Lessons from Data Obsessed People (CFFL 554)

Lessons from Data Obsessed People (CFFL 554)


Jack Butala:                         Jack Butala with Jill DeWit.

Jill DeWit:                            Happy day.

Jack Butala:                         Welcome to our show today. In this episode, Jill and I talk about lessons learned from data obsessed people. Jill wrote that title.

Jill DeWit:                            I did.

Jack Butala:                         I wonder who she’s talking about?

Jill DeWit:                            I’m excited.

Jack Butala:                         Before we get into it, let’s take a question posted by one of our members on the LandInvestors.com online community. It’s free.

Jill DeWit:                            Luke Harris asks, “There are some HOA properties I’m making offers on. I figure their fees kill the price of the land, and it gets it in a range, I might have a shot at it. Also, thinking how much of an HO fee is too much. The ones I’m looking at right now are $43 a month, on little house lots. You get paved roads, trees, golf, lake, and other stuff. But $43 a month on an empty lot? That makes a high default rate on these.” I understand. We’ve done those areas, and it does rack up really, really fast.

Jack Butala:                         The truth is this, we have a tremendous amount of experience with HOA land. There’s some great stuff, and some bad stuff. By the way, all HOA property, land, not houses or condos, they have a bunch of people sitting in an office, usually if the subdivision is big enough, and their whole job is to handle defaulted properties and manage fees and stuff. If you get to know them … And guess what, Jill knows them on a first name basis. They always have lien sales, and they have properties that they’ve taken back. You can cut a great deal with them on these properties. I don’t care what they say, they have a list somewhere of properties that are for sale. Before you go buying properties from owners in these subdivisions, check out the HOA itself. Did I just take away all your thunder?

Jill DeWit:                            No, it’s okay. That’s exactly what I was going to say. Keep going.

Jack Butala:                         No. Luke, I think you’re right on the right track. Would I put all my money into one subdivision with an HOA? No. But I think that you could do okay. Just make sure … The basic stuff that we do, applies. Make sure you’re buying them way cheaper than you’re going to sell them for, and make sure that they’re good properties. All the HOA subdivisions have … They’re all broken up into units. Like unit one, unit eight. What you want to do is get used to saying this to yourself, “Unit one rocks, and I can sell those properties really fast. Unit 18, it does not.”

Jill DeWit:                            It’s way out there.

Jack Butala:                         Yeah.

Jill DeWit:                            It’s only dirt roads at this point-

Jack Butala:                         It’s real different.

Jill DeWit:                            … and all that.

Jack Butala:                         Exactly, Jill.

Jill DeWit:                            You what I would do too, Luke? I would either A) … Say you’re buying it really, really cheap, because HOA fees are really high, and you’re actually buying it from a seller, which is … Unless a seller has 10 of them, it doesn’t make a lot of sense. You wouldn’t just buy the one off, you’d go right to the association. Either way, I’d want to start fresh. If I’m buying it really cheap from the seller, which is actually not my first choice, so I’m going to skip that one. My first choice is, now that I’ve identified this area and these are good properties, I’m going to the HOA. I’m getting a list from them, which is what you can do. They will email you a list, and you can go and look on the map and pick out the 10 that you want, or the five that you want. Whatever it is, like Jack says.

You’re going to negotiate the price with them. They can’t do anything about the taxes. You’ve got to remember that too. But they can zap out those HOA fees, is usually what they’re going to do. They’re going to say, “All right, you can buy these 10, the board meets on Tuesday. Send me a check.” You know, however their process is. It’s often something like that. You identify the 10, and then they will do the recording and everything for you, and send them to you.

Now you’ve started fresh, buying them from the HOA. They now have zero HOA fees at this point, and they only have the taxes. When you post the properties, please post all those details. “They are fresh. They have zero HOA fees as of today. Their HOA fees are $43 a month starting today, and they have $100 in taxes,” or whatever it is. Just spell it all out, so the questions are answered before the call gets to you. I think those can be great things to have in your inventory.

Jack Butala:                         I think that’s great advice.

Jill DeWit:                            Thank you.

