrends.
Staying on this, this frictionof local versus outsider.
(08:49):
It's nothing new, it's just anew person involved.
So the feelings are new to thatperson, but the trend is not
new.
The Rockefellers and many otherwealthy families have been
investing in ranches in the Westsince the West was settled and
(09:10):
tourism income.
Ranches as dude ranches orranches as recreation and hobby
sport as we know them today,trophy ranches as we know them
today.
That's nothing new either, andI have to remind myself of that
because I come from a very smalltown, legacy generational
family operation where thelivestock supported the lives of
(09:36):
the humans, and that is.
I can recognize and validatethat.
That can be painful, that whenpeople feel like everything
they've known, everythingthey've liked and enjoyed is
being absorbed, it's being Idon't want to use the word taken
(09:58):
from them because we're in avoluntary market.
It's a willing buyer andwilling seller every time.
Another beauty of free markets,capitalism is no one is being
compelled to do anything.
You're not forced to give upwhat you have services, labor
(10:20):
time, product assets, realproperty at the end of a gun.
That's the only way communismworks is at the end of the gun,
and we're not there.
So everything that's happeningaround us is a beautiful
challenge of capitalism.
Capitalism isn't a thing, itdoesn't exist, it's not real.
(10:43):
Capitalism is just another namefor human behavior.
So here we are, we findourselves and I'm on the front
end of this because I'm a broker, right.
So I've got this almost thisconflict of interest that I
could be accused of selling myfriends out, selling my
(11:04):
neighbors out for the highestdollar, which is true.
I mean, if I'm bringing them,if they've hired me, I'm going
to bring them the highest dollar.
Right, that's my obligation,that's my duty to them.
This rapid change that happened.
I do think we should embrace it, and I am guilty of being a
(11:30):
hypocrite in this regard.
I think anyone who's listenedto several episodes could
probably point out severalhypocrisies of mine.
Most notably in my mind is thisissue of being a shill.
Someone could call me a shill,that I'm, or the, as Karl Marx
(11:50):
would call me, the petty bourge.
I'm not the bourgeois, but Isell out the proletariat to
benefit the bourgeois.
I'm the petty bourge accordingto my good good buddy, karl Marx
.
I was at a conference two yearsago at the height of the real
estate boom.
Everyone's just killing it, thechampagne's flowing, everyone's
(12:11):
having a good time, this is allhigh performing brokers.
It's the Realtor, landInstitute accredited land
consultant.
Well, rli's annual conventionand the money's flowing, people
are doing good and there's agentleman very high up within
the organization, so he's made agood career probably averages
(12:31):
$200 million a year in sales.
That year was far beyond it andhe got up there to accept the
award as the highest performerand he said I have mixed
feelings about this award.
This is bittersweet.
It's bittersweet because I'mseventh or eighth generation
Floridian.
I couldn't even fathom thatbecause Montana's not that old.
(12:53):
Me as fifth generation.
That's 1883 is when my familycame over parts of my family.
So I can't even fathom seventhor eighth generation Floridian.
And he's saying how bittersweetit is.
God, I made all this money forme because I had to sell out my
neighbors.
The culture around me, myhometown in Florida, is changing
(13:17):
.
It doesn't look the same, itdoesn't feel the same, but I
made all this money and Floridais going to be developed.
It's houses, it's not cowsanymore and pine trees, it's
Florida.
When the guy sitting next to meturns to me and goes Bullshit,
(13:38):
you can't have it both ways.
And I agree.
I mean this gentleman and Iprobably shouldn't even lament
about the good old days ofMontana and Florida when we are
on the front end.
This is our business.
We are supposed to change withthe times, respond to consumer
demand, figure out a way toliquidate and market supply.
(14:02):
The supply is always going tobe there.
Demand is changing, but demandis always changing and we're
here to find that highest andbest value and provide the best
service to that client who'sselling.
So I'd agree we can't have itboth ways.
I probably need to startsinging a little different tune
about the loss of culture.
(14:22):
There's just to justify that alittle further.
There's always been loss ofculture.
I mean, when my family cameover in 1883, it was still
Indian lands.
Today they claim to be feelingculturally appropriated, which
is just people appreciating thatculture.
If you wear beads or dress upas a cowboy, you're just
(14:47):
appreciating that culture.
I know I went to Australia whenI was 21 to hitchhike for three
months and couch surf.
Before Airbnb and Uber I didn'teven have a cell phone.
It was couchsurfingorg and Iwent down there with the intent
of being a surfer.
Long hair, wanted to spendthree months on the Australian
(15:10):
beach doing nothing with my life, essentially, but surfing, and
definitely the locals could havesaid it didn't work out.
By the way, I just hitchhikedand couch surf across Australia
for three months.
Did not get much real surfingin, but I was worried about the
(15:32):
locals, the snobby, uppity,elitist locals saying well,
you're not the real thing,you're not the real deal, you're
a wannabe.
And I think that's okay.
It's okay to be a wannabesurfer.
We get to pursue our dreams.
We get to define what ourdreams are.
Other people's opinions shouldhold no weight.
(15:53):
And yeah, if I want to be asurfer and I'm horrible at it
and maybe my board is cheap andmy surf shorts at the time are
not name brand, so be it.
That's my style, that's my bestway of pursuing my dream and I
think we should share that withanything.
(16:16):
With people who want to dress upas Native Americans they
obviously deeply appreciate thatculture.
People who want to buy a ranchand learn how to rope and ride
and maybe fix fence and reallywear leather shafts, just for
the sake of wearing leathershafts and jingle bobs, spurs
(16:37):
where spurs the town where abigger, taller hat.
If you're going to go, go allthe way, lean into that, and I
think we should appreciate that.
And I come from a place a lotof Nimbis not in my backyard
small town where that getscriticized and I'm guilty of
making jokes about those peoplemyself.
(16:58):
Everything is about positivity,finding immense value in what
you do, creating the mostrewarding life.
We can not letting outsideopinions, values, morals even
affect what we want to do,because morals are subjective as
well.
We're not going to get intothat.
But pursuing your dream Can'thave it both ways.
(17:21):
So here I am.
I am trying to create asyndication to bring in more
people to these Montana ranches,colorado, wyoming, more people
coming in to?
Someone could say tourism is anextractive mining industry.
You just come in, take what youwant and you leave.
(17:43):
You're not vested in the localcommunity, not vested in the
local area.
No alignment of interest forthe long term.
It's absolutely extractive.
It takes a resource and movesit somewhere else, which is okay
.
Again, I mean, that's the beautyof economics and free markets.
The value is being createdsomewhere.
And I think that's what I haveto respond to.
(18:05):
I can't sit here and, on onehand, whine and lament about the
good old days when we hadcommunity style brandings,
everyone helped everyone, and oh, it's not that way anymore,
back in the good old days.
I can't do that If I'm going tosyndicate a ranch to bring in
(18:26):
more people who value thatculture, that experience, that
lifestyle.
And at the end of the day again, this is art, this is an
investment, a tangible asset,and there's a lot of people who
demand that there is a hugemarket across the world, that
want a small piece of that.
They want to feel that, theywant to be part of the
(18:49):
experience, and I think peoplelike myself and the other
syndicators I've had on HarvestReturns, chris Raleigh, josh
Green, pursuit Outdoors I thinkwe should build the product,
build the platform, themarketplace, create a means for
capturing that value because itis valuable.
(19:12):
Jason Kent is another one.
He's in the Reno, nevada areathinking about how do we protect
all these things?
How do we protect communityculture, ecology, legacy,
environment?
How do we protect all that yetgive demand what it wants.
Demand wants a piece of this.
There's people who want to moveto Reno because it's beautiful,
(19:34):
on a great climate Josh Greenhas identified.
There's people who want to havea small interest in a luxurious
amenity ranch in WesternColorado or Southwest Montana.
We shouldn't fight them.
I mean, that's about thedumbest thing you can do if
(19:55):
you're in business.
Right, and I'm in business.
I'm a broker, I'm a accreditedland consultant, accredited farm
manager.
I've invested a lot of money inthis business, I've invested a
lot of time and, as peoplementioned, the first three years
, you starve in this business.
For the first five years peopledon't even call you back.
(20:16):
And I'm here, fortunate enoughto say that this is my seventh
year and I'm averaging 10 to 12million a year sales volume.
So this is what I do and Ishouldn't fight it and I did.
In the beginning I thought I waslike I'm going to be a good old
(20:38):
broker, ranch guy who servesthe farmers and ranchers.
