Member Luke Smith Explains His Success (CFFL 369)
Member Luke Smith Explains His Success
Jack Butala: Member Luke Smith Explains His Success. 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: Hi.
Jack Butala: Welcome to our show today. In this episode, Jill and I talk with member, Luke Smith. We’re going to ask him to explain his success. We’re going to ask him every question, and most likely really embarrass the hell out of him. Before we get into it, let’s take a question posted by one of our members on landacademy.com live community. It’s free.
Jill DeWit: Okay. Matt asked, “I have a ten acre parcel, that appears to have road access, and a interested buyer who wants to buy it. However, he says he can’t get to it. He tried, and there is a gate across the road that is locked.” Sounds familiar. “It looks like it’s off a path. But, I guess the path ends short of it, and becomes private. Should I pass on this parcel?”
Jack Butala: Luke, this is a perfect opportunity for you to answer this question, if you’re interested.
Luke Smith: Yeah. I wouldn’t pass on the parcel. You just tell the guy, “Most little country boys keep wire cutter in their truck”.
Jill DeWit: That’s awesome. Right under their rifle.
Jack Butala: You know what? All three of us need to answer this question separately.
Luke Smith: This is my answer. So, maybe, I’m a little different. But, and other guys keep a bale of wire in their truck, too. ‘Cause some fences you wire up and other ones are chain and padlocks. A lot of chain with padlock fences have multiple padlocks. Each padlock is a different person or different family that goes through that gate. You cut a link out of the chain, and you put your own padlock on there. Whether it’s a key, or a code, or whatever you like. And, there’s your gate access. You know? Just make sure you close the gate behind you ’cause that’s the way you really piss people off is when you don’t close the gate. That’s how a lot of the country is. That’s just how it is.
Jack Butala: Now that we’ve got the felony portion of the show out of the way, Jill, how would you answer?
Jill DeWit: I love it. Yeah, I wouldn’t pass either.
Jack Butala: Yeah, I wouldn’t pass it either.
Jill DeWit: No, I … Me, personally, I don’t carry that stuff around. But, I would be tracking down, maybe, whose fence it is at that point. And, you know … As far as for the parcel and all that good stuff? I would just let the guy figure it out. That’s really it. I wouldn’t pass on the parcel. ‘Cause I’ve had this situation. My buyers figured it out. Somehow. Actually, it was a non-event, for me.
Jack Butala: Yeah, I mean, we get this all the time. The answer is, just find a way in.
Jill DeWit: Yeah. I love it this way.
Jack Butala: I love your specific response, Luke. I mean, I’ve never actually cut a fence. But, I have found a way in.
Jill DeWit: Mm-hmm (affirmative).
Jack Butala: You just drive along the fence until you find a way in.
Jill DeWit: Exactly. Hop the fence and walk further if you can.
Luke Smith: I had a property like that. Forty acre in northern Arizona, four or five people went to look at it, and there’s a fence. They weren’t comfortable finding a way, or going through the fence and things. One guy said, “You know, I can see the property from standing on the fence post” And he sent me some pictures and said “There’s some cars there, and it looks like somebody’s camped out sleeping there. They’re not … They haven’t built anything, but they’re living out of their cars. It looks like they’re right in the middle of the property. It’s beautiful, and I love the area and everything’s great. But, I can’t figure out what to do with it.”
Next guy came along, and says, “I love the area, it’s beautiful everything’s great. There’s a gate.” So, I went and I talked to a sheriff in town, “Whose gate is that and how do I get through?”, and that kind of thing. The sheriff went out and opened the gate for him. He went over there and guys were sleeping in their cars, and he asked the sheriff what he should do. You know, he says he wants to buy the property and people are sleeping there. The sheriff said that you’ve got to talk to, I forget the guys name, but the local church, it’s a very Church of Latter Day Saint’s kind of town.
So this guy is from Texas. He drove from Texas to Northern Arizona to look at the property. He wasn’t gonna leave until he figured it out. So he talked to whoever it was that he got introduced to at the church that the sheriff told him to talk to. He said he wanted to move there, he wanted to bring his family, and he wasn’t part of the church, but he wanted to be a part of their community. The guy at the church said “That’s great. Let’s see who’s out there. I think I know who it is and we’ll find somewhere else for him.”
So the church went out there and they offered help to the people who were living out of their cars, and politely asked them to move somewhere else. They pointed them out to some other vacant land somewhere. Everybody won. The guy bought the property. He was so happy. He had a gate, he had a gated property.
Jack Butala: Yeah.
Luke Smith: With no one sleeping on it.
Jill DeWit: Yeah. Heck.
Luke Smith: And, he just had to ask. He asked the sheriff. You know?
Jack Butala: Wow. I mean, talk about getting it done. No matter what it takes, getting it done. Plus, you probably never left your house for this whole thing, right?
Luke Smith: No, I didn’t go out.
Jack Butala: What were the economics on the deal?
Luke Smith: I was kind of depressed, ’cause it didn’t sell for awhile. He wanted to do terms. So, I did terms. I paid $1500 for the property. I got … I think the guy gave me … This was a long time ago. It was like a year ago. I think it was like two grand he gave me down. And, he’s still making payments of, I think it’s $175 a month. So I still get his payment every month and I forget how long. But I was gonna come out at like seven or eight grand.
Jack Butala: Wow.
Luke Smith: When all the payments come in. So, it’s just long payments over time. But, I got more than my money back out of the front end.
Jack Butala: Exactly.
Luke Smith: Yeah.
Jill DeWit: That’s the way to do it.
Jack Butala: [crosstalk 00:06:05] Did you send, I mean, you obviously send a lot of mail out, like we do. Did you send an offer for fifteen hundred bucks for a forty acre property?
