How to Generate $100K per Deal (CFFL 517)
How to Generate $100K per Deal (CFFL 517)
Transcript:
Jack: Jack Butala, Jill DeWitt.
Jill: Hi there.
Jack: Welcome to our show. In this episode, Jill and I talk about how to generate a hundred grand per deal. I feel very qualified to discuss this. Before I get into it, let’s take a question posted by one of our members on landinvestors.com online community is free.
Jill: Okay. Vlad and Nadia ask, “So, my husband and I are new members to Land Academy. I really enjoy the material in the course so far. But now that I’m actually getting starting to research which county to target, I’m getting a bit discouraged. Maybe because I hate taking risks. Or at least I’m willing to take a risk if I see some logic in my decision. I’ve been spending a lot of time reading the forums. I feel states like Arizona, New Mexico, California, et cetera are targeted a lot. Should I even bother with these popular states? I’m getting the feeling that there’s much more competition now than even just two years ago. Maybe if it wasn’t as expensive to send a mailer out, I wouldn’t stress out as much and just give it a shot. I’m looking for a word of encouragement or any advice you’re willing to share.”
Jack: You go first Jill.
Jill: I didn’t think it was expensive. No. So, you know what, so here’s where I’m coming at this from. These are all valid, good points. I first question commitment. And I see, how do I say this –
Jack: Waffling?
Jill: – Yeah. And getting in her own way.
Jack: Yep.
Jill: So, I’m trying to think of another example of what something that in a whole different business. You know what. Every business has risks. Every business you want competition. Competition is healthy. And in the real estate world, there’s a lot of competition out there. Let’s be honest. That’s okay. That’s why you need to do it right and be efficient and be the best and have the best property at the best price. And there’s nothing to think about. And that’s where we are. And that’s what we share.
Jack: We have a handful of members, actually now way more than a handful, and I ask them because I talk to them regularly. They do a ton of deals. And almost all of them started with nothing. They have a little bit experience flipping houses or some other business, and it didn’t work out. So, the light bulb went off. They heard this show. Or they talked to Jill or whatever. And light bulb went off over their head, and they’re making six figures every month. And it’s because they just get it. It sung to them. And this is clearly not singing to you. I’m trying to be nice about it actually.
Jill: That’s what I –
Jack: It either works or it doesn’t. I feel compelled to quote Dr. Phil. You know, you either get it or you don’t. And if you don’t, that’s okay. Move on. I mean there’s a lot of fish in the sea.
Jill: Yeah.
Jack: I’m not a big Dr. Phil fan by the way. But that is pretty damn good advice. Captain Obvious type advice.
Jill: Exactly. Well you know, it’s kind of funny. Makes me think of when I run into, we go, Nell and them will be in investor group settings. And the majority investors don’t understand the whole direct mail thing. And they can’t wrap their heads around it. And I tell them in there. And I’m like, “Yep.” And usually my parting comments are, “Yeah, but who am I to say 15, 16,000 deals later, maybe I don’t know. It’s just a test.” And they go, “Wait a minute.” I know they think about it later. But –
Jack: Where’s the risk in sending out … spending $500 to send out a thousand offers on houses or boats or whatever you choose. We just choose land.
Jill: Bingo.
Jack: Sending out a bunch of undervalued offers. It’s completely predictable. You know exactly what’s gonna happen. If you price property correctly, and this is land now. And you send out a thousand maybe 1500 offers. You spend $500. If $500 is a ton of money to you, and it’s –
Jill: You’re in the wrong business.
Jack: – you’re gonna need, it’s gonna [crosstalk 00:03:55] this is not for you.
Jill: Right.
Jack: Or like Jill says, save a bunch of money up for six months in a separate bank account. Make sure it’s not gonna change your life to send out 1500 letters to see if this is for you. If you’re listening to this show, this might be for you. Either that or you have really bad taste in entertainment.
Jill: But you know what I’m really thinking honestly … on what other business, you certainly can’t have a brick and mortar business, any brick and mortar business –
Jack: That’s the most risky thing there ever was.
Jill: – I mean, there’s no inventory I have to stock. I mean this is one of the cheapest –
Jack: You know what this is a good time to go over this –
Jill: – easiest –
Jack: – Go ahead with this topic.
