Land Investing – The Truth (CFFL 358)
Land Investing – The Truth
Jack Butala: Land Investing – The Truth. Leave us your feedback for this podcast on iTunes and get the free ebook at landacademy.com, you don’t even have to read it. Thanks for listening.
Jack Butala: Jack Butala with Jill DeWit.
Jill DeWit: That was a long pause there in the middle of my name. Hello!
Jack Butala: You ever want to make Jill upset, put two Ts at the end of her name.
Jill DeWit: Oh my gosh!
Jack Butala: Why does that make you so mad, by the way?
Jill DeWit: It’s just so silly. I’m so tired of saying, “DeWit, one T.” “DeWit, one T.”
Jack Butala: Welcome to our show. In this episode, Jill and I talk about land investing and the truth, the real transparent truth.
Jill DeWit: What!
Jack Butala: Yep. We’re going to tell you everything great about it and everything that sucks. There’s way more positive stuff than negative for us, anyway. For instance, if you are afraid of computers, this is not the profession for you. We’ll cover that in a second. Before we go though, let’s take a question posted by one of our members, on the landacademy.com online community. It’s free.
Jill DeWit: This is interesting. As I look down at my question, it says it’s a question from, “Jack Butala, owner.”
Jack Butala: I re-wrote the question. I deleted a question by a pro member, because I am sick of diaper changes. I’m sick of it.
Jill DeWit: I got it.
Jack Butala: I’m sick of deleting questions and legal questions. Let’s talk about the stuff that really makes you successful.
Jill DeWit: Thank you.
Jack Butala: The little decisions that you make.
Jill DeWit: Jack, I appreciate that. Here’s Jack’s. It may not be a question … It’s a question/Let’s see here. “How can I up my game and get surgical specific about offer amounts in a chosen county?”
Jack Butala: Let me rephrase the question because maybe that’s a little bit of a strange sentence because I wrote it in anger.
Jill DeWit: Thank you. There we go. That’s the truth.
Jack Butala: Picture a map of a county in your mind, maybe the county you live in. Then, picture the zip code boundaries everywhere. There’s, obviously, more than one zip code in the county. In general, the value of property is probably different per zip code, right?
Jill DeWit: Mm-hmm (affirmative).
Jack Butala: The end schemes work exactly the same way. Most counties have what’s called an “index map” or an “APN map.” Different parts of the country call it different things. In the southwest here, in California and Arizona, they call it “index map.” The first three or four letters of the APN, and they’re all different throughout the county, just like zip codes, just like the back numbers of a zip code are different. There’s different values.
When you scrub the data and get real serious about it, you can get really surgically specific about who you send offers to and the amounts that you send. When you run numbers like we do, you can make an offer per property. If you have 1,000 lines in a spreadsheet, you can literally and should make different amounts to every single person, every owner, that’s getting an offer.
Jill DeWit: At what point in my game, I’m going to ask a follow-up question, please. I’m six months in, Jack. At what point am I ready for this yet? How many deals do I need to have under my belt before I start getting this detailed?
Jack Butala: Your rule’s what? Ten?
Jill DeWit: Ten. Ten.
Jack Butala: Bought and sold.
Jill DeWit: For me, ten bought and sold. Now, you kind of understand what’s going on.
Jack Butala: Yeah, and I think maybe on the third, or fourth, or fifth 1,500 unit plus mailer that you do, you really should start to experiment with some of the stuff. I know it works for us. There’s certain types of assets I don’t want to buy. There’s lots of types of assets that’s some of our members, they specialize in stuff that we don’t want to buy. It’s all personal preference.
Jill DeWit: It’s true. You don’t have to get this detailed too. I know a lot of our members are doing very, very well.
Jack Butala: You can spend your whole career just $100.
Jill DeWit: They kind of, not skip along the top, but they kind of skipped along the top and do the big picture stuff and see what comes. I’m all for that. That’s okay too, because when I’m reviewing the asset later on, I can change my offer price.
Jack Butala: You could to get so specific you could use Census tracks. I’ve done this in the past. Census tracks, now the census is taken every ten years. It’s down to the block. Think about the real estate values where you live if you’re in the real estate business at all. You probably might obsess about it like I do and it’s like, “What! What the heck is two streets over? Houses sell for 1.2 million dollars. These houses, they sell for $300,000. What’s the difference?”
If you really deconstruct and figure out why, that’s a different census track by the way than the one that you live in. You can get it down. I’ve done this. It works. What ends up happening, than that effect, and this is a takeaway from this show, is it increases your yield. Now, we always say, like we talked about yesterday, for every 100 offers you send out, you can basically bank on, if you do it right, bank on getting one deal.
Now, it’s five, or eight, or ten. Our yield is close to 20% since [crosstalk 00:05:01].
Jill DeWit: Exactly.
