When Doubling your Money Just is not Enough – Sell on Terms (CFFL 0051)
Jack Butala: When Doubling your Money Just is not Enough. Why We Can Afford to Give Land Away Every Month. Every single month we give away a property for 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 even have to read it. Thanks for listening.
Jack Butala: Hey, this is Jack Butala for Land Academy. Welcome to our cash flow for land show. In this episode, Jill and I discuss the decision that we go through on every single property we buy. Do we sell it for cash or terms, do we double our money in a week or do we make 50% annual return on our investment for the next several years. Jill, this is such a topic that we talk about or manage every single day that I forgot to include it in our regular show like probably I should have done it a lot earlier.
Jill DeWit: Yeah that’s true, it’s a good thing to bring up and let everyone know how we do this or what we do when we’re selling properties. Do we sell it, like you just said, cash or terms.
Jack Butala: Let me tee up the typical situation. We send out a bunch of mailers, and within that mail, we send out offers, actually, in direct mail to buy people’s property. A certain percentage, pretty high percentage, mail them back, or they call Jill back and they say yeah, I do want to buy the property, and so we do. We buy a piece of property for let’s say $1,000. A piece of vacant land, and we’re going down the path of purchasing the property, and we purchase it. This is very typical for us. We do multiple transactions like this a week, and we teach everybody how to do it at land academy. Our members are doing it. If you want to check out success plan, they’re talking about it all the time in real time, successplan.com. We have this property that we were into for $1,000. Let’s say it’s five acres in northern Arizona, or 10 acres in northern Arizona, and it passed all our tests. Then Jill and I stare at each other and say …
Jill DeWit: Do we just double it tomorrow, flip it quick and get some acquisition cash, which I love having a healthy balance.
Jack Butala: Do we sell for $2,000 or $3,000 really fast, or do we sell it for $10,000 or $12,000 or $15,000 on terms, let’s say $99 down $99 a month for eight or nine years. That’s the point of this. When doubling your money is just not enough, do we sell it on terms? I think you like terms deals, don’t you?
Jill DeWit: I do. It’s great. Everybody wins on that one. Well, either way everybody wins no matter what, because even the way we buy and we sell, it’s pretty much way under retail if you will. Everybody loves that. But for people who don’t have the cash and they really want the property, typical banks will not finance on improved land. We can finance it for them, and they’re thrilled.
Jack Butala: Right. I think like this and a lot of topics, you come at it from a customer perspective which is awesome. One of the many reasons we’re partners. I come at it from a numbers perspective. I think a good healthy balance of both is great, but I know that the people who purchase, tons and tons of people that we collect payments from every month on transactions like this, I know how appreciative they are. I know they call and say there’s no way I could have ever bought this property. You’re making my dream come true.
Jill DeWit: Totally, they love us. They thank us and they can start using the property today. They are so appreciative too. I wrote some notes earlier and I put not like a mean bank, because I feel bad. We all know how banks are, let’s be honest. I have a few customers now and then, especially around the holidays, things get goofed up or payments get kind of messed up. They’re not necessarily on time. You know what, I’m fine with that. They call me and they tell me hey Jill, I’m so sorry, can I catch up next month? No problem. I don’t assess any fees or anything like that. I’m very relaxed and good about that. Everybody wins.
Jack Butala: Right. Here’s the raw math. By the way, one of our programs is called $10,000 a Month for Life. Here’s the math on that. If you place 50 properties at $200 a month, typically we like to do this with between 10 and 40 acres properties because they’re real easy to sell on terms. They sell really fast. All you need to do is 50 deals. Now you’re making $10,000 a month. You can do that once you get through with our program and with the help of success plan. I think it’s very realistic to do that in six months to a year on the weekend.
Jill DeWit: I have a number of people that have reached out to me that just got the program, and they haven’t even gotten into it, but they grasp, maybe because they’re listening to this show like right now, and they grasp the concept and they’ve got a fast track plan. They’re doing it. They really are. They have targeted the exact properties already that they can buy around $1,000, sell for a whole lot more. They’re doing a great job of recouping even, my favorite deals are the ones where I bought it for 1,000 and I’m selling it for 10,000. Maybe I’m doing $500 down and $100 a month or something like that. In just a few months, I’ve already recouped my whole investment. Now, for five years of payments, it’s all gravy. It’s fantastic.
Jack Butala: I’ve been going back and forth with a member who he said let’s cut to the chase. I’ve got a ton of money. He’s got big huge bulging money pockets. He said …
Jill DeWit: I wasn’t sure where you were going to go with that there. I have not heard that term, big huge bulging money pockets. That’s a little scary.
Jack Butala: Do you like that term, Jill?
Jill DeWit: Is this still G rated, now? I love that our show is for all ages, I’m a little worried right now. Go ahead.
Jack Butala: Technically, this show is rated G. We don’t really say any bad words, not very often. The topics we cover, anyway. This guy has got money to burn. Not money to burn, he’s got a bunch of money that he set aside like all of us should be doing. He’s like man, come on, what do I do. I said target, go through our program, don’t skip any points, go through it to the letter. Then send mail out to properties west of the Mississippi for acreage [inaudible 00:06:34] or whatever, and I’ll tell you. Make sure the four As are involved; acreage, affordability, access, and attributes. Then mail it out. Mail a ton of mailers out, buy 50 properties and sell them for $200 down and $200 a month. That month you will make $10,000 just on the down payments. In the next month, you’re going to make $10,000, a couple of people are going to fall out because they got cold feet or whatever, or they have buyer’s remorse.