Jill: – Okay? All right. There’s no brick and mortar business you can do for $5000 Jack. You can’t even start a t-shirt company and have inventory online Jack. I mean think of all the things that –
Jack: What if you flip a house?
Jill: – Right? Yeah, I’m gonna go buy a single family, that’s cheaper –
Jack: Where’s the risk in that? That’s –
Jill: – now. Oh my gosh.
Jack: – liquid risk.
Jill: Exactly. I really can’t think of a single business, unless I’m a consultant for something. But you still have to know what you’re doing. I mean … I can’t think of anything that is less risky or –
Jack: Take six months off and write a book.
Jill: – Yeah.
Jack: You don’t know if it’s gonna sell.
Jill: That’s true.
Jack: I mean there’s not –
Jill: Yeah, look at the money you lost there.
Jack: – The reason that we’re in this business Jill is because we just don’t perceive it as risky. Every mailer we send out I can tell you what’s gonna happen. Plus or minus 10%. It’s totally and completely predictable. in fact that’s why we started this company. So that, you can learn from all the mistakes that we’ve made and use our experience through the risk. Last week we did a show on risk-free info lots or something like that.
Jill: Exactly.
Jack: It’s so predictable.
Jill: You know, I’m glad this question came up –
Jack: Me too.
Jill: – because we were talking about this the other day. And I do wanna do a whole show on this. So, the people that don’t make the cut, because a majority of the people that don’t make the cut, it’s them. They can’t do anything. This is the third thing that they’ve tried.
Jack: Or the 30th.
Jill: They’ve tried selling shoes online. I’m not kidding. They made their own jewelry. Whatever it is. Now they’re gonna try, “Let’s try this.” And so when you really sit back and look at it, it’s a pattern for the individual that’s –
Jack: Here’s the truth about owning your own company. There’s stuff that goes on that’ll turn your stomach for the first two years.
Jill: Yeah, it’s scary.
Jack: Any company, I don’t care. And if you just barrel through it like a Marine, you adapt and overcome. Every single little issue … for Land Academy specifically when we started this, not flipping land. But when we started Land Academy and now Land Investors, I had to learn how to use all kinds of new software, which was way out of my comfort zone. But you just get through it. It’s a personality type. And then enjoy it for the rest of your life by the way.
Jill: Exactly. That’s good.
Jack: So –
Jill: We’re gonna do another show on that though. I’d like to talk more about that.
Jack: About this topic.
Jill: Yeah.
Jack: Okay. I’m actually writing it down right now.
Jill: Thank you.
Jack: You have a question or you wanna be on the show, reach out to either one of us on landinvestors.com. Today’s topic, how to generate a hundred grand per deal. This is the meat of the show. Before we get into this though, honestly, this question it just –
Jill: It still bites. Still hanging on me too.
Jack: – they’re asking us permission to … is it okay mom and dad? That this sucks and I suck at it. Yeah, it’s okay.
Jill: That’s what’s gonna be my answer. You know what, I would rather if you are not set up to be your own boss or you think $500 is a lot of money or you’re not comfortable in your decisions even though I’m standing here holding your hand, whatever it is, then you shouldn’t do this. And I wish you all the best. And I mean that sincerely –
Jack: Me too.
Jill: – I’m not being sarcastic.
Jack: They’ve given themselves an out.
Jill: Yeah, and that’s okay.
Jack: That’s the first step in failing.
Jill: Yeah, that’s okay. It’s not for everybody.
Jack: Today’s topic again, how to generate a hundred grand per deal. Today this is the meat of the show. So, how do you generate a hundred grand per deal? So, what we talk about all this time in the show is how do you double your money. You buy property for four grand. You sell it for eight. It’s really worth 12, 15, 20. Everybody wins. Well, it’s real simple. You just up the numbers like Jill says. You buy property for 400, 500 thousand dollars. You mark it up 100 thousand dollars. It’s really worth 1.5, 1.2. That’s the end of the show.
Jill: Okay. No. You know what’s so funny though, I was just thinking though. We went from a question, we went from the, they don’t get it, hearts not in it. To, okay for the rest of you who get it, here’s how to do 100 thousand dollars a deal. And it really is not crazy. And it’s so funny because it’s all over landinvestors, on our online community. The people talking about these bigger deals like this, they’re in there. You just go looking. It’s not crazy, you know.
