I Want to Own Property Investment Company (CFFL 0132)
I Want to Own Property Investment Company
Jack Butala: I Want to Own Property Investment Company. 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 from Land Academy. Welcome to our “Cash Flow From Land” show. In this episode, Jill and I talk about owning a real estate investment company. Jill, this has been my dream for as long as I can remember. Did it ever hit your radar like it hit mine early on?
Jill DeWit:
Yeah, it did.
Jack Butala:
Really? We’ll get into it in a second here but what really hit my radar was just being a private investor, I wasn’t sure it was going to be real estate but I knew it was going to be something like this. Good show today as always but, before we start, let’s take a question from a caller.
Jill DeWit:
Sure. All right. Mark from Orlando asks … It says, we have a handful of callers to follow-up. Oh, this is good. This sounds like one of our people. It says, we have a handful of callers to follow-up and see if they’ll sell. Two seem interested but using the mailing references they provided I searched the properties and found they have no access. Okay, got it. His question really is, should we turn these deals down completely or is a $500 acquisition always a good buy? The lowest retail I could find is $2,499.
Jack Butala:
I think what he’s saying is … Look, it doesn’t appear to me … He did everything that we do.
Jill DeWit:
Absolutely.
Jack Butala:
He did everything right. He sent a ton of mailers out, based on the criteria, the whole thing, and he got a lot of responses back and so he’s going through his due diligence choosing the ones that he wants to buy. A couple of them don’t have what look like direct physical access. The access thing comes up a lot. I think all properties, almost all properties have legal access. Meaning, you can’t reasonably withhold access to someone else’s property if your property’s kinda in the way, so to speak. Then most of them, if it’s sub-divided properly, they have easement access anyway, legal. Just because there’s a roadmap there in Google Earth, that’s what happened. In Google Earth, just like we said, he said, “There’s not a road right up to it.” There might be one a quarter of a mile away, eighth of a mile away, there might be a two track running through the middle. What do you think?
Jill DeWit:
It comes back to that property. Does it have the other … It sounds like it has the other attributes that we’re looking for. It sounds like the acreage is not an issue and the affordability is certainly not an issue. Does it have another attribute, I still might do it at that price because the comps that he’s finding are five times … The lowest he could find is five times that price I might do it. I’ll tell you, and this is because we’ve been doing it a long time, but I’m watching some of our members. In our community, we have an online community, successplan.com, and I’m watching them talk about some of these properties. One of the members came up with his own way of saying, “Hey, I give everyone a … ” Not everyone, but one of his options is, “I offer them a 60 day, money back, go out there and look at it yourself guarantee,” and then I’m like, “Beautiful,” there’s stories around that too. Somebody might want it.
I hear what this guy’s asking. Mark, I get it. Mark, and if it’s got the other three things, this is all a personal thing to you, I honestly might do it too.
Jack Butala:
Yeah, it’s really property specific but the super bullet in real estate for all these rules and these questions is simply this, if you disclose everything, that you know about it, that’s all you can do. Again, you’ve heard me say it a million times, Jill, we disclose that we buy these properties and sell them as a primary business, we don’t go out and see them, we don’t know much about it and, “Please, please, please, take a look at the whole situation before you actually buy it.” I think the vast majority or properties when you look at them on Google Earth and they’re relatively close when you can see platted easements, checking all that, I think it’s going to be fine.
Jill DeWit:
You brought up something really, really good Steven, that disclosing everything. Because I’ve had properties like this where I’ve said, “Look, is it staked out?” No. “Well, let’s be honest. You’re buying it at this price because I’m not going to go out there and stake it out. You can afford to hire someone to stake it out, and I’ve had people go, “Yeah, you’re right.”
Jack Butala:
That’s exactly right.
Jill DeWit:
I said, “Do you want me to have someone …? If you’re going to buy it and you’re willing to pay X amount of dollars, I’ll hire someone to go stake it out. They’re like, “Oh, no, no, you’re right. Never mind.” I’m like, “Yeah, thank you.” I watched one of our members do that to something else, where they were asking for something and she said, “All right. For X amount, I’ll figure it out or you want to just go with what we had negotiated and you do it? Because, trust me, it’s cheaper if you do it.” The guy is like, “Yeah, you’re right,” that kind of thing, so totally, so there you go.
Jack Butala:
I think that answers the question.
Jill DeWit:
I agree.
Jack Butala:
All right, everybody seems … Most people seem to want a yes or no question. Should you ever buy property that doesn’t have access? No.
Jill DeWit:
Right.
Jack Butala:
But ..
Jill DeWit:
Are there exceptions? Yes.
Jack Butala:
Yes, and the deeper you look into this access issue, the less severe it really is.