Luke Smith: No. I sent a bunch of other offers. And, this church, different church, in the south replied. They had one of the little properties that I’d made an offer on. So I bought that. And, they said, “We also have this one.” And, I was like, geez, you know? That was the first forty acres I ever bought. I don’t know how much to offer. This is what I have.
Jack Butala: You sound like Jill.
Luke Smith: So.
Jack Butala: That’s what Jill would do. I would offer ’em four grand.
Luke Smith: Yeah.
Jill DeWit: I know.
Luke Smith: They got back to me later, this church that I paid for the property? And, they got it off of someone from their congregation, or member, or whatever you call ’em, who’d passed on. The church has no money. And, they were so excited. They were telling me about the front door that leaks and is ruining the carpet and stuff. They want to fix that. They were just hoping they could get enough money to fix the door. But, I gave them so much money they could fix the door, fix the carpet, and a bunch of other stuff they were talking about. A bunch of maintenance on the church. They were crying happy. That’s more money than the congregation gives them a year. That’s what they said.
Jill DeWit: Everybody wins. There you are, solving their problem. That was awesome.
Jack Butala: Exactly. Hey, if you have a question, or want to be on the show, reach out to either one of us on landacademy.com. Actually, reach out to Luke Smith, also. He’s on there a lot. Today’s topic, this is the meat of the show, is we’re talking to member Luke Smith. He’s one of our original members and he explains his success.
So, Luke, what’s the secret, man? ‘Cause you’re killing it, obviously. I’m gonna have, later in the show, some real specific questions. Like, how many deals you do and stuff. But, let us in on the big picture.
Luke Smith: Well, I got the idea in my head that I would start sending letters out every week, no matter what. I’d just start mailing out letters every week. Making offers every week. And set the schedule, and then over time, I’d figure out how many offers I should be making, depending on what I can keep up with? So, I started out and I was thinking I’d send like 3,000 or 4,000 offers or something a week. I got to week four. By the time I was doing week four, I was … I couldn’t keep up. There’s no way I could keep up. I was researching land 24/7. Trying to reply to all the people who want to sell land to me. And, trying to pay for it. I mean, running to the bank, and running to the notary, and doing the paperwork side as fast as I could. I didn’t have the time to do another mailer.
I had this group going with other people off the success plant. Kind of the idea was we’d rotate it around the group and send this mailers out, kind of automated. Maybe I’d end up doing every other one or every fourth or fifth one or something with a couple other guys? And they would be doing ’em in between. But, it never really rotated ’cause they were so busy they couldn’t keep up, and they couldn’t do the next week. So, I stopped doing it weekly and been kind of running on those fumes ever since. That was like, June or something? May, June?
Jack Butala: Wow.
Luke Smith: Now it’s January? I’ve done a couple mailers in between, but nothing like before. The residual just keeps coming in. You know, you put land up for sale and people say, “Oh, you should buy my land too.”
Jack Butala: Yep.
Luke Smith: And, the deals just keep coming.
Jack Butala: What do you … That first run, the month of June, how many offers do you think you sent out?
Luke Smith: I think the biggest one was like 4,000 in one week. But, sometimes I didn’t get enough data from doing all the polls and scrubbing it down. I’d scrub down the data. It’s scrubbed down so much that’ll only get … I was aiming at more. But, I’d only get 1,500 or 1,800 mailers. So, less than 15,000 mailers.
Jack Butala: Okay.
Luke Smith: 10-15,000 was the main push of it. Since then, I’ve done some bigger mailers. Some of ’em have … I tested some different stuff. Like, I tried doing up to 80% of the population of properties that fit my description instead of like 20% of the population?
Jack Butala: Mm-hmm (affirmative).
Jill DeWit: Mm-hmm (affirmative).
Luke Smith: I got some deals out of that that are probably a lot higher margin deals?
Jack Butala: Right.
Luke Smith: But, I got a lot more people that call and chew me out or ask a lot of questions. A lot more questions, you know?
Jack Butala: Yeah, yeah.
Luke Smith: Yeah, they legalized marijuana in California. But, really? Come on buddy. You know? Different kinds of questions. So, it’s not as accurate to mail everybody really low offers. It’s more accurate to do more data scrubbing and mail low offers to the higher statistic probability crowd to get back to you.
Jack Butala: That’s what I think.
Luke Smith: I did that to … to vacation properties. I mailed ’em a lot like I mail the desert areas. I thought I offered a lot of money, compared to what it looked like the propers are trading for. Maybe 25% of the bottom-end properties in the market place?
Jack Butala: Yeah.
Luke Smith: For the area. And, same thing. That last mailer was a little over 4,000 letters, and I sent them out first-class mail. In the past, I’d usually do standard mail so it spreads it out over more time. It’s a lot easier to answer the phone when not everyone gets the letter that same day?
Jack Butala: Yeah.
Jill DeWit: Mm-hmm (affirmative).
Luke Smith: So, first class is great to get the phone started, like a couple days from now. And standard, if you can do first class and a standard back to back, they line up just perfect. But I had cash, and I was like “Okay, ready to go”. So, I did a first class, little over 4,000 unit mailer? And, the phone literally blew up. And, it was just really hard to keep up with that much call volume. I just hate and hate and hate and hate. I had a couple of deals that came in, not at the prices I offered. But, like, negotiated higher prices? That I could probably make a good deal of money on. But, it’s … I just passed ’em.
Jack Butala: Yeah.
Luke Smith: I’d rather send out more mail and get more accurate-
Jack Butala: Me too.
Luke Smith: Than taking the ones that are negotiated.
