40 Acres is Better than 2 Acres Most of the Time (CFFL 0213)
40 Acres is Better than 2 Acres Most of the Time
Jack Butala: 40 Acres is Better than 2 Acres Most of the Time. 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 from land academy, welcome to our cash flow from land show. In this episode, Jill and I talk about 40 acres, and how it’s better than two acres most of the time. Not all the time. Great show today Jill! Hey, let’s take a question first, posted by one of our members on successplant.com, our free online community.
Jill DeWit:
Okay. Luke says-
Jack Butala:
Oh Luke!
Jill DeWit:
Yes.
Jack Butala:
Luke pipes in a lot. Luke is one of our star members.
Jill DeWit:
He does, I’m glad. Luke says lots of questions and no buyers. Interesting my friend said the same thing. Up the price. I did that, and the one I tried that on sold right away. This is kind of true. Sometimes a higher price makes it sound more serious or believable or desirable. I have found that also and I love that.
Jack Butala:
One of the most common questions that we get in land selling all the time. It doesn’t happen in houses and I’m not sure why, is what’s wrong with it, it’s priced so cheap. What’s wrong?
Jill DeWit:
Mm-hmm (affirmative)
Jack Butala:
I threw this question here of the millions and millions of questions almost literally that we can throw in, but I’m shouting out to Luke. I can tell when someones’ doing really well with this program, when they’re starting to ask and answer pretty sophisticated questions.
Jill DeWit:
Mm-hmm (affirmative)
Jack Butala:
I find myself explaining why this real estate’s so cheap all the time, and the fact is this: there’s this mentality out there that you get what you pay for. Which I thin kin general is true, for let’s say, furniture, but sometimes, if it’s used furniture, you bought it at a garage sale and you got a smoking deal on a great piece of furniture. Well that’s what our business model is. We got a smoking deal on some real estate, and we’re passing on the savings.
Jill DeWit:
Wait, how does jewelry apply.
Jack Butala:
(Laughs) Same thing right.
Jill DeWit:
(Laughs) How can you get what you pay for in jewelry too?
Jack Butala:
Jill brings it all back to jewelry.
Jill DeWit:
I’m just saying. I got to point out the obvious.
Jack Butala:
I think you can get big cheap diamonds.
Jill DeWit:
There’s no such thing as a cheap diamond.
Jack Butala:
Yeah sure.
Jill DeWit:
No.
Jack Butala:
No, not like low quality. I mean inexpensive because someone just wants to let it go, just like a business model.
Jill DeWit:
Like somebody died?
Jack Butala:
No, you just find the person at the right time, yeah.
Jill DeWit:
All right. All right. Okay. Just making sure.
Jack Butala:
Not that you want to do this but, a diamond might be cheaper in a pawn shop than it would at Tiffany’s.
Jill DeWit:
That’s true. (Laughs) Just had to get that in there.
Jack Butala:
I’m trying to talk my way out of this.
Jill DeWit:
Yeah, please tell me. Please tell me how this is better.
Jack Butala:
(Laughs)
Jill DeWit:
Hey baby, I know you wanted the Tiffany’s one slash however, my grandma passed on and no I don’t know.
Jack Butala:
Have you ever see that one episode of Everybody Loves Raymond where the parents find out, the older been married 50 years parents across the street, she finds out that her diamonds not real.
Jill DeWit:
Oh I didn’t know that.
Jack Butala:
Yeah.
Jill DeWit:
Oh I miss that one.
Jack Butala:
That was good.
Jill DeWit:
Oh that’s good.
Jack Butala:
Hey, if you have any questions or you want to be on the show, call 800-725-8816. Today’s topic, 40 acres is better than two acres most of the time, not all the time. This is the meat of the show. We have show coming up called the three rules of real estate. You know what they are, because this taps right into it.
Jill DeWit:
No.
Jack Butala:
Location, location, location.
Jill DeWit:
Oh, yes. Sorry.
Jack Butala:
Would you rather have two acres in Manhattan Beach, California, or 40 acres in northern Arizona?
Jill DeWit:
I know what I want.
Jack Butala:
Right. You want that two acres in Manhattan Beach.
