Two Ways to Raise Money (CFFL 0111)
Two Ways to Raise Money
Jack Butala: Two Ways to Raise Money. 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.
Steve: Jack Butala here for Land Academy. Welcome to our Cash Flow from Land show. In this episode, Jill and I talk about the 2 ways to raise money. You can raise it with debt or raise it with equity. Or you can do it our way which I’m going to explain in great detail, which is spending your way to the top. Jill and I’ve done it. I love money, Jill.
Jill: Mm-hmm (affirmative).
Steve: I love this topic.
Jill: I know you do.
Steve: This is gonna be a blast.
Jill: You just like seeing zeros on on a piece of paper. It’s not like you need the green cash.
Steve: No, it has nothing to do with need it’s just a game.
Jill: I know. At some point it does become just a number on a screen.
Steve: Plus when the other people are winning too it’s just great.
Jill: Mm-hmm (affirmative).
Steve: I mean teaching, when we’re teaching. Before we do this let’s, as always, take a question from a caller.
Jill: Sure. Okay.
Steve: Maybe we should do the phone number.
Jill: I could do the phone number. You mean the 888-735-5045, that number?
Steve: Yeah, that number.
Jill: Are you sure? Let me make sure I got it right. I have 888-735-5045.
Steve: That’s the number.
Jill: Oh good.
Steve: So you can call that number and leave a message with a question and if you’re actually an interesting person, we’ll have you on the show.
Jill: You know what else? As we’re recording right now it’s the end of the month. Well, it’s actually the beginning of the next month and we are doing drawing. So get in, rate this show on iTunes and get in the drawing. Got to download the free eBook, rate the show and then you will automatically be in the drawing for a free property. We do it every month. Thank you.
Okay, back to our question. Manny from London. I had to ask, is there really a Manny in London? Steven said that he’s heard of that.
Steve: Oh yeah.
Jill: So Manny from London called in and asked, “Can you do this from other places?” Can you do this in other places? I wonder if he means … I’m assuming he means where he is, not …
Steve: Yeah, it could be a lot of stuff, because I’m really surprised by this Jill, you and I have talked about it. We send education material and data subscriptions all over the world.
Jill: Mm-hmm (affirmative).
[00:02:21]
Steve:
List the places that you can think of that we’ve … Where we have sent education .
Jill: Italy, Belgium, England, Japan …
Steve: Japan and Singapore.
Jill: We did it to Singapore. We have-
Steve: Canada several times.
Jill: Yeah, lots of Canada.
Steve: I don’t think South America yet.
Jill: I don’t think I have any … Well, I have Mexico.
Steve: You send to Mexico?
Jill: Well, I have a percent- I think it ended in Mexico.
Steve: Trinidad.
Jill: Oh yeah, yeah. Trinidad, that’s right. All over. It’s really cool.
Steve: So- Go ahead.
Jill: Because we give them the tools that they- and teach them how to do this from anywhere, so you go ahead.
Steve: There’s 2 parts to this question. I think what he might be saying is, “Does it work in England?”
Jill: Oh.
Steve: Or can I do it from England in America and do it with American property? Those are-
Jill: Different questions.
Steve: Yeah. The answer is, this program works, in my opinion, on every type of asset. I’ve done it with hospitals, long term care facilities, I’ve done it with apartment buildings, all that.
Jill: Mm-hmm (affirmative).
Steve: I’ve done it with real estate listings to get real estate listings. I haven’t done it but I helped somebody do that.
Jill: Mm-hmm (affirmative).
Steve: Yeah, I think that you can … The only thing variable is your percentages of success. Here’s ours. You can take this percentage to the bank. Ours is a lot higher because we’re pretty experienced, but if you send base, generally send out a hundred letters to buy rural vacant property and you scrub the data how we teach you to do it, you should get about 1 to 5- You should buy between 1 and 5 properties. Ours is a little bit higher for a lot of reasons. Well, because we send out 7 billion pieces of mail.
Jill: Then that hundred, that’s like 20ish call backs.
Steve: Yeah, it’s one-
Jill: Twenty really good leads that you’re following up on and then you buy 1 to 5.
Steve: I just had lunch with somebody that’s very experienced, almost as experienced as we are and we laughed about it because we have the exact same numbers.
Jill: Mm-hmm (affirmative).
Steve: But you can bank on this, a hundred, 10, 1.
Jill: Mm-hmm (affirmative).
Steve: So with houses, the way that I’ve done it in the past and I do it very conservatively to make sure you make a ton of money, 10 to 20 thousand bucks a house, it’s a thousand letters to 1 house, which is not bad. The mailer costs you around 500 bucks and you make 10 thousand dollars.