Jack Butala:                         If you have a question, or you want to be on the show, reach out to either one of us on LandInvestors.com. Today’s topic, is Jill’s topic. Lessons learned from data obsessed people. This is the meat of the show.

Jill DeWit:                            I wrote this topic, because I was thinking big picture stuff. There’s a lot of our members in our community that are just like Jack, which is not like me. So this is why I have these questions.

Jack Butala:                         Do you ever ask yourself, like in the morning, “How did I get messed up in this group of people?”

Jill DeWit:                            Every day. You mean my family? My family? Every day. Our whole community? Once a month. I’m just kidding.

Jack Butala:                         That’s awesome.

Jill DeWit:                            My family? Oh yeah. No, so it’s … They don’t see it. It comes naturally to them. These data obsessed people. This is how they operate. This is how they roll. I have to take a step back and go, I’m like, “Why are they this way? How can I be more like them?” I see-

Jack Butala:                         No, please don’t do that.

Jill DeWit:                            Okay, well. I see-

Jack Butala:                         Jill, do not change a thing.

Jill DeWit:                            I see you data obsessed people, all y’all, making really healthy decisions, because your decisions are numbers based, not emotional based. That to me, is the best way to make decisions. I had to learn to take emotion out. When I took emotion out, boy do I make the best decisions. I see it as a number, on a spreadsheet, not as a, “Oh look at the sunset. Look at the pretty view,” or, “Look at the kitchen,” you know, kind of thing. You have to take that out. I wrote this topic, because I want to pick your brain and get some lessons from you data obsessed people, Jack, as the leader of the pack here.

Jack Butala:                         Okay. This is fun.

Jill DeWit:                            What is it? What can you share with those of us who are not data obsessed?

Jack Butala:                         This is going to surprise you. Ready?

Jill DeWit:                            Yes.

Jack Butala:                         I can’t stand to lose.

Jill DeWit:                            Oh.

Jack Butala:                         We’re at a point in our career now, Jill, where we look an acquisition, which we do all the time, every day, all day. Then in the back of my head, I’m saying, “How can I lose in this?” Not, “How can I win?” I know how to win. “How can I lose? What’s wrong with this property that someone wouldn’t buy it for more than we’re about to buy.” I’ll state all the obvious reasons of what could go wrong. “We’re paying too much money. You can’t get to it. What did I miss? Did I miss an HOA situation? Does the property have an HOA that we don’t know about? Are there liens or mortgages associated with the property that we haven’t uncovered? How can I lose?” If the answer is at the end, “There’s no way we’re going to lose in this property” … In fact, we’ve perfected it now.

That’s how this whole offer campaign, how I came up with that. I can sit and look at 10 properties that people are willing to sell me, and there’s probably eight of them probably don’t work for us, even though we’ve sent offers out on them, right? That’s how I gage it. If it hits my desk, and it’s signed, nine times out of 10 we buy it, because it’s so silly cheap, and it rocks.

Jill DeWit:                            Mm-hmm (affirmative). That’s really interesting. You look at it from that perspective.

Jack Butala:                         Mm-hmm (affirmative).

Jill DeWit:                            I don’t think we’ve ever talked about this.

Jack Butala:                         I don’t think so either.

Jill DeWit:                            This is really good stuff. You look at it like, “What could go wrong?” Basically. If you could go, “No, all right. I’m safe here. I’m safe there. Check, check, check,” you’re like, “You know what? Nothing can officially go wrong.”

Jack Butala:                         When’s the last time you and I purchased a piece of property, where we haven’t sold it before we actually bought it? I don’t think there … I mean, we do have a few properties in inventory that for some reason just aren’t sold yet.

Jill DeWit:                            We’re not reaching them. That’s the whole thing. We forget about them.

Jack Butala:                         It’s not … Yeah. It’s not, it’s like three or four so-

Jill DeWit:                            Right. It’s like, “Oh yeah, we still have that. Somebody needs to put that out there.”

Jack Butala:                         We’re going to end up giving those away anyway. I’m sure of it. Yeah. I mean, especially with houses. We already know … We’re just filling orders with houses.

Jill DeWit:                            Right.