Jill DeWit:
Yeah I do.
Jack Butala:
And me too for the same price but, in our game, and I think it’s super important to realize this, in our game, where we have a pretty strict acquisition criteria that pays our bill every week and month, you want to focus on those forties. You want to kick our those forties buy them for three or four gran and sell them for 8 or 9 or 10 thousand bucks. If somebody calls you and says I have two acres in Manhattan Beach and I really need to get rid of it, I’m not saying run the other way, I’m just saying, hey it’s not your acquisition criteria, and focus on what really really matters. Jill, you’re on the front lines with this, do people call you up with other properties?
Jill DeWit:
All the time. All the time. You know what’s interesting is, I find a lot of members getting hung up on this. They think their acquisition criteria is anything great that comes my way. I’m like no no no no that should not be your criteria.
Jack Butala:
Exactly.
Jill DeWit:
Your criteria should be whatever it is you outline, like you just said Jack. It’s this county, you set the mailer on it, you did all the research.
Jack Butala:
Right. Keep the system moving.
Jill DeWit:
Let’s not mess around slash however, one of the things that I always I tell everybody, be sure you do ask “Hey, what else do you have” because you might be able to get a bundle of property at some time, and make a good deal, but still, what you should be searching for and looking for is your criteria. Don’t waiver, get it done.
Jack Butala:
Yeah. So what do you do when somebody calls and says “Hey, I’ve got two acres in Manhattan Beach. I know it’s not your acquisition criteria, but I heard you guys are in land business.” This has been happening my whole career. “You’re in the land business? Oh, you must know X, Y, Z down the street over here.” No I don’t actually.
Jill DeWit:
Happens all the time.
Jack Butala:
I’m kind of in the IT business.
Jill DeWit:
Exactly.
Jack Butala:
(Laughs)
Jill DeWit:
You know what I do, I get my friends. For some reason, all of our friends, I have them at breakfast saying “Hey I have this guy that I know. This one guy has 640, like a whole section, seriously, in southern Arizona. Can I send them your way?” I’m like what the heck [inaudible 00:05:41]
Jack Butala:
Yeah. I get that too Jill. All the time.
Jill DeWit:
What’s funny is it’s not that it’s not my area, or my type of property, or whatever. It’s not my customer. He wants MLS prices, I’m not MLS prices, and he thinks that I’m a broker. I’m not a broker.
Jack Butala:
That’s right.
Jill DeWit:
I’m not going to go out there and do all this stuff. So, it’s really funny, I think the guy was kind of disappointed. I tried to help the guy out and kind of at least say “Hey, if you really want to sell it, you need to post it here, here, here, and here. You need to do these things and that.” What did he do? Nothing.
Jack Butala:
Yeah.
Jill DeWit:
He didn’t want to sell it.
Jack Butala:
It’s not in the machine. You have to stay inside your little machine. I had a person who worked with me a really long time ago, and she’s a licensed agent. We don’t have any licensed agents here anymore for a lot of legal reasons and a bunch of reason. She got a call form somebody who wanted to by her ranch, very wealthy person, and she wasted about a month of her life. A lot of it on company time, trying to find this guy a ranch, and it just didn’t happen, because it’s not in the machine.
Jill DeWit:
It doesn’t work that way. We’re not here to buy, not that you can’t use it to buy your dream property, we’re here to flip and make some cash. Like you said that’s our system.
Jack Butala:
If you want to buy two acres in Manhattan Beach California, send a mailer out, and then it becomes part of the machine.
Jill DeWit:
By the way, better chance buying .2 acres than you do buying two. I don’t think anybody has two acres.
Jack Butala:
No, I don’t think there’s two acres.
Jill DeWit:
Wouldn’t that be interesting?
Jack Butala:
There’s turn downs-
Jill DeWit:
Wonder what the biggest property is out there, seriously, is it a half acre?
Jack Butala:
You mean residential?
Jill DeWit:
Yeah.
Jack Butala:
I don’t think there’s anything.
Jill DeWit:
There’s like a country club and there’s thing like that out there-
Jack Butala:
Yeah, golf courses and stuff.