Jack Butala: This is the beauty of this business model man. You nailed it, so. You don’t have to do a deal you don’t want to do because you know, next week, there’s gonna be 25 more deals.
Luke Smith: Yeah. Exactly.
Jack Butala: So, did you send mail out? Or send offers out like this before you joined our group?
Luke Smith: Yeah. I was skeptical. I didn’t want to pay for your program? I didn’t want to pay for much of anything, you know?
Jack Butala: Yeah.
Luke Smith: Not against you-
Jack Butala: No, I get it. I’m the same way.
Jill DeWit: Yeah.
Luke Smith: It’s my money. I’d rather put it to work in what I think would be best. So, I tried. I was watching your free stuff and reading everything I could on the free side. I think that was very much before success plant was going and there was hardly anything, if anything on there at all. Like, Seth Williams and other random stuff on the internet, people making offers. So, okay, I’ll give it a try.
I wrote my own letter, and just started mailing out offers. I got the data off of Agent Pro, which is a really cheap way to start. I started sending off these offers. I was really surprised at how many people called me back. I didn’t buy anything. But, I’d send out like a hundred offers. I’d print ’em and stuff by myself. I couldn’t figure out how to get the mailing address part to work on my printer. So, I was hand writing ’em. Right?
Jack Butala: Oh my gosh.
Jill DeWit: Wow.
Luke Smith: It took me so long to figure out how to get the envelope print thing to work. I was like, “heck with it. I’ll just write ’em faster.” So, I wrote ’em out and … just a really high response rate. When you hand write ’em like that, with my horrible handwriting. They think they’re calling the mental institution [crosstalk 00:15:29] They’d all give me advice on how I could do better business and stuff.
But, I was just surprised how many people actually read the mail and called me back. Like, they actually picked up the phone and called me after getting some junk mail? There’s gotta be something to this. Like, I get junk mail all the time and I never pick up the phone. I can’t think of one time ever I picked up the phone off of a piece of junk mail. That response rate is just not there. It’s not something I do. These people did. They picked up the phone and they called me.
So, I knew there had to be something to this. I just started researching more, and, you guys sent out an offer for your program. You get this piece of land, if I buy the program right away. So, I started researching the land you offered. It looked too good to be true. So, I gave it a try-
Jill DeWit: Well it was the Alco, wasn’t it, Luke?
Jack Butala: Yeah. It was like 20 acre property in Nevada I think.
Jill DeWit: Oh, up in Nevada?
Jack Butala: Yeah.
Luke Smith: It was a ten acre one.
Jack Butala: Ten. Okay.
Luke Smith: I used to sell a lot of stuff on e-bay in the past. I figured, I could sell that thing on e-bay.
Jill DeWit: Right.
Luke Smith: Watched your program, studied your stuff on how to actually do the paperwork and transactions and like the whole detailed circle of the business. Or else, I wouldn’t have known what I was doing. I put the thing up on e-bay. I figured I’m just gonna try it, e-bay test it, ’cause it would be nice if that worked. Then I could just dump everything on e-bay. So, I made a video and all the information that I could come up with on the property and I made this ad and posted it. I put it on there for a dollar. No reserve. Dollar. Let it fly, see what happens. It came back and it looked like somebody bid 3,333 and someone outbid them by like 50 bucks. It was like $3,383.33. That’s like, twice what I paid for the program.
Jack Butala: Right.
Luke Smith: I’m gonna get back double off of the free property you guys gave me for buying the program.
Jack Butala: Awesome.
Luke Smith: That was sweet. So, I tried to sell others on e-bay since. Some of ’em did really well. Some of them not so well. I think it’s a lot better to sell ’em through a lot of the other websites on the internet. So, I’ve given up on trying to sell through e-bay for various reasons. They sell faster on other websites. Like, if you do 30 day auction on e-bay versus putting it on five or ten other websites, I mean, you might have it sold in two days, or five days, or something.
Jack Butala: What are your favorite sites, or what are all the sites that you use?
Luke Smith: Without e-bays fees. Right now, I think I’m getting most of my leads from Land and Farm.
Jill DeWit: Hmm.
Luke Smith: I used to get more from Land Watch. Land Watch changed their system a little bit. You used to be able to buy showcase property. For like, 50 bucks a month you could showcase one of your properties. Just get to the top of the pile and you get everybody to go look at your property first. And, it would sell a couple days later and you’d put another one in there and that sells, and again and again and again on the same 50 bucks. Way better than e-bay.
They changed it so you can’t do that. ‘Cause I would showcase it for the county. Now they’ve got, not counties, but regions. Ever since they changed to regions, I’ve been watching the click through volumes and stuff and it’s been going down for me. ‘Cause people don’t search by county, or they don’t look at the county anymore and then sort it by the cheapest property in that county? You look at the cheapest property in that county, my stuff still comes up in the counties that I’m dealing in. But, their website’s not set up for that. It’s set up for like the region. You know, three, four, five counties, or half of the state or whatever, depending on the area.
Jack Butala: Mm-hmm (affirmative).
Luke Smith: I still come up as the cheapest usually. But, it just doesn’t seem to produce the buyers that it used to.
Jack Butala: We’re having the exact same experience. Exactly.
Jill DeWit: Mm-hmm (affirmative).
Luke Smith: Yeah. Land and Farm, I haven’t been able to figure that one out. You get your listings on there, and I think new listings get featured and showed off more than older listings. I think they’ve got some kind of criteria in there, algorithms for that. And then, every now and then, they promote your properties. I don’t know how they pick up on whatever property gets promoted. But, every now and then, one of my properties gets promoted through their system. Like they send out these blast emails, or promotion things, and newsletters, and updates, like region, or state, or city, or county, like different, really specific people that were searching for that … something like that.