I'm going to work with justpeople like me, generational
operators.
I'm going to provide them value, make sure that they're
protected.
I'm going to advocate for them,get them into good ranches on a
1031.
And that's a good way to starve.
(21:01):
So I have adjusted.
I've adjusted to yeah, I wantto appeal to the Rupert Murdochs
who come in and buy a $200million ranch.
I want to appeal to the DallasTexas hunter who wants a place
in Montana to brag about to hisfriends at a barbecue on some
(21:23):
lake that I want to be at,especially in January and
February.
I want to appeal to them.
I want to appeal to thesuburban Chicago homeowner who
wants a small piece of Montana,and there's a lot of people and
(21:44):
so I had to adjust my businessand especially if I'm going to
support my two girls.
Now Life is much.
What I do every day is moremeaningful.
It needs to be more reasonable,sensible, because I have two
beautiful little girls and so Ican't do everything with my own
(22:05):
ego, and mine and my own egowould get in my way.
That's the one that's tellingme that I'm the elitist, that
I'm the good old boy fromRoberts Montana who has some
sense of entitlement about whatthat should look like.
What should Roberts Montana be?
And that's completely egodriven if I think I can even
(22:26):
have that position, or if thatI'm entitled to see Roberts stay
the same, with communitybrandings and the good old boy
culture, or if that I'm elitist,if I'm better than those who
are moving in because I've gotsome inherited, unearned right.
Our rights are defined by theBill of Rights and the
(22:51):
Constitution given by God,guaranteed by the Constitution.
Anyhow, we have the right topursue our dreams too, and I
think the syndication is a greatway to do that for a lot of
people.
Drew Hedrick is actually doingthat as well.
Drew Hedrick is a friend ofmine who is syndicating smaller
recreational ranchettes inEastern Montana where there's
(23:15):
great trophy elk hunting,something like that.
What they're doing.
I probably would have had asharp tongue.
I probably would have casted astone at that.
I would have been envious,certainly in that I wanted what
someone else has, what ChrisRaleigh is doing or Josh Green
or Drew Hedrick.
Had syndication, onlinesyndication been a thing nine
(23:41):
years ago, when I was looking atthis as a re to real estate
investment trust.
That was the more commonvehicle method for large passive
investments in these types ofassets restrictive assets.
I would have been envious ofthose guys because I would have
(24:02):
wanted what they had or whatthey were doing, which is
unfortunately getting worse insociety with Instagram.
People are becomingincreasingly envious and it's
creating a toxic world around usand that holds people back.
Unfortunately, I was able towork through that and just apply
(24:25):
myself and say this is what Iwant.
I don't wanna be the small townRoberts Rancher.
This is my legacy, it's my past.
It's kind of some outsideexpectations of me, but that's
not what I want.
I wanna pursue something bigger.
I would have also been jealousbecause that small town there's
(24:52):
a atmosphere of jealousy whenpeople come in with more money.
So jealousy is feelingthreatened by what someone else
has, whereas envy is feelingpainful feelings wanting what
someone else has.
Jealousy is threatened and Ithink a lot of this rapid change
(25:14):
is the negative feelings aroundrapid change in rural Montana
are feelings of jealousy.
People do feel threatened whenland values boom around them,
when they go up around them andyou can relate that to Brooklyn
and any area being gentrified,some old industrial district.
(25:35):
That's definitely one of thefeelings that arises is jealousy
.
Fortunately, I think dreams canbe stronger than that feeling,
those negative, toxic feelingsand dreams can.
They pushed me to become amarketer, become a broker and
(25:56):
work one step closer tosyndicating ranches online, and
I do believe that this is goodfor the economy.
It has to be.
It's a free market solutionthat's usually value creating,
solving a problem, providing abetter service at a lower cost,
providing a better product at alower cost, more reliably, less
(26:19):
risk.
The free market and capitalismis everything we want as a
society to improve and I believethat online syndication,
opening up ranches for passiveinvestment, is creating immense
value and one of the values bothfinancial, economic and
(26:44):
cultural, personal, subjectivevalues is that I do think these
syndications are going to bringin more like-minded people who
appreciate that culture, thecowboy culture, the good old boy
, montana culture, rural America.
I think it's gonna bring in analignment of interest.
(27:04):
People are vested for thelong-term improvement and
outcome.
You have more people invested.
Actually, I do believe that is asuperior solution to what I
jokingly say, the aristocracyand the gentry and the lords and
(27:25):
the dukes, that this feudalistsociety, this transition to a
serfdom where you have thelandowners, the elites that are
in control of and completelyremoved from the proletariat,
the serfs and again, that's alljokingly how I present it,
(27:48):
because I personally believewhere we are with the economy,
the way the markets are today,that is it's a good thing.
It's okay that land values aregoing crazy.
The locals can't afford them.
That's okay, because that iswhat capitalism's doing, and
(28:10):
it's creating better solutions.
Maybe not immediately, we justdon't see it, and that's
frustrating for people.
This solution, though, issyndication.
Bring more people in who sharethe vision, who want robust
ecology, who want good waterrights and good land management,
and they want a good beefsystem, a good food system.
(28:33):
They want healthy ruraleconomies, self-reliant prairie
communities, they want theculture of good people that are
not crazy burning downMinneapolis.
That is what syndication isdoing, and it's making that
accessible and available to morepeople rather than the
(28:55):
mega-billionaire ranch owners.
That's where we are today withsyndication.
It has been extremely difficult.
I am bootstrapping this.
Part of the reason is because Ijust want to own the whole
company.
I don't do well with partners,I don't play nice with others,
(29:16):
so I've never been good atpartnerships.
Then the other reason I'mbootstrapping this is because
the other alternative would beto blitzscale it, to treat it as
a tech venture, tech-enabledland tech, prop tech, whatever
fin tech, whatever people wantto dress it up as paint stripes
(29:41):
on a horse and call it a zebra.
The other option would be toblitzscale this to taking a
bunch of outside investmentventure capitalists and rapidly
grow this.
The problem there is that thelimited investors, the passive
investors, partners, the LPs.
(30:02):
They become the product Forplatforms like Farm Together,
which we've had Tracy Donovan on, who worked with Farm Together
before.
I haven't had on Acre Trader,but they are the most well-known
online farm syndicatingplatform.
Then you've got Harvest Returnsand Josh Green.
(30:23):
Some of those are VC blitzscaleprojects.
Businesses Grow the value, sellit to some other firm, sell it
to its FinTech, sell it toGoldman Sachs, blackrock.
That could be their exit plan.
(30:46):
But the issue to me is thelimited partners who are
entrusting you with their moneyto make good management
decisions, good buy decisions,good timing of the market on
selling decisions.
The limited partners who havetaken some of their hard-earned
money, savings, retirements.
They are entrusting you withthat In those blitzscaling
(31:12):
models, they are the product.
The actual investment of thefarm is not the product being
optimized, the LP is beingoptimized.
You can't serve two gods.
When you have a retail investorthe LP in the farm, and you
(31:34):
have a venture capitalistinvestor who wants to see 30%
returns in three years, whichone are you going to serve?
You can't serve them bothbecause the VC is investing in
you to raise more LPs and theLPs are investing in you to find
(31:56):
better options for theirhard-earned money.
That's the biggest reason why Ialso thinking about this
holistically, which is a bigvalue of mine.
We talked about it a lot in thepodcast.
Holistically.
This type of prop tech call itventure online syndication of
(32:19):
ranches cannot be VC-backedblitzscale.
Someone is going to lose andthat someone could be the
ecology.
It could be overhunting of aplace If there isn't the right
rules and regulationsestablished.
That could come at the cost ofthe local ecology and the
(32:42):
environment.
It could come at the cost of abad tenant who goes broke on you
or you put such terms andconditions around that tenant
that they become the serfs thatit's still just the feudalist
society that we really don'tvalue and appreciate.
For many reasons that's notpart of being American.
(33:08):
You know everyone has propertyrights here.
Everyone has rights.
We don't have kings.
It's been very challenging tobootstrap but it has to be
bootstrapped For this to work inthe long term.
It cannot be VC backed and forothers it can probably be
partnered.
For me it can't be.
(33:29):
But the challenge is, thebiggest challenge is not being a
timeshare registered file as atimeshare, for many reasons it
must be treated as an investmentfirst and, as I've explored
this diligently over the lastthree years, the equity
(33:52):
crowdfunding is becomingincreasingly difficult due to
the recreational enterprisemonetizing, optimizing the value
of the recreational enterprisefor the LPs, all the while
understanding that Westernranches, the majority of their
(34:15):
value is in exclusive use andaccess to recreation.