Jill DeWit:
Right, I agree because there’s somebody out there … If the comps are $2500, there’s somebody out there that wants it for $1,000 and they’re going to figure it out because they’ve still got a smokin’ deal.
Jack Butala:
There’s a huge, huge market out there for property that can’t be found and no one talks about it. There’s a lot of people who want to buy property that want to live where you cannot be found. Oh, that’s true, good point, and you forget about that. I had a customer client a lot of years ago that specifically sought that out from us. You’d have to have a pretty serious all terrain vehicle to get there because he wanted to be not found.
Jill DeWit:
Was he in the Witness Protection Program or something, what is that?
Jack Butala:
I never asked.
Jill DeWit:
Maybe we should be marketing to the Witness Protection Program, just kidding.
Jack Butala:
I don’t know anything about that.
Jill DeWit:
Hilarious. I want to talk about this topic because you brought up something really cool.
Jack Butala:
Yeah.
Jill DeWit:
How did you know, Steven, that … Why has this been a dream for you? What was it about where you grew up or your family or people … What triggered this in you?
Jack Butala:
The honest answer is, I have no idea, but I know that, I know I have always wanted to make my own decisions based on where I put my money full time. Not other people’s money, not any of this like, “I want to represent invest … I want to represent you in this investment,” none of that stuff. I’ve always known that I want to create my own equity and then put the equity in stuff that I can control and watch and build. It’s not … You and I have had this conversation many, many times. There’s lots of ways we could go borrow money or to raise equity, we could do that, I’m not joking, probably in the next 45 minutes, tons of it.
People reach out to us all the time but, unless it’s very specific, you and I so far haven’t in a big way taken advantage of that. It’s because after a certain point the money’s not that important, it’s just kind of like a piece of mind and control.
Jill DeWit:
Right.
Jack Butala:
Yeah, I don’t know, I’ve always wanted that.
Jill DeWit:
That’s cool.
Jack Butala:
I never really believed … The stock market’s a great thing, I never believed in it, that’s not my thing.
Jill DeWit:
Oh, yeah. I never … I tried. Well, I never really tried to understand it. My brother, of course, is a pro at the stock market, makes my head hurt. He worked for awhile in Chicago and I’d go visit him. He was on the Mercantile and I’d stand in that big room and I’d look up on the walls all around, all the numbers and all the displays and all the monitors and I’d just go, “All this makes my head hurt.” I’m like, “There’s no way. I don’t get it.”
Jack Butala:
I love that stuff but I’ll tell you, at a very, very young age in my early to mid-20s, I was an officer and a vice president in a company. We took it public, so I was there when it was private and we took it … And then I realized that it’s just … When you buy a share of stock you are not … Reading aimless reports and stuff … This is just my opinion. Reading reports, you have no idea what’s going on. There’s so many ways and things that can go on with financial statements and all that. It cracks me up when I hear people say, “I bought 25 shares of Apple because they’re selling so many iPhones and it’s like, “Pam, it has nothing to do with their product, has nothing to do with really their financial performance.” Which theoretically should make the stock … What are we talking about?
Jill DeWit:
Right.
Jack Butala:
Exactly. This is how I chalk it all up with the stock market, you just don’t have the control that you might think that you have over the value of a stock, there’s a lot of stuff that can happen.
Jill DeWit:
Right.
Jack Butala:
I’d rather control my own stuff, like own your own investment company.
Jill DeWit:
Correct. You know you’re going to double your money and you have a lot of control over what you’re doing.
Jack Butala:
Right.
Jill DeWit:
I agree. What’s interesting is, when you said that I hadn’t thought about that before this call, what was about it for me? You know what, for me, I swear it was my … Two things. One, growing up in Southern California seeing all this property. Back then it was a guy, it was Cole, his last name was Cole. You’d see Cole everywhere and he was buying up everything. You’d think the guy owned all of Irvine, and he probably did. Some of the beach areas in Newport, oh yeah. In Newport Beach, Cole everywhere. I’m seeing this person buying up all this stuff totally peaked my interest, number one.
Then, my dad, that was always one of his passions was … And he later did buy … Yeah, he did his own … Had some residential rentals, most in Texas. He did that for awhile and I just … He always wanted to do it. It was fun to watch him get ready and prepare to do it and then just do it.
Jack Butala:
You know what’s really intriguing for me for real estate, specifically land, but the house is a novel thing. Houses are not even on my top radar for real estate investing but they always come up so we talk about it a lot. What I love about it is that you can almost literally … You can literally start with nothing because all you have to do is one deal and understand it … Get educated and understand it, one deal. All right, so great, now you’re making 150 bucks a month. Are you going to retire on that? No way, but now you’re looking around for the next one.