Jack Butala: We implement this.
Jill DeWit: Exactly. Good question. Good question, Jack. Thank you for asking that.
Jack Butala: Jill’s whole point is, “Don’t mess with it if you’re brand new.” If you love data and you understand all this stuff, this isn’t rocket science, man. It’s just numbers and a spread sheet, which brings me to my point of the whole show here.
Jill DeWit: Thank you, Jack.
Jack Butala: If you have a question or you want to be on the show, reach out to either one of us on landacademy.com. I will parley that last comment into this. If you do not like data in any way and you’re scared of it, this is not for you.
Jill DeWit: That’s true.
Jack Butala: If you don’t like computers, this is not for you. This is land investing, the truth. This is the meat of the show.
Jill DeWit: Mm-hmm (affirmative).
Jack Butala: What else, Jill?
Jill DeWit: You know, you can’t be afraid. These properties that we’re working in, I don’t have 123 Main Street on every property. There’s not an address. I’m going to have to do some work and look these things up. There is some work involved. I get so frustrated, by the way, that people … It’s not like, how do I say this? It’s not like I’m sharing any big secrets.
Jack Butala: It’s a teaspoonful of effort.
Jill DeWit: It is, but it’s interesting. People say, “Okay, I’m going to get your program. I’m going to get in your world. I’m going to … There’s one secret, right? I’m paying for this secret and you’re going to tell me the secret.” Then, it’s just going to magically …
Jack Butala: There’s no secrets.
Jill DeWit: No. I’m showing you the process. I mean, that’s the whole thing. What you and I are doing are teaching how we do this. There is a process. There’s a data process. There’s the mailer process. There’s the doing your due diligence process. There’s a decision process. There’s the marketing process. There’s a selling process. There’s your website.
There’s a lot of different things; however, we share with you every little thing that we did. That’s what we’re doing right now on this show is sharing with everyone our trials and errors. Have we made mistakes? Heck, yeah. Are you going to make mistakes? Heck, yeah. It’s still going to happen, but that’s part of it. That’s maybe some of the good and the bad.
Jack Butala: Some of the comments that I’ve heard from people in all kinds of different environments, let’s say from a cocktail party to pro members. Right? I have several people, I’ve haven’t heard it recently, and not in the last few years, but have had people in the past come to me and say, “Aren’t you concerned about going to hell?” “What are you talking about?” “Well, you’re sending under-valued offers. That’s just not right. It’s not ethical.”
Jill DeWit: Isn’t that funny?
Jack Butala: “You should offer what property’s worth, what the value’s worth.”
Jill DeWit: You’ve never bought anything on sale, right? You’ve never gone to a yard sale, right? You’ve never negotiated for your vehicle, right? You just walk up and pay sticker price. No.
Jack Butala: After I get done giving a socialism lecture, I actually get to the point. Enjoy your socialism. Listen, if you don’t enjoy a bargain, people who say that are not in this business because what ends up happening is here’s the truth about land investing. They thank you, up-and-down. They don’t have time to sell these assets. They don’t care.
Jill DeWit: That’s true.
Jack Butala: They don’t care. It is almost never about the money for these sellers. It’s about the convenience.
Jill DeWit: It is, “Get this off my plate.”
Jack Butala: You have three choices when you go buy a gallon of milk. I haven’t said this in a while. If you’ve heard me say it more than two times, I apologize, but our numbers are getting pretty big on these shows, our listener numbers. You can buy it at Walmart where it’s incredibly cheap, you can buy it at a convenience store, where it’s pretty expensive and, in fact, it might be doubled, or you could buy it at a grocery store, which is probably somewhere in-between.
You don’t go to the cashier and start yelling at them and saying … No, you consciously go to the convenience store because it’s convenient. It’s the same thing with this.
Jill DeWit: I just thought of something funny.
Jack Butala: If I sound angry, it’s because I am.
Jill DeWit: No, it’s speaking of your pricing thing. Did you about fall over last night? We went to the little convenience store, liquor store, right by our house here at the beach last night. We picked up two little pints of ice cream. I’ve never spent more for ice cream in my life.
Jack Butala: How much was it? I didn’t even notice.
Jill DeWit: It was like $12.00.
Jack Butala: Oh my God! For one?
Jill DeWit: For two.
Jack Butala: Six bucks.
Jill DeWit: Still, but it was like, “Well, that was a little expensive.”
Jack Butala: I saw an interview with Ben and Jerry.
Jill DeWit: It was funny.
Jack Butala: They decided to get into their business, into the ice cream business because pints were selling for five bucks. They said, the math on that is just silly. I don’t think there’s like 12 cents in there of actual product.
Jill DeWit: Right. Exactly.
Jack Butala: No, I don’t.
Jill DeWit: It was just funny.
Jack Butala: Then, we had ice cream together.