Jack: These deals are more prevalent than the smaller ones.
Jill: Yeah. People I’m sure will go, “Did they add an extra zero there. Is that right?” Yeah. It is right. They didn’t mean 10 thousand, they did mean 100 thousand.
Jack: So, imagine you’re sitting at your kitchen table in the morning with your spouse. And you’re opening the mail. And you get to a letter. And you open it and it says from Jill and I, “We would like to buy your property for four thousand bucks. It’s showing all the signs of the fact that you might want to sell it.” And you share it with your spouse. And your spouse says, “Wow. Four thousand bucks. That’d be cool. We’re never gonna use that property anyway. We inherited from your parents 18 years ago.”
Now imagine same situation. You open a letter. And the letter it says, “We would like to buy your company for 450 thousand dollars.” And the same conversation happens. “You know we inherited that from your parents. I know it’s worth more than that. We don’t really need the money or want. But wouldn’t it be nice not to get that 28 thousand dollar tax bill every year. It’s just a hassle. We’re never gonna use it. So we can either call these guys and get it done next week. Or we can list it with a realtor and wait eight months or 12 months or whatever. What do you wanna do?” “Uh, let’s just get rid of it. I got bigger fish to fry.”
Jill: Bingo.
Jack: That’s exactly what happens. It’s a lot easier to get a check for half a million dollars than it is for four thousand. It’s the same process. Exact same process. So, you just have to, the whole key to making money like this … there’s two keys. The first is, price it properly. So, you don’t wanna send out 450 thousand dollar offer out to –
Jill: On a 10 million dollar.
Jack: – thousands of people. Yeah. Or on a 300 thousand dollar piece of property. Or like Jill said, a 10 million dollar piece of property. It’s –
Jill: Like New York.
Jack: So, those are ways to fail. You have to price it properly. But percentages are fantastic on these larger land deals. And houses, forget it. It’s even easier to make 100 thousand dollars on a house, especially in California, than it is on land. And, “What are you talking about Jack? I thought houses were bad flip.” Here’s the deal. Let’s say you got a 800 thousand dollar house that’s falling down. But it’s so valuable. The area is so valuable that, and it’s the same situation, it’s the exact same breakfast table situation. I get an offer for 400. You have a buyer in your back pocket ’cause they redevelop properties or whatever. Sell it to them for 500. And they’re happy as clams ’cause they thought they were gonna pay eight. They’re flipping other houses or renovating other houses right now where they paid eight. They’re happy to roll one in for a couple hundred thousand dollars.
Jill: This just happened. This couple here in Southern California, good friends of ours, her in-laws just did this. She’s sitting there scratching her head going, “I can’t believe they’re selling their house for this. They just want out. They wanna move down by us at the beach. And that’s all they care about. They’ve got enough money. The kids are all grown. We’re all adults. They’re past retirement.” The home hasn’t been updated since the 60’s by the way. It still has shag carpet and wood paneling. It’s so funny. And they’re just letting it go. And you know where they sold it to? The next door neighbor.
Jack: Exactly. Ding, ding.
Jill: And what’s funny is, my girlfriend, I’m like, “Then why the heck are you not buying this house? I will help you.” She’s like, “Oh, no no. But I don’t wanna do that.” I’m like, “You silly.” So, isn’t that funny? But it really does happen.
Jack: So, you’re never gonna know Vlad and Nadia, you’re never gonna know unless you send offers out and find out. Where’s the risk in that?
Jill: Exactly.
Jack: There’s no risk.
Jill: There is no risk.
Jack: The absolute worse thing that could happen is you spend 500 or 700 bucks. Send a bunch of offers out. And you incorrectly price them, which is hard for me to believe.
Jill: No, you’ll get deals back. Then you have to decide if you wanna act on the deals. Then, you know, it just –
Jack: Here’s my final point.
Jill: – insecurity I think too.
Jack: Yeah. Go ahead. I wanna hear about insecurity. ‘Cause that’s really the root of what’s going on here. They don’t believe in themselves.
