Buy It by the Acre, Sell It by the Foot

Growing up, my Sunday mornings after church weren’t spent in front of a TV—they were spent in the passenger seat of my dad’s truck, cruising backroads and looking at land. Going on “Sunday Drives” was a special time learning and listening to my Dad who was out of town working most of the time.

One day, my dad, Bruce Kitsch, pulled over beside a massive hole in the ground next to a main road. To anyone else, it was an eyesore—a literal pit. To Bruce, it was a goldmine.

He bought that hole for what it was. Then, he grabbed a couple of sheets of plywood and some paint. My sister and I spent the afternoon hand-painting a sign in big, bold letters: "CLEAN FILL WANTED."

For the next few years, the business model was beautiful in its simplicity. People didn’t just give him the dirt he needed to level the land; they paid him for the privilege of dumping their clean gravel and soil there. He was getting paid to acquire his raw materials.

Once the hole was filled, he compacted the ground, navigated the rezoning process, and subdivided the site into 14 residential lots. Where the world saw a void, he saw 14 future homes for families and a tidy profit for his vision. He used that project as a rung to climb the real estate ladder—a ladder that eventually led to him scouting land from the cockpit of a helicopter (but that’s a story for another time).

If you know someone who you want to know about the jewels being shared here each week, to learn or listen to some great ideas, share the Fountain with them. We appreciate the vouch.

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The lesson for our community today is simple: Where are the "holes" in your world?

Most people see a problem and keep driving. To capitalize on opportunity, you have to be able to "think in 4D." Like Doc Brown in Back to the Future trying to explain the continuum to Marty, you have to realize that the solution is already there—it just hasn't arrived in "1985" yet.

Real estate development isn't always about glass towers and massive capital; often, it’s about:

This month in The Fountain, we are diving more into the world of real estate development. We’ll discuss how anyone can get their toe onto the property ladder by identifying undervalued assets and protecting the downside with sweat equity.

Your "hole in the road" might be a neglected duplex, a mismanaged piece of land, or a zoning opportunity everyone else is too tired to pursue. My wish for you this week is that you stumble across something "broken" that you have the unique vision to fix.

Building on the lessons I learned from those Sunday drives with my dad, I had to find my own "hole in the road" back in 2007. At the time, I wanted to get into the market, but the numbers weren't adding up—the bank flat-out wouldn't approve me for a mortgage on a single-family home.

Instead of walking away, I looked for a different angle. I discovered that if I bought a duplex, the bank would factor in the rental income from one side to help me qualify.

I pulled the trigger on a property for $494,000. It wasn’t a turnkey luxury build; it was a project. I moved into one side and spent my evenings and weekends fixing up the other. Once that unit was finished, I swapped: I moved into the "nice" side and started the demolition on the side I had just vacated.

Over the next two years, I did the vast majority of the work myself. I wasn't just painting walls; I was learning the anatomy of a building. I made two specific moves that changed the math:

Today, that original $494,000 investment is valued at approximately $1,200,000, and it has generated hundreds of thousands of dollars in rental income over the years.

But the story doesn't end with a "flip." I’ve spent the years since then quietly assembling the two neighboring lots surrounding that original purchase. What started as a move of necessity—buying a duplex because I couldn’t afford a house—has evolved into a site for a future six-story multifamily apartment building. We are currently refining the plans and waiting for the right market conditions to break ground.

I share this because many people feel the property ladder is out of reach. It often is, if you try to buy the finished product. But if you are willing to apply some elbow grease and look at the "hidden" income—like that rental side of a duplex—you can create your own leverage.

The lessons I learned swinging a hammer on that duplex in 2007 are the same ones I use today on multi-million dollar developments.

My challenge to you: Don't look for the perfect house, the perfect situation, the perfect whatever, look at the defect as the beauty - the "fixable" problem. Look for the project where you can protect your downside and create more upside with your own hard work.

Thank you for sharing your mental factory with me. Have a great week and keep believing in yourself. 

Great POSTS We’re Paying Attention to & Add Value

What an awesome concept and idea. Congrats to the visionaries who now have an amazing collection and thanks to all the artists out there making our world and more beautiful place. Who’s coming with Ria and I to France?

Congratulations to UCLA women’s basketball for winning the Natty. We go to games at Pauley to support and also for their 6 draft picks in the WNBA draft. We love women’s sports around the Fountain and keep doing it ladies - you are amazing and deserve the bright future.

Fruits of the labor - teams and conferences are cashing in on performance in tournaments, we saw it with the WBC - now the NCAA tourney is sharing the revenue from March Madness. Big dollars and congratulations to all the programs and student athletes who are getting the fair share.