So that that portion of aregression analysis, what
explains the value of a Westernranch portion exclusivity,
recreation is probably thelargest portion of why people
(34:35):
buy and so why anyone would wantto passively invest in a ranch.
Why do that when you can't haveaccess to it?
So figuring that out has beentremendously difficult.
I've had Holly Fretwell on PhDformer professor of mine from
Montana State University.
She she's been thinking aboutthese issues for conservation,
(35:01):
yellowstone area, large privateranches.
And how do you?
How do you fairly, equitably,equally pragmatically, allocate
rec days, recreational days,based on a level of investment,
knowing that that's what peopleactually want?
How do you do that While stillholistically taking care of the
(35:25):
ecology, not over hunting theplace, not, not scorched earth
style hunting anything thatmoves dies.
And then I've had Eric Blascoeon and another professor of mine
, phd, who's the head ofeconomics at MSU, and we talked
about auction theory and howthat produces the highest and
(35:47):
best value in limited markets,which allocating recreation days
would be a very limited marketif you're holding it exclusively
for the LPs, if you're notputting it on land trust, common
and broadening the amount ofpeople who could potentially
book in reserve a day.
(36:07):
If you're holding thatexclusively for the LPs, then
that's a very limited market andyou'd expect a discount.
How does everyone get what theywant?
There's a lot of people here, alot of stakeholders, the
community, the LPs, myself, theGP, the lessy, the operator.
How do you create this productto make it work for everyone so
(36:32):
that everyone gets on board?
That's been the challenge withequity and I think what we're
going to move to is or test out,at least I should say is
alternative financing, mezzaninefinancing, bridge funding.
I think we're going to, as aminimum, viable product test an
(36:57):
LP product that would be basedon options, real estate options
that acts more like a financialinstrument, staying away from
the word mortgage.
It's a contract for deed.
I think that would be the pathof least resistance and I say
that because I'm working onbringing one to market right now
.
That seems to be moreachievable than figuring out
(37:21):
equity.
It's based more on cash flows,more on annual yield and IRR.
It's pretty objective.
It's based on the economics andnot subjectively based on
location and recreation, allthose good feelings around a
ranch that are hard to monetizeand especially hard to optimize
(37:45):
when everyone wants the samething, which is one thing
exclusivity, exclusive use andbenefit.
So that's where we're at.
We are going to be testingmezzanine capital contract for
deeds, options, yield based, andI think that's a good way to
start by getting the averageAmerican exposure to investing
(38:08):
in the ranches.
That's more cut and dry.
So moving on to guests, topicnumber two guests of 2023.
We had some awesome guests on.
That's one of the rewards ofthis podcast.
Personal rewards is I have areason to reach out to people I
look up to, such as Will Harriswho came on the podcast he's
(38:34):
been on the Rogan podcast twicenow and Dallas Mount, another
mentor of mine, someone I lookup to tremendously, and those
guys had huge downloads.
Those episodes were verypopular.
I had on Jim Howell who talkedabout syndication.
(38:55):
He did it in the oldtraditional way.
He had a couple of billionairebackers that he put together a
management company for andmanaged ranches South Dakota,
montana, colorado, new Zealand.
He did it all over the world.
Traditionally you get threebillionaires and buy big ranches
(39:16):
and I've admired that.
He was on my radar when Istarted my brokerage career
seven years ago and now I had anopportunity to bring him on and
ask him fairly direct questionsand kind of how you do it and
that's personally rewarding.
I very much enjoy.
That about this podcast is justthe talent of guests we have.
(39:36):
On Might calico rate that therewas an interesting one where he
was so blowhard populist,nationalist and getting into
communist socialists that it Ididn't even want to release that
episode it was.
There's been a couple that Idon't don't want to release but
(39:59):
I mean I got to stand behind mywork.
I can't just cherry pick and Ithink I do believe in
transparency and I think peopleshould present all sides I mean
good, bad ugly, uncomfortable.
We should be able to have thosediscussions.
I didn't do much discussingwith Mike.
(40:20):
He kind of owned the, he ownedthe podcast for that hour.
I didn't get a lot of words in,but it was.
It didn't.
I didn't agree with a lot ofwhat he said, but I still
dropped it and I'd like to domore of that.
Actually, I think we need tohave more uncomfortable
conversations in this countryand not get siloed.
(40:42):
So, as I continue to developthis syndication, I'm grateful
for free to have experts on,such as Holly Fretwell and Eric
Palasco and Dallas Mount.
These are consultants who wouldotherwise be charging me for
their time and here I get anhour for free with them.
(41:03):
I get to ask all the questionsI want and they help me build my
product, my pitch.
They're secretly my advisors.
They don't know it, but I haveappropriated them as my advisors
.
And how rewarding is that?
When I was fixing fence nineyears ago by myself, yeah,
(41:24):
there's a lot of good thingsabout that, but I longed for
these types of conversations andI longed for interaction with
professionals around me, and ittakes a balance, I guess.
And here I am today and I getto reach out to people like John
(41:45):
Hansen, who was the manager ofTurner Enterprises, ted Turner's
ranches I mean what a greatworld we live in when people
like that are just a phone callaway, who share interests with
you.
So that's a short one.
Topic number two is guests.
It's been extremely rewarding.
(42:05):
We've had some great guests.
Topic number three is trends.
Here's one that I do feelstrongly about.
Carbon credits are not going tobe a thing.
We've had a lot of carboncredit people come on, pitch and
I still get pitches for carboncredits people to come on.
It's too technically difficultto have accurate carbon credits.
(42:29):
It's going to be politicallydifficult as we move away from
the religion of climate changein the United States and DEI.
Those are related that type ofharassment and oppression and
that movement.
It's fading out and dying away.
(42:50):
I can't say that I always sawcarbon credits as just being a
trend, a fad, but I think it is.
I don't think it'll be that bigof a deal here in the next 10
years.
Maybe it's a 30 year thing.
Maybe technology comes along towhere it's accurate, to where
(43:14):
it becomes so accurate.
Maybe it is valuable to whereit becomes less political.
I don't see it being a big partof ranches Carbon credits.
That's a trend of 2024, goingto become less and less relevant
.
Regenerative agriculture and wedo use this term I think
regenerative agriculture is justa good way to rebrand what
(43:36):
you've always been doing.
Most of our operators, who arelong-term, resilient, long-term
minded, they are alreadyregenerative by those standards.
The standards are not clearlydefined.
I would probably define them asthe five key principles of soil
(43:58):
health as developed by NRCS.
I hate to give the governmentany credit like that, but they
summed it up best with justthose five soil health
principles.
That is regenerative.
We didn't really needgreenwashing activists, al Gore,
the world is coming to an end.
Kilimanjaro is going to be bearby 2006.
(44:23):
We didn't need this ecorebranding.
It was already there, it wasalready in practice.
So regenerative, yeah, we usethe word.
It's buzzy, it's trendy, it'sprobably more correlated to an
economy that's doing wellbecause it's stylish, maybe
superfluous, maybe it'sinherently superfluous.
(44:46):
It's like liquid death.
The water, the can of water.
That's a can of water that theysell for like $350.
It's just a way to take whatalways has been, redesign it to
appeal to people who are willingto pay more.
That's where regenerativeagriculture is.
(45:06):
It is liquid death.
All branding, all marketing,taking something old, not
changing it one bit andpositioning it to bring a higher
price, which maybe I need toconcede that that is a higher
value.
Branding is a value.
I'll leave room there forconsideration about regenerative
(45:28):
agriculture if that is drivinga higher value, but I think it's
going to wane in 2024.
I think that it's had its timein the sun.
If it keeps people interestedin grazing rotational grazing
that's great.
Maybe if it brings ininstitutional investment and
(45:51):
maybe if it brings in a largeramount of interest for these
syndications yeah, that's great.
If it brings more people torural America that are vested
and aligned, it's probably a netpositive.
Conservation easements Again, Ido think conservation easements
(46:13):
are correlated to a luxuriouseconomy.
When things are going well,people will do conservation
easements.
People will invest and buy andsell, donate, whatever.
Again, if the value is there,which I don't really think the
(46:37):
value is there.
