Our Most Frequently Asked Questions (CFFL 0030)
Our Most Frequently Asked Questions
Jill DeWit: Welcome to the Cash Flow from Land show. In this episode, Steve and I talk about the most frequently asked questions we field about our business. Welcome, Steve.
Jack Butala: Thank you, hi.
Jill DeWit: I am excited to be doing this show with you.
Jack Butala: I’m excited you’re the host of this one.
Jill DeWit: Thank you.
Jack Butala: I love when you’re the host, Jill.
Jill DeWit: I like doing that too. I’m really excited, on this show in particular, because I think that we can help many individuals at 1 time.
We get several questions along the same lines, but there’s always 1 that rises to the top. I want to address that first about our business. Bring it. Let’s start off with a bang. What is the number 1 most frequently asked question you’ve received?
Jack Butala: Across the board from cocktail parties to email, to Bigger Pockets, to successplant.com, the single biggest question that I feel that it comes in very different forms is what’s the catch? Come on, can you really buy property that cheap? What’s wrong with it? There’s got to be something. It’s got to be temporary, or it’s just one-off deal. What’s the real deal? Basically, they’re saying, “I don’t believe you.”
Jill DeWit: Or, “Is it too good to be true?”
Jack Butala: Yeah, that’s the sentiment exactly.
Jill DeWit: How do you answer it?
Jack Butala: I say it’s a very little-known real estate niche. It’s so little known that we actually started a company called Land Academy to teach other people how to do it. If you don’t believe me, go to successplant.com. All those people are out there which is our Web site. All those people are out there buying and selling property for next to nothing and selling it for a lot more.
Jill DeWit: Exactly.
Jack Butala: It’s hard to explain. I’ve been struggling with it honestly for 15 years, telling people what we do. Their first reaction is it’s just I think it’s hokey and silly that you buy property for $100 or $1,000, or 5,000 and sell it for 10. They always think there’s a catch and there’s not.
The catch is we’re buying it from people who just don’t want it anymore. We’re paying a lot less for it. Here’s a thing. I’m glad we’re doing this show. Here’s the thing. Buying property that’s undervalued, real estate that’s undervalued is the basis of every type of real estate from Donald Trump to Sally Duplex. That is the key to being successful in real estate.
Whether you’re buying unwanted vacant land like we do, or you’re buying houses and flipping them, or renovating them, or wholesaling them, or apartment buildings, or strip malls, everybody wins, everybody when you buy it under its value. We just happen to do an extreme version of that. It’s hard to communicate to people. They think there’s some catch.
Jill DeWit: That’s true. What I find is interesting that people think that you have to improve it to make money on it. For me, I think that’s almost a second question. Sometimes when people can wrap their head around, “Okay, you buy it, right. That’s great, but what do you do to it to make it valuable for the next guy?” When I say, “Nothing.” They’re like, “What?” They don’t really get it.
You almost have to go, “Okay, let’s go back to step 1 again. I bought it right so I didn’t have to do anything.”
Jack Butala: I used to have a plaque on my desk. You know this, but I’m saying so that listeners, because you’re the host and I’m the guest and I can say stuff like this. I used to have a plaque on my desk that said, “Good acquisitions solve all problems.”
Jill DeWit: Yes, it’s very, very, very true.
Jack Butala: People who have a lot of property that they can’t sell, they’re not pricing it right. They bought it for too much. They didn’t do their homework before they bought it; should never be stuck with a property ever.
Jill DeWit: That’s a scary place to be in too, when you overpaid for something and you find out later on you overpaid for it. That’s a tough one. You have to decide …
Jack Butala: I remember …
Jill DeWit: … do I hang on it? What do I do now?
Jack Butala: It’s good that you bring that up. We have a ton of members. Can you think of anybody who’s got stuck with some property that they don’t know what to do with, or they overpaid with it, or they’re just having trouble selling it? I can’t think of 1 example.
Jill DeWit: That’s a really good point. I feel really good about that. We have done a really …. I’m patting ourselves on the back right now. Through our program, people get it and they are buying it right. They’re listening and doing what we said. They’re buying it right. No one’s standing there going, “Oh gosh, I just paid this for this property.” We’ve successfully taught everyone how to value it, and find it.
Jack Butala: Maybe we don’t make a big enough deal out of it, Jill.
Jill DeWit: That’s true.
Jack Butala: Our people don’t get stuck with property they don’t want, or because they overpaid.
Jill DeWit: Exactly. You’re right.
Jack Butala: You know what else I get, another question I get a lot? Ir comes in different forms; is, “How do you know that you’re supposed to buy? How do you know you’re doing the right thing by buying this piece of real estate? Is it a feeling? Is there some magical math formula that you do? How do you know you’re making the right decision about buying this property?”
My answer is because I did all my homework about how I’m going to sell it long before I ever decided about how to buy it.
Jill DeWit: That’s true. That’s part of the acquisition process and our whole engineering piece of it. That’s 1 of the things that we teach is when you’re researching the property, and you’re doing homework, and you’re looking at maps, you’re saving those maps because you’re going to use it later.