So they had this up-selling kind of system going on in their background that I don’t see because I’m not shopping land on there?
Jack Butala: Mm-hmm (affirmative).
Luke Smith: But the people that are shopping land, they refer to it. They tell me about it. That’s how I learned about it. So, one of my properties, for example, I got this random one in South Carolina. It got featured as best deal in the state? On Land and Farm? It was … I got more phone calls than like sending out a mailer. It was ridiculous.
Jack Butala: Wow.
Luke Smith: Everybody in South Carolina wanted to buy the property at the same time. So, I get those waves every now and then from Land and Farm. So, people will hit that. Then they see one of my properties, ’cause it’s the cheapest, ’cause it’s the best deal, ’cause it’s got a lot of click through, pie conversion rate or something kind of accuracy that they’re looking at. They promote it out to their others, and those people look at my other properties. So, that brings a lot of sales through. And the people just go to my website and buy it.
One guy will be mailing me cash, another guy will be trying to send me PayPal or something. Another one … ’cause they can’t buy it on the website ’cause someone else already bought it.
Jill DeWit: Wow.
Luke Smith: I get like three people buying the same property at the same time. I’m like, guys, it’s already sold. You know?
Jack Butala: Right.
Luke Smith: But, when they hit it, they hit it hard. It just disappears. It’s … So we get a lot of traffic through there. I’m also on Lands of America, I get a little bit there. Zillow, get a little bit … I get a lot of people from Zillow, but I don’t think so many actual buyers. It’s a lot of tire kicking and question-beginner type shoppers that might come around later on.
The Craigslist people, I get a lot, still through Craigslist. Craigslist is a lot of work to keep the listings up on Craigslist.
Jack Butala: Yeah.
Luke Smith: I get flagged a lot. It’s just a lot of work. Gotta keep putting them up. But, get a lot of people through Craigslist. People go to find property. They go look at it, they buy it while they’re on their phone. They look at Craigslist while they’re on their phone. They go find the property on their phone, and then they buy it from their phone. While they’re standing there.
Jack Butala: My exact experience on Craigslist is the people that get to you on Craigslist are super serious.
Luke Smith: Yeah. They’re very tech savvy too. Phone … your website has to be set for phone, like checkout, you gotta do checkout all phone ready enabled and stuff. They’re not cruising Craigslist on their desktop.
Jack Butala: Mm-hmm (affirmative).
Luke Smith: They’re carrying it in their pocket. Trying to think of what else. Those are the main ones.
Jack Butala: I had no intention of talking about this today. But, you know, we’re releasing … we changed our Land Stay website to LandPin. And we’re addressing through talking to a ton of people, now you included. All of these issues. And so we intend on taking a substantial amount of market share for selling vacant land online.
Luke Smith: Yeah.
Jack Butala: Really, it’s just the two Land and Farm and Land Watch. And, I think Land Watch is making mistake after mistake after mistake. And you just confirmed an additional mistake. So, LandPin, our new website will be released later this month. Will solve all those problems. I mean, we’re throwing a small fortune at it to drive traffic toward it. I’m very confident it’s going to work.
Luke Smith: I got a lot of buyers off of the old Land Stay, now LandPin. Sorry, I forgot to mention that one. But it’s working really well. It’s really wholesale guys. Guys will come in and buy five properties or ten properties or something. They rarely buy just one property. They want to buy a list of them that they can go re-market and sell on terms or sell for more. I meet great guys. They come back. They sell those, they come back and get more.
Jack Butala: So you, as an early adapter … ‘Cause we chose you and about eight other people to post a bunch of property on the first draft of that website. You actually sold property based on that?
Luke Smith: Yeah. I’m pretty sure. It’s-
Jack Butala: Wow.
Luke Smith: It’s totally land dealer guys that go through there that look at that stuff. I’ve referred that website to a lot of people, too. They ask “I bough land in Florida. I’ve also bought some land from you. I also want some land in” somewhere else that I’m not doing deals. I said, go look at some of the other guys on here. Go to Land Stay or LandPin. It’s one of my featured like partners on my website.
Jack Butala: Oh, great. Okay.
Luke Smith: So, when I’m talking to people, I’m usually referring ’em over there. Like, don’t just look at the generic places. This is where the dealers go. This is where this stuff comes from. This is like the source.
Jill DeWit: Nice.
Luke Smith: Over here get good prices and get it done right.
Jack Butala: Those are hassle free sales, too. When you sell it to an industry person, and we talk about it on the show all the time. It’s just, you know, they don’t have any questions. They’re like, “Where do I send the money?”
Luke Smith: Exactly. Just wanna get them their deed as fast as you can.
Jack Butala: So, how many deals do you do in like a month? Sales? Acquisitions? The whole … give us a rundown. Just basic stuff.
Luke Smith: Well, I’m running on fumes right now. I kind of took a little bit of time off around Christmas, New Year’s. My inventory has been plummeting. I need to ramp up the mailers. I didn’t want mailers coming through when I was spending time with the kids-
Jack Butala: Yeah.
Luke Smith: Not in school and stuff. So, now, it’s the first day that they’re back in school. I plan to go crank up the mailers again. I was thinking I would get it cranking for the calls to start today. But, I’ve just been slow. Like, September was really a good month for me. I did, I think it was 67 properties that I sold in September?
Jill DeWit: That’s good!
Luke Smith: October, it wasn’t that many but it was … I think it was in the fifties. Fifty-some properties. And then November, my inventory is dropping the stuff sells that fast, right?
Jill DeWit: Yep.
Luke Smith: I was still buying. I would buy more properties almost every day at that time. And, November was more like, maybe thirty properties kind of volume. And, December has been a lot slower. It was in the twenties, probably upper twenties in December.