I think the way operators goodoperators, rotational crazers if
they're healthy, if they'recreating profits, they're long
term sustainable, they don'tneed the conservation easement
to keep the whole place intactand to keep it ecologically
friendly.
That is.
(46:57):
Conservation easements are notnecessary.
They're novel, they'repolitical and they are a waste
of taxpayer dollars.
I would rather the taxpayers beinvesting in good operators.
Hopefully the wisdom of thehive, all the voters and their
(47:21):
representatives over time cometo understand that conservation
easements are a joke, thatthey're not needed.
What's needed is moreholistically minded operators
and profitable operators, stableoperators.
I think 2024, probably not yet aloss of love for conservation
(47:48):
easements.
I do think that that will goaway, especially as national
debt becomes a bigger issue.
The amount of tax we have puton my daughters is just insane.
Hopefully our representativescome to understand that and
(48:09):
rectify this national debtbecause my daughters' kids are
going to be paying for thedecisions we make today.
Conservation easementshopefully become a part of that.
That program just gets cut andtaxpayers are not wasting money,
they're keeping more of whatthey've earned.
(48:29):
So that was the three trendscarbon credits, conservation
easements, regenerativeagriculture.
Those are all highly related.
Trend number four we saw the IXRanch never sell for 10 years
and then it was syndicated.
We saw the climbing arrow ranchat that time was the largest
(48:54):
sale in Montana history.
That was syndicated.
We're going to see more of this, especially since we have tech
solutions and easy back officemanagement, a white labeled back
office that makes the barriersto entry lower.
The threshold is lower forpeople to get in and try this.
(49:14):
Create the product, create theservice.
As land values continue toclimb, even the ultra wealthy
are saying, well, I don't wantto buy a $80 million ranch, but
I'd put 10 into an $80 millionranch.
So even that level of wealth isinterested in syndication.
(49:38):
We know that the averageAmerican is like, yeah, I'd love
to put 500 bucks into a ranch.
So across all socioeconomiclevels, it seems that
syndication will continue togrow, I think due to land values
.
So to wrap it up in summary,what a great journey it has been
(50:03):
.
I appreciate everyone who'staking this journey with me.
It's the most rewarding thingI've ever done professionally.
It is.
I look at it as an art, it'sself expression, it's a way to
be authentic and original.
(50:25):
It's just me.
I mean.
This is the beauty aboutshowing up every day to pursue
something you love.
Is you just be candid about it?
This is my identity, outside ofbeing a father, that comes
first.
But my identity of artisticself expression is
(50:49):
entrepreneurship and pursuingsolving a problem.
That's, entrepreneurship isalways about solving a problem.
So I think there are immenseproblems here that could be
solved.
Well, I don't think ourproblems are ever solved.
It's the flux of markets andcapitalism is.
You provide solutions, but thenthings always change.
(51:12):
Technology always drives morevalue, creates more change
around it.
So I'm not going to say we'resolving any problems here, but I
think there are issues beingaddressed that are going to be
benefited from large scalesyndication and I think you'll
see more brokers offering thisin 10 years.
(51:33):
Probably might even be amarketplace, might even become
more common than the traditionalconsolidator sites like landcom
, land hub, land watch, allthose listing services and the
brokers websites themselves.
Probably won't be 10 years, butthose might evolve into online
(51:54):
syndication portals.
Might be more common than justoutright ownership at a certain
level, at a certain asset class,like 50 million or more.
So this is a trend topic.
Number three for today trendssyndication.
Yeah, I think it'll become morecommon, more popular in 2024.
(52:15):
It sure took a big jump in thelast three years probably the
biggest jump it's ever takenbecause of other online
syndicators Crowd Street,commercial real estate and a few
other commercial real estateplatforms that will spill over
into other assets.
(52:35):
We've already seen that withart.
You can passively invest in art, probably coins and cars, I
think there's people are findingways to when, when the crypto
craze was going on, they weretokenizing all those assets.
You see, it definitely wasZillows, spin off Picassocom,
(52:57):
second home ownership,syndicated farmland.
So this, this isn't going tochange.
And, wow, what a what abeautiful world we live in when
investing is becoming moredemocratized.
It's not a gatekeeper societywhere Goldman Sachs and Black
Routes are the only ones thatare black rock, black stone,
(53:19):
merrill Lynch those, those firmshave a stronghold on what and
how you invest.
Hopefully we see that trendimprove.
I don't think we will.
I think the SEC keeps a prettytight red tape that's on the
investing industry, and for goodreason.
There's been swindlers in thepast.
(53:40):
I mean Bernie Madoff's and thatthat kid with the token
recently can't SPF Sam Bankmanfreed.
You know there's always goingto be fleecers and hustlers out
there, so maybe we do to for toprotect the legitimate out there
(54:02):
who have to spend tens ofthousands of dollars, like
myself, on attorneys to get thislaunched.
I guess that barrier has notbeen lowered, but hopefully for
the investor, barriers are beinglowered.
It's becoming democratized andmore accessible, and that
creates more value.
That's what we want.
We want more value beingcreated.
(54:23):
So thanks for tuning in.
It's been a tremendous ridewith you all and look forward to
staying in touch.
We've had some great calls,texts, emails, social media
messages.
Keep it up.
I like.
I like hearing the feedback andthere's anything you'd like to
hear from me.
Going forward, 2024 is going tobe a beautiful year.
(54:44):
Thanks for tuning in.
We at Ranch Investor are veryinterested in hearing your
thoughts, your opinion, yourwants, desires, hopes and dreams
.
Everything on ranchsyndications, ranch investment,
ranch real estate syndicationsand DPP's direct participation
programs.
(55:04):
Please reach out.
Intro (55:06):
Subscribe on your streaming platform so you know
when the latest episode hasdropped.
Be the source of knowledge andthe maven that other
professionals are excited torefer.
So he's made a good career probably averages
$200 million a year in sales.
That year was far beyond it.
Welcome to the Ranch Investorpodcast.
I am your three year host,colter DeVries, a credited land
consultant with the Realtor LandInstitute and accredited farm
manager with ASFMRA.
(00:21):
I'm excited to bring you theexperts on a weekly basis to
hear what's trending, what'shappening, what's going on in
Montana, wyoming, the West andranches across the United States
.
Intro (00:33):
The Ranch Investor podcast is the most downloaded
and informative industryspecific content that intrigues
while entertains.
Colter DeVries (00:42):
The Ranch Investor podcast.
I'm going solo today, so you'vegot me Colter DeVries and I've
never done this before.
A year end summary, just adissertation on my thoughts,
views, values and beliefs A soloepisode.
But I see it's trendy.
(01:03):
So I like to be a hipster andI'm going to do what the other
podcasters are doing and do a2023 summary.
And actually I'm excited totest this, to challenge myself
to produce a solo episode.
Even being the naturally giftedsalesman that I am, it's tough
(01:26):
to just shoot from the hip,speak from the heart, not worry
about being canceled, and give afull opinion, hold no punches
dissertation.
As I said, this is going to beme talking about three things
(01:46):
today the syndication that I'vebeen working on, the guests of
2023, and the trends that I seefor 2024.
I want to start by saying howfortunate I feel to have this
podcast, to have it last threeyears.
(02:08):
As you would imagine, if itwere 60 downloads a week, it
wouldn't be worth doing.
It wouldn't be worth my time,the cost involved.
It's not good marketing for mybrokerage business.
It's more about buildingcommunity.
I've come to find, and the mostfeedback I receive is actually
(02:33):
from people just like myself whoare trying to figure out a
better way to finance a ranch,to invest in ranches and to
become the syndicatorsthemselves.
Actually and we've had a coupleof guests on who have done that
We'll get into that in topicnumber two some of those guests.
I'm going to continue on thissyndication why I think it's
(02:58):
important.
We, as mentioned several timeson the podcast, across the
United States we have seen landvalues appreciate so
significantly that the holdingcosts are higher than the annual
yield.
That's almost going backwards,like in a negative bond for some
(03:24):
of these ranches.
So it's obvious that the marketis saying that a lot of these
are not utilitarian assets.
These are not cash producingvalue in that way.
Value cash producing assetsproducing value in some other
way and I think we all can agreethat the value those type of
(03:48):
ranches and I'm talking aboutWestern Wyoming, Western
Colorado, western Montana,anything where you can see a
mountain and drive to town andget a latte those are very hot,
very popular, sexy and and youknow I have begged the question
before what is a ranch?
Is it?
(04:10):
Do you have to have livestockon it?
