USA Property Stats Work in Your Favor (CFFL 0073)

USA Property Stats Work in Your Favor

Jack Butala: USA Property Stats Work in Your Favor. 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:                   Jack Butala here for LandAcademy, and welcome to our Cash Flow From Land Show. In this episode, Jill and I talk about real estate statistics, one of my favorite topics, and why they work in your favor overwhelmingly so, in fact. Jill, I can’t … This is a … My dream topic.

Jill DeWit:                            I actually think these are 2 of yhour favorite topics, because 1, you love real estate all by itself, and 2, let’s be honest, you love statistics all by itself.

Jack Butala:                   We started this topic was complete … We put it up on the screen, and we were both talking about it, and it was something obscure, and I … Jill said “We should change the show to talk about real estate statistics.”

Jill DeWit:                            We did. Okay, so here’s what happened. We have a question from a caller in the … We were sitting here doing our research to answer this question, and that’s how it turned into this. It evolved into this show in 3 minutes.

Jack Butala:                   See, by the way, we have an 800 number now. We’re going to start sharing it with you. If you want to be on the show or if you want to ask us anything, call us at 888-735-5045.

Jill DeWit:                            Just like this caller did. This was from Rex in Seattle. Rex called in and asked “Are there enough properties to go around?” It was … I love this question. He said, basically “Are LandAcademy members running into each other and competing?”

Jack Butala:                   This cracks me up.

Jill DeWit:                            I know.

Jack Butala:                   We’re going to dispel that once and for all. Right now.

Jill DeWit:                            Exactly. That’s what we started … After I … I’ve had this question before, so yeah, go ahead Steven.

Jack Butala:                   There are … I mean there … That’s how it got into this … Launched ourselves into this raw statistics thing. It’s not raw. We’re going to have some fun with it. Never, and I’m knocking on wood, have I ever had any LandAcademy member run into each other as competitors. In fact, it’s quite the opposite. There’s just so much property out there that no one’s ever heard from anybody about whether or not they want to purchase it. A lot of years ago, every time I spoke with a seller on the phone because they received a mailer we sent, I would ask them “Do you get a lot of letters like this?” They always said “No, this is the first letter I’ve gotten.” Or they would say “I got one a few years ago, but never … Wasn’t anything like the one you sent.”

Jill DeWit:                            Mm-hmm (affirmative).

Jack Butala:                   “You actually offered a price, and said how we were going to close the deal.” What they’re saying, I’m paraphrasing is, they’ve received letters of interest, but not ones that said “Hey, on Friday, we’re going to pay you $800 to buy your property.”

Jill DeWit:                            Right.

Jack Butala:                   We’re going to send somebody to your house to close the deal. Do people run into each other? Absolutely not. This is … I’ve described this one time. This has actually happened to me. We have a very, very … We have a very successful member who shared an incredible amount of detail on our website SuccessPlant, where everybody talks to each other. All of our members go to SuccessPlant.com and talk to each other all throughout the process of mailing properties. It’s a support group / learning place. At the moment, it’s free. This guy went out there, mailed the heck out of a county. All the five-acre properties in one county, like we teach. Got a huge response. Talked about the name of the county, and then a lot of people piped in and said “You’re nuts for saying where you were so successful.” I had to correct everybody and say “Look, what he did was warm everybody up to the fact that there’s a lot of people interested … Now there’s some people interested in buying their property.” They didn’t even know that.

Jill DeWit:                            Mm-hmm (affirmative).

Jack Butala:                   Some day I’m going to do this. I’m going to do a follow-up mailer and see how many … Then they think the county’s wrecked. There’s no way people are going to buy 5-acre property in this county anymore. It’s exactly the opposite.

Jill DeWit:                            Mm-hmm (affirmative).

Jack Butala:                   Now the sellers are all warmed up to the fact that maybe somebody’s interested.

Jill DeWit:                            Mm-hmm (affirmative).

Jack Butala:                   Does that ever happen? No. My point here is there’s no competition.

