How Much Money Does it Take to Get Started (LA 717)
How Much Money Does it Take to Get Started (LA 717)
Transcript:
Steven Butala: Steve and 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’m Jill DeWit, podcasting from sunny southern California.
Steven Butala: Today Jill and I talk about how much money does it really take to get started. I’ll tell you, we have answered this question quite a lot, but it warrants answering again, because we get it so often.
Jill DeWit: I’ll tell you, it’s not zero. People think that-
Steven Butala: It’s not zero, and it’s not 100 grand.
Jill DeWit: Oh my gosh. People will be like … I usually get both extremes. People say, “I’ve heard you need no money at all to get started at this.” I’m like, “Hold on a moment. That’s bad advice, number one. Don’t go down that path, and certainly don’t take out a new credit card or a second on your house to do this.” And then the other thing I’ve heard is, “Oh, I can’t possibly be an investor. I don’t have enough money.” Well, hold on a moment. You probably can.
Steven Butala: Well, as a twist I’m gonna add-
Jill DeWit: But some money-
Steven Butala: I’m gonna add some flavor to this in the meat of the show. There are people who throw a ton of money at this and do extremely well. They take assets from somewhere else in their life and they pour them into vacant land and flip it, and end up making millions. So, I want to talk about that in a minute.
Jill DeWit: But, they also have to be educated. Just because you have a lot of money in here doesn’t mean you’re gonna do well.
Steven Butala: Exactly. And I’m gonna give you the profile of somebody who’s like that with several real examples.
Jill DeWit: All right.
Steven Butala: Before we get into that though, let’s take a question posted by one of our members on TheLandAcademy.com online community. It’s free.
Jill DeWit: Okay. Matt asks, “Hey everyone. I just bought a property from XYZ Company, and John Doe sold it. I got the articles of organization from John before he sold it, confirmed that he was the only guy that needed to sign to sell the property on behalf of the company, and I got the deed signed.”
Steven Butala: Good.
Jill DeWit: “Is that sufficient to transfer the property”-
Steven Butala: Yes.
Jill DeWit: “Or should I have him sign some sort of affadavit confirming he’s the right guy to sell? Will a title company potentially push back on this down the road? Should I follow the articles of organization with the deed at the same time, or a separate document, or just go ahead and send the deed in and keep rolling?”
Steven Butala: Go ahead, Jill.
Jill DeWit: It’s the … This is your classic, Steven, you answered your own question. You know what, you did confirm it. You don’t have to go that far. That’s one of the beautiful things here.
Steven Butala: You already did enough. You did too much.
Jill DeWit: You did.
Steven Butala: Not too much, but safe stuff.
Jill DeWit: And honestly I love it. This is how I do. I like to play it safe, and that’s exactly what you did, Matt. You said, “You know what, hey John Doe, I appreciate you are the sole managing member of XYZ Company, but I kind of need to check it myself. And by the way a lot of these, you can go online and find this and confirm it yourself for a lot of states. Like ours in Arizona, you can look us up and confirm it right then and there, and you don’t have to have the documents. It’s like right [inaudible 00:02:47], it smacks you in the face, which is nice. But you even went above and beyond and said, “I need the articles of organization proving everything.” Great.
What I would do is save that. File that away with all your documents associated with this transaction online, because we don’t do paper here. And should it ever come up, three transactions down the road, now it’s worth 100 million dollars, who knows, and a title company’s doing their due diligence and stuff, you have it. You’ve already gone above and beyond. You wouldn’t even have to, but you have it and you’re covering your rear and it’s all good. Then all you need to do is treat it like normal. You put the signature, which will reflect his title and position with the company, and you send in your still regular normal probably one page deed, and on your merry way.
Steven Butala: In all these questions, there’s a question, or a statement, that says, “Will the title company potentially push this back down the road?” Here’s the deal. If you self close a transaction, meaning a guy’s got a property. You send him the deed. He signs it and notarizes it, and it’s all great, and you send it to a recorder and they record it. There’s no title insurance associated with the deal. The chance that a title company down the road is gonna kick it back, and not kick it back like, oh my gosh, this is awful. They’re just gonna ask you to sign some stuff to say who you are, is very likely. But that doesn’t kill the deal. It doesn’t make it less valuable. There’s a huge misconception on this point, in my opinion. Just because you bought and sold a property without title insurance, especially rural vacant land, doesn’t mean the sky’s gonna fall. And there are some title agents that portray that picture. These guys are hacks. They couldn’t even use a title company? And the whole industry likes to think that, but the fact is, it’s not the case.