Jack Butala:                         The movie star ranches, that’s a little different. There’s a little bit more risk in that. We never put any of our money into it.

Jill DeWit:                            Right.

Jack Butala:                         The partners that we do this stuff with, they can’t … I mean, so what’s the worst thing that can happen? The worst thing that happen, is they’re going to hold a property that they purchased for a million two, that’s worth 1.8, they might have to hold it for 60 days.

Jill DeWit:                            Right.

Jack Butala:                         You know. Because … So, come on.

Jill DeWit:                            Exactly.

Jack Butala:                         Is there really a risk in that? Not really. Roundabout way to answer your question is, how can I lose in this? If there’s any way we can lose on it, we just do the next deal.

Jill DeWit:                            Okay, I have a question.

Jack Butala:                         That’s the beauty of data.

Jill DeWit:                            You data obsessed people, use data for everything. The way you buy a car, the way you decide who’s going to paint the garage.

Jack Butala:                         It’s true.

Jill DeWit:                            Right? The school system.

Jack Butala:                         Yeah. All this is true.

Jill DeWit:                            Uh-huh (affirmative). So-

Jack Butala:                         I might be mentally ill.

Jill DeWit:                            I’m guessing you’re born with it. This is nature, not nurture. Were you always this way?

Jack Butala:                         Yeah.

Jill DeWit:                            Ah.

Jack Butala:                         I’ll tell you what. I’m old enough to … I was born and raised before the internet, so the only way you learned anything was through books or TV. You didn’t have any choice about TV. It was whatever was on, was on. You don’t have any choices. There’s no YouTube, or any of that stuff. So, when all the stuff started kicking in, in the ’90s, really the late ’90s, and YouTube became a thing … This is a good generation. This is a good time to be alive for data obsessed people. Before this, you’re spending a lot of time in the library. Even then, still not … Library never seems to have the right books. I’ve always said that.

Jill DeWit:                            Really?

Jack Butala:                         Yeah.

Jill DeWit:                            Every time you go in it’s not … You can’t find what you want? That’s not true.

Jack Butala:                         Every time I go … Even today. I go to a library, or I go to a bookstore-

Jill DeWit:                            I’ve had that.

Jack Butala:                         … and I go immediately to the reference section.

Jill DeWit:                            Oh funny. I go to self-help. Which is really true. That’s where I spend all my time.

Jack Butala:                         Really? What do you read? What do you read through?

Jill DeWit:                            That’s exactly where I go. I always go to self-help, and I spend the whole two hours there.

Jack Butala:                         What do you … Jill, you don’t need any help?

Jill DeWit:                            Come on. No.

Jack Butala:                         It’s not … It’s motivation.

Jill DeWit:                            It is. I just love it. It sings to me. I’m like, “Okay, what do you [crosstalk 00:11:18]-

Jack Butala:                         It’s not help. It’s motivation, right?

Jill DeWit:                            No. No. No. It’s not like I’m struggling. That’s so funny. Let me back up. Hello.

Jack Butala:                         If you get any more self-help, if you get any more healthier and happier, you’re going to explode.

Jill DeWit:                            Okay. Stop.

Jack Butala:                         Just stop with the self-help.

Jill DeWit:                            Self-help does not mean, “Help!” That’s not what that means. “I’m about to lose it. Help me, please!” That is not what self-help means. Self-help is spiritual, and motivational, and you know it’s … You know what I’m doing? I’m not there because I need to learn something. I’m there because I’m with my people.

Jack Butala:                         It makes you feel good.

Jill DeWit:                            It does. I’m reading books about like-minded people, and I love to hear their perspective on things. That’s what I do in self-help. That’s why I love that section. It’s not about data. You go to the reference section, is where you hang out. Here, let me ask you a question. Did you used to, as a child, read the Guinness Book of World Records, and things like that?

Jack Butala:                         No.

Jill DeWit:                            Did you used to read … Remember the Consumer Reports magazines? My dad used to get that.

Jack Butala:                         Yeah. I used to read that.

Jill DeWit:                            Okay, got it. Did you … I know this about you, but our listeners don’t know this about you. You like The Wall Street Journal, because you like the shorter articles. You don’t need to read the whole thing. You want to know a lot about many things, or a little about many things.