Jill DeWit:                            No.

Jack Butala:                   It’s nothing like houses.

Jill DeWit:                            I was going to add one note that of all the hundreds of properties that we have in our inventory at any one time, I have properties that I sell and I have properties that I don’t sell, that are in our inventory. I get maybe a letter every other month, Steven. Think about this. The properties that we own, the hundreds of properties, and how few people reach out to us.

Jack Butala:                   Maybe thousands.

Jill DeWit:                            What’s really funny is when I get one from our members and I can kind of tell, I’m like “Oh, that’s one of our people!”

Jack Butala:                   Have you gotten one?

Jill DeWit:                            Sure! Yeah. Well they don’t know that it’s … They don’t … When they’re going through the list, I’m on a mail merge. They don’t see it’s me. They’re only reaching out to the owner on record of that property, and they’re in that county.

Jack Butala:                   Or just companies. Our comparnies.

Jill DeWit:                            Exactly. I love it, because I see some letters and I go “Ah, thanks.”

Jack Butala:                   Oh, yeah, I’d like to look through that.

Jill DeWit:                            It gets me all warm and fuzzy inside because I’m like “Look! Look! So and so did a good job.” Yeah.

Jack Butala:                   I’d like to see that. Yeah, you’re saving those, right? I’d like to see one. That’s good.

Jill DeWit:                            Mm-hmm (affirmative). Mm-hmm (affirmative). My point is that even in our world, gosh, I mean there’s … You’re going to tell us some more, Steven. You’re going to tell us why.

Jack Butala:                   I am.

Jill DeWit:                            You’re going to tell us. Please tell us the big numbers. Why we’re not stepping on each others’ toes and why this is nothing to worry about.

Jack Butala:                   There’s 3200, almost 3200 counties in the … Most of this data that we’re going to talk about today is from realtor.org. They disclaim it, and most of that comes from actual US Census data. I sit around and read the Census data sometimes.

Jill DeWit:                            I’m sure you do.

Jack Butala:                   It’s weird.

Jill DeWit:                            Did you read encyclopedias when you were a kid?

Jack Butala:                   No.

Jill DeWit:                            Okay. Phew, started to scare me there.

Jack Butala:                   I read spreadsheets. Green bar spreadsheets that you print out on an IBM computer.

Jill DeWit:                            Ah. What was the false-

Jack Butala:                   It’s data.

Jill DeWit:                            Were you having trouble sleeping at night?

Jack Butala:                   Why did I keep, I love that stuff.

Jill DeWit:                            Because that was on your … It’s on your … Wait, so you had the green and white lined spreadsheet stuff from the old printers on your nightstand?

Jack Butala:                   Yeah. Yeah. If I told you really, really what went on.

Jill DeWit:                            Wow.

Jack Butala:                   I would take that home from this office job that I had, in college, up there in the summer, and analyze data that way.

Jill DeWit:                            Oh.

Jack Butala:                   Learn how to program in DOS back then and Virtual Basic from those printouts. Because I couldn’t afford a computer or anything, so that’s all I … They were going to throw that stuff away and shred it. Like it was my job in the office to shred all this stuff.

Jill DeWit:                            Instead you’re analyzing it. You sneak it home and analyze it.

Jack Butala:                   I would- Yeah. Then I take it back the next day or the next week and shred it.

Jill DeWit:                            You know what? That answers so many questions right now.

Jack Butala:                   This is the person that you’re involved with.

Jill DeWit:                            Wow. That is the guy inside of Steven.

Jack Butala:                   That’s right, it is! No, it’s sad.

Jill DeWit:                            There’s a nerd in there.

Jack Butala:                   Yeah, there is. Fun guy’s usually on the outside.

Jill DeWit:                            Yes.

Jack Butala:                   There’s 3,143 counties in the whole country. I mean counties plus parishes and Washington D.C., and things like that. Here’s some funny stats. You think you’re going to run into somebody? Think about this. You’re going to run into somebody, they’re going to be a competitor in LandAcademy, think about this. There’s 8,600 real estate brokerage firms.

