Reviving a Bankrupt Drone Company for Land Flipping (Droners.io)

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In this podcast episode, hosts Daniel Apke and Ron Apke discuss their recent acquisition of Droners.io, a service they have heavily relied upon for their land deals.

The company, which provides drone pilots for various tasks including real estate and land inspections, had been shut down by its parent company, PrecisionHawk, which filed for Chapter 7 bankruptcy.

Realizing the significant impact of this closure on the real estate community, they pursued the purchase of Droners.io. After a rigorous due diligence process and a high-stakes auction against another bidder, they successfully acquired the company!

With the acquisition now complete, Dan and Ron plan to integrate Droners.io into their portfolio, which includes their main business Land Investing Online and the The Land Portal.
Watch the full episode to get the full story about their acquisition, and hear about their plans for the future of Droners.io!

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Ron: Every single land deal we’ve ever really done, we’ve used Droners.io, we’ve been a customer. It was so clear

Dan: It was so clear how big of an issue it became in the land community and the real estate community in general. It was hard for the last six months helping students get drone pilots. There’s a third party who’s in charge of the foreclosure, that’s court appointed, and he’s the one who informed us.

There’s a company with a bid, and we had to beat that bid to get it to auction.

Ron: One thing we noticed is the other attorney kept on just going up 5, 000. So we kind of wanted to put some pressure on him, and then he had to call his clients who are the actual donors. Oh, he comes back and he still raises five grand.

And then we put in a another offer that is raising it basically 50 percent of what it’s at.

Dan: Hey everybody. Welcome back to the real estate investing podcast. Today’s topic we’re discussing acquiring Droners.io. I’m your host Daniel Apke joined again by my brother and business partner, Ron Apke. And we just got back from Raleigh. Last night, it was a crazy 24 hours. We were in foreclosure court doing all kinds of crazy things, trying to buy a business that helped our land customers, helped our land business, helped our land investing online members, helped the community in creating more freedom and everything we’re looking for.

And it was such good alignment, but.

Ron: And not, not sure exactly when this episode’s airing, but this is right now when we’re recording, this is the day after we purchased it. It is April 24th, I believe. Um, but yeah, I mean, it was a crazy situation. Like Dan said, it’s just something we’ve used it for so long.

Every single land deal we’ve ever really done, we’ve used droners. io. We’ve been a customer, um, And there’s a huge, huge need for it. So that’s why I’m so excited about it.

Dan: It was so clear when, when they kind of shut that down and they kept their site open and they’re still doing some orders supposedly.

Um, but it was so clear when they shut their, uh, you know, asset and entity down, how big of an issue it became in the land community and real estate community in general. It’s just, we, we didn’t have a good source to go to. And droners. io was a huge help for, you know, everyone’s land business, especially ours.

And that’s, that was it. Like, that’s, that’s how we identified this situation. Ron is, you know, we were using it, then we couldn’t use it anymore. And we dug into why we’re using it or why, why did it shut down? And then it kind of went from there.

Ron: Yeah. And from a business opportunity, it just kind of made sense.

Like we have built in customers, like we can talk about it in terms of that. And, uh, and there’s so much beyond, like, I think drone, the use of drones is such a big part of the future beyond land investing beyond anything like that. Um, but if you guys haven’t used droners. io, hopefully it’s up and running the next couple of weeks.

Um, the website’s up and working right now. It’s just the orders right now. Um, but, uh, it’s where you can hire drones for those of you don’t know, this is a website where you can. Hire a drone pretty much anywhere in the country. Like drone pilots, a lot of times they’ll travel two, 300 miles to get to a job, whatever it is.

There’s 12, 000 pilots on the network. So I mean, the opportunity was there. We saw them. We just kind of moved pretty fast on it.

Dan: Yeah. And it’s, we, we use it on every single one of our closings for not only You know, listing pictures and, and the marketing pictures when we put it on Zillow and all that stuff.

But we also use it for due diligence and we have them go and get ground shots of the road frontage. We have them get ground shots of inside the woods and inside the land and the wet spots, maybe a part’s wet. They’d help us with due diligence a lot. And it’s just, it was a big part of our business in general going from there.