Does it have to be supportingan operation that supports one
family?
I mean that that would be likea 400 head ranch in most places
in the West arid West, so thateliminates probably 80% of quote
unquote ranches.
Does it have to be all aboutcreating a lifestyle around
(04:39):
cowboy and generational ranchersand homesteaders?
I think the definition of aranch is it's there, isn't one
and it's ever changing.
It's subjective, it's personal,and I think that's beautiful
because we do see, we like tosay that branches seem to be
those types of ranches seem tobe much like fine art.
(05:04):
Beauty is in the eye of thebeholder and it's completely
speculative what that art isgoing to be worth in the future.
I bought a print recently ofthe famed Kevin Red Star Indian
artist here in Montana, actuallyin my hometown, actually a
(05:25):
neighbor to my parents ranchtwice, once on the south side,
once on the north side, and so Ihave this personal connection
with Kevin Red Star's workbecause I know him personally.
But I didn't want to lose myass buying a print, I wanted to
make sure that held its valueand I think that's how the
(05:49):
majority of Western ranch buyerstreat it is.
They want to have a personalconnection, they don't want to
lose their ass, they just wantthe enjoyment out of it and they
want to make sure that they'regoing to be okay when it comes
time to liquidate it.
So I personally now cananecdotally say that, yeah, I
(06:10):
think ranches trade a lot likefine art.
So when that happens, the caprate approaches zero, right,
maybe even negative.
When you're holding, costs areare more than the annual yield,
and that's going to happen.
When you have largeimprovements house Taylor
(06:33):
Sheridan's equestrian system orwhatever he's doing with horses
on on your place that's going todrive the cap rate below zero
and that's okay.
We know that there is a lot offrustration across the United
States about, about land valuesand that's coming from the
(06:53):
populace, the locals, and Ithink we should validate their
feelings as well.
I mean, that's that's me.
I am the populace.
Fifth generation Montanarancher who lives in a gentler
is from a gentrified area, redlodge, where prices are
astronomical.
If you were to buy a ranch Inthat area it would take at least
(07:19):
150 years to pay it off withlivestock.
That's a good thing.
Friction and economics.
Economics move money from areasof low yield to high yield.
That's the study of movement ofcapital, not just money capital
from areas of low yield to highyield, which means we humans
(07:41):
have to constantly be creatingvalue, real value.
That's the beauty of capitalismand free markets.
Going back to the feeling, thesentiment of those being
gentrified and I I use the wordgentrification and cultural
appropriation.
So when Taylor Sheridan creates30,000 new buyers flooding to
(08:07):
Montana for a ranch to livetheir dreams as a cowboy which
is okay, that's that's yetanother beautiful thing that we
get to pursue our dreams andthat's not for anyone else to
tell us what our value should be.
So when they do that, Ijokingly say that the locals are
(08:28):
, you know, the ranchers like mydad are.
They're being culturallyappropriated.
And I do that to throw it backin the face of DEI, which we'll
get into DEI topic number threetrends.
Staying on this, this frictionof local versus outsider.
(08:49):
It's nothing new, it's just anew person involved.
So the feelings are new to thatperson, but the trend is not
new.
The Rockefellers and many otherwealthy families have been
investing in ranches in the Westsince the West was settled and
(09:10):
tourism income.
Ranches as dude ranches orranches as recreation and hobby
sport as we know them today,trophy ranches as we know them
today.
That's nothing new either, andI have to remind myself of that
because I come from a very smalltown, legacy generational
family operation where thelivestock supported the lives of
(09:36):
the humans, and that is.
I can recognize and validatethat.
That can be painful, that whenpeople feel like everything
they've known, everythingthey've liked and enjoyed is
being absorbed, it's being Idon't want to use the word taken
(09:58):
from them because we're in avoluntary market.
It's a willing buyer andwilling seller every time.
Another beauty of free markets,capitalism is no one is being
compelled to do anything.
You're not forced to give upwhat you have services, labor
(10:20):
time, product assets, realproperty at the end of a gun.
That's the only way communismworks is at the end of the gun,
and we're not there.
So everything that's happeningaround us is a beautiful
challenge of capitalism.
Capitalism isn't a thing, itdoesn't exist, it's not real.
(10:43):
Capitalism is just another namefor human behavior.
So here we are, we findourselves and I'm on the front
end of this because I'm a broker, right.
So I've got this almost thisconflict of interest that I
could be accused of selling myfriends out, selling my
(11:04):
neighbors out for the highestdollar, which is true.
I mean, if I'm bringing them,if they've hired me, I'm going
to bring them the highest dollar.
Right, that's my obligation,that's my duty to them.
This rapid change that happened.
I do think we should embrace it, and I am guilty of being a
(11:30):
hypocrite in this regard.
I think anyone who's listenedto several episodes could
probably point out severalhypocrisies of mine.
Most notably in my mind is thisissue of being a shill.
Someone could call me a shill,that I'm, or the, as Karl Marx
(11:50):
would call me, the petty bourge.
I'm not the bourgeois, but Isell out the proletariat to
benefit the bourgeois.
I'm the petty bourge accordingto my good good buddy, karl Marx
.
I was at a conference two yearsago at the height of the real
estate boom.
Everyone's just killing it, thechampagne's flowing, everyone's
(12:11):
having a good time, this is allhigh performing brokers.
It's the Realtor, landInstitute accredited land
consultant.
Well, rli's annual conventionand the money's flowing, people
are doing good and there's agentleman very high up within
the organization, so he's made agood career probably averages
(12:31):
$200 million a year in sales.
That year was far beyond it andhe got up there to accept the
award as the highest performerand he said I have mixed
feelings about this award.
This is bittersweet.
It's bittersweet because I'mseventh or eighth generation
Floridian.
I couldn't even fathom thatbecause Montana's not that old.
(12:53):
Me as fifth generation.
That's 1883 is when my familycame over parts of my family.
So I can't even fathom seventhor eighth generation Floridian.
And he's saying how bittersweetit is.
God, I made all this money forme because I had to sell out my
neighbors.
The culture around me, myhometown in Florida, is changing
(13:17):
.
It doesn't look the same, itdoesn't feel the same, but I
made all this money and Floridais going to be developed.
It's houses, it's not cowsanymore and pine trees, it's
Florida.
When the guy sitting next to meturns to me and goes Bullshit,
(13:38):
you can't have it both ways.
And I agree.
I mean this gentleman and Iprobably shouldn't even lament
about the good old days ofMontana and Florida when we are
on the front end.
This is our business.
We are supposed to change withthe times, respond to consumer
demand, figure out a way toliquidate and market supply.
(14:02):
The supply is always going tobe there.
Demand is changing, but demandis always changing and we're
here to find that highest andbest value and provide the best
service to that client who'sselling.
So I'd agree we can't have itboth ways.
I probably need to startsinging a little different tune
about the loss of culture.
(14:22):
There's just to justify that alittle further.
There's always been loss ofculture.
I mean, when my family cameover in 1883, it was still
Indian lands.
Today they claim to be feelingculturally appropriated, which
is just people appreciating thatculture.
If you wear beads or dress upas a cowboy, you're just
(14:47):
appreciating that culture.
I know I went to Australia whenI was 21 to hitchhike for three
months and couch surf.
Before Airbnb and Uber I didn'teven have a cell phone.
It was couchsurfingorg and Iwent down there with the intent
of being a surfer.
Long hair, wanted to spendthree months on the Australian
(15:10):
beach doing nothing with my life, essentially, but surfing, and
definitely the locals could havesaid it didn't work out.
By the way, I just hitchhikedand couch surf across Australia
for three months.
Did not get much real surfingin, but I was worried about the
(15:32):
locals, the snobby, uppity,elitist locals saying well,
you're not the real thing,you're not the real deal, you're
a wannabe.
And I think that's okay.
It's okay to be a wannabesurfer.
We get to pursue our dreams.
We get to define what ourdreams are.
Other people's opinions shouldhold no weight.
(15:53):
And yeah, if I want to be asurfer and I'm horrible at it
and maybe my board is cheap andmy surf shorts at the time are
not name brand, so be it.
That's my style, that's my bestway of pursuing my dream and I
think we should share that withanything.
(16:16):
With people who want to dress upas Native Americans they
obviously deeply appreciate thatculture.
People who want to buy a ranchand learn how to rope and ride
and maybe fix fence and reallywear leather shafts, just for
the sake of wearing leathershafts and jingle bobs, spurs
(16:37):
where spurs the town where abigger, taller hat.