Jill: Mm-hmm (affirmative). It’s not bad.
Steve: That’s 10 if you’re-
Jill: Gee, let me think about that.
Steve: What if you did this?
Jill: Carry the 2 …
Steve: Manny, listen to this, get the data, get the education, send out a thousand letters a month very strategically, do 1 deal a month, make 10 thousand dollars. You can do it probably in a whole weekend once you’re all set up. One a week. Spend your weekends doing this. Now you’re making a hundred and twenty grand a year.
Jill: Oh, and by the way Manny, when you pick up the data, you also have access to our mailer program. So the letters are very inexpensive, less than the price of our stamps, and they come from here. It’s not like you’re sending them all international from England. That would be a mess.
Steve: We have the single best mailer program that I think you can get. It’s the cheapest and the best service and the whole thing, unless you own your own print shop and then I would even argue it might even be more.
Jill: Right.
Steve: So can you do it in London? Yeah, I think I just answered it. Any different property type. Can you do if from London? Yeah, if you have a night job and you can deal with the time zone difference and the whole thing, yeah.
Jill: Mm-hmm (affirmative).
Steve: We have people who do it from further away places than you.
Jill: Yeah, we have one guy that he’s consistently on our weekly member call and he’s in Japan and he’ll tell you, it’s like he has to get up early for the call or something. There’s something going on there. He does it in the morning before he starts his day.
Steve: The free member call is at 3:00 and the membership pro call’s at 4. I think he’s on both and he says it’s 8:00 in the morning I think?
Jill: I think it is, yeah.
Steve: He’s always saying I have to get up for this, so I don’t know what he does in his life.
Jill: Right.
Steve: He has to get up at 8-
Jill: To listen to the call.
Steve: What time do you get up, Jill?
Jill: I get up- Don’t ask me that today.
Steve: That’s exactly why I’m asking you today.
Jill: Oh my gosh. That’s probably what’s going on. I’m sitting here with my eyes … If anybody can see me right now, my eyes are just kind of … but that’s …
Steve: You’re a little off your game today I have to say.
Jill: I’m a little off my game today and I just realized that’s probably part of it just because I did not get a lot of sleep. We just have so many good things going on.
Steve: I got up at 3:30 today.
Jill: I know you did.
Steve: You know why I’m excited?
Jill: I’m getting early emails from you.
Steve: I’m serious. I … I don’t know. I have a lot … I like our role in life right now a lot.
Jill: Me too. Tell me about the 2 ways to raise money.
Steve: So there’s 2 ways to raise money in my opinion. Well, there’s 3. We’re going to spend 30 seconds talking about the first 2. If you need money to buy a house what do you do? You go get a mortgage, you raise some debt. If you are an entrepreneur and you want to start a company and it’s a surefire thing and you’re a tech guy or let’s say you’re an app developer, you go raise equity. You don’t put any money in your own, you go raise a ton of money and in exchange for that, instead of paying it back in payments like you do a mortgage, in exchange for that, you give away equity. You give away 51 percent of the company or you give way intellectual property or whatever.
Both ways have advantages and disadvantages. This is what Jill and I did instead and you should too, at least be aware of it. You buy a property for a thousand bucks and then you sell it for 2 thousand. You put the thousand dollars, wherever you got that thousand bucks, put it back there, in your savings account, from your grandmother’s drawer, whatever. Take that thousand bucks, make it 2 thousand, 4 thousand, 8 thousand, 16 thousand, and I’ve proven this over and over and over again. It doesn’t take too long if you know what you’re doing to get to a pretty substantial amount of money accumulated.
Jill: Mm-hmm (affirmative).
Steve: Less than a year actually. You just have to have your ducks all lined up and you have to write people in place and do a lot of deals fast, which is not hard to do. You need mailer capital and some good education. That’s what I call spending your way to the top. Which is probably not a very good way to describe that because that’s what sorority girls-
Jill: You should say borrowing your way to the top.
Steve: Or sleeping your way to the top.
Jill: Yeah, no, we’re not doing that. That’s not how we did it.
Steve: Some of us may have.
Jill: Yeah, no. No. I’m back on the sorority girls thing. Please explain that to me.
Steve: Well I just meant because spending-
Jill: Like shopping?
Steve: Yes, like spending your way to the top.
Jill: Oh.
Steve: Spend your way buying expensive clothes even though you’re a ding dong.
Jill: Oh, got it.
Steve: You’re at the top of the social thing so you never understood, but whatever. That’s not my thing.
Jill: That’s funny.
