How to Scale Up After 10 Deals (LA 713)
How to Scale Up After 10 Deals (LA 713)
Transcript:
Steven Butala: Steven, Jill here.
Jill DeWit: Hello.
Steven Butala: Welcome to the Land Academy Show, entertaining land investment talk. I’m Steven Jack Butala.
Jill DeWit: And I am Jill DeWitt, broadcasting from sunny southern California.
Steven Butala: Today, Jill and I talk about how to scale up your land operation, after those crucial first 10 deals. This topic … I have to tell you, I’m a little biased.
Jill DeWit: Really?
Steven Butala: I love, people who have made it [inaudible 00:00:28] to this point.
Jill DeWit: Oh, oh, yeah.
Steven Butala: There’s no more whining, there’s no more, “oh, my god, how do I do it”. What happens, all their hurdles and the hard stuff’s done. Now you’re staring in the mirror saying, “you know what, I didn’t know this could work”.
Jill DeWit: Right. I have 10 examples showing that I did it.
Steven Butala: And then you start doing some math, saying all you really even need to do is just 10; if I make 10 grand a transaction and I do one transaction a month, I’m going to make $120,000 this year. You’re staring at yourself in the mirror; that’s a good moment.
Jill DeWit: Yeah, exactly.
Steven Butala: And then, if I can do one deal a month, I can do two, and now I’m making a quarter of a million bucks a year, now I don’t need a job.
Jill DeWit: Ding ding.
Steven Butala: That’s how it starts. I love this point. This is the excitement and the whole scaling it up, what do I have to do, just tell me what to do.
Jill DeWit: Yep, love it.
Steven Butala: Before we get into it (we really just did), let’s take a question posted by one of our members on landacademy.com online community. It’s free.
Jill DeWit: Alright, Jeff asks, “Hello all, I have a question about sending offers. If you send 1500 offers and someone with some land sends a signed one back in, are you not obligated to buy the land? Has anyone ever cried foul, or more than cried, in times where you go back and decide not to purchase? Thanks, Jeff”.
Steven Butala: Go ahead, Jill. We’re going to say the same thing.
Jill DeWit: Totally. One of the things that we do-
Steven Butala: It’s a good question, by the way.
Jill DeWit: It’s a great question. And you know what, Jeff, the answer is, anybody can back out at any time, and it happens not just with land. Even with houses, you could be in escrow and you know –
Steven Butala: It could happen at the altar.
Jill DeWit: It could happen at the altar!
Steven Butala: You know, it turns out [crosstalk 00:02:13] that I just don’t want to get married.
Jill DeWit: And you know what, all that happens is how much do you want to pursue and make that person, I mean, do you want to chase that person and bring legal recourse or attempt to bring legal recourse to them? No, because then it’s going to cost you both money, and that’s really not the answer. Let me just simplify and make it really easy though, what we do, because it doesn’t usually get to that point, obviously.
With land, one of the things that we have on our mailer is, at the bottom, there’s like five or six conditions there that we have put, that this is contingent upon the taxes being current or in a whatever situation, up to us, by the way, and it’s dependent on it meeting our acquisition criteria.
Steven Butala: Good marketable title.
Jill DeWit: Good marketable title-
Steven Butala: There’s four or five of them.
Jill DeWit: Exactly.
Steven Butala: You can find an exact copy of the mailer we send out on offerstoowners.com, in the forms section.
Jill DeWit: Exactly. So the bottom line is, we have one there five or six things that, that’s great that you signed this back, but it’s all contingent upon it meeting, passing our tests of these five things, and I can back out. I could say any one of those, I could say, “you know what, this doesn’t meet my number three right there, and that’s why,” and I’ve never had to say that.
Steven Butala: The last condition, I think it’s number five, and I’m paraphrasing, says, look, we reserve the right to just not buy this transaction at all.
Jill DeWit: Right.
Steven Butala: I mean, it’s not that blatant, I think it’s closer to-
Jill DeWit: It’s eloquent.
Steven Butala: Yeah, it’s closer to, “this property has to meet our acquisition criteria in its entirety”.
Jill DeWit: Right.
Steven Butala: There, that’s your out right there.
Jill DeWit: Exactly.
Steven Butala: The grass is too green, I don’t want to buy it, that’s not in my acquisition criteria, I don’t know what your acquisition criteria is. Actually, that’s what it says, “It has to meet our acquisition criteria.”
Jill DeWit: And there’s times when I flat-out don’t want the property, and usually it’s because, usually it’s properties from years ago that we’re just not buying in that area anymore. So that’s a no brainer.
Steven Butala: There’s certain sections of the country that Jill and I, we won’t buy property for a dollar.
Jill DeWit: Right.