Jack Butala: I keep telling Jill, the holiday is not a busy season. She keeps disagreeing.
Jill DeWit: But, he’s out of inventory too a little bit.
Jack Butala: Okay.
Luke Smith: If I had inventory that I had going into the summer, I think volume would’ve been multiples that. So, then it’s a factor of my inventory going down. It’s been less, smaller dollar properties and more bigger dollar properties. So I’ve been switching from … not meaning to, but just as it’s been happening. Switching from these properties that I can sell for $1500, or $2000 or $4000 or something to properties that hope to sell for 10 and 20 $50,000. That’s just less numbers of transactions, but maybe more profit margin? So I don’t think my profit margin has changed drastically since this summer. Some of the deals I got off recently were a deal that is better margins than a boatload of the little guys. I don’t know how to explain it. It’s just bigger dollars on the bigger deals.
Jack Butala: Yeah. I know exactly what you mean. We made that switch about three or four years ago and never went back.
Luke Smith: I like both. I’d like both of those markets to be firing in my portfolio. ‘Cause I got a lot of the old guys that want more of the sub $1000 properties or sub $2000 properties that they can go sell on terms. They wanna do ’em in portfolios. They don’t want to just buy them one at a time. They can make a lot of money on that, they can diversify their risk amongst multiple properties. Instead of buying one of these fancier ones. It totally makes sense to me. I gotta get the mailers rolling to buy more of those. And, I know exactly what I want to mail and how much I want to mail. How much I want to offer I’ve got that plan set.
By working on it and cooking that plan, kind of the last two months, I’ve been trying to make that plan for the next year. It’s what I’m trying to do. I’m trying to stamp it out so I know my mailers, I want to get back to a weekly mailer. I know how many offers I gotta send out a week to hit the numbers that I want to hit over this next year. And do it on a …. break it down to a weekly basis. And then, compile it into a monthly basis and then eventually an annual basis. And just have that set the base and grow from there.
So, I’ve been doing a lot of data gathering on multiple areas and population. Not people population, but parcel size population and statistics about things about those parcels that makes ’em higher probability from my point of view of being a deal or not. Ranking them and trying to take that list out over the next year.
Jack Butala: So, I’m gonna ask you a few questions that we get all the time. I can’t wait to hear your answer, because … our listeners and members hear us say it all the time in different ways but I’d love to hear it from you. Do you think there’s a chance that you can over mail a county. Like, if everybody at the same time decided to mail a county, do you think that? Or have you ever seen it happen?
Luke Smith: There’s a particular county that’s mailed a lot in Arizona. ‘Cause it’s near the river and there’s a lot of good attributes to it. I just had a guy, a newer member, approach me yesterday and say he mailed this county. I thought, “oh man, really, everybody mailed that county.” He was like, “Yeah, I didn’t get a whole lot of responses. But, I got this deal I don’t have the money for. I wondered if you could work with me on it.” He shows me the deal, and it’s … I don’t know how much specifics I should get into or not. But, it’s a lot of medium acreage properties and larger acreage properties.
Jack Butala: Mm-hmm (affirmative).
Luke Smith: That, you know, it would be awesome. I could sell those properties in no time. The prices he got on ’em are spectacular.
Jack Butala: Awesome.
Luke Smith: How did this guy get through the barrage of mailers that’s probably gone his way in the last year? Maybe that barrage of mailers warmed him up to the prices that these guys have negotiated. I don’t know. Maybe the time of his life wasn’t there that he had to read his mail and think about this stuff. Or maybe, the doctor just told him some bad news or something. Who knows what happens? He’s gotta sell. He wants to sell. He wants a stupid low price because this other member told him he’d buy it all. Even though he doesn’t have the money.
Jack Butala: Yeah, yeah.
Luke Smith: So, I think I’ll probably put the money up, and we’ll do some kinda deal or work together on it.
Jack Butala: That’s great.
Luke Smith: You know, go take out the guy’s whole portfolio. It’s just, you do that once, and the guy trusts ya, and he’s got other land. Then you got shots at the next, and the next, and the next wave that he’s got. Guys like that know other guys with land.
Jack Butala: Yep. Yep.
Luke Smith: The next thing you know, it’s their brother, their cousin or their neighbor or somebody.
Jack Butala: They realize you have a lot of cash, and they know you’re going to close the deal, it’s … you’re in.
Luke Smith: Yeah. Exactly. Not just talking about it, but you actually pay ’em. So, I’m gonna do the due diligence and stuff on it. And, it’s probably totally against your guys’s risk tolerance and what you tell people. But, I think I’ll probably just … I keep doing these without escrow.
Jack Butala: Mm-hmm (affirmative).
Luke Smith: Probably 30-40 grand worth of land.
Jack Butala: Yeah. Yeah.
Luke Smith: ‘Cause I could probably sell it faster than the escrow paperwork and dealing with those people.
Jack Butala: If there’s … if he individually owns it and … there’s a bunch of reasons that I would check for. But, I mean, no it’s not beyond our risk structure.
Luke Smith: It looks totally straightforward.
Jill DeWit: Sounds like Luke has a big reserve too. If anything goes sideways, he can solve any problems. ‘Cause, that’s one thing Jack always says, “Money can solve a lot of problems.”
Jack Butala: Well, he’s got bolt cutters in his trunk.
Jill DeWit: That too.
Jack Butala: That’s great, man. So, what advise would you have for somebody whose brand new at this? Whether they’re in our group or not in our group, or just thinking about it? Or? Our listening population is pretty large. You know there’s a lot of people in our … not a lot … But, we’re getting to the point where we’re gonna turn off taking in any more members. So, what advise would you give to people who want to get in the business, but maybe don’t necessarily want to be involved in our group?