But I want to talk about the process of doing this and buying the business a little bit. Cause I think that we get asked that question a lot. I put up a video yesterday. on Instagram and I never been blown up with so many questions about it. So let’s address some of those questions here, but let’s start by talking about the process of actually acquiring it and what that looked like.

Ron: Yeah. I mean the first thing was like six months ago, like you talked about, like we realized, uh, six months ago, we realized like something was off with the website, like jobs weren’t getting approved. Something felt felt off a couple of months after we did some digging a couple of months out of, after that we found out the, uh, the parent company, I guess you’d call it.

parent company went. bankrupt or filed for bankruptcy. So then we dug in some more and found some information, found about it going to auction. Um, and this was all in the last like two, three weeks is when we found out about this, we reviewed numbers. Um, it was the auction started at such a low price. It made no sense for us not to be a part of it.

And then it kind of went from there. Honestly, like Dan said, we were in a, it was a federal bankruptcy court. It was intense. Like it was intense. It was us versus another party. And it was an intense situation, but worked out in our favor going back and forth in numbers. And that’s pretty much the process, I guess.

 

Dan: Yeah. Well, let’s get into specifics then. So it was, like I said, it filed for bankruptcy chapter seven bankruptcy, uh, which means all doors closed pretty much under that entity precision Hawk. They had a bunch of different companies, droners. io being one of them. So we originally, Uh, reached out to someone on LinkedIn who gave us direction of who the trustee is.

There’s a third party who’s in charge of the foreclosure. That’s court appointed. So the court hires a trustee to do the whole process. So hopefully the court gets some money back, right?

Ron: Get the most money out.

Dan: Money out of it. So it’s a third party, kind of like an auctioneer, right? That’s that’s how I’d put it, but they’re attorneys obviously.

And yeah. The first part was reaching out to that attorney, getting more information on it. Uh, when’s the date of, when’s it closing? What’s the process look like? And he’s the one who informed us that there’s going to be an auction. There’s a bidder right now. There’s a bidder at that time for X amount of money.

And, uh, it gave us the bidder’s name and their contract and everything like that. And then we needed to dive into due diligence. Being a foreclosure, Uh, in a bankruptcy case, due diligence is, is hard. You’re getting it at a deep discount, but there’s also risk associated with it because this was a parent company by PrecisionHawk.

It wasn’t like they had just droners. io books to the side. We really didn’t have good numbers. The only numbers we had still don’t, yeah, we still don’t have good numbers and we don’t know what we’re getting really.

Ron: No,

Dan: the only, uh, and we met, yeah, I’ll get into that. The only thing that we really had was top line numbers and, uh, gross, gross margins.

We don’t have any of their expenses or anything really like that. We had some numbers that looked like expenses, but we couldn’t really figure it out. And it was, uh, Yeah, it wasn’t too detailed in the due diligence phase because they just had such lack of information. We didn’t have, you know, how many email contacts they have, how many customers they have, how many, you know, where they stored, all that stuff.

But what helped was the trustee referred us to a security guy who did a lot of their, um, IT guy, IT guy who did a lot of their IT and, and, uh, warehousing, data warehousing and things like that. And we hopped on a call with him and he was able to give us a lot more information and due diligence and showed us where the emails and the contacts and customers and everything stored.

And that gave us reassurance that we’re going to get the most important asset, not only the IP domain, but we’re also going to get the customer list and the droners list. And that’s what the three things we really needed to make sure we had when the top line was. Um, but essentially like this, this, the starting bid was less than 5 percent of what it sold for in 2017.

Ron: I don’t know when it sold exactly. It was seven or eight years ago.

Dan: It sold seven or eight years ago and we bought, we, uh, the starting bid was what 2%, 2 percent it was 2 percent of what it sold for. So we know the potential is there. We know how good of a tech that’s the thing. This, this business was such good technology at such good SEO had such good, uh, just, uh, organic website visitors without ads.