Jill DeWit:
Commercial but, I’ve got residential. I can’t imagine anybody having anything really really big.
Jack Butala:
I can’t even. I bet it’s .02.
Jill DeWit:
That’s what I’m thinking.
Jack Butala:
You measure the lots in square feet.
Jill DeWit:
It’s 23 million dollars on .02 acres. (Laughs)
Jack Butala:
It’s a negative lot line situation. You know what, I always said that, I haven’t brought this up at the show ever, when I look at the property, and the square footage of the house is larger than the square footage of the lot, I get excited, because that means it’s all densely packed in a super fun area. So you have 3,000 square foot house on a 15000 square foot lot. It’s a zero lot line deal, and it’s two stories, basically. I mean, I’m really simplifying but (Laughs) you know what I mean.
Jill DeWit:
Yup. I do.
Jack Butala:
I wrote this headline, I wrote this title “40 acres is better than 2 acres most of the time” as a type of a ironic, not ironic, but just to ask more questions and give answers.
Jill DeWit:
Mm-hmm (affirmative).
Jack Butala:
So from a pure money standpoint, two acres in Manhattan Beach is way better than 40 acres in northern Arizona, but if you do 50, 40 acre properties, maybe not.
Jill DeWit:
I have a question.
Jack Butala:
Yeah.
Jill DeWit:
Jack. Here’s something that jumps out at me too, comparing these two exact examples. The buyers our there for these 40 acres that I have priced at 10,000 dollars, I have a lot more buyers than my two acres priced at a million. How much of that comes into play.
Jack Butala:
All of it.
Jill DeWit:
Thank you.
Jack Butala:
All of that does. If you spent the last 6-8 months, or in our case, 15 years developing a data base with buyers who have a specific product type, I would even argue that it’s more valuable, the 40’s more valuable.
Jill DeWit:
Mm-hmm (affirmative).
Jack Butala:
Yeah. You’re re-inventing the wheel if you’re going to go out and buy, and try to finance the whole thing with two acres in Manhattan Beach.
Jill DeWit:
Exactly.
Jack Butala:
I used to hate when my teachers said crap like this, like I’m saying right now. Coaches would always say, you know, if you ever played sports and you won the game, and you get back in the locker room, and the coach is yelling at you saying this is the worst game you guys ever played but “Coach we won!” I feel like that guy right now.
Jill DeWit:
I know. I just think it’s funny. I think it’s funny when you reach that age. A lot of people, it’s in your twenties. All of a sudden you start quoting you’re parents you’re like “What did I just say? Oh no.” People used to say “Hey. Did you hear that? Your dad’s here.” I’m like “Oh funny thanks”, but it was a good little wake up you’re like “Yeah, you’re right. Oops.”
Jack Butala:
Yeah. Sometimes I sound like my father. Anyway, that’s a different show.
Jill DeWit:
(Laughs)
Jack Butala:
This is the technical two. Two minutes of property investment advice, from our 15 year 15,000 transaction experience. You’ve heard me say it before, stick with the acquisition plan. Don’t get side tracked for two months. Think about all the deals you would have done. If you’re working on some home-run type deal, you could of done tons and tons and tons of transactions in the machine.
Jill DeWit:
Mm-hmm (affirmative)
Jack Butala:
Or, if you can get a bunch of people in place, and they’re running the machine for you, then go start another machine, but don’t do one off views. That’s my point.
Jill DeWit:
Don’t spend 40 hours on one because you think it’s going to be the end, end, end.
Jack Butala:
Right. Hey, if you have a question, or you want to be on the show, call 800-725-8816. Jill inspire us.
Jill DeWit:
Don’t give up.
Jack Butala:
Aw, short and sweet. I like it.
Jill DeWit:
I know.
Jack Butala:
No, I love it!
Jill DeWit:
It’s worth saying. So many people throw in the towel.
Jack Butala:
I think it’s worth saying 50 times.
Jill DeWit:
I see people getting frustrated by some of the littlest things. I mean, maybe they’re little to me, but they’re big to them. Whatever it is, don’t give up. Create that plan, and don’t stop. Eventually, as you conquer these, what you think is instrument able now, as you start checking these obstacles off, they will become speed bumps. Right now it might look like a wall, but you know what, don’t give up, and you’ll get through it, and it will be a speed bump later. That’s what it should be.