When you look at an apartment building … I used this example in my … Somewhere, I think it’s in the fee e-book. Imagine you could buy an apartment building one unit at a time. That’s what this is. Instead of going and trying to source three, four, five million dollars to buy the whole thing at once, this is buying one unit at a time and collecting, with a fantastic return on investment ROI, one unit and just build from there. You might do 10 in one month and then something comes up and you don’t do any.
Jill DeWit:
Right, and you pay cash, by the way.
Jack Butala:
Yeah.
Jill DeWit:
That’s my thing too. This topic I want to talk about because I’ve had this asked of me. I’ve had people just in passing say, “Wow, I want to do what you’re doing. How do you do this?” Kind of thing. That’s the same thing I tell them. I say, “Start small, pay cash, learn the business.” I really, really urge people who want to be in this business, have a mentor, it’ll save you so much time and headaches and trouble. You’ve got to look around, find the right person. It’s sometimes hard to find the right person which is why we wave Land Academy kind of thing. We were individually mentoring people and it just got to be … We couldn’t help it, we couldn’t do it, it just got too busy.
Now we can help a lot of people this way, which is great so I love it. One other thing is to put yourself on a path and grow and stay with it and don’t push it, if that makes sense. I see people sometimes want it to be … Sometimes they set goals for themselves that might be a little bit out there. Don’t set yourself up for failure and I’m not talking about you, Steven, don’t think I’m talking about you.
Jack Butala:
No, because …
Jill DeWit:
Oh. Who are you talking about?
Jack Butala:
I’m laughing because you and I differ on this.
Jill DeWit:
Oh.
Jack Butala:
I think that’s right because, again, that’s one of the reasons we do well as partners. I really think that you need to throw all kinds of gas right on the fire.
Jill DeWit:
That’s hilarious. We do [inaudible 00:12:32].
Jack Butala:
A few days ago … I’ve been saying this phrase for quite some time, for more than a couple years, and Jill finally … For whatever reason, it sunk in with Jill two days ago. It’s swing hard and hope for the best which is a silly golf thing that I came up with. I don’t golf very often at all but a few years ago I was golfing with my attorney and he said, “You know, you clearly have some issues with your swing. Why don’t you just swing hard and hope for the best?” I turned around and said, “You know, I approach a lot of things in life like that.”
Jill DeWit:
Yeah, you do.
Jack Butala:
We all had a real good laugh about it and so you can visualize what happened then.
Jill DeWit:
Totally.
Jack Butala:
It’s just always been a funny … Just swing hard and hope for the best.
Jill DeWit:
My gosh. Oh, yes, yes.
Jack Butala:
I really think you should throw some fire on some stuff and just … I don’t know. I’m a big fan of going 100 miles an hour, skewing some stuff up, see what happens, and then in the end … It’s the tortoise and the hare thing, I’m more of the hare and you’re maybe the tortoise, I don’t know.
Jill DeWit:
Well, you know what though, we’re a good team because we’re happy … I’m not about sitting around making sure everything is … My desk is all straightened and you’ll say, “Okay, now we can start taking clients.” No, no, no, you don’t want to do that. Have your receptionist there working for a week and getting everything going before you open your doors to your business, don’t ever do that, so I think …
Jack Butala:
Yeah exactly, exactly right.
Jill DeWit:
Yeah.
Jack Butala:
Grind it out in the basement.
Jill DeWit:
Exactly.
Jack Butala:
It’s a good cash flow, and then go get an office three years later.
Jill DeWit:
Right. When you’re pulling your hair out and you can’t keep up and you have money just coming in … You have deposits coming in, you’re not even sure where they came from.
Jack Butala:
Yes.
Jill DeWit:
It’s a great problem to have.
Jack Butala:
You’ve got to know how to account for the money that’s coming in.
Jill DeWit:
That’s it.
Jack Butala:
That may be one of the signs.
Jill DeWit:
There you go, you’ve arrived. You now have a property investment company. Congratulations.
Jack Butala:
Let’s wrap it up like this. What advice would you give to somebody who’s new? I don’t care about their age, but somebody who’s new that says, “You know what?” They either say something like this. “I’m 22 years old and I know I want to have my own private investment company.” Or they’re a lot older in life saying, “You know what? That’s what I’ve wanted to do, now I realize it.” What advice would you give?