Jack Butala:                         Yeah. Then decide which ones I’m going to go look into. Which is exactly how The Wall Street Journal’s set up. You read the front. Now you’ve got like 50, I don’t know, 25 to 50 news items that happen, and I go read about two that I care about.

Jill DeWit:                            Love it.

Jack Butala:                         Or anything that Bill Gates says, I read it in detail. Usually three times.

Jill DeWit:                            Love it. What could you share with those of us that are not data obsessed?

Jack Butala:                         Marry somebody who is.

Jill DeWit:                            Well, there’s one.

Jack Butala:                         Get somebody in your life who’s … Because we make good decisions. The vast majority of the people … Not the vast majority. Every single person in this group who does incredibly well, is either … Comes from an engineering, or an accounting background, or they have somebody in their life like that. Think of Kathleen, she’s not like this at all.

Jill DeWit:                            No.

Jack Butala:                         She has a PhD in psychology.

Jill DeWit:                            Right.

Jack Butala:                         She has a data person in her house that helps her with this stuff.

Jill DeWit:                            Right. She thinks things through.

Jack Butala:                         She’s extremely successful.

Jill DeWit:                            She really thinks things through though too.

Jack Butala:                         Yeah.

Jill DeWit:                            That’s who she is.

Jack Butala:                         If you’re not … Data obsessed is Jill’s title. If you’re not, a methodical … I call it a linear thinker, where if you start with A, you go to B, you go to C, and then if you still want to keep going, you linearly travel through life. You don’t really have any feeling about anything, you just mechanically go through the steps to get you to some end, you’re going to succeed.

Jill DeWit:                            You know, one thing that-

Jack Butala:                         I was not always like this.

Jill DeWit:                            Really?

Jack Butala:                         Yeah. I was tired of failing.

Jill DeWit:                            Oh. Then you found that data would solve that?

Jack Butala:                         Yeah. Or linear thinking, or decision making. Yeah. Look, we have all the information … This is what I tell the kids. Every single answer, to every single question on the planet, is in your pocket.

Jill DeWit:                            It’s true.

Jack Butala:                         Remember your parents used to say, “Go look it up.”

Jill DeWit:                            Right.

Jack Butala:                         Dad, how do you spell invoice? “Go look it up!” Right?

Jill DeWit:                            That’s true.

Jack Butala:                         Now, you don’t … You just pull the thing out of your pocket. You have no excuse, is what I’m saying.

Jill DeWit:                            Now you say … I’m not going to say it now, because there’s one in the room. You say, “Hey, Blank, how do I spell this word?”

Jack Butala:                         Uh-huh (affirmative).

Jill DeWit:                            It spits the answer right out at you. You don’t even have to pull it out your pocket.

Jack Butala:                         If you’re not seeing things through, or you don’t have enough resources, I don’t care if it’s money, or motivation, or any of that stuff, the answers are all in your pocket.

Jill DeWit:                            Right.

Jack Butala:                         The reason that you’re not doing it is … Or succeeding at whatever it is you’re trying to succeed, or you don’t have as much money as you want, or you’re in a bad relationship. It’s because you’re lazy.

Jill DeWit:                            Data is the new bacon.

Jack Butala:                         What is that? That’s Jill’s way of saying, “Jack-

Jill DeWit:                            The human head weighs eight pounds.

Jack Butala:                         What the hell?

Jill DeWit:                            Do you remember that from Jerry Maguire?

Jack Butala:                         No. What the hell is that?

Jill DeWit:                            That’s a non … You don’t remember that?

Jack Butala:                         No.

Jill DeWit:                            All right. Never mind. Somebody there is … That’s a way tangent. I won’t go there. That was … Okay. Sorry. I just wrote that down because I put that on my Facebook when I saw that phrase. “Data is the new bacon.” That rocks. Data rocks. You know what’s funny? For a non data obsessed person, now learning the value of data, I’m excited about data. That’s why I say data is the new bacon. Data is awesome. And data, like you said Jack, will keep you from making mistakes too.