Jill DeWit:                            Excuse me, 86,000.

Jack Butala:                   I’m sorry. 86,000. How many agents do you think are per firm?

Jill DeWit:                            Yeah.

Jack Butala:                   I don’t know if they disclose that or not. That’s insane. Do you think they’re running into each other?

Jill DeWit:                            Right.

Jack Butala:                   Once in a while. Once in a while, and the agents compete with each other for listings in the same office. This is why we’ve never had anybody. I mean that’s a staggering number.

Jill DeWit:                            Mm-hmm (affirmative).

Jack Butala:                   When you divide that by 50. There’s … That’s what, that’s a lot.

Jill DeWit:                            Mm-hmm (affirmative).

Jack Butala:                   Per state, and then you think about some of these states, they’re very little. Very few brokerages. There’s 5.6 million commercial buildings in this country.

Jill DeWit:                            Wow.

Jack Butala:                   That, to me, is staggering.

Jill DeWit:                            Mm-hmm (affirmative).

Jack Butala:                   You think about, you can’t find acquisitions? You can’t find … You can’t send a mailer out. Tell me this.

Jill DeWit:                            I might step on somebody else’s’ toes, I only have 5.6 million to deal with, and I’m a commercial broker.

Jack Butala:                   Let’s say you say I’m only going to send mail, and the data that we have, you can pull this … The data that we sell contains these statistics. I mean it contains … All the county data is contained in the data that we are licensed to resell.

Jill DeWit:                            Mm-hmm (affirmative).

Jack Butala:                   It’s not just land that’s in there or houses. It’s every single property that is in a given county. It’s … 98% of the counties are covered.

Jill DeWit:                            Mm-hmm (affirmative).

Jack Butala:                   Let’s … There’s 5.6 million commercial buildings. Let’s say you sent a mailer out to all of the building … All of the apartment buildings that were built after 1986 and are more than … No, more than 12 units and less than 22 units. The assessed value is less than $5 million. That’s the kind of data that you can … It’s very easy to pull the data like that. This is what we teach.

Jill DeWit:                            Mm-hmm (affirmative).

Jack Butala:                   You send them a letter and say “I want to buy the property for X.” How many do you think are going to call back and say “Heck yes.”

Jill DeWit:                            Mm-hmm (affirmative).

Jack Butala:                   A ton!

Jill DeWit:                            Mm-hmm (affirmative).

Jack Butala:                   You think anybody is doing that?

Jill DeWit:                            Mm-hmm (negative).

Jack Butala:                   Neither do I.

Jill DeWit:                            Not like that.

Jack Butala:                   I know they’re not.

Jill DeWit:                            Nope.

Jack Butala:                   That’s what I’m talking about. There’s 115 million occupied housing units in the country. 115 million.

Jill DeWit:                            115 million.

Jack Butala:                   115 million.

Jill DeWit:                            Occupied homes.

Jack Butala:                   Yeah.

Jill DeWit:                            This is single-family residence. Housing.

Jack Butala:                   No, it’s occupied owned homes. Condos and … [inaudible 00:09:13] and condos and townhouses.

Jill DeWit:                            Homes. Housing units. Okay.

Jack Butala:                   Almost 5 million, 4.94 million homes … 5 million homes were sold in 2014.

Jill DeWit:                            Huge.

Jack Butala:                   I mean this stuff … This is staggering to me.

Jill DeWit:                            Mm-hmm (affirmative).

Jack Butala:                   This might be the most boring show of the world for probably most of the people who are listening to it. All six of them.

Jill DeWit:                            I love it.

Jack Butala:                   I love this stuff. All this does is make me so encouraged at the opportunity that’s out there.

Jill DeWit:                            Right. This is for you, Rex. We’re not stepping on anybody’s toes.

Jack Butala:                   Yeah. Thank you for reeling it back in.