Steven Butala: And it’s just because it’s been too saturated.
Jill DeWit: Well, and there’s some subdivisions that we were doing, we were happily flipping for small dollar amounts back then, and we just don’t do it, it’s just too small of a deal for me anymore. [crosstalk 00:04:27] So that’s a lot of it too.
Steven Butala: And we don’t $1,000 per deal anymore.
Jill DeWit: Yeah, I’m not into that anymore. But somebody else is.
Steven Butala: Sure.
Jill DeWit: If they do ever really get upset about it, “but you said you’d buy it”, here’s what I would come back with: look, I looked it up, and I can provide you a video and stuff if you want to see what I’m looking at too, so you can see where I’m coming from. This price doesn’t work for me. I went and did my homework and it just doesn’t work. So, I’m sorry, I know I put $4,030 on there, I can’t make it work for $4,030. What I can make it work is for $2,000. So if that works for you, then great we have a deal. If it doesn’t work for you, I understand and have a nice day. And then put it on them, and then they might go, “Alright fine”. And they might not be happy, but you know what, they got an offer and then it’s up to them.
And what’s funny is how many times some of them do come back and go, “alright,”-
Steven Butala: They always do.
Jill DeWit: “I’ll take your $2,000.” And sometimes then I go, shoot, I really didn’t want it. [laughter] But it works for that.
Steven Butala: A word of caution here though, you do not want to be that guy that becomes your business model, where you send a bunch of $4,000 offers out and you tell everyone, oh I mean $1,000.
Jill DeWit: Right, don’t make that your business.
Steven Butala: That’s not cool.
Jill DeWit: That’s true, that’s not how you should be doing it. But if something happens…
Steven Butala: That will come back and get you.
Jill DeWit: Exactly.
Steven Butala: What happens with houses (and we’re not really supposed to talk about houses here) a lot, very often actually, is we send a mailer out and the property is located on a really, really busy street and they have been trying to sell forever, and you have to back out of that. They get mad.
Jill DeWit: Yeah… and it’s too bad.
Steven Butala: Last mailing, we had two properties in there, they were livid about the fact that we wouldn’t honor it. Even reducing the price; Jill and I refuse to buy property on a main thruway.
Jill DeWit: There’s a few things you can’t get past. And usually it’s more than one. It’s not [crosstalk 00:06:24] but that’s a big one.
Steven Butala: For land, it’s great, you always want property that’s on a main street- a major street.
Jill DeWit: Right. Has anyone ever? Yeah, it’s happened and it’s not a problem and you just apologize and move on and they might be mad and that’s just okay.
Steven Butala: Well, what you do because you’re part of this group now and we do this all the time, is you go on DealBoard and say, “Hey, I got this property and I don’t want it. Here’s the name and number of the guy who’s gonna sell it for X, see if you want it.”
Jill DeWit: You could do that. That’s not a bad idea to say, “Hey, this doesn’t meet my criteria. I’m happy to share it with my peers.” If anybody’s interested, you’ll know. And, at least, that even might just make the guy feel better. You know what I mean? And you throw it up there and who cares? That’s actually going above and beyond. I don’t know if I would necessarily do that, but that is being nice.
Steven Butala: I think if you’re in the beginning of your career, I think you should take five seconds and post it on DealBoard and then the seller is gonna get ten phone calls from other people or whatever and it’s all good. It’s good karma thing.
Jill DeWit: That’s good. That’s very big of you, Jack, Steven.
Steven Butala: Today’s topic: How to scale up after those first 10 deals. This is the meat of the show.
How do you get past those first 10 deals? You’re an expert at this. How do you get from zero to deal number 11?
Jill DeWit: Okay, so let me give you a little background on what we’re even talking about. I came up with this, I don’t know how many years ago-
Steven Butala: You did, this is your baby actually.
Jill DeWit: Thank you. I came up with this because people were like, “I’m ready to take the next step.” I’m like, “knock it off everyone.” I said, “You’re not ready. Get ten deals under your belt[crosstalk 00:07:55], then call me back.” They do one and think, “this is it! I got it, I’m in.” I’m like, you know what? I get that, thank you. You’re on your way, let’s get 10 deals, and I mean 10 deals start to finish: bought, recorded, marketed, sold, recorded. That’s all the way through, you are done with that, there’s nothing else that’s needed on that transaction.
Steven Butala: And if you did it right, you have some spectacular failures in the first ten.
Jill DeWit: Oh yes. And that’s why. Because if you do one and it just, cause sometimes the first one just goes beautifully and you think, “this is great!” And then number 3 goes it’s returned from the county six times because you keep forgetting something on the deed or you did it wrong or the wrong person signed or who knows what? Things happen. That’s why I want you to have ten deals, start to finish, done. You’ve got a lot of the kinks out, you understand how the county works, you understand how the recorder works, you understand what the assessors role is, you understand deeds now, you’ve done different deeds-
Steven Butala: And you like it.