Plus a great community. It’s great. You know, it’s doing so much good for the world and investors. I think that another competitor hasn’t really filled to that extent yet. And it was just a really good situation, but I just got to the point where we met with the it guy and then we had to kind of discuss next steps.

So. , I wanna talk about putting in our first bid. So there was a company with a bid and we had to beat that bid to get it to auction. Yep. At that point, before we put the bid in, uh, it was, they accepted the trustee. The third party auctioneer accepted the first bid, which means if there’s no other bid, they win.

But we came in and that’s when we were doing our due diligence. We came up with a price that we wanted to put our next bid in to get it to auction. And then once we put that bid in Mm-Hmm. , we knew that we were gonna have to go to rally. But let’s talk about putting that bid in, in that next process.

Ron: Yeah.

I mean, it was basically a blind bid. Like this was over, we sent a purchase agreement essentially before our bid. All we had to do was beat their bid by 10, 000. I think put down a deposit. We did have to be qualified bidders, which you didn’t talk about. Like we had to be, we had to show bank account statements, all this stuff to make sure that we can fulfill what we’re offering essentially or bidding for.

But once we had that bid in that beat their bid, immediately initiated the in person auction, which was yesterday. Um, We put in our bid to beat them two days ago. So literally we put in our bid two days ago to beat that Monday. Um, yesterday’s Tuesday. And then yesterday was the auction Tuesday. So we had to book our flights, do everything like that.

Uh, the other party sent an attorney to bid on their behalf. Uh, so that’s how it went, led up to there. We booked our flights.

Dan: Uh, yes. Monday we were on standby pretty much. We’re like, just making sure, like sure it’s going to auction tomorrow and confirm that because we put a bid in 24 hours before auction.

And we wanted to do it a little earlier, but we had due diligence and a bunch of things we had to go through. And the auction date’s been set for a long, long time by, by the court. So we wanted to make sure, uh, it was still going to be fulfilled. So we’re literally sitting here Monday, like, should we book our things yet?

Like, is it going to go through tomorrow? And we all had kind of our travel plans, but we couldn’t book anything. And then Monday comes and you know, I, I booked my ticket at two and a half hours before we had to leave essentially to go there and just booked in the morning and then hopped out and hopped on a plane.

And that. Maybe put them against the wall a little bit. And that’s just a little overarching strategy is it’s, it’s within reason it was legal. It’s within the contract and everything

Ron: wasn’t our intent,

Dan: Wasn’t our really intention, but I think naturally what it did was, uh, you know, they, they couldn’t go, they couldn’t be there, which they did send a representative, which was their attorney and everything.

I don’t even know where these people live, but it all worked out. And, and then we went to Raleigh, North Carolina. We went in Monday. Okay. Uh, I got in Monday, hung out there, and then first thing Tuesday morning, we had to go to court. And we were the winning bidder at the time. We had no idea what to expect.

I’ve never been in a federal courtroom. It was federal court because it’s chapter seven bankruptcy, which is, you know, federal wipeout. And we go in and we go through security and everything like you do at a normal courthouse and go up and try to find the trustee, which is the attorney. And it’s us in there.

And, uh, we didn’t even know if they were going to show up because we’re like, you know, just thinking in our heads, if we won and they can’t go over their original bid, we don’t know if they’re going to show up. So the first thing they did, their attorney came out or their trustee said their attorney’s coming in representing them.

And then he kind of gave us the rundown of what we’re going to do. And, and he’s like, we’re going to do a live auction right here in the hallway. And we’re literally in a hallway of this old, like 1940s building in Raleigh, North Carolina. And, uh, you know, doing a, doing a live auction and the starting bid started, we are the highest bidder and the other party came in and put, you know, a bid 5, 000 above that last bid.

And you want to explain the next?

Ron: Yeah. We’ll have more numbers probably eventually in the future. We’re going to try to stay away from as far as having numbers. Um, but yeah, it was pretty much going back and forth. The one thing we noticed, uh, maybe we’re getting too much in the weeds, but we’ll talk about the one thing we noticed is the other attorney kept on just going up 5, 000.