Jill DeWit:                            Right.

Jack Butala:                   Now, they don’t … Unfortunately, I dug around pretty good, and I couldn’t find vacant land properties, and I will get to the bottom of that. I know that it’s … It’s much much much larger number than any of these.

Jill DeWit:                            Oh, definitely.

Jack Butala:                   There’s way more vacant properties than there are homes.

Jill DeWit:                            Vacant land, you mean, or any kind of property like that.

Jack Butala:                   Yes, any kind of vacant property.

Jill DeWit:                            Land.

Jack Butala:                   That’s purchasable, like here’s another stat. Only 12% of the property in Arizona is purchasable. It’s … We call it private land. Where it could be bought and sold between private properties. Everything else is Bureau of Land Management, BLM, reservation, native american reservation, and state land or whatever. There’s no problem purchasing or you running into … With competition at all.

Jill DeWit:                            Mm-hmm (affirmative).

Jack Butala:                   How you doing?

Jill DeWit:                            Okay.

Jack Butala:                   I think I just lost you for a second.

Jill DeWit:                            No, I’m just saying that 12% number, I know that 12% number sounds really low, but it’s really a lot of land. People don’t realize that. It is a lot of properties. That’s the main thing. I mean even in Texas, you and I talk about it all the time. What is it, are there 350 counties in Texas alone? Something like that, right?

Jack Butala:                   Yeah, I think. Yeah. I’m not exactly sure.

Jill DeWit:                            It’s over 300. It’s a lot.

Jack Butala:                   I mean what’s our mailer response now? That’s … That’s … It’s fun to talk about these stats, but the way that we teach this. Our … People ask me “Well how many properties can I budget to purchase when I send out 100 mailers?” What they’re asking me is, if I do everything right and I send out 100 mailers, how many properties can I purchase? My answer is between … This is for new people now.

Jill DeWit:                            Mm-hmm (affirmative).

Jack Butala:                   Not you, Jill, because you could buy 50. It’s closer to, I don’t know, 1 or 2 … Between 1 and I don’t know, 8. That’s doing it the way we do it. Not just back taxed property, because we include that.

Jill DeWit:                            Mm-hmm (affirmative).

Jack Butala:                   It’s not property where you send … We don’t send a $500 offer out to a property that’s assessed for $5 million.

Jill DeWit:                            Mm-hmm (affirmative).

Jack Butala:                   We send it out for 5-acre property, $500 for a very low assessed value. That’s one of the ways that we can mathematically use data. It’s what we teach. To send letters to the right people.

Jill DeWit:                            Mm-hmm (affirmative).

Jack Butala:                   Instead of wasting your time, and your money, and postage and the whole thing.

Jill DeWit:                            Exactly.

Jack Butala:                   You’re not going to run into anybody.

Jill DeWit:                            Any other fun, interesting stats that you’re seeing there?

Jack Butala:                   Let’s see.

Jill DeWit:                            I like that one though.

Jack Butala:                   Oh, a typical homeowner, yeah. This is shocking to me.

Jill DeWit:                            It’s interesting, yeah.

Jack Butala:                   The typical homeowner in this country right now is 55 years old.

Jill DeWit:                            I find that interesting. I find that higher than I thought it was going to be.

Jack Butala:                   I thought it would be like 32.

Jill DeWit:                            That’s what I thought.

Jack Butala:                   That tells me there’s a lot of aging in place going on, and that’s going to drive properties down. Property values, I mean, and this is housing now.

Jill DeWit:                            Right.

Jack Butala:                   Housing values down.

Jill DeWit:                            Right.

Jack Butala:                   These older people expire. We shouldn’t be afraid to say that on the radio, it’s just a fact.

Jill DeWit:                            I’m sorry. As we’re sitting, right now recording on a … Happens to be a holiday, which for students … We now have … Here are our new topics, or our new the way we describe things around our office. Have they expired? It’s a holiday in eruption.

Jack Butala:                   We’re in a holiday right now. We are.