Jill DeWit: You’ve dealt with a bunch of different sellers, you have all these things that you’ve figured out. You could do this in a month, by the way. However fast you want to do it. After you’ve got those ten deals, you had to go through all that work and maybe angst and pain and fixing it and apologizing and changing things and figuring out how to do deposit the money [crosstalk 00:09:22]
Steven Butala: How to deposit the money!
Jill DeWit: That happens sometimes too. They’re like, [crosstalk 00:09:24] “This guy wants to pay me, I don’t know where to put the money or how to take a payment. What do I do?” You’ve got all that stuff figured out and now you’re like, “Okay. I have a good feel for it now, after ten deals and I like it.”
Steven Butala: “And I like it” that’s the key.
Jill DeWit: That’s the main thing. A lot of people after ten deals are gonna go, “this is not for me.” And that’s okay too.
Steven Butala: That happens. People call us. They’re like, “you know, it works, I just don’t want to do it anymore.”[crosstalk 00:09:53]
Jill DeWit: That’s fine! It’s not for you. I don’t care. I could go out right now and go to an auction with you, Steven, and we could buy cars [crosstalk 00:10:01]
Steven Butala: [crosstalk 00:09:59]Well, yeah, oh cars.
Jill DeWit: Yeah, let’s just say that, or horses.
Steven Butala: Oh my god, no.
Jill DeWit: Or cattle.
Steven Butala: Or we could own a daycare.
Jill DeWit: Or we could own a daycare. We could own nursing home facilities. Whatever it is. There’s a lot of things we could be doing right now, but I just don’t want to, it’s not my thing. They’re very profitable. It’s just not my thing. Then that’s okay. There’s nothing wrong with that.
Steven Butala: I do love the nursing home business, I have to say. But go ahead.
Jill DeWit: It’s too much work.
Okay. Now you’ve got that done. Now you’re ready to scale up. I came up with four things, that I thought I would share, then you see if you have more. Then we’ll talk about them.
Steven Butala: Yeah.
Jill DeWit: Okay.
You’re ready to kick up your business, take it to the next level.
Steven Butala: Deal number eleven.
Jill DeWit: [crosstalk 00:10:41]I’m in.
Steven Butala: About 20, 30, 50,000 bucks in the bank from all this. Go ahead.
Jill DeWit: Number one: Now I want you to systemize your business. Number two: you need to create a routine for yourself. You can’t be doing this part-time when you feel like it now. You’re doing more than that. You need to have a routine. It might be for 2 hours everyday after work and all day on Saturday or whatever it is.
Steven Butala: Put systems together[crosstalk 00:11:05]
Jill DeWit: And a routine.
Steven Butala: And a routine, go ahead.
Jill DeWit: Number three: A lot of this should be going faster now. You should automatically be getting faster and you should have seen things that you could do quicker and better and all that good stuff. You should have identified those things. That should be happening, number three. Number four is kind of a bonus one: You should be looking to get help [crosstalk 00:11:34] for stuff that you’re not good at, or you absolutely can’t stand.
Steven Butala: Jill, this is brilliant stuff!
Jill DeWit: Maybe it’s deeds, maybe it’s paperwork, and you should be looking at that. Those are my four. Do you have anything you want to add?
Steven Butala: Is it my turn?
Jill DeWit: Yes.
Steven Butala: Jill perfectly put that- I can roll it into one though. When you’re staring at yourself in the mirror and you’re happy, you’re patting yourself on the back. You also should be saying, “If I only had this conquered.” And whatever “this” is, “x” conquered, I could send this thing to the moon. We all have it. We all have a bottleneck. For me, it was what Jill does. My business only got to a certain point because, the thing for me I didn’t want to do was talk on the phone with people, on the acquisition side or on the sell side. I couldn’t stand the paperwork part. The paperwork part you get over real fast because there’s lots of [inaudible 00:12:28] people that will moonlight or do deeds for you and all that stuff. That’s actually pretty easy, but that personality part, for me, I can do it. I absolutely can do it enough to have a pretty successful talk show. I just can’t stand doing it. I think it’s inefficient. I should be working on other stuff.
Jill DeWit: That’s getting help with the stuff you’re not good at or hate. That’s probably slowing you down.
Steven Butala: I think [crosstalk 00:12:52]
Jill DeWit: You probably avoid it at the end of the day, right? That’s what happens to you, when you’re like, “oh, great. I bought all these great properties and they’re posted but I don’t want to talk to anybody.”