Jill DeWit:
Okay. I’d tell them to decide where they want to be in the end, and then work it backwards. Maybe three years from now, two years from now, I don’t care what it is. Give a date. “I want to be doing this, and this is where I want to be,” and then work it backwards. How much money do I want coming in every month? It is $10,000 a month? Is it $20,000 a month? I don’t care. Work it backwards. Figure out, “Okay, how many properties do I need to place? What do I need to be doing? Duh, duh, duh. Then, when you sit back and go, “All right, here’s my five year plan, that means I have to place one property a week, or two a month, or whatever it is.” I would say, start with that.
Jack Butala:
Excellent advice.
Jill DeWit:
Then once you have that, get the knowledge that you need. You have to think you can really do this. We can all do … Last night I was talking to my friend, Kelly, about this. Short of physical restrictions that we joke around, you’re six foot … Maybe you’re 5’2″ and you want to be a professional basketball player, you might have some issues with that. Short of that kind of stuff kind of stuff, gosh, you can really do anything you really put your mind to, right?
Jack Butala:
It comes back to confidence, I agree with you.
Jill DeWit:
Yeah, and we were both just talking about that. It’s so interesting how many people … Fo some reason, they don’t get it so, but you want to do this you can do this, it’s not hard. There are some ways to get there faster too which is have a mentor. Look at how long it took us to get to his level, how many years. There’s things you can do that will save you a lot of time and money.
Jack Butala:
My direct advice would be, get education first. Is the biggest mistake I see in real estate investment. A lot of other stuff is people, they actually trying to start doing deals really quick. The first thing they do is go out and look for a deal to do, instead of really just methodically going through all the free education you can get out there and then finding something that you might have to pay a little bit for and make a commitment. Then after … I would say for the average person, it was probably shorter for me, maybe longer for some people, but about six months of pure education where you’re really studying mainly part-time because you have a regular job and stuff. Just get educated first and then pull the stops out.
Jill DeWit:
You know what else? You need to expect that you’re going to screw some things up. You’re going to get some things wrong, you might accidentally … But you can recover.
Jack Butala:
I see this generation, this younger generation really kicking themselves really hard for not doing everything perfectly.
Jill DeWit:
So what? You learned from it, move on. Who cares?
Jack Butala:
I just think with the way the internet is you go out on You Tube and you watch somebody do something spectacularly fantastic and you think, “Oh, that’s it.”
Jill DeWit:
I can do that. Yeah.
Jack Butala:
I don’t know.
Jill DeWit:
That wasn’t their first take.
Jack Butala:
People get real frustrated in school that way because they don’t … Maybe one or two classes or topics and you’re doing great in but one’s a C. That’s what school’s supposed to be for. It’s supposed to say, “Hey, I’m great at this and it comes easy to me. Or this is awful over here and I suck at it.” That’s okay.
Jill DeWit:
I’m going to say something funny that you said the other night. I want to tie into that one you just said the other night. Even Alex P. Keaton is not good at everything, everyone.
Jack Butala:
I said that?
Jill DeWit:
Well, you were talking about you. You described you with that. Someone was asking who you were and you said, “You know, I was Alex P. Keaton in high school, I thought that was really cool. Some of our listeners are going, “Oh, I get it,” and some of our listeners are going, “Who the heck is that?”
Jack Butala:
Half of our listeners are gone now.
Jill DeWit:
No they’re not, they’re looking it up right now. “Who’s Alex P. Keaton?” It’s hilarious. All right.
Jack Butala:
Join us on another episode where Jill and I discuss your all important success in property investment and in life. You know what I should have mentioned, Jill, is how bad I have the flu right now and I’m trying to show up for this.
Jill DeWit:
You’re rallying and you’re doing so great.
Jack Butala:
Am I pulling this off?
Jill DeWit:
Yeah, you are.
Jack Butala:
I’m not complaining.
Jill DeWit:
I’ve gotta tell you, Steven, I hate to say this but this is just a little after show that I hope no one’s listening to this but you have so much energy and so much push all the time. When you don’t feel good and you’re kind of calm and relaxed and a little bit out of it, it’s kinda nice. I’m so sorry, I have to say that.
Jack Butala:
“Okay, thanks for getting sick once in awhile, Steve. Gives me a break.”
Jill DeWit:
Thank goodness you got the flu, God man.
Jack Butala:
I’m taking a break from you.
Jill DeWit:
That’s right.
Jack Butala:
There’s a compliment in there somewhere.
Jill DeWit:
That’s right. Can’t get out of bed, yay! All right, we get the office to ourselves today everybody, woo hoo! Just kidding.
Jack Butala:
I don’t think you’re kidding at all, I think you like the break.
Jill DeWit:
I do like the break.
Jack Butala:
Taking a break from the boss, that’s awful, man.
Jill DeWit:
Thank you.
Jack Butala:
Oh my gosh, let’s go buy some property.
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