Jack Butala:
May I add?
Jill DeWit:
Please.
Jack Butala:
When you run into some type of speed bump let’s say, you thin it’s a road block. What you want to do, in my opinion, is develop the skills to go around it. Not just solve the problem, not just sweep it under the rug and solve it. Develop the skills because let me tell you, I’m here to tell you, you’re whole career is going to be packed with stuff like this. Eventually, when you’re at the tip top, and you’ve got literally have a CEO under you, who’s making tremendous amount of money in making these decisions for you, only then can you really and I’ve experienced this, only then can you really, have to not deal with any problems. I’ll tell you, a lot of stuff gets lost when that happens. My point is, practice or establish some type of a way to solve like a A to B to C, a way to solve problems that’s mechanical.
Jill DeWit:
Mm-hmm (affirmative)
Jack Butala:
It starts with not getting emotional, I know that, and not being upset, and I know that I don’t practice that as much I should (Laughs) Jill’s laughing at me across the studio she’s like “What kind of advice are you hypocritically giving?”
Jill DeWit:
Right. It is a lot easier to do as I say, not as I do. We’ve all experience that. You know-
Jack Butala:
Don’t give up, I love it.
Jill DeWit:
Jack I don’t mind if some people get a little bit emotional, just don’t spend a week in bed over it.
Jack Butala:
(Laughs)
Jill DeWit:
I’m not saying you do that, I’m just saying people do.
Jack Butala:
I’ll spend a week in bed for other reasons.
Jill DeWit:
Or don’t just like “I’m out here and go on” and no. You can get a little emotional.
Jack Butala:
All right Yoko Ono.
Jill DeWit:
Yes.
Jack Butala:
Week in bed Yoko.
Jill DeWit:
It’s okay. We know people that do that. We all know people that do that. It’s the silliest thing.
Jack Butala:
Don’t give up. Join us in another episode where Jack and Jill discuss how to use information, that’s me-
Jill DeWit:
And inspiration that’s me.
Jack Butala:
That was a trick. Just about anything you want.
Jill DeWit:
We use it everyday to buy property for half of what it’s worth, and sell it immediately.
Jack Butala:
Send a ton of offers out and get there first. Good show Jill.
Jill DeWit:
Yeah. Cool.
Jack Butala:
Don’t give up.
Jill DeWit:
I like your weighing in on that and inspiring people to learn from that.
Jack Butala:
I get more side tracked throughout my career on these darn one off deals that never happen, I can’t even tell you.
Jill DeWit:
Yeah.
Jack Butala:
There’s just no way you can explain that to somebody who’s relatively new. The more seasoned guys knows that, for some reason, the house guys know it more than the land people.
Jill DeWit:
Yeah.
Jack Butala:
The house members, they’ve got a few deals under their belt, and they just know not to veer from the situation.
Jill DeWit:
You know what I think? I think because they hit a lot of tragedy early on.
Jack Butala:
I think so too. I think it’s a harder deal to do.
Jill DeWit:
I really think, yeah, I think that their 1st, 2nd, or 3rd, one of their first flips went horribly wrong, and they’re scrounging to make it work. You have to figure out, because it will sink the ship.
Jack Butala:
Absolutely.
Jill DeWit:
There’s payments do on this stuff. It’s not like I over paid oh well. That property over here, I only invest 2,000 dollars. It’s hundreds and thousands of money, and they are forced to figure it out. So that’s it. Maybe that’s why, you either sink or swim man, quickly in that group. That’s what I think.
Jack Butala:
If you’re actually doing the renovations, heck yes. If you’re wholesaling it, like we do, it’s really hard to lose.
Jill DeWit:
Mm-hmm (affirmative)
Jack Butala:
That’s why we do it.
Jill DeWit:
Exactly.
Jack Butala:
It’s a different show.
Jill DeWit:
Right. (Laughs)
Jack Butala:
Jack and Jill information and inspiration. Now let’s go buy some property.
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