You are researching it and you’re already thinking about where you’re going to sell it, what you’re going to do with it, what price you’re going to get for it, all that good stuff. Is that what you’re saying?
Jack Butala: Yeah. The way I answer it and it really hits home with people is, “Let’s line it up against a regular single family residential re-hab deal.”
I go out. You always do your homework. Before you buy a house to re-hab it and clean it up and resell it for more, you go out and look at the market. You say, “Oh the value of these houses in this area sell for $120,000.” let’s say.
I’m going to buy this house for 80. I’m going to put 20 into it and I’m going to sell it for 120 and make $20,000.
Jill DeWit: Right.
Jack Butala: Does that sound?
Jill DeWit: Yup.
Jack Butala: What happens in reality? It costs way, way, way more money to renovate it than you thought. You got to pay a bunch of realtors 6% on each side, and on, and on, and on. With our product type, let’s say everything in the market’s selling for $10,000 cash.
Would you buy it for 5,000 and think it’s going to be okay? Probably, but that’s not what we teach. What we teach is buy it for 2,500, sell it for 5,000. In a $10,000 market, then there’s really no way you can get hurt.
You never have to go see the asset. It’s just land. You hire somebody for 50 bucks or so to go out there and take a picture and then market it all over the Internet the way that you would market a dress or anything. I get that question a lot and I try to answer it that way.
This feels so good answering these questions on the air like this because I just know I’m going to get the 15 questions next week just like this. Maybe you could point them to the podcast episode, Jill.
Jill DeWit: That’s not a bad idea. You know what’s interesting? I find more and more individuals in that flipping niche that are struggling to find deals, struggling. They’re saying the ones that were there are not there any more.
Jack Butala: Yeah, I’ve heard that too.
Jill DeWit: It’s really hard to find good deals. It’s getting harder, and harder, and harder. I think they’re looking for other things. What they’ve done is so much more difficult. It’s funny. For some reason, they think this is hard. Once we talk about it a little bit, they go, “Oh, you’re right.” The perception is our way is even harder. I’m like, “No, guys. What you guys are doing is way more difficult that what I’m doing.”
Jack Butala: Why do you think that is? Why do you think their perception is this is harder?
Jill DeWit: I have no …
Jack Butala: I think it’s this.
Jill DeWit: … idea.
Jack Butala: Who the hell would want to live way out in the middle of nowhere like that? That’s what I think.
Jill DeWit: No, just the whole transaction piece of it.
Jack Butala: Really?
Jill DeWit: Yeah. For some reason I think …. Here’s what I think. I think a lot of realtors, they’re not a title agency. I think that they’re a little bit fearful of the whole transaction.
Jack Butala: Having to do the deal themselves.
Jill DeWit: Yeah.
Jack Butala: I see.
Jill DeWit: I think there’s a little bit of fear in there. Like, “Wait a minute. What do you mean I can do this?” It’s like buying a used car from a guy off Craig’s List. It’s like that.
Jack Butala: Yeah, it’s easier I think.
Jill DeWit: It is. When you buy a used car off Craig’s List you both don’t have together get someone to represent you and then show up at the DMV together and then give each person 20 bucks for showing up. [Know what I mean? 00:08:54]. It’s like that. I just came up with that by the way.
Jack Butala: That’s awesome.
Jill DeWit: Thank you. Imagine if you had to do that. It’s like you take that piece out of it. No, I hand you the cash. You hand me a bill of sale. We go our separate ways. I go to the DMV and I license it. That’s it. It’s hard for them to grasp that concept that it really is that simple.
Jack Butala: If they’ve seen our program, or any 1 of our programs, where we address that specifically, it’s a step by step process that’s incredibly simple.
Jill DeWit: Yes, it is.
Jack Butala: With the agreements and everything, it’s all in there. No stone un-turned kind of thing.
Jill DeWit: Exactly.
Jack Butala: This is a good prelude to plug in our program.
Jill DeWit: It is. It’s interesting. This comes up a lot. I feel like we’re land flipping. We are. We land flip, but we don’t do anything to it. Other people house flip. We’ve done that too.
When you talked about how it often goes sideways in those deals, 1 of the things that people don’t often think about is the carrying costs of how long. Most flippers I know don’t walk in with cash. They finance the deal.
Jack Butala: Yeah, and it’s loan shark financing, too.
Jill DeWit: That is so scary. Exactly.
Jack Butala: That’s hard money. That’s a topic for a different show.
Jill DeWit: They have these 45 and 90 day deadlines because they got to do it. That the way the math works out. It’s not that that’s their dream. It’s like something bad’s going to happen if it’s not sold at that point. They keep losing money. That’s a whole scary thing that we don’t have to deal with.
I have a good question. This is 1 of my top, top, top questions. As the host, I’m going to ask you to answer this question for all of our listeners, Steven.
Jack Butala: I love this.
Jill DeWit: This is the second most question I get. How much money do I need to get started?
Jack Butala: I can tell you honestly it’s not 0, like every other person says. But, it’s not 50 grand either. All BS aside, I started with 500 bucks and doubled my money, and doubled my money, and doubled my money. How much does it start?