Luke Smith: Most people don’t believe. I think the only way to believe this is to test it. I mean, I test theories all the time. Doesn’t mean they come true. But, I learn a lot. By testing mailing offers to people, and seeing what kind of response I got, I started believing in this system. I think if … It’s really hard to hear that from somebody and believe them without testing it on your own. I think if you do your own test, whether the offers come back, whether you’re even gonna take the offers seriously or not.
Jack’s got a free test that he talks about. Putting some feelers out on Craigslist. Saying “Hey, I wanna buy vacant land. I’ll pay cash, what do you got?” kind of ad. Just testing it and then seeing. Seeing what kind of stuff comes back. See what kind of prices people ask for. Figuring out how to research this-
Jack Butala: So-
Luke Smith: What questions do you ask? What am I looking for when it comes to buying an asset like this?
Jack Butala: When you started what was your concerns? Obviously, you had validity concerns. Which, I did too. But, were you concerned about … What were you concerned about? If anything.
Luke Smith: How to close one of these transactions. Because, we’re always told that you need a real estate agent. And, real estate agent says, “Well, it’s over my head, we need a title agent.” And, the title agent says, “It’s over my head. We need a …” You know, first it’s escrow, then the title, then we still gotta bring in the insurance company, and all these people in between. Bankers and stuff. You gotta put them all together before you can pull off a transaction, and you can really believe in having that transaction. So, all of these scary stories about people that bought land, and you found out later that you don’t have the water rights or somebody’s got a lien on the property or five generations ago somebody made up some restrictions on the property that don’t let ya …. whatever. Like that person’s dead and gone. Who enforces those restrictions?
Jack Butala: Exactly.
Luke Smith: Whose out there trying to make this stuff happen? What it comes down to is this is an industry that’s not policed. There’s no … I mean, there’s a court system when someone complains, or they feel wronged. But there’s no … I come from the brokerage industry where every email I sent, every communication I had is basically recorded and open to our compliance officers. And the compliance officers were watched by the government alphabet soup of regulators. And, they were always slapping my wrist and telling me I can’t do this, I can’t say that, I can’t … you gotta say it more like this, because all the liability and things like that that might come along with it and regulations that are there because somebody did something wrong before I was born. They drew up these regulations.
The real estate industry isn’t like that. It’s much more of the wild west. It’s a lot more open, and it’s a lot more free to interpretation. It’s not saying you go do something wrong. But if you think you’re doing it right, and you’re following some basic guidelines in how to feel out a deed. And, you gotta have a couple things on there that they want, the rest is up to you. It’s up to you to tell the person whose buying, or if you’re buying, you to do the due diligence who you’re buying from. To make sure stuffs valid, and it’s real and it’s gonna stand up. A lot of it is just saying this is how it is and delivering that sales pitch in a solid way. Be … like you’re coming from a point of knowledge.
That’s what the industry’s foundations are on. It’s like generations of that kind of paperwork. Our grandparents didn’t use real estate agents, and title companies, and escrows and all the bankers … hopefully not all of the bankers and everybody in between.
Jill DeWit: It’s so funny, Luke. And, you are so right. I gotta share … And, you’re right. You’re doing the right thing. And you know what to do. What’s interesting is, Jack and I are actually putting together a whole new show right now and the whole premise is telling the world, you don’t need a real estate agent. You can do these deals. You don’t need to have, like you said, the broker, and the insurance, and all those things, all that … I don’t know how to call it-
Jack Butala: Well, we … When we start the “Kill Your Real Estate Agent Show”-
Jill DeWit: Yeah.
Jack Butala: We’re obviously not gonna call it “Kill Your Real Estate Agent.” But, it will be “Break up with your Real Estate Agent” or something-
Jill DeWit: I call it “You Don’t Need No Stinking Agent.”
Jack Butala: Everybody hates real estate agents. Everybody.
Jill DeWit: We all have horror stories.
Jack Butala: Like, right up against politicians. It’s so … I’ve never been steered in the right direction by a real estate agent.
Jill DeWit: Yeah. So it’s-
Jack Butala: It’s so fun to not like ’em.
Jill DeWit: It’s gonna be so interesting. Luke, you’ll love this ’cause we’re gonna, Jack’s talking about this the other day. Have people calling in, you know, and they can tell us their stories about “I paid this agent, you know, they got $40,000 commission and I did all the work” kind of stories. ‘Cause you know they’re out there.
Luke Smith: Oh yeah.
Jack Butala: All you gotta do is ask your immediate family or friends. They’ll come up with fifteen reasons why the last deal they did on their primary residence was horrific.
Jill DeWit: Exactly. And we’re all trained. Like Luke just said, we’re all trained that that’s the way you have to do it.
Jack Butala: Right.
Jill DeWit: So, that’s a lot of this business is figuring that out.
Jack Butala: There are a lot of people that reach out to us, Luke, that think you have to have a real estate license to buy and sell land.
Jill DeWit: Yep.
Jack Butala: You know, they think that we’re breaking the law by not having a license.
Jill DeWit: Exactly.
Jack Butala: It’s hilarious. You’re right, its totally unregulated. And you get rewarded, unlike some other industries, you really get rewarded for being honest and having some ethics and following through.
Jill DeWit: Mm-hmm (affirmative). Perfect.
Luke Smith: Yeah. Honest. And, this is the information era. I mean, you can’t screw people and get away with it.
Jack Butala: That’s right.
Luke Smith: Your name gets trashed, it’s that’s it. It’s like trying to sell bad stuff on e-bay. You know, your ratings kill it. You don’t get to do it for very long. It’s not worth it. It’s not worth it at all.