I never worry about the big … When you are faced with a big financial decision, whether it’s studio equipment, or a boat, or an acquisition, or a new office, or whatever it is, by the time it gets to me, by the time you go, “Hey, when you have time today, I’d like to sit down and talk to you about X.” I don’t worry. I don’t have to go do my own homework. I don’t have to go, “I’ll get back to you on that.”

Jack Butala:                         Right.

Jill DeWit:                            I know, that by the time it gets to me, you’ve already done … You’re just pretty much letting me know. It’s really … But you nicely say, “I want to talk to you about this asset. I think we should pick this one up and here’s why.” Which is really just a polite way of informing me it’s coming, so I don’t panic when I see the money come out of the account, “Where did that go?” I don’t worry about it, because I know that’s who you are. This is one of the beautiful things about data obsessed people. I don’t worry about you guys, because you guys do so much over the top research and homework, that I wouldn’t even know how to do, or think about it. That by the time it gets to me, boy all those questions are answered and I’m like, “Okay. Heck yeah. Do it.”

Jack Butala:                         Here’s some advice. I personally don’t buy anything, whether it’s a car, boat, or any of that stuff, unless I know I can, overnight, something goes wrong, I can sell it for twice. It was like that with real estate forever until the last couple of years. Where now, on the bigger deals, it’s not two times, but it’s more like, “I know I can sell it for ten grand more, or a hundred thousand dollars more,” or whatever. Never get yourself in a situation where you don’t have an exit. That’s really the takeaway from this. I bet members that we have, who are killing it, would agree with this. Always have an exit strategy. Always. That’s one of the first things they teach you at any kind of entrepreneurial learning environment, which I guess this kind of is. Always know what you’re going to do with it before you get it. Whether it’s start a company, get married. Always know how it’s going to end. I’m not joking about that at all.

Jill DeWit:                            I know. I know. That’s great advice.

Jack Butala:                         It takes all the stress out of it.

Jill DeWit:                            It really does.

Jack Butala:                         There’s a saying … I’ve said it like a month ago on the show I think. “You never want to end up with ‘For Sale’ property,” in air quotes. Commercial real estate people have been walking around their offices saying that since the beginning of time.

Jill DeWit:                            Right.

Jack Butala:                         “What are you going to do with the property?” “Oh. I’m going to slap a sign on it, and see what happens.” No. No. No. Never want to do that. Never.

Jill DeWit:                            And let it just sit there. That’s stupid.

Jack Butala:                         Yeah. That’s stupid?

Jill DeWit:                            It is stupid. On that note-

Jack Butala:                         Is this how you thought this was going to go?

Jill DeWit:                            You know-

Jack Butala:                         The show?

Jill DeWit:                            … it’s actually better than I thought it was going to go.

Jack Butala:                         Oh wow.

Jill DeWit:                            Thank goodness.

Jack Butala:                         You had low-

Jill DeWit:                            Yeah. I had very low expectations. Let’s get out now. Don’t sink it. Join us in the next episode where we discuss when to quit your day job. Oh. This out to be good.

Jack Butala:                         And answer Brian E.’s question about buyers with doubt.

Jill DeWit:                            You are not alone in your data obsessed life, and real estate ambition.

Jack Butala:                         Good show Jill.

Jill DeWit:                            Thank you.

Jack Butala:                         It’s good for me. Probably-

Jill DeWit:                            That was fun. You know, we uncovered a few things, and we talked about things that we’ve never talked about.

Jack Butala:                         Yeah.

Jill DeWit:                            That was really cool. I like that.

Jack Butala:                         Yeah. Why would you ever get into any type of investment opportunity just to see what happens? You don’t want to do that.

Jill DeWit:                            No. You don’t want to do that. “Let’s test the water and spend $100,000.” Don’t do that.

Jack Butala:                         No. No. No. No.

Jill DeWit:                            Right? Yeah. Do it right, and run the numbers. Good stuff. Hey, like our show? Like Jack said, “That’s your problem.” That’s so funny. I really love that. I’m going to go with that. I want to hashtag, “Like our show? That’s your problem.” Please subscribe and rate us on iTunes, or wherever you are listening.

Jack Butala:                         Information and inspiration to buy undervalued property.


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