If you're going to go, go allthe way, lean into that, and I
think we should appreciate that.
And I come from a place a lotof Nimbis not in my backyard
small town where that getscriticized and I'm guilty of
making jokes about those peoplemyself.
(16:58):
Everything is about positivity,finding immense value in what
you do, creating the mostrewarding life.
We can not letting outsideopinions, values, morals even
affect what we want to do,because morals are subjective as
well.
We're not going to get intothat.
But pursuing your dream Can'thave it both ways.
(17:21):
So here I am.
I am trying to create asyndication to bring in more
people to these Montana ranches,colorado, wyoming, more people
coming in to?
Someone could say tourism is anextractive mining industry.
You just come in, take what youwant and you leave.
(17:43):
You're not vested in the localcommunity, not vested in the
local area.
No alignment of interest forthe long term.
It's absolutely extractive.
It takes a resource and movesit somewhere else, which is okay
.
Again, I mean, that's the beautyof economics and free markets.
The value is being createdsomewhere.
And I think that's what I haveto respond to.
(18:05):
I can't sit here and, on onehand, whine and lament about the
good old days when we hadcommunity style brandings,
everyone helped everyone, and oh, it's not that way anymore,
back in the good old days.
I can't do that If I'm going tosyndicate a ranch to bring in
(18:26):
more people who value thatculture, that experience, that
lifestyle.
And at the end of the day again, this is art, this is an
investment, a tangible asset,and there's a lot of people who
demand that there is a hugemarket across the world, that
want a small piece of that.
They want to feel that, theywant to be part of the
(18:49):
experience, and I think peoplelike myself and the other
syndicators I've had on HarvestReturns, chris Raleigh, josh
Green, pursuit Outdoors I thinkwe should build the product,
build the platform, themarketplace, create a means for
capturing that value because itis valuable.
(19:12):
Jason Kent is another one.
He's in the Reno, nevada areathinking about how do we protect
all these things?
How do we protect communityculture, ecology, legacy,
environment?
How do we protect all that yetgive demand what it wants.
Demand wants a piece of this.
There's people who want to moveto Reno because it's beautiful,
(19:34):
on a great climate Josh Greenhas identified.
There's people who want to havea small interest in a luxurious
amenity ranch in WesternColorado or Southwest Montana.
We shouldn't fight them.
I mean, that's about thedumbest thing you can do if
(19:55):
you're in business.
Right, and I'm in business.
I'm a broker, I'm a accreditedland consultant, accredited farm
manager.
I've invested a lot of money inthis business, I've invested a
lot of time and, as peoplementioned, the first three years
, you starve in this business.
For the first five years peopledon't even call you back.
(20:16):
And I'm here, fortunate enoughto say that this is my seventh
year and I'm averaging 10 to 12million a year sales volume.
So this is what I do and Ishouldn't fight it and I did.
In the beginning I thought I waslike I'm going to be a good old
(20:38):
broker, ranch guy who servesthe farmers and ranchers.
I'm going to work with justpeople like me, generational
operators.
I'm going to provide them value, make sure that they're
protected.
I'm going to advocate for them,get them into good ranches on a
1031.
And that's a good way to starve.
(21:01):
So I have adjusted.
I've adjusted to yeah, I wantto appeal to the Rupert Murdochs
who come in and buy a $200million ranch.
I want to appeal to the DallasTexas hunter who wants a place
in Montana to brag about to hisfriends at a barbecue on some
(21:23):
lake that I want to be at,especially in January and
February.
I want to appeal to them.
I want to appeal to thesuburban Chicago homeowner who
wants a small piece of Montana,and there's a lot of people and
(21:44):
so I had to adjust my businessand especially if I'm going to
support my two girls.
Now Life is much.
What I do every day is moremeaningful.
It needs to be more reasonable,sensible, because I have two
beautiful little girls and so Ican't do everything with my own
(22:05):
ego, and mine and my own egowould get in my way.
That's the one that's tellingme that I'm the elitist, that
I'm the good old boy fromRoberts Montana who has some
sense of entitlement about whatthat should look like.
What should Roberts Montana be?
And that's completely egodriven if I think I can even
(22:26):
have that position, or if thatI'm entitled to see Roberts stay
the same, with communitybrandings and the good old boy
culture, or if that I'm elitist,if I'm better than those who
are moving in because I've gotsome inherited, unearned right.
Our rights are defined by theBill of Rights and the
(22:51):
Constitution given by God,guaranteed by the Constitution.
Anyhow, we have the right topursue our dreams too, and I
think the syndication is a greatway to do that for a lot of
people.
Drew Hedrick is actually doingthat as well.
Drew Hedrick is a friend ofmine who is syndicating smaller
recreational ranchettes inEastern Montana where there's
(23:15):
great trophy elk hunting,something like that.
What they're doing.
I probably would have had asharp tongue.
I probably would have casted astone at that.
I would have been envious,certainly in that I wanted what
someone else has, what ChrisRaleigh is doing or Josh Green
or Drew Hedrick.
Had syndication, onlinesyndication been a thing nine
(23:41):
years ago, when I was looking atthis as a re to real estate
investment trust.
That was the more commonvehicle method for large passive
investments in these types ofassets restrictive assets.
I would have been envious ofthose guys because I would have
(24:02):
wanted what they had or whatthey were doing, which is
unfortunately getting worse insociety with Instagram.
People are becomingincreasingly envious and it's
creating a toxic world around usand that holds people back.
Unfortunately, I was able towork through that and just apply
(24:25):
myself and say this is what Iwant.
I don't wanna be the small townRoberts Rancher.
This is my legacy, it's my past.
It's kind of some outsideexpectations of me, but that's
not what I want.
I wanna pursue something bigger.
I would have also been jealousbecause that small town there's
(24:52):
a atmosphere of jealousy whenpeople come in with more money.
So jealousy is feelingthreatened by what someone else
has, whereas envy is feelingpainful feelings wanting what
someone else has.
Jealousy is threatened and Ithink a lot of this rapid change
(25:14):
is the negative feelings aroundrapid change in rural Montana
are feelings of jealousy.
People do feel threatened whenland values boom around them,
when they go up around them andyou can relate that to Brooklyn
and any area being gentrified,some old industrial district.
(25:35):
That's definitely one of thefeelings that arises is jealousy
.
Fortunately, I think dreams canbe stronger than that feeling,
those negative, toxic feelingsand dreams can.
They pushed me to become amarketer, become a broker and
(25:56):
work one step closer tosyndicating ranches online, and
I do believe that this is goodfor the economy.
It has to be.
It's a free market solutionthat's usually value creating,
solving a problem, providing abetter service at a lower cost,
providing a better product at alower cost, more reliably, less
(26:19):
risk.
The free market and capitalismis everything we want as a
society to improve and I believethat online syndication,
opening up ranches for passiveinvestment, is creating immense
value and one of the values bothfinancial, economic and
(26:44):
cultural, personal, subjectivevalues is that I do think these
syndications are going to bringin more like-minded people who
appreciate that culture, thecowboy culture, the good old boy
, montana culture, rural America.
I think it's gonna bring in analignment of interest.
(27:04):
People are vested for thelong-term improvement and
outcome.
You have more people invested.
Actually, I do believe that is asuperior solution to what I
jokingly say, the aristocracyand the gentry and the lords and
(27:25):
the dukes, that this feudalistsociety, this transition to a
serfdom where you have thelandowners, the elites that are
in control of and completelyremoved from the proletariat,
the serfs and again, that's alljokingly how I present it,
(27:48):
because I personally believewhere we are with the economy,
the way the markets are today,that is it's a good thing.
It's okay that land values aregoing crazy.
The locals can't afford them.
That's okay, because that iswhat capitalism's doing, and
(28:10):
it's creating better solutions.
Maybe not immediately, we justdon't see it, and that's
frustrating for people.
This solution, though, issyndication.
Bring more people in who sharethe vision, who want robust
ecology, who want good waterrights and good land management,
and they want a good beefsystem, a good food system.
(28:33):
They want healthy ruraleconomies, self-reliant prairie
communities, they want theculture of good people that are
not crazy burning downMinneapolis.
That is what syndication isdoing, and it's making that
accessible and available to morepeople rather than the
(28:55):
mega-billionaire ranch owners.
That's where we are today withsyndication.
It has been extremely difficult.
I am bootstrapping this.
Part of the reason is because Ijust want to own the whole
company.