Jill DeWit: Well, Jack and I were talking about that last night. This is kind of funny. It’s like dating.
Jack Butala: It’s like he was at the dinner table last … sometimes.
Jill DeWit: I know.
Jack Butala: Like the way he’s talking right now. It’s the same conversation we had at the dinner table.
Jill DeWit: Totally!
Jack Butala: Go ahead.
Jill DeWit: But, you know in this day and age, yeah, if you’re a bad person and you’re a mean guy on a date, it’s gonna come out. It’s gonna be on Facebook, you know what I mean? You know, social media. So, it’s the same with our business. You … A. You better be transparent so people can find you and B. You better be a good person and doing good stuff. If you are, like you said, Jack, and you know, Luke, you win.
Jack Butala: Yep.
Luke Smith: Yep. We used to finance little penny stocks. Some of the guys, a couple of cases would show up all over social media as a womanizer, or a cheat and a thief. And whatever. And, it doesn’t work. Because people you sell the stocks to are researching these companies and these guys that run the company show up on there. And they want to sell the stock. As they probably should. As we shouldn’t be financing them. As in we shouldn’t be involved in companies like that.
It’s the same thing with dealing real estate. Or, whatever business. Doctors, I mean, if they’re doing something wrong, it should be all over the internet.
Jack Butala: That’s what I think.
Luke Smith: You should be able to pull it up and see it and read it and make our own opinion. Whether we believe in it or not. And run with it. So, that’s the policing action of the real estate industry. I mean, we can probably all name a couple of people that have been accused of selling land multiple times, or something. That’s the last thing you ever want to get accused of.
Jack Butala: Exactly.
Luke Smith: It’s so much more profitable to keep a clean, straight name. Do everyone right. Teach ’em. Watch ’em come back. They refer their friends or refer their family. Come back and do other deals. Buy other land from you. Or sell more land to you. It’s just good business practice, whatever industry it is.
Jill DeWit: Yep.
Jack Butala: Hey, did you have to learn how to do mail mergers? Or was there any technical hurdle you had to get over before you started doing this? We get a lot of questions like that, too. From people that are, not necessarily in our group, but just in the industry.
Luke Smith: I used to do some mail merges in my previous business. I did ’em through like Microsoft … what was it? The data base or something. Whatever it was called back in the day-
Jack Butala: Access.
Luke Smith: Yeah, Access data base. Mail merges. It’s the same kind of thing as pulling data off a spreadsheet when it comes down to the mail merges. You don’t really have to do mail merges anymore. The people that I do the mailings though, I just send them the file. They do the mail merge.
Jack Butala: Yeah.
Luke Smith: You just boil down the date and make sure you got like the columns, the name of each column you want to use. Fits the place holder in the letter that you want to send ’em. And they take the data from the spreadsheet and they put it in the letter for each little piece. The software does it.
Jack Butala: Yep.
Luke Smith: The mail company wants that data. They don’t want it all merged together in a PDF or something. They want that data because they run it through the US Mail System’s computers. They … if someone has their address forwarded or that kind of stuff, US Mail computers changes it, and recommends a different address. It automatically gets sent to the new address. It saves a lot of work for the post office and the mail company gets lower postage for doing that-
Jack Butala: That’s what they claim. One of the big reasons I don’t think you should do … you should never print some stuff out and stuff an envelope at the kitchen table and put a stamp on it. Because you miss all the software benefits.
Luke Smith: Yep. Miss the software benefits. Another thing to be careful of, I used to tell people when they call back, “Okay, I’m gonna send the money by notary to wherever I sent you that letter. Is that cool?” “Yeah.” Okay. Click. Deals done. It turns out that wherever I sent the letter was forwarded from what I had in the data base.
Jack Butala: That’s a first, I’ve never heard that before. You gotta confirm that address.
Jill DeWit: How’d that happen?
Luke Smith: Gotta confirm that address. ‘Cause, the mail company updates it on you. Yeah. But, I really boiled the calls down to that. Just, basically close it on the one call. Try not to do back and forth. Like, “I’m gonna call you back after I confirm stuff.”
Jill DeWit: Mm-hmm (affirmative).
Luke Smith: I just confirm it all in the original call. If there’s any problems, I’m gonna call you back. Otherwise, the notary’s gonna be calling you and bringing your money. That’s been a big time saver and hassle reliever too. Trying to get ahold of somebody the second time.
Jack Butala: Exactly. Any last words for, or advise for people who … we’re about to release a product called OfferstoOwners.com. And it involves … everybody who’s a Land Academy member will get it as part of their subscription. But, we’re getting a lot of requests from people who are already in the real estate industry, but are really kind of frustrated with their deal flow. So, it’s basically a subscription to Real Quest, and then the new mailing company that we retained, Letter Stream. To send out mail for less than a price of a stamp. So, do you have any recommendations or any words of advice before we close out here?
Luke Smith: What do they get in the program? You go in there and you say I want to mail offers to this area, in this dollar price in this size and it just happens, or they do the search or?
Jack Butala: No. It’s … you still have to scrub just exactly the same way that you do it, but it doesn’t … the product itself doesn’t involve all the other stuff that Land Academy members get. So, it’s, quite simply, if you’re pretty familiar with … Like if you’re at the level where you are, all you need is the data and a real inexpensive efficient way to submit your mail merge. Or, the data to do the mail merge, ’cause these guys do the mail merge for you, too. And, save a ton of money on postage. That’s all it is. It’s a scaled down version. But, people who are very successful in real estate are a little afraid of that for some reason. So that’s why we came up with this product so they don’t have to worry about it.
Luke Smith: Yep, that would be nice and easy. They’re scared of sending the offers?