Steven Butala: Everybody, their success, is sitting in the back saying, “If only I didn’t have to do this.” I’m telling you, don’t knock yourself out over this thing. Get somebody to do it. Now more than ever, in the history of time, because of the internet, you can find people to do these little jobs that you can’t stand to do, for next to nothing. All over the world.
Jill DeWit: Exactly.
Steven Butala: If it’s something as important as talking on the phone, get yourself a partner. Get your husband to do it, or your wife to do it, or your teenage kid even.
Jill DeWit: Do you want to talk about, real quick, my number one? I want to cover them again just real quick. My systemize. What do you want to add about creating a system, please? Because this your forte.
Steven Butala: If you have what it takes to do ten deals, and you’ve got paper all over the house, and notepads filled, and all that stuff, that’s not uncommon. Take a class, take an organizational class, go on YouTube and figure out how to do spreadsheets, databases, and everything else. If you have what it takes to send out a mailer, you’re way, way ahead of the curve. Again, I can’t say it enough. If you’ve done ten deals, I love where you are. It’s way easier to talk to people who’ve done ten deals and want to ramp up than somebody who’s brand new. To systematize everything, start with spreadsheets. Just get yourself some spreadsheets, organize your acquisitions and your sales, and start with spreadsheets. You shouldn’t end there. You also need to get some version of a CRM.
Jill DeWit: Beautiful. What about routine? You wanna share on routine a little bit?
Steven Butala: I’m a massive fan of this. Everybody asks me what my day looks like. I constantly get this question like, “what do you do everyday?” I’ll tell you what I do. I wake up and I look at my calendar. I usually have one planning day a month and I plan everything out. I plan every last minute of my work day out with an extra hour at the end cause stuff doesn’t always go as planned. Do that. You have to have a calendar and you have to stick to it.
Jill DeWit: Love it.
Steven Butala: It takes all the stress out of everything, by the way. Like, “What do I have to do today. Shit, I gotta do this, I gotta call that person,” Oops. I have to bleep that out.
Jill DeWit: It’s okay.
Steven Butala: Go ahead.
Jill DeWit: Number three. Talk to me about faster and speed. You noticed that, right? Part of this little faster and speed thing, I was pleasantly reminded how this goes on that Scrum book that I’m reading.
Steven Butala: What happens is, the first acquisition that you do, you’re gonna talk to the person like twenty times, the seller. In the end, you should take a look at it and say, “You know what? The person called me back, they’re on the phone right now, close the deal.” Close the deal right there. [inaudible 00:15:32] notary, the whole thing.
Jill DeWit: That’s good. You’re getting faster at this point by deal eleven. You know who’s a good buyer cause all the experience that got you to this point. You’re faster at getting deals done.
Steven Butala: Yeah
Jill DeWit: Okay, good. You can pick out the who’s a right buyer who’s a tire kicker and get them off the phone.
Steven Butala: That and you can pick out the right deals to close too. You’re gonna get a lot of mail back and a lot of calls back and some of the deals, you’re just not gonna want to do.
Jill DeWit: Yeah, you already know: no, no, no, yes, yes, no. [crosstalk 00:16:03]
Steven Butala: The first ten that you do, hopefully are slam dunks. There’s no ran to the bank situation where you couldn’t fail.
Jill DeWit: It took you a lot of time on each one of those, especially deal number one.
Steven Butala: Now you’re gonna roll some of those not run to the bank deals in there if you’re gonna ramp up.
Jill DeWit: Awesome!
Steven Butala: Join us tomorrow for another interesting episode where we discuss the business signs that tell you to go from part time, to full time. This is a cool week!
Jill DeWit: I love it. I know. And we answer your questions posted on our online community, which is free. You can find it from landacademy.com or go directly there, it’s landinvestors.com.
Steven Butala: You are not alone in your real estate ambition.
Jill DeWit: Yeah, I do like this week.
Steven Butala: I think listeners would be interested to know that we actually have to get off this episode right now because Jill has to sell a fairly large piece of property right now.
Jill DeWit: I do have a person waiting for me to give him some instructions on payment.
Hey, share the fun by subscribing at iTunes or wherever you’re listening and while you’re at it, please rate us there.
BOTH: We are Steve and Jill
Steven Butala: Information
Jill DeWit: And inspiration
Steven Butala: To buy undervalued property.
If you enjoyed the podcast, please review it in iTunes . Reviews are incredibly important for rankings on iTunes. My staff and I read each and every one.
If you have any questions or comments, please feel free to email me directly at steven@BuWit.com.
The BuWit Family of Companies include:
I would like to think it’s entertaining and informative and in the end profitable.
And finally, don’t forget to subscribe to the show on iTunes.