Steve: Why’d you get up so early?
Jill: Well my phones ringing from emails coming in because someone is in the office at 4 in the morning. That’s part of it. You know why I got up so early this morning? Because I was heading to the DMV. Just kidding.
Steve: Oh my gosh, you kill me with this DMV thing.
Jill: No I’m not. It’s just so funny and as you stand there and it takes so long, you’re kicking yourself going, “I should have got here earlier.” No, I shouldn’t have been there at all. Anyway …
Steve: You know, every time I talk about debt and equity, it seems like the pendulum, everybody’s either for it or against it. There are people that love debt, they just love to leverage everything. They somehow make that work. I’m on the other end. I say pay cash for everything. I think probably the right way to do this is to use it wisely in the middle somewhere. Is it crazy to get a mortgage? Probably not. I’m nuts about that. I refuse to have a mortgage, I don’t know why. I know you’re like that too, Jill.
Jill: I know. Well, you know you just brought up a really good point. There are a lot of people out there that they just think it’s a way of life, that it’s a fact.
Steve: I’ve met a lot of people who say, “Oh yeah, I have a car payment. Doesn’t everybody have a car payment?”
Jill: Right, and it’s not even that. It’s not even just the normal walking around car payment stuff, but I’m just thinking even the professional in the professional world. If I had a car payment and a house, at least I know I can sell my car and probably sell the house, I mean, I’ll go sideways, I’d be able to do that.
Steve: Yeah, me too.
Jill: But I’m borrowing to do a flip and I have a mortgage and I have a timeline and I’m borrowing a lot, now I don’t- People do that, they borrow money for a flip and they’re borrowing all the money for all the renovations. It’s all borrowed, and they’re counting on the fact that it’s going to be done in X number of days and staged and sold in that many days after that and there’s so many things that can go wrong. You’re staring at this mortgage coming at you and you don’t have the money for the mortgage payment. That’s just so scary to me, but there’s a lot of people that’s how they roll.
Steve: Nothing makes me more stressed out than what you just described. I would rather just do something else.
Jill: I know.
Steve: I’m not a house flipper, man. That makes me so stressed out to think about that. You and I did a bunch of flips. I don’t mind wholesaling them, I love wholesaling them.
Jill: Right.
Steve: But cleaning them all up and then waiting … Jill, I don’t get it either. I guess we all have different thresholds for that.
Jill: I don’t have the stomach for it. I just … I would not sleep.
Steve: Think about this, so let’s say somebody gets a bright idea like whoever came up with Uber, the taxi cab replacement company, you can’t start that yourself. Unless you’re a billionaire, then you wouldn’t even want to anyway. What you want to do is raise private equity …
Jill: Hold on a moment.
Steve: … And probably a portion of debt.
Jill: I have a question about that. Why couldn’t you start that yourself? They don’t own the vehicles.
Steve: Oh my gosh, the computer power that’s required to develop that …
Jill: Well I mean, couldn’t they have started small in the city and just go from there? Isn’t that how it started?
Steve: There’s a company in San Francisco called …
Jill: Is it Lyft?
Steve: No, it’s called, I don’t remember, but it’s specifically made for kids, for children.
Jill: Mm-hmm (affirmative).
Steve: So it’s all-
Jill: They make the best drivers.
Steve: I couldn’t have said that. If I say that I get in a lot of trouble, but you can say that.
Jill: Where are you going with this?
Steve: When it’s that big and you know it’s going to be that big, you raise a ton of equity and you do it right. Servers can crash and stuff. It looks like a silly little app on your phone, but-
Jill: All right.
Steve: You are overtired.
Jill: I am. You know what? As soon as I’m done there’s a 12 year old driving me home. Right now they’re a better driver actually.
Steve: You should go to the DMV right now.
Jill: Yeah, that’s a great idea. I’ll be a barrel of laughs there. That’d be funny to walk in, overtired and drunk.
Steve: Are you drunk right now too?
Jill: No I’m not. I just threw that in because it would be funny.
Steve: Because Jill’s drunk you can join us in another episode here she and I discuss your all important success in Uber investment and in life. What’s going on with you woman?
Jill: I am not drunk.
Steve: I know you’re not.
Jill: I’m tired.
Steve: Yes, you are overtired, I can tell.
Jill: I’m overtired and I’m glad you figured it out because when I was sitting here and we’re talking about the shows, I like to get my head together and get my notes together, I’m going, “Why can I not focus? I’m having a hard time,” then it hit me. This is funny. I apologize to anyone right now and … Everyone and anyone listening.
Steve: We’ll cut this short for Jill. Let’s go buy some property.
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