So we kind of wanted to put some pressure on them and we went up 30 grand up 10 first. We don’t have 10 to meet at a number. Yeah, we went up a couple of times, just 10 or five. And then we went up like 15. And then he had to call his clients who are the actual bidders. And he was on the phone for 15, 20 minutes.

Dan: Yeah, I was nervous. I mean, my heart hasn’t been

Ron: It’s like sports. Yeah,

Dan: it was like, yeah, it was like a sports game before you go out on the game. Like my heart was beating and stuff. He was on that phone for 15 minutes. We’re like, did we win it here? And then talk about that.

Ron: Then our plan was we talked while he was out there, like, okay, let’s really put, he’s obviously this is a conversation.

Like they had a number that they could go to. If they don’t, if he doesn’t get under this number, he’s got to call them. Okay. So that was a trigger point. And next time we said, next time he comes back, we’re going to go to another number and it’s going to raise it 50 percent higher than the current. Yeah.

It’s going to raise it by like, it’s going to raise it by like 50%. Um, So he comes back and he still raises five grand and then we put in another offer that is raising it basically 50 percent of what it’s at. And our thought there was like, okay, let’s not mess around with these 5, 000 increments. Let’s just go up and put some pressure and put some daggers.

Like maybe we bought it from more, if we would’ve just kept going up

Dan: Let’s force another phone call.

Ron: Exactly. He forced another phone call. We forced another phone call two, three minutes went back. Yeah. He comes back and, uh, he reaches out his hand and, uh, Congratulations. You got the business. Yeah. So it was a surreal, I think, like experience.

Like we had no clue. Sometimes we were going into something with absolutely no clue, no expectations on what it was going to be like. We didn’t know if we were going to be in a courtroom. We don’t know if it, we didn’t know if it was going to be in a conference room. We didn’t know if we’d be separate from the other bidder.

Dan: The fact that it’s still in person. It’s kind of odd too, but it makes sense because it’s in a hallway, like, but, but so after that, yeah, we want it. We shook his hand, said, uh, thank you and everything like that. And, um, we went in with the intention to win this and we had, um, let’s just say our, our number that we were willing to go up with to was over double probably what we actually ended up on.

I was happy with the result. We could probably could have got it, you know, a little bit, tiny bit cheaper, but not much. Um, putting that dagger in and going up 50 percent was just a strong move, I think overall, because I don’t want to keep going back. It’s easy if you get a phone call and they’re like, Hey, They’re at this number.

Do you wanna go up $5,000 again? And then we go up five. It’s easy to go up $10,000, you know, but as soon as you go up, you know, a big, and there’s, there’s literally case studies on this. Uh, for auction, like auctioneers love, when people go back and forth, $5,000 or minimum, it’s easier. The minimum, the minimum, it’s easier to get it up because it’s easier to say yes.

You can say, say an auction was going for, you know, a thousand dollars for a hou, for a, you know, a Amish cabin or something. It starts at a thousand bucks and everyone’s going 1,050, 1100, 11 50. And you’re like, Oh, I just put 1100 and I can go up to 1200 now that you guys just beat me. And it’s just easier.

Like the, the, the, a lot of the case studies show you’ll reach a higher number when you go in those increments instead of stepping up and trying to set the tone early and be like, Ooh, you know, if you start at 500 auction. And the guy, the first guy goes to 1, 300 and you’re willing to pay, you know, 2, 500 or something.

And you go up to that 1, 300 number. You might, the chances of you having other bidders come in or is less likely.

Ron: Yeah. I mean, it was, uh, I think it was, I mean, we have no clue what it would have turned out with. It could have gone higher. It could have been, I think there was a less emotional part. Case studies are obviously with the actual parties there.

So there’s less emotional pool because it was just an attorney there representing. So it’s not like we were face to face with the other bidders, but overall we went after that, we went to finalize it into the big courtroom in front of the judge. So the judge had to basically approve the bankruptcy sale or the sale of this asset.

The judge was happy because, um, It went three, we got it about for 5 percent of what it sold. So it went about two and a half times higher than what the bid was going into the day. Um, but yeah, I think everyone’s happy.