Every month, we kind of deal with that because we have so many properties placed, but that’s it. It’s as simple as that. For the rest of us, I think a healthy balance of both is great. You take $2,000 or $3,000 that you have saved, or maybe even $1,000, double or triple your money on it, buy a bunch more properties, two or three more properties. Sell one of them on terms, sell two of them for cash. Double, triple your money, and then over and over and over. In fact, I put a calendar together, a suggested calendar that we haven’t published yet, like a success calendar that says once you get the package, you need to take x amount of time to go through it, really learn it, ask some questions on success plan, reach out to us or whatever. Send out your first mailer in week five or whatever. I don’t remember the exact, but it ends up being 12 months before you’ve got some money coming in, some substantial money coming in, not just a couple hundred bucks every single month.
Jill DeWit: Is it a conservative calendar?
Jack Butala: Oh my gosh, yeah. If we did it, you and I, because we’re pretty experienced, we could do it next week. If it was somebody that knows nothing about this at all, you start making some money in about month 10.
Jill DeWit: Okay, hold on a minute, can I ask a question about this calendar?
Jack Butala: Sure.
Jill DeWit: Is it a calendar where I have a full time job and I only have eight hours on the weekend to devote to this because I have family and kids and soccer games. Is it that kind of a calender, or can we do a couple calendars?
Jack Butala: You nailed it. It’s a work on Sunday only calendar. But yeah, maybe I should become full-time. Jeez, can you imagine full time?
Jill DeWit: Do two calendars, like one is you’re going to devote 40 hours a week to this because you’re just going to kill it, you’re going to come home from your day job and do this. Who knows, people do that stuff because they want to hurry up and get there. There could be one that all right, I don’t have the time or the resources, I’ve got to be slow and conservative, so here’s your calendar.
Jack Butala: All right. I’ll expand it. The one for Sunday is already done. I’ll do a full time calendar.
Jill DeWit: I like that.
Jack Butala: Or an after school calendar. I don’t want to complicate this. Or maybe I could do three.
Jill DeWit: Two is good. I think two is good.
Jack Butala: Should I reverse the Sunday one? You want an after school/after work …
Jill DeWit: I want an after school/after work. I’m going to devote 40 hours a week to this calendar, like this is my second job. I would think that would be really beneficial, because I think there’s a lot of people out there that want to do that. Then I think having a, like I said, for the person that’s I want to get there, but I have all these responsibilities, I really can only devote every Sunday eight hours a weekend or something on it, calendar.
Jack Butala: I’ll say like eight to ten hours a week.
Jill DeWit: Yeah, eight to ten hours a week and then 40 hours a week.
Jack Butala: Right.
Jill DeWit: I think that’s great.
Jack Butala: All right, I just wrote that down. Again, I really think a healthy balance is good. In fact, we do a healthy balance. I’ll tell you though, here’s the big difference. I would love to get your opinion on this. The cash sales is just like immediate gratification. Our cash sales, and we have members that are at this point now, too, many members. The seller calls you back or they mail back their offer, and then it signed, and you call the seller and you say hey, do you really want to sell this, are you ready to go? They say absolutely, yes, I need the money by x. You put the phone down, you jump up and down.
Jill DeWit: I’m sure you would hang up the phone by the way.
Jack Butala: Even today, after all these years, I still jump up and down. We’re doing the [inaudible 00:10:52] properties right now I’m really jacked about. Anyway, the next phone call that I want to make to our A-list buyers, specifically a handful of them that I know are going to buy this property for two to three to four times what we paid for cash. It’s wholesaling. Wholesale flipping land is what we’re doing, and that’s my immediate reaction. What’s yours, Jill?
Jill DeWit: What was the question again? I got sidetracked.
Jack Butala: You’re jumping up and down because the seller called, or you’re doing a deal now. Then, the next call I want to make is to two or three of the A-list buyers that we have, because you know you’re going to double, triple, quadruple your money. I love that immediate gratification piece.
Jill DeWit: We do that.
Jack Butala: I know we do, but for the terms property, is your immediate reaction like oh my gosh, we can make $40,000 on this with interest over 20 years?
Jill DeWit: No, you know what, my immediate reaction is oh, I know who I’m going to call right now. I like that. It kind of depends on where I’m at and what I’m working on too. If I go I think I’m going to spend some time on this one, this is a really great property. I’m going to really market it, get it out there, and set it up as a terms thing and let it bring in a nice income. Most of the time, I’m like woohoo, I know right who I’m going to call, and I’m working out the sell deal as I’m buying it. It’s like seamless. I barely own it.
Jack Butala: You know what triggers it for me is the actual property. Before we buy it, we obviously do the maps just to see if we want it or if it doesn’t fall into our criteria. There’s certain places in the country that when the letters come back, that I just know our terms properties regardless of the fact that we can double and triple our money. Northern New Mexico is one, because it’s just so freaking gorgeous out there, and then there’s certain places in northern Arizona, California there’s very specific places. The closer you get to LA, there are always terms property, and then the same thing with Nevada.
Jill DeWit: I think because you want them all to fall through so you can keep them. There’s the emotional part coming out again.
Jack Butala: If you’re finding yourself saying man, I should keep this, that’s a terms property.
Jill DeWit: Who knew in this partnership Steven is the emotional one.
Jack Butala: I get a little misty about some of these properties.
Jill DeWit: You did that to me last week. I was looking at something, you’re like you cannot sell that one. I’m like what the heck. Get it off the list, it should not be on my list. It was really funny. Two points. One is one of the best things about these terms properties is it’s very easy to get a nice auto-pacing system set up like through Fresh Brooks or Stripe. I’m going to say they take a little piece off the top of the payments, it’s not much. Then, I don’t know, maybe $20 a month if you need that kind of a service. I have it set up where ever month on a certain date, there’s an e-mail invoice that automatically goes out to my buyers, and they just check out and click it out themselves. There’s nothing that I have to do. I don’t have to have a little reminder on my calendar, it’s an auto-invoice thing. It’s not even that …
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