Jill DeWit: I know. It was fun.
Jack Butala: What’s that worth?
Jill DeWit: Exactly. That’s it. I’m trying to think of some of the land investing the truth. There’s work involved. # 1. There’s details to learn. # 2. You need to be organized. # 3.
Jack Butala: This is good stuff.
Jill DeWit: Can you be absolutely wildly successful and profitable? Yeah. Definitely, but you’ve got to do all those things.
Jack Butala: Right.
Jill DeWit: I’m trying to think of some of the …
Jack Butala: There’s a lot of data processing and computer work to this. If you are deathly afraid of computers and databases and anything like that, this is not … Don’t even start down this path. I’m not saying you have to be a genius about it, I’m just saying know how to use Microsoft Word, know how to use Excel, just with the basic knowledge.
Jill DeWit: Here’s my thing too. You can’t, just like everything, you can’t expect everyone just to hold your hand and do it for you, by the way. That’s not cool. If you know you get hung up on something, and I’ve had a lot of members that do this, I have like brothers involved and husbands and wives involved, get a partner like Jack and I. If you really want to do this and you are real smart and honest with yourself and you know what your hangups are, get a partner that’s going to pick up the slack where you need them.
Jack Butala: Jill’s a people person. I’m the data person. Now, we actually have a third person involved, who’s one of my former partners from a long time ago, who’s a total IT tech .com person. With a ton of back end database experience and now we’ve got experts everywhere. I agree with you.
Jill DeWit: I look at you like that too though, Jack. I know you can do all that stuff.
Jack Butala: Not like this guy.
Jill DeWit: Okay. You’re still the pro.
Jack Butala: I tape together a lot of stuff.
Jill DeWit: You’re good at …
Jack Butala: Then, people, experts take the tape off and actually finish it.
Jill DeWit: You’re good at getting stuff done.
Jack Butala: [Crosstalk 00:11:59].
Jill DeWit: You know what? You have to set goals for yourself and stick to it. You know? I mean …
Jack Butala: A lot of times, and you’ve had me refer to this as the “Haight” like Haight-Ashbury, where you send a bunch of offers out that are less than retail value, there’s also a certain percentage of people and it’s not very many, who are pretty upset about this. Some of them call and it’s pretty … I think it’s some of the funniest stuff that people get so angry about. A $10,000 piece of property, they think it’s worth $1,000,000 bucks. It cracks me up.
Jill DeWit: I know.
Jack Butala: On Jill’s point, and correctly, and she’s been saying this for years, there’s customer service issues with every single business.
Jill DeWit: Yeah.
Jack Butala: You own a bank, there’s a certain percentage of people that are upset. If you own a convenience store, a certain percentage.
Jill DeWit: Ice cream.
Jack Butala: If you manufacture airplanes, there’s a certain percentage of people that are unhappy.
Jill DeWit: I mean, let’s just think. We used to joke about that. I mean, we have an employee who used to manage an ice cream shop. She said, “Crazy people, how rude they have been and demanding they’ve been and stuff.” Done horrible things to her over ice cream. You’ve got to be kidding me.
Jack Butala: Why are you upset about when you’re eating ice cream?
Jill DeWit: That’s what I’m thinking.
Jack Butala: It should be the happiest part of your whole thing.
Jill DeWit: That is just the funniest thing. You’re getting ice cream.
Jack Butala: Yeah.
Jill DeWit: You should be very happy. It’s ice cream. Like, last night. I was very happy to overpay for ice cream. I don’t care.
Jack Butala: I was too. I didn’t even look at the price.
Jill DeWit: No, I don’t. It was really funny. I’m trying to think of the truth. Some other things that I want people to know. You’ve got to …
Jack Butala: You need to answer your phone.
Jill DeWit: Yeah, that’s true.
Jack Butala: There’s some people who don’t want to do that. I’m actually one of those people.
Jill DeWit: Just like anything, I mean, you know what? Here’s the thing. You’re your own business owner. This is the big picture stuff. When you really think about this, if you go down this path with us, you’re running your own little business. There’s a lot of little things that are going to come up and you, as the owner, have to solve them.
Jack Butala: You’ve got to fix them. Who’s going to fix them for you?
Jill DeWit: It happens all the time. This is one of the things when I do … You and I do very different consulting calls at times, Jack. I talk to people a lot about big picture and business stuff and customer service and sales and things, but you’ve got to get past these things. One of my favorite things is, it depends on how you look at something.
Every time I have someone say, “Oh my gosh! My credit card company said we’re not going to do this or their rates changed or I’ve got to do something else.” I’m like, “You know what? Congratulations. That’s an obstacle that other people are not going to get past and you are.”
Jack Butala: That’s right, Jill.