Dan: Yeah. The judge was happy. Uh, we’re definitely happy. The other parties, you know, they didn’t have to put too much money there or they lost so they don’t have to put money in or anything like that.

I was going to try to say they’re happy, but, um, in general, like it, it works out well. It was a really, really cool experience. We still like to this date, this is the day after that just happened. We don’t know, like we haven’t closed on it yet. We don’t have the IP or the DNS or anything from the website yet.

We don’t have, uh, we haven’t done the transfer, so it’s still. An unopened box at this point, which is exciting. It’s going to be a lot of work and stuff. We’re going to get it up and running. It’s just, we don’t know how much money time effort. Yeah. And to be clear, Ron and I hire, or we have an operator that’s going to be doing the day to day here because we’re so focused on land investing online and our land business and the land portal.

Like the land portals are big focus. So we hired an operator as well with this, and we’re going to do a lot of the bigger picture direction, helping out with that, how to scale it, things like that. It is our business, obviously. But, um, it’s just fits our portfolio. And now you have the land port. That was a big part of it.

Like the land portal, land investing online. And, and now droners. io and the portfolio, it all works to the same thing. Helping you guys be a more efficient, a better land business, getting the freedom you guys want quicker and easier with less resistance around.

Ron: It was hard like I didn’t know, we didn’t know who to like, it was hard for the last six months.

Getting, helping students get drone pilots.

Dan: Oh, it’s been a pain. It’s been really a pain. I’ve heard that story and had more replies on that story from yesterday in the airport than I probably ever have.

Ron: It’s a site that makes people’s lives like easier. Like it really does. There’s such a big reach for it beyond land investing, like I said, but within land investing within our community, like there is such a need and there it’s, it’s a gap that was temporarily empty.

Dan: And looking at his, uh, the sites. SEO and everything too. There’s a lot of people that are hiring drone droners for, you know, land investing. We’re thinking so small, that’s a big part of it. And that’s, uh, you know, what we’re fulfilling it for, obviously, but a lot of people are using it for, you know, inspections, roofing, inspection, commercial properties, general real estate houses, uh, for sale.

I mean, this is drones and then you have events like events are big with this sporting events. Um, Wedding venues, tons of different life events. If you want shots of your, you know, and you’re an outdoor setting and you want shots of your, you can see so much more, so much more, you can get good video footage of it.

It’s really cool what it can do and the scalability of it’s just great. And that’s, you know, this episode was just inform you on the acquisition and we had so many questions and I think people are interested in the process and how it worked. I don’t know what else to add around. I think in the future, like we will have another episode of,

Ron: Yeah

Dan: know, getting it and starting it and getting it up and running and what that looked like.

But right now we haven’t done that yet. And we’re kind of on the verge of doing that.

Ron: Yeah. Once we get it up and running, we’ll probably bring our operator on at some point and, um, have them be a part of it, kind of explain where we are right now. Um, but, uh, yeah, we’re excited to bring it back. Get it back up and running.

Like, that’s what I’m so pumped about. It’s like the effect that’s going to have on the community. Like it’s a due diligence, like joiners that IO could save someone a hundred thousand dollars from buying a bad piece of land. Like there’s, there’s just so many different things. You got to think if you don’t get a drone pilot at your land, like you’re only going to see that you have 10 acres, best case scenario, the pictures get you to see.

I don’t know, 10 percent one acre. Like someone walks around an acre, get some pictures. You have a drone pilot. Like you go in the air, you see everything in one, one shot. Like the power of what you can see, how much land you can see in one drone picture plus the marking side of it as well. A hundred percent.

But, uh, yeah, I don’t have anything else then

Dan: as always guys. Thank you for joining. If you guys have not yet, please like, and subscribe our YouTube channel. It really helps drive our mission forward. Other than that, thank you for joining. We’ll see you next episode. As always, thank you for joining. Please do us a huge favor and like, and subscribe our YouTube channel and share this with a friend.

It really means the world to Ron and I, but more importantly, it could help change the life of someone else. Thanks for joining and we’ll see you next episode.

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