I don't do well with partners,I don't play nice with others,
(29:16):
so I've never been good atpartnerships.
Then the other reason I'mbootstrapping this is because
the other alternative would beto blitzscale it, to treat it as
a tech venture, tech-enabledland tech, prop tech, whatever
fin tech, whatever people wantto dress it up as paint stripes
(29:41):
on a horse and call it a zebra.
The other option would be toblitzscale this to taking a
bunch of outside investmentventure capitalists and rapidly
grow this.
The problem there is that thelimited investors, the passive
investors, partners, the LPs.
(30:02):
They become the product Forplatforms like Farm Together,
which we've had Tracy Donovan on, who worked with Farm Together
before.
I haven't had on Acre Trader,but they are the most well-known
online farm syndicatingplatform.
Then you've got Harvest Returnsand Josh Green.
(30:23):
Some of those are VC blitzscaleprojects.
Businesses Grow the value, sellit to some other firm, sell it
to its FinTech, sell it toGoldman Sachs, blackrock.
That could be their exit plan.
(30:46):
But the issue to me is thelimited partners who are
entrusting you with their moneyto make good management
decisions, good buy decisions,good timing of the market on
selling decisions.
The limited partners who havetaken some of their hard-earned
money, savings, retirements.
They are entrusting you withthat In those blitzscaling
(31:12):
models, they are the product.
The actual investment of thefarm is not the product being
optimized, the LP is beingoptimized.
You can't serve two gods.
When you have a retail investorthe LP in the farm, and you
(31:34):
have a venture capitalistinvestor who wants to see 30%
returns in three years, whichone are you going to serve?
You can't serve them bothbecause the VC is investing in
you to raise more LPs and theLPs are investing in you to find
(31:56):
better options for theirhard-earned money.
That's the biggest reason why Ialso thinking about this
holistically, which is a bigvalue of mine.
We talked about it a lot in thepodcast.
Holistically.
This type of prop tech call itventure online syndication of
(32:19):
ranches cannot be VC-backedblitzscale.
Someone is going to lose andthat someone could be the
ecology.
It could be overhunting of aplace If there isn't the right
rules and regulationsestablished.
That could come at the cost ofthe local ecology and the
(32:42):
environment.
It could come at the cost of abad tenant who goes broke on you
or you put such terms andconditions around that tenant
that they become the serfs thatit's still just the feudalist
society that we really don'tvalue and appreciate.
For many reasons that's notpart of being American.
(33:08):
You know everyone has propertyrights here.
Everyone has rights.
We don't have kings.
It's been very challenging tobootstrap but it has to be
bootstrapped For this to work inthe long term.
It cannot be VC backed and forothers it can probably be
partnered.
For me it can't be.
(33:29):
But the challenge is, thebiggest challenge is not being a
timeshare registered file as atimeshare, for many reasons it
must be treated as an investmentfirst and, as I've explored
this diligently over the lastthree years, the equity
(33:52):
crowdfunding is becomingincreasingly difficult due to
the recreational enterprisemonetizing, optimizing the value
of the recreational enterprisefor the LPs, all the while
understanding that Westernranches, the majority of their
(34:15):
value is in exclusive use andaccess to recreation.
So that that portion of aregression analysis, what
explains the value of a Westernranch portion exclusivity,
recreation is probably thelargest portion of why people
(34:35):
buy and so why anyone would wantto passively invest in a ranch.
Why do that when you can't haveaccess to it?
So figuring that out has beentremendously difficult.
I've had Holly Fretwell on PhDformer professor of mine from
Montana State University.
She she's been thinking aboutthese issues for conservation,
(35:01):
yellowstone area, large privateranches.
And how do you?
How do you fairly, equitably,equally pragmatically, allocate
rec days, recreational days,based on a level of investment,
knowing that that's what peopleactually want?
How do you do that While stillholistically taking care of the
(35:25):
ecology, not over hunting theplace, not, not scorched earth
style hunting anything thatmoves dies.
And then I've had Eric Blascoeon and another professor of mine
, phd, who's the head ofeconomics at MSU, and we talked
about auction theory and howthat produces the highest and
(35:47):
best value in limited markets,which allocating recreation days
would be a very limited marketif you're holding it exclusively
for the LPs, if you're notputting it on land trust, common
and broadening the amount ofpeople who could potentially
book in reserve a day.
(36:07):
If you're holding thatexclusively for the LPs, then
that's a very limited market andyou'd expect a discount.
How does everyone get what theywant?
There's a lot of people here, alot of stakeholders, the
community, the LPs, myself, theGP, the lessy, the operator.
How do you create this productto make it work for everyone so
(36:32):
that everyone gets on board?
That's been the challenge withequity and I think what we're
going to move to is or test out,at least I should say is
alternative financing, mezzaninefinancing, bridge funding.
I think we're going to, as aminimum, viable product test an
(36:57):
LP product that would be basedon options, real estate options
that acts more like a financialinstrument, staying away from
the word mortgage.
It's a contract for deed.
I think that would be the pathof least resistance and I say
that because I'm working onbringing one to market right now
.
That seems to be moreachievable than figuring out
(37:21):
equity.
It's based more on cash flows,more on annual yield and IRR.
It's pretty objective.
It's based on the economics andnot subjectively based on
location and recreation, allthose good feelings around a
ranch that are hard to monetizeand especially hard to optimize
(37:45):
when everyone wants the samething, which is one thing
exclusivity, exclusive use andbenefit.
So that's where we're at.
We are going to be testingmezzanine capital contract for
deeds, options, yield based, andI think that's a good way to
start by getting the averageAmerican exposure to investing
(38:08):
in the ranches.
That's more cut and dry.
So moving on to guests, topicnumber two guests of 2023.
We had some awesome guests on.
That's one of the rewards ofthis podcast.
Personal rewards is I have areason to reach out to people I
look up to, such as Will Harriswho came on the podcast he's
(38:34):
been on the Rogan podcast twicenow and Dallas Mount, another
mentor of mine, someone I lookup to tremendously, and those
guys had huge downloads.
Those episodes were verypopular.
I had on Jim Howell who talkedabout syndication.
(38:55):
He did it in the oldtraditional way.
He had a couple of billionairebackers that he put together a
management company for andmanaged ranches South Dakota,
montana, colorado, new Zealand.
He did it all over the world.
Traditionally you get threebillionaires and buy big ranches
(39:16):
and I've admired that.
He was on my radar when Istarted my brokerage career
seven years ago and now I had anopportunity to bring him on and
ask him fairly direct questionsand kind of how you do it and
that's personally rewarding.
I very much enjoy.
That about this podcast is justthe talent of guests we have.
(39:36):
On Might calico rate that therewas an interesting one where he
was so blowhard populist,nationalist and getting into
communist socialists that it Ididn't even want to release that
episode it was.
There's been a couple that Idon't don't want to release but
(39:59):
I mean I got to stand behind mywork.
I can't just cherry pick and Ithink I do believe in
transparency and I think peopleshould present all sides I mean
good, bad ugly, uncomfortable.
We should be able to have thosediscussions.
I didn't do much discussingwith Mike.
(40:20):
He kind of owned the, he ownedthe podcast for that hour.
I didn't get a lot of words in,but it was.
It didn't.
I didn't agree with a lot ofwhat he said, but I still
dropped it and I'd like to domore of that.
Actually, I think we need tohave more uncomfortable
conversations in this countryand not get siloed.
(40:42):
So, as I continue to developthis syndication, I'm grateful
for free to have experts on,such as Holly Fretwell and Eric
Palasco and Dallas Mount.
These are consultants who wouldotherwise be charging me for
their time and here I get anhour for free with them.
(41:03):
I get to ask all the questionsI want and they help me build my
product, my pitch.
They're secretly my advisors.
They don't know it, but I haveappropriated them as my advisors
.
And how rewarding is that?
When I was fixing fence nineyears ago by myself, yeah,
(41:24):
there's a lot of good thingsabout that, but I longed for
these types of conversations andI longed for interaction with
professionals around me, and ittakes a balance, I guess.
And here I am today and I getto reach out to people like John
(41:45):
Hansen, who was the manager ofTurner Enterprises, ted Turner's
ranches I mean what a greatworld we live in when people
like that are just a phone callaway, who share interests with
you.
So that's a short one.
Topic number two is guests.
It's been extremely rewarding.
(42:05):
We've had some great guests.
Topic number three is trends.
Here's one that I do feelstrongly about.