Jill: No. ‘Cause what’s gonna happen is they’re gonna get some signed things back. Now they have to be comfortable enough to plop down some money to buy a piece of property. That and you have to be secure enough to do that. You have to trust that you did all the steps, which we help with everyone make sure it has access. Make sure it has this. Make sure it has that. Go out, look at the comps, and all that good stuff. So you know it takes all the question out of your mind. You’re good to go. But you’ve gotta be secure enough to do it. And I don’t think they have the security to do it. And that’s all right.
Jack: Here’s my final point. It’s very hard for probably, if you’re listening to this show, you’re into real estate or you wanna get into real estate … and for us too. We’re some version of a real estate professional, right, at varying levels. So, it’s real hard to get out of your head. And to reel up that kitchen table conversation that I described earlier. It’s hard to imagine that. And why would anyone do that? Why would anyone sell a car for way half of what it’s worth. Here’s why.
Because they’re inconvenienced by owning it. That’s the whole deal. Or they just wanna check it off their list. It happens all the time. So, how many times have you had a garage sale, right? Where you just pull all this stuff out. Or some version of a garage sale. Or call somebody to collect your stuff for free. ‘Cause you’re confused by it. Yeah, ’cause you make a few thousand, 10 thousand bucks on it or whatever the numbers are. I don’t wanna do it today. I’d rather go surfing with the kids.
Jill: Exactly.
Jack: That’s the deal. So, you have to get out of your head and forget about what’s gonna happen on the other end of that offer. Because let nature work that out. Natural selection. [crosstalk 00:14:35]
Jill: That’s really good.
Jack: Join us for another episode where Jack and Jill discuss how to use information, that’s me.
Jill: And inspiration, that’s me.
Jack: Get just about anything you want.
Jill: We use it every day to buy property for half of what it’s worth and sell it immediately.
Jack: You are not alone in your real estate ambition. You know Jill. Was that too harsh?
Jill: You know what, tough love hurts. Wait, wait. And I have something funny to share. So, as I’m sitting here talking, I’m like, “Okay. How do I walk around -” I was getting in my own head thinking about this. Why am I so secure? Like stupidly, sometime foolishly. Why do I have confidence in somethings? You know what I mean? I swear I think it comes back to something that my dad taught me. Ready for this?
Jack: Yeah. This is good stuff.
Jill: He taught me the basics of how to come off like you know what you’re doing.
Jack: He taught you to lie?
Jill: No. But act like you know what you’re doing. You know what I mean? Who says your not a pro? You feel like a pro, you gotta understand it, you are a pro. So, you need to walk around with an attitude like that. And for me it goes back to sneaking backstage at pop concerts. Seriously. I would walk in with my head held high with my backstage pass that I finagled because I stayed at the same hotel. And I acted like I knew I was supposed to be there. And guess what? I was greeted with open arms like, “Yeah, come on in.” I’m like, “Holy cow. This works.” So –
Jack: That’s a really good lesson actually.
Jill: – It is. So, I’m not insecure walking into a room of, well especially when it comes to anything in our industry. I’m very confident. But I’ve been in other places where … I’ve been in environments where I really don’t know much about the topic. But I pretend that I do. And I listen. And I wait. And I think about it. And I ask good questions. And I come off you know. And so, anyway. For me, that’s confidence and you can train yourself, I guess is what I’m trying to say. You can learn and kind of train yourself and build up your own confidence.
Jack: I mean you could be at a rocket science –
Jill: Me personally, or in general?
Jack: – in general. I mean you could and so could I. And you could have a very intelligent conversation about success. And just turn it in to all that. And never really talk about rocket science. And leave everybody there with a fantastic impression of you in a positive whole thing. And you could just, that’s what I think you’re kind of saying.
Jill: Right.
Jack: You don’t have to know –
Jill: You really don’t.
Jack: – about rocket science or any of that.
Jill: Yeah. Don’t ask stupid questions. And it’s okay to say, “All right. I obviously don’t have a PHD like you do. But can you explain this to me?”
Jack: Or we applied those exact same principles that you were just talking about to buying and selling real estate. That’s interesting that we’re doing the same thing together only you’re doing it with this. And I’m doing it with this. There’s multiple ways to do that.
Jill: Totally.
Jack: To make it all positive and going in the right direction. And now you’re in a room full of successful people. So … I’m really glad we had this show and had this question.
Jill: Me too.
Jack: Information and inspiration to buy undervalued property.
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