Jill DeWit: You know what I think is kind of cool, too. Whenever these … So be ready, Matt. The more property you sell, someday down the road, someone’s gonna come to you and say, “Hey I need you to sign this stuff just proving this is how the transaction, because we’re doing the title work”-
Steven Butala: Proving who you are.
Jill DeWit: Exactly, and all that good stuff. And you know what, what it does for me is, I’m like, oh my gosh this is actually really worth something now. That’s the thing I go, “Woo hoo. That’s pretty cool for whoever this person is.” That’s how I see. It’s not like, “Oh no. They’re trying to see if I screwed something up.” No, now it’s obviously worth more money, and then whatever the transaction they’re doing, they’re doing their homework here. I’m like, “Wow. Good for that guy.”
Steven Butala: Yep, exactly.
Jill DeWit: That’s all I think. And then you just sign the stuff and move on.
Steven Butala: It flips a switch in certain people that there’s really intelligent real estate investors out there. I don’t know what it is. Like, oh my god they don’t need me, or they think they can do my job, or something. It trips something, but it cracks me up because a normal person I think would say, “Wow. Thanks for doing most of my work.”
Jill DeWit: Do you know what I think it is? Here’s the mindset. I think that what a title agent thinks of buying a property without title insurance is like buying a camera from Best Buy and not buying the three year warranty. That’s the mentality. Well, why would you not buy the three year warranty at Best Buy?
Steven Butala: I never buy the warranty. Do you?
Jill DeWit: That’s my point.
Steven Butala: Do you ever buy a warranty on that stuff?
Jill DeWit: No. So, the same person that will do title insurance I guess on every single property, whether it’s $100 or $100000, probably buys the three year warranty because they think they have to. Isn’t that funny?
Steven Butala: Yeah. There’s some reason for it. There’s some core psychology thing about it. That’s a good example.
Jill DeWit: Thank you.
Steven Butala: But for us, just so you know, listener we don’t buy property that’s $5000 or more purchase price without getting title insurance, just to avoid … because number one, you can afford it now. There’s enough meat in the deal with 500 to 1000 bucks isn’t gonna matter.
Jill DeWit: And it makes it more valuable down the road, too sometimes.
Steven Butala: There’s a perception for some of the buyers if you present it right on the internet, that there’s a perception that it’s a better deal. It just makes you stand out, versus the six or seven other properties that may be on the internet that they can choose from.
Jill DeWit: Yeah, but it doesn’t mean anything. You’re right.
Steven Butala: It doesn’t.
Jill DeWit: I would say, “Bought with title insurance.” People go, “Ooh,” and I’m like, “Yeah, I just did it because” … Sometimes I just did it because to not only get more money, but it was a tough deal. Maybe someone passed on and we had to do this stuff. I’m like, “I’m not touching with that. We’re gonna let the title agent do it.” It was worth it.
Steven Butala: One of the words in title insurance is insurance.
Jill DeWit: Right.
Steven Butala: So, if you’ve ever sat down to really think about insurance itself and what it is and why, then you would understand.
Jill DeWit: Understand their mentality.
Steven Butala: Insurance is maybe the greatest scam of all time ever-
Jill DeWit: It’s true.
Steven Butala: On this planet. Potentially maybe the greatest one.
Jill DeWit: Yeah.
Steven Butala: Anyway. Today’s topic, how much money does it take to get started in all of this mess? This is the meat of the show. Jill, cut to the chase for us right now. I want to get into the business. You take these calls. I know you take these calls multiple times a week from potential members, just people who want to know. How much, and what’s your standard answer, and then I’ll work from there.
Jill DeWit: Okay. Standard answer is $5000 to $10000 to get you up and running. I would love more. I would like closer to 10, because you could do better acquisition-wise.
Steven Butala: Break us down. What do you spend that 10 on, or five on?
Jill DeWit: Okay. Well number one, you need to get educated. You are wasting your time if you’re running blindly buying property, not downloading good data, overspending on mail, and not knowing what you’re doing. You don’t want to do that.
Steven Butala: Spending too much on mail will kill you. I’ll tell you right now. And education. Spending too much on education.
Jill DeWit: Right. I hadn’t thought about that, too.
Steven Butala: I don’t mean to interrupt you. Getting the wrong kind of, I don’t mean low quality education. I mean this. I’ve heard a lot of people say this. “Well I’m just gonna listen to this Land Academy podcast all the way back to the beginning.”
Jill DeWit: And I’ve got this.
Steven Butala: “All 717 shows. I don’t need any education.’
Jill DeWit: I got it.