Carbon credits are not going tobe a thing.
We've had a lot of carboncredit people come on, pitch and
I still get pitches for carboncredits people to come on.
It's too technically difficultto have accurate carbon credits.
(42:29):
It's going to be politicallydifficult as we move away from
the religion of climate changein the United States and DEI.
Those are related that type ofharassment and oppression and
that movement.
It's fading out and dying away.
(42:50):
I can't say that I always sawcarbon credits as just being a
trend, a fad, but I think it is.
I don't think it'll be that bigof a deal here in the next 10
years.
Maybe it's a 30 year thing.
Maybe technology comes along towhere it's accurate, to where
(43:14):
it becomes so accurate.
Maybe it is valuable to whereit becomes less political.
I don't see it being a big partof ranches Carbon credits.
That's a trend of 2024, goingto become less and less relevant
.
Regenerative agriculture and wedo use this term I think
regenerative agriculture is justa good way to rebrand what
(43:36):
you've always been doing.
Most of our operators, who arelong-term, resilient, long-term
minded, they are alreadyregenerative by those standards.
The standards are not clearlydefined.
I would probably define them asthe five key principles of soil
(43:58):
health as developed by NRCS.
I hate to give the governmentany credit like that, but they
summed it up best with justthose five soil health
principles.
That is regenerative.
We didn't really needgreenwashing activists, al Gore,
the world is coming to an end.
Kilimanjaro is going to be bearby 2006.
(44:23):
We didn't need this ecorebranding.
It was already there, it wasalready in practice.
So regenerative, yeah, we usethe word.
It's buzzy, it's trendy, it'sprobably more correlated to an
economy that's doing wellbecause it's stylish, maybe
superfluous, maybe it'sinherently superfluous.
(44:46):
It's like liquid death.
The water, the can of water.
That's a can of water that theysell for like $350.
It's just a way to take whatalways has been, redesign it to
appeal to people who are willingto pay more.
That's where regenerativeagriculture is.
(45:06):
It is liquid death.
All branding, all marketing,taking something old, not
changing it one bit andpositioning it to bring a higher
price, which maybe I need toconcede that that is a higher
value.
Branding is a value.
I'll leave room there forconsideration about regenerative
(45:28):
agriculture if that is drivinga higher value, but I think it's
going to wane in 2024.
I think that it's had its timein the sun.
If it keeps people interestedin grazing rotational grazing
that's great.
Maybe if it brings ininstitutional investment and
(45:51):
maybe if it brings in a largeramount of interest for these
syndications yeah, that's great.
If it brings more people torural America that are vested
and aligned, it's probably a netpositive.
Conservation easements Again, Ido think conservation easements
(46:13):
are correlated to a luxuriouseconomy.
When things are going well,people will do conservation
easements.
People will invest and buy andsell, donate, whatever.
Again, if the value is there,which I don't really think the
(46:37):
value is there.
I think the way operators goodoperators, rotational crazers if
they're healthy, if they'recreating profits, they're long
term sustainable, they don'tneed the conservation easement
to keep the whole place intactand to keep it ecologically
friendly.
That is.
(46:57):
Conservation easements are notnecessary.
They're novel, they'repolitical and they are a waste
of taxpayer dollars.
I would rather the taxpayers beinvesting in good operators.
Hopefully the wisdom of thehive, all the voters and their
(47:21):
representatives over time cometo understand that conservation
easements are a joke, thatthey're not needed.
What's needed is moreholistically minded operators
and profitable operators, stableoperators.
I think 2024, probably not yet aloss of love for conservation
(47:48):
easements.
I do think that that will goaway, especially as national
debt becomes a bigger issue.
The amount of tax we have puton my daughters is just insane.
Hopefully our representativescome to understand that and
(48:09):
rectify this national debtbecause my daughters' kids are
going to be paying for thedecisions we make today.
Conservation easementshopefully become a part of that.
That program just gets cut andtaxpayers are not wasting money,
they're keeping more of whatthey've earned.
(48:29):
So that was the three trendscarbon credits, conservation
easements, regenerativeagriculture.
Those are all highly related.
Trend number four we saw the IXRanch never sell for 10 years
and then it was syndicated.
We saw the climbing arrow ranchat that time was the largest
(48:54):
sale in Montana history.
That was syndicated.
We're going to see more of this, especially since we have tech
solutions and easy back officemanagement, a white labeled back
office that makes the barriersto entry lower.
The threshold is lower forpeople to get in and try this.
(49:14):
Create the product, create theservice.
As land values continue toclimb, even the ultra wealthy
are saying, well, I don't wantto buy a $80 million ranch, but
I'd put 10 into an $80 millionranch.
So even that level of wealth isinterested in syndication.
(49:38):
We know that the averageAmerican is like, yeah, I'd love
to put 500 bucks into a ranch.
So across all socioeconomiclevels, it seems that
syndication will continue togrow, I think due to land values
.
So to wrap it up in summary,what a great journey it has been
(50:03):
.
I appreciate everyone who'staking this journey with me.
It's the most rewarding thingI've ever done professionally.
It is.
I look at it as an art, it'sself expression, it's a way to
be authentic and original.
(50:25):
It's just me.
I mean.
This is the beauty aboutshowing up every day to pursue
something you love.
Is you just be candid about it?
This is my identity, outside ofbeing a father, that comes
first.
But my identity of artisticself expression is
(50:49):
entrepreneurship and pursuingsolving a problem.
That's, entrepreneurship isalways about solving a problem.
So I think there are immenseproblems here that could be
solved.
Well, I don't think ourproblems are ever solved.
It's the flux of markets andcapitalism is.
You provide solutions, but thenthings always change.
(51:12):
Technology always drives morevalue, creates more change
around it.
So I'm not going to say we'resolving any problems here, but I
think there are issues beingaddressed that are going to be
benefited from large scalesyndication and I think you'll
see more brokers offering thisin 10 years.
(51:33):
Probably might even be amarketplace, might even become
more common than the traditionalconsolidator sites like landcom
, land hub, land watch, allthose listing services and the
brokers websites themselves.
Probably won't be 10 years, butthose might evolve into online
(51:54):
syndication portals.
Might be more common than justoutright ownership at a certain
level, at a certain asset class,like 50 million or more.
So this is a trend topic.
Number three for today trendssyndication.
Yeah, I think it'll become morecommon, more popular in 2024.
(52:15):
It sure took a big jump in thelast three years probably the
biggest jump it's ever takenbecause of other online
syndicators Crowd Street,commercial real estate and a few
other commercial real estateplatforms that will spill over
into other assets.
(52:35):
We've already seen that withart.
You can passively invest in art, probably coins and cars, I
think there's people are findingways to when, when the crypto
craze was going on, they weretokenizing all those assets.
You see, it definitely wasZillows, spin off Picassocom,
(52:57):
second home ownership,syndicated farmland.
So this, this isn't going tochange.
And, wow, what a what abeautiful world we live in when
investing is becoming moredemocratized.
It's not a gatekeeper societywhere Goldman Sachs and Black
Routes are the only ones thatare black rock, black stone,
(53:19):
merrill Lynch those, those firmshave a stronghold on what and
how you invest.
Hopefully we see that trendimprove.
I don't think we will.
I think the SEC keeps a prettytight red tape that's on the
investing industry, and for goodreason.
There's been swindlers in thepast.
(53:40):
I mean Bernie Madoff's and thatthat kid with the token
recently can't SPF Sam Bankmanfreed.
You know there's always goingto be fleecers and hustlers out
there, so maybe we do to for toprotect the legitimate out there
(54:02):
who have to spend tens ofthousands of dollars, like
myself, on attorneys to get thislaunched.
I guess that barrier has notbeen lowered, but hopefully for
the investor, barriers are beinglowered.
It's becoming democratized andmore accessible, and that
creates more value.
That's what we want.
We want more value beingcreated.
(54:23):
So thanks for tuning in.
It's been a tremendous ridewith you all and look forward to
staying in touch.
We've had some great calls,texts, emails, social media
messages.
Keep it up.
I like.
I like hearing the feedback andthere's anything you'd like to
hear from me.
Going forward, 2024 is going tobe a beautiful year.
(54:44):
Thanks for tuning in.
We at Ranch Investor are veryinterested in hearing your
thoughts, your opinion, yourwants, desires, hopes and dreams
.
Everything on ranchsyndications, ranch investment,
ranch real estate syndicationsand DPP's direct participation
programs.
(55:04):
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