You got to get yourself educated, so it costs a little bit of money there. You’re either going to educate yourself with Land Academy, our company, or you going to do it taking the long …
Jill DeWit: Doing it the long way?
Jack Butala: … long route. That’s what I was just going to say. You can spend a couple of years …
Jill DeWit: Screw it all up for a while.
Jack Butala: … spend a couple years on Bigger Pockets and try to learn it through osmosis. It costs a little bit money for education.
In our case, we almost always give away a free property with our programs. You’ve got the first investment property to start with. Not all the time, but most of the time.
Jill DeWit: Often.
Jack Butala: Often, yeah. There’s that. To give a dollar amount? I don’t know. If you got yourself educated, how much does it cost for seat money and all that stuff? I don’t know, 1,000 bucks maybe. 500 to $1,000 and you’re going to be in business if you got the right ambition level.
Jill DeWit: Could I do some mailers with that money?
Jack Butala: Yeah. Yeah. You figure it’s the price of a stamp. I would highly recommend sending out …. We cover all of this in our program. No less than 500 letters, maybe 1,000. 1,000 be better. More is better especially in the beginning.
To send out a great mailer that’s very well executed and the whole thing, that’s going to cost about, I don’t know, 250 to $500. You will buy a property if you do everything right. You’ll buy more than 1. All you got to do is go on SuccessPlant and watch and see all the people that are doing it right now with very little money.
Multiple people have purchased. In the last 2 weeks, we’ve had many, many, many members buy properties for $500.
$500 is the price. I didn’t know that this was going to have this effect. I’m glad we’re talking about this. In our Cash Flow From Land program, it’s this 10 hour video program that Jill and I put together. Over, and over, and over we use the example of buying 5 acre properties for $500. It was just an example, but it was the 1 that I chose. That’s what everybody seems to be doing. You still can buy ….
Jill DeWit: Multiple.
Jack Butala: … a 40 acre property for 4,000, or what we do all the time is buy a smaller individual lots for next to nothing, 50, $100. For whatever reason, everyone’s stuck with that, or a lot of people stick with the $500.
Jill DeWit: I didn’t even think about that, too.
Jack Butala: 5 acres.
Jill DeWit: YOu’re right. The 5 acre is singing to everyone. It’s a good size. It’s a good price point. It’s easy to double and triple your money on that. That’s fantastic.
Jack Butala: After you get our education package, or whatever, however you get educated, if you have 500, $2,000, you should do well. The more that you have, I don’t know. At a certain point it becomes a crutch and you’ve got too much money. You start making bad acquisitions.
That reminds me of this quote. Warren Buffet has a great quote. He said, “The worst financial decisions I’ve ever made if my life was when I had a pocket full of cash.”
Jill DeWit: Do you know what was funny? I thought you were going to say something different. You know what I thought you were going to say?
Jack Butala: No.
Jill DeWit: There was a woman involved.
Jack Butala: Oh my gosh, Jill.
Jill DeWit: Come on. How many men? No, let’s be honest, come on. How many men make bad decisions because of a woman?
Jack Butala: Or maybe good decisions.
Jill DeWit: Financial decisions.
Jack Butala: I don’t know.
Jill DeWit: You are different because you have me.
Jack Butala: How many wives. Now I wonder if we’re going to publish this episode.
Jill DeWit: Yes, we are.
Jack Butala: How many wives have you spoken with with members like men who want to become members in Land Academy and they’re like, “Jill, can you just please talk to my wife about this?”
Jill DeWit: Oh gosh, a number.
Jack Butala: I got to say, and I know we’ve talked about this a million times. When 2 people who are together are on the same page moving forward in the same direction and you don’t have to come home every day, explain why it just didn’t go perfectly that day to somebody, it’s just that the chances of success are so much better.
Jill DeWit: YOu’ve go to be on the same page.
Jack Butala: If you have a wife …
Jill DeWit: … or husband …
Jack Butala: … out there in listening audience, or husband who’s not on the same page and thinks this is all silly fiction, call Jill. Her number’s 480-467-0359.
Jill DeWit: You had to get me back.
Jack Butala: May God give you 5,000 phone calls.
Jill DeWit: I am. Here it comes. No, but it’s true.
Jack Butala: Jill, now you’re Jill the therapist.
Jill DeWit: I am not the marriage therapist. Hi, Jill. I know I was supposed to be calling you about this, but ….
Jack Butala: I hate [to just throw you under the bus 00:15:19]. I’m the guest.
Jill DeWit: You are. This might be your last invite. That’s awesome. Guest throwing host under bus. Thank you very, very much. All right. We have time for 1 more. Any big, burning question you want to answer.
Jack Butala: Yeah, I started it earlier. I’ll finish it now, is why the hell would anybody live way out there in the middle of nowhere?
Jack Butala: Every single month we give away a property f or free. It’s super simple to qualify. Two simple steps. Leave us your feedback for this podcast on iTunes and number two, get the free ebook at landacademy.com, you don’t have to read it. Now go buy some property.
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