Dirt = 180% Profit. Media = 100% Broken.
How's this for a bizarrely wonderful business idea based on hipsters love for camping and maybe one with a more altruistic purpose.
Buy Land for $10k, Make $1,500 A Month on It?
Just to note up front, that is a 15% return per month or 180% in a year. Not bad. Seems scaleable too, i.e. buy land in varying places for $10k+ make $1,500k a month.
You know what is amazing in business, there are literally a zillion (technical term) ways to make money in this wild world of commerce.
Typically we focus on, (whether at EEC or at Unconventional Acquisitions) acquiring small profitable businesses because of the repeatability of acquiring in the $10MM in rev and below space. As well as the ability to use SBA loans and seller financing. This idea included meets none of those expectations but is intriguing nonetheless.
BUT this business idea I thought of was fascinating, and who knew, eh?
Plots of land for campers. A hipsters haven, one could say.
A story first: A group of friends and I were going to Zion National Park. We were so excited to explore and get lost. Except in this world of Covid all the hotels were shut down, as were national park campsites (I’m more of a glamper to be fair).
Regardless what were four already road weary humans to do?
One of our industrious friends was not to be deterred, and said, “Don’t worry guys. I got it!”
Got it he did. He found us a for pay campsite on private land. The rancher who owned the place told us he makes more on campers than cattle. Not to mention it’s a two-fer, tax breaks for agriculture and the ultimate low maintenance rental income. I mean the bathroom is a literal hole.
This, and my conversation with another entrepreneur, got me thinking. You see Kate Hancock bought 3 acres of land in Joshua Tree for $10k.
I like Kate, but my motto is question everything, so I didn’t believe you could get land in Joshua Tree for $10k. Turns out, joke is on me.
Low and behold in Joshua Tree there are 222 locations you can buy for on average $10-22k.
So old Kate here decided she wanted a business that was low maintenance, low cost, low risk and didn’t have much wear and tear. A plot of literal dirt appears to hit those parameters.
Kate bought the property for $10,000. She bought it with straight cash, which although wasn’t much, I STILL think I’d see what fun you could have financing it.
Regardless - $10k in costs. She puts it on two sites: AirBNB & VRBO under campsites. Which again is something I had no idea existed.
And Kate charges $50 a night. Kate told me she brings in about $1500 a month on this site. So let’s do the math:
Airbnb charges her 3%
Land Tax - Changes a lot by state (but national average about 1%)
Zero other costs
That’s a 96% profit margin and she’s at breakeven in 7 months. Not to mention their is the potential appreciation of 3-5% per year and no depreciation because she doesn’t have anything on the property.
So Kate takes home $1455ish a month on dirt. Not bad. Also quite scaleable.
Perhaps Kate gets tired of answering the pestering AirBNB questions (I know I did on our property) so she adds a manager for 25% of the profits. That’s still $1095 a month.
Now when I am modeling out my investments here are some assumptions:
Average allowance per acre is 10 campsites. So we can theoretically host 10 people per night on each acre.
I assume we will have on a on average 1 person per night. According to Kate during high season that will be 5-10 people and during low season could be empty.
How will you manage the property? Aka what about the poo :)
My secret is to use military spouses by bases that are local. They handle online property managing and really run this and I buy the property. I give them a vesting schedule for equity and am a passive investor. They’re efficient, highly competent, come with built in military security and usually underemployed given how much they move. They also end up driving a lot of campers to the site through the base and network.
I’m also going to experiment with shared land for grazing with cattle ranchers in return for them doing clean up and policing. That is what the camping site in Zion I stayed at did. They also had no amenities, you dug holes and brought your own toilet paper. THIS IS CAMPING PEOPLE. We’re just authentic wink wink.
I also didn’t know you could use sites like Hipcamp below to list your campsite, and it comes with a $1MM insurance policy automatically.
So with Hipcamp apparently you can earn thousands of dollars a month on land with nothing on it because we are a generation of wanderlust van loving hippies.
Check on zoning in your area for allowable camping vs set structures.
Check on sewage allowances, do you need utilities or not? Had a woman with a literal name like Wendy “Spirit” Mathews email me some good ole hate about hippy campers building unzoned septic tanks. Let’s keep it legal eh? For Wendy.
Grass and keeping area manicured? I like the cattle idea for this.
The moral of the story here is that surrounding yourself with others who are buyers and builders is the fastest way I know to achieve success.
Forget MBA’s, they teach you theory; I’m into Mastermind’s and good networks, they teach you tactics.
MEDIA IS 100% BROKEN
Lastly, did you know this platform I write on (Substack), has raised $15M+ from Andreessen Horowitz?
I believe this may be the future of news.
Independent long form experts without the censorship, slant and ratings obsession of news sites.
Industries go through cycles:
Creation of small new startups, consolidation into big behemoths, and then breakups as the old models are attacked by more nimble upstarts. We are in a disaggregation phase. If you haven’t been tracking this eyes up, here’s a short list of some of the journalists that have been fired or voluntarily left due to the broken news media of late and the resignation letters they wrote. It comes from both sides of the aisle:
Most Americans would agree with these journalists and say media is broken. Instead of bemoaning it, think about this… if the system is BROKEN, the OPPORTUNITY is there to fix it.
I mean Bloomberg became a billionaire off of media; Softbank started as a newsletter. It’s a $720B industry. There’s gold in them there peacocks and foxes. We’re going to dive in more how to next week.
NEXT WEEK: How I Got 10,000 Newsletter Subscribers in 30 Days.
You asked for it, so I’ll give you the good, the bad, the embarrassing things I did.
As always, question everything and stack revenue streams,
Love to have you join us on the journey. Subscribe or share.
This article is presented for informational purposes only, is an opinion, and is not intended to recommend any investment, and is not an offer to sell or the solicitation of an offer to purchase an interest in any current or future investment vehicle managed or sponsored by Entourage Effect Capital, LLC, or Codie Ventures LLC, or its affiliates. Any such solicitation of an offer to purchase an interest will be made by a definitive private placement memorandum or other offering document.