Jill DeWit: “That’s why you’re going to be successful.” I get excited now about those little things. I’m like, “Yep, check.” I remember at the beginning, you and I were like, “Great. eBay changed this. It’s going to sink the ship.” No, it’s not.
Jack Butala: Yeah.
Jill DeWit: We figured out a way.
Jack Butala: There’s always a way.
Jill DeWit: What I do is, I go, “You know why? There went half of our competition.” Every time something comes up, I’m like, “Great, and some more people just dropped out. Great. There goes some more.” That, I think, is one of the things our group was so successful. We have the right people. They get us. If you’ve been listening to this show for a while, you get us. I appreciate that. We’re not going to stop, man.
Jack Butala: You’ve got to find creative solutions for stuff. What’s the Marine Corps? The Marine Corps motto is, “Adapt and overcome.”
Jill DeWit: I thought it was, “Once a Marine, always a Marine.” I’m sorry.
Jack Butala: Adapt and overcome.
Jill DeWit: I didn’t know that. Really?
Jack Butala: Yeah.
Jill DeWit: How do you know that?
Jack Butala: I don’t know. Probably watch too many movies.
Jill DeWit: That’s really good.
Jack Butala: I know it because my favorite contractor buddy, that’s their company mission statement. “Adapt and overcome.” He’s a commercial contractor, a huge one.
Jill DeWit: Love it. Love it.
Jack Butala: Conrad, you know?
Jill DeWit: Ahhhh (affirmative).
Jack Butala: He hires Marines, regularly, because they just get it. Former Marines.
Jill DeWit: Ahhh (affirmative).
Jack Butala: Like colonels and stuff to be his project managers.
Jill DeWit: See, that’s good stuff. Jack, that’s borderline inspirational. I’m proud of you.
Jack Butala: I don’t want to take your thunder, man. I do not want to be inspirational.
Jill DeWit: Join us for another episode where Jill gives all the data and Jack gives all the inspiration.
Jack Butala: Oh my God!
Jill DeWit: This could be hilarious.
Jack Butala: Join us in a fresh disaster.
Jill DeWit: Here’s Jill’s numbers. I don’t know, three or four.
Jack Butala: What’s a number?
Jill DeWit: It just worked. I don’t know why. Take a guess. We shouldn’t do this.
Jack Butala: We should reverse our roles for like one day.
Jill DeWit: This would be awesome. You could send everybody to me and I’ll send all my people to you. This would be hilarious. Jack, all my people are going to go, “Nothing’s going to get done.” They’re going to hang up on everyone. They’re going to go, “Diaper change. Diaper change. Click, click, click. Not talking to him.”
Jack Butala: You would lose half if I talked, if I answered the acquisition phone for an hour. We’d lose half.
Jill DeWit: Oh my gosh!
Jack Butala: We would make half as much money as we do.
Jill DeWit: “That guy’s a jerk.”
Jack Butala: Yeah. “What’s his problem?”
Jill DeWit: “I’m not going to give him … What the heck!”
Jack Butala: What’s he so angry about?
Jill DeWit: I know. He’s lucky getting a dollar. What the heck! I’m lucky he gets on the phone. Oh my gosh!
Jack Butala: Some classic stuff. That’s the truth about land investment, actually.
Jill DeWit: Here we go. Know your strength and weaknesses. That’s the truth.
Jack Butala: Yep. Know what you’re getting into. Do some research. The more research you do, long before you ever buy anything, from us, or anybody really. Do some research, a ton of research.
Jill DeWit: That is it. Some of our best, most successful people did so much research and so much whatever, it was driving me crazy. They questioned everything, but in a good way. In a really, really good way.
Jack Butala: Then, make a commitment or not.
Jill DeWit: They did. Like this show, they had all the answers. They asked all the right questions. They knew what they were getting into and now they’re ready.
Jack Butala: Right. Join us in another episode where Jack and Jill discuss how to use information.
Jill DeWit: That’s me.
Jack Butala: Or, maybe not.
Jill DeWit: Inspiration, that’s Jack, not …
Jack Butala: Forget just about anything you want.
Jill DeWit: We use this every day to buy property for half of what it’s worth and sell it immediately.
Jack Butala: You are not alone in your real estate ambition.
Jill DeWit: You’re not alone in searching for a new show. Just kidding.
Jack Butala: You’re correcting me. I used to do all this stuff myself. It wasn’t that bad, I just … We’re joking around.
Jill DeWit: I know. Exactly.
Jack Butala: If you can do this, than so can I. I just don’t want to.
Jill DeWit: That’s the whole point. That’s the truth. Especially in the beginning, you’re going to have to wear all the hats by yourself until you get to a level where you don’t have to wear all the hats or you have a partner that can wear the hats you don’t like.
Jack Butala: That’s right.
Jill DeWit: That’s okay. Just know what you’re getting into.
Jack Butala: Information and inspiration to buy under-valued property.
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