Jack Butala: No, they’re just … they may be just a little bit older than us and their not as computer savvy. They know all about real estate and where they want to buy, and the prices they want to offer and all that. So-
Luke Smith: Yeah, the technical side, I haven’t had any problems with it. But, I’ve answered a lot questions for people that seem to have … get stuck on some little detail somewhere in between.
Jack Butala: Mm-hmm (affirmative).
Luke Smith: It doesn’t usually need to be a problem. It becomes a problem in their head for some reason. You know, it’s just … the main part is just getting started. Gotta get started. Get that first one going, break the seal, and all those problems seem to disappear. I think those most those problems are between your right ear and your left ear.
Jill DeWit: Totally.
Luke Smith: It’s a mental challenge to get over those problems more than a technical challenge.
Jack Butala: Yep, I agree. Luke, it was great talking with you , man.
Luke Smith: Yeah.
Jack Butala: Congratulations on your success. I mean, I’m sure you’re going to take this thing to the end now, right? I hope.
Luke Smith: That’s the idea. I got some … I got a drawing … finalizing the drawings of a map for this next year. I’m gonna try to hit it out of the park. I want to say thank you guys to for the knowledge and the information and the tools to make this business happen. I think it’s a very fun business. I can’t stop talking about it. I’m always talking about it with my friends. And they’re, don’t you ever talk about anything else?
Jack Butala: That’s awesome man.
Luke Smith: What is there else to talk about? This is-
Jill DeWit: Exactly.
Luke Smith: This is a sweet business.
Jack Butala: Well, thanks again. It was great talking to ya. Thanks for letting us talk to you on the show.
Luke Smith: Yeah, thanks for having me.
Jack Butala: Join us on another episode where Jack and Jill discuss how to use information, that’s me.
Jill DeWit: And inspiration, that’s me.
Jack Butala: To get just about anything you want.
Jill DeWit: We use it every day to buy property for half of what it’s worth and sell immediately.
Jack Butala: You’re not alone in your real estate ambition. Thanks again, Luke.
Great show, Jill.
Jill DeWit: That was so much fun. What an inspiration, and knowledge and you know, and I remember Luke being very skeptical.
Jack Butala: I do too!
Jill DeWit: I really love that.
Jack Butala: I do too!
Jill DeWit: It’s funny. I just had a call the other day with a guy, and I pretty much said, you gotta get out of your own way!
Jack Butala: Yeah.
Jill DeWit: Like Luke said, most of the issues are between your ears. Which is true. Well, like I only should mail people with tax linkable properties. Wrong.
Jack Butala: Wrong.
Jill DeWit: I should only mail such and such. Wrong
Jack Butala: Wrong.
Jill DeWit: I should right my own letters ’cause that’s gonna save me money in the end. Wrong. You know, there’s so many things that you have to-
Jack Butala: Right.
Jill DeWit: Get passed.
Jack Butala: Those are awesome stories he told. But, the message I really want to convey is it’s not hard. We’re not here recruiting new people. We’re kind of here to just spread the word.
Jill DeWit: And save people.
Jack Butala: Yeah.
Jill DeWit: With our new you don’t need no stinking real estate agent show.
Jack Butala: You know what’s hard? Fixing up a house and selling it is hard. This is making a bunch of deals. I love that at one point he said, look there’s a bunch of deals I just passed on. ‘Cause I know there’s gonna be a bunch next week.
Jill DeWit: Yeah, exactly. Yeah, now he’s really he’s so in. He obviously went crazy in the beginning. Which I love. We are still running on the coattails from residual mailers. From years ago. Ten years ago and I still get calls. Once you get that process going. Now Luke, it’s so nice, he’s at the point, he can really pick out just the ones he really wants, just the best deals, you know. That kind of stuff. Pick up 10 and 20 from a same person, ’cause he has the reserves to do … I would love to know what his bank balance is right now. But, I wasn’t about to ask.
Jack Butala: I mean, I did the math and if you sell 50 properties a month, and you’re averaging a $5000 price, which I think is way lower than what his average probably is. I know ours is way higher than that. You know, it’s a quarter of a million dollars revenue a month. At our margins. He’s making a couple hundred thousand dollars a month.
Jill DeWit: Right.
Jack Butala: So, he hit on a couple of great things. And he mentioned Success Plant, which is now Land Academy Online Community. But, I started Success Plant for the reasons that he said. Where you can just go on there and start asking questions.
Jill DeWit: Communicate with each other. Help each other and Luke’s really vocal and helps. This is a good thing for folks to hear. Luke is there and on there all the time. And, he’s really vocal an really happy to help people. ‘Cause it helps him too. So, if we, as you post things and issues, as our members post issues and little hiccups and things that got in their way, it helps somebody else. Which is great.
Jack Butala: Yeah. You know, the other thing that he mentioned to is that he’s becoming the bank. He’s so prevalent on the Land Academy Online Community answering questions and stuff. People are going to him now to fund their deals.
Jill DeWit: Exactly.
Jack Butala: That was my intention.
Jill DeWit: Exactly.
Jack Butala: I knew this would happen when we started it over a year ago. To have the more senior members, help the younger ones. Because the younger ones are hungry, and they’re going to go out and find new ways to find different types of subsections of property owners and turn over new stones. And get the financing from the older guys. Not older, but the more senior people in our group.
Jill DeWit: Or just the people with the cash. The people with, some of them, I’ve even noticed, ’cause we have our deal board, hidden from our members, on our online community. I see other people that hey, I don’t really have time to do this, or I really don’t want to answer the phone but, heck, I gotta lot of money here. Happy to fund some stuff and share some deals. And its helping out everybody.
Jack Butala: Right. It’s awesome. Information and inspiration to buy undervalued property.
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