Jill DeWit:                            My seller expired, what do we do?

Jack Butala:                   I had that happened to me.

Jill DeWit:                            Oh, no.

Jack Butala:                   That’s happened to me a lot actually.

Jill DeWit:                            I remember that one in Michigan I had too. We figured it out. In the middle of the transaction, they expired.

Jack Butala:                   Yeah, they, yes.

Jill DeWit:                            Remember that? Yes.

Jack Butala:                   Here’s some interesting stats that have nothing to do with our … With land or expiration or taking a holiday in eruption. Here’s some home buyer stats. Doesn’t really have anything to do with again, land, but they’re interesting. First time home buyers who … This is all the people who buy houses. 32% of all people who buy houses, first time home buyers, median age of a first time buyer, 31.

Jill DeWit:                            Awesome.

Jack Butala:                   Median age of the repeat buyer, 53.

Jill DeWit:                            Oh.

Jack Butala:                   That shocks me!

Jill DeWit:                            Well can I have a question-

Jack Butala:                   Would they stay in their house that long?

Jill DeWit:                            Well hold on a second. Repeat buyers. Are they buying their vacation home?

Jack Butala:                   No, that’s just … They’re a repeat buyer.

Jill DeWit:                            Is that their primary residence?

Jack Butala:                   It would be included in that.

Jill DeWit:                            Oh, cool.

Jack Butala:                   It’s their second property they’ve purchased.

Jill DeWit:                            They’ve bought a home before. Okay, got it.

Jack Butala:                   Could be their vacation, could be they own 4 houses. It could be they sold the old one and got the new one.

Jill DeWit:                            Okay, cool.

Jack Butala:                   Median household income for first time buyers. $69,400. That’s pretty high. That excludes a lot of people.

Jill DeWit:                            It does.

Jack Butala:                   That tells me it’s hard to get a loan, or harder. Or that’s at least what they filled out on the paperwork.

Jill DeWit:                            They have 2. Household income. Household.

Jack Butala:                   Right.

Jill DeWit:                            It’s 2 combined, right?

Jack Butala:                   Then the median household for repeat buyers is $98,700.

Jill DeWit:                            Well look at the age.

Jack Butala:                   55.

Jill DeWit:                            You better be making closer to that at …

Jack Butala:                   Yeah.

Jill DeWit:                            Heh.

Jack Butala:                   Well, not necessarily.

Jill DeWit:                            Right.

Jack Butala:                   The takeaway from this is there’s so much opportunity out there, I can’t describe it.

Jill DeWit:                            There is.

Jack Butala:                   I have yet to send out, knocking on wood, yet to send out a mailer where we just got completely stumped and that was it, and we did it all wrong, it was silly.

Jill DeWit:                            Mm-hmm (affirmative).

Jack Butala:                   No one called back.

Jill DeWit:                            Right.

Jack Butala:                   No, there’s no competition for this.

Jill DeWit:                            No. I love that question though, it’s a great question, until you … In all of this, you just have to take and sit down and like we just did, gave all the numbers. When you really look at it go “Oh, okay, I get it.” Think about … I mean just … Just the fact of how many brokers, in a way, how many … You know what it didn’t say? Tell me how many licensed real estate agents there are. That’s at the thing, at the top.

Jack Butala:                   Well there’s 86,000 brokers.

Jill DeWit:                            Brokers. Brokerage firms.

Jack Butala:                   Right, and that’s who real estate agents work for. One broker … Like lots of them work for one.

Jill DeWit:                            I know. 2 million active real estate licensees in the United States. What do you think about that?

Jack Butala:                   I think it’s … If there’s 2 million people out there looking for single family residential houses to convert into income for themselves, and there’s, I don’t know, a few thousands LandAcademy members looking for properties that are way … There’s way more properties than there are houses and a house … It’s called tenable property. The numbers are so staggeringly in our favor it’s amazing.

Jill DeWit:            That’s what I wanted to get out of you. That’s what I think.

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