Steven Butala: “It’s all in there. I’m gonna read Seth Williams’ blog right back to the beginning.” Which, by the way, is one of the best blogs, I think in the business here. That’s just not the case. You need to get a calendar out and mark days and get some serious serious education about how to send a mailer out, which mailers work. I mean, there’s a-
Jill DeWit: Picking a county. How to price.
Steven Butala: All of that.
Jill DeWit: How to buy. How to transfer. How to sell. How to market. What do I need to know? Big picture.
Steven Butala: You need to hook yourself up with the-
Jill DeWit: There’s a lot.
Steven Butala: Hook yourself up with some of the senior members in LandInvestors.com, which is all free, and ask them a bunch of questions. There’s a bunch of stuff. Does it sound like a lot of work? Yeah, it’s a lot of work. And you know what, there are people who make millions of dollars a month in our group that started with nothing. I really did interrupt you. Go ahead.
Jill DeWit: You did. It’s okay.
Steven Butala: Because I’m excited about it.
Jill DeWit: I know. So, you need to get educated. Number one, you need a couple thousand dollars for that. Now, that’s us, by the way. I think we’re the least expensive of this kind.
Steven Butala: I know we are.
Jill DeWit: And we provide the most-
Steven Butala: And best.
Jill DeWit: How is that? But anyway, just think about that. It’s like you’re not gonna be a doctor without going to school. Think of all the things, you’re not gonna fly a plane without learning how to fly. You’ve got to get educated. Whatever you want to do.
Steven Butala: You’re not gonna be set up for a multi million dollar a month career-
Jill DeWit: It’s true.
Steven Butala: For a couple of grand anywhere else either.
Jill DeWit: Yeah. And ask our guy. That’s a really good way. You can certainly go on our sites and quickly, like our land selling sites on the community and figure out who the big players are. Ask them and they’ll tell you right away. Like, “Oh my gosh. Here’s why I’m here.”
Steven Butala: They’ll tell you.
Jill DeWit: “And what was a game changer for me.” They’ll share that. So, you need to get educated. The second thing you need a budget for is mail and data. It’s not like I just got the education, I just go buy something. And you’re gonna spend some time here. You’ve got to budget. A mailer right now, I think I remember right, is 58 cents I want to say. And that’s all in postage, two pages, envelope, everything.
Steven Butala: It’s assistance.
Jill DeWit: Printing. We do the mail merge.
Steven Butala: Basic assistance from our staff to make sure it goes out right.
Jill DeWit: Exactly. And it’s within 24 hours or same day, depending on what time you submit it. Anyway, you’ve got to plan on that and you’ve got to plan on getting the data and downloading the records and doing that, so that costs a little money, getting the data and getting the education. Then finally, so you’re spending … You could do that in under $3000 by the way. Now, you’ve got either $2000 if you’re in the $5000 plan, or you’ve got $7000 if you’re on the $10000 plan for acquisitions. That’s what you really want to spend your money on.
Steven Butala: Yeah. You want to spend it on real estate, not on all this other stuff.
Jill DeWit: Mm-hmm (affirmative). Exactly.
Steven Butala: By the way, those numbers she just threw out, that’s about what it takes to do your first deal as a licensed real estate agent. Between education, association fees, and oh I have to buy a sign after I got a listing, put it … All this stupid stuff. Would you rather be a real estate investor or a real estate agent?
Jill DeWit: Right.
Steven Butala: I know which one I’d rather be.
Jill DeWit: What’s interesting is it’s so cool. Here’s what I love, too. We have a lot in our group of real estate agents who are transitioning to be investors. I think it’s the coolest thing. I think some of them, because they see clearly that’s where the big money is. And then some of them too, it’s just like, “I can do this anywhere. This is my retirement game plan.” I’ve talked to them and I’m like, “Yep, you’re right.” It’s brilliant. Super cool.
Steven Butala: Retirement game plan. I love that. I’m gonna do a show like that. Retirement game plan. That’s exactly what this is.
Jill DeWit: This is my retirement game plan.
Steven Butala: It is mine, too.
Jill DeWit: So, yeah. What questions … Do you have more questions for me, Steven?
Steven Butala: How much does it cost? I made a bunch of promises at the beginning of the episode that I’m gonna keep here in a second.
Jill DeWit: Uh oh.
Steven Butala: How much does it cost? Here’s a few real examples of some serious go-getters in our group that they’ve actually accomplished. And if you don’t believe me, go on TheLandInvestors.com. This is all free. And ask, “Is this really true? Did this guy really do this?” Get a user name. It’s all free. LandInvestors.com is an online community I literally developed myself a few years ago while Jill was on vacation, so that we could all just collaborate. It doesn’t cost a dollar. We all just get in there and say, “I’ve got this problem.” All these questions that we read at the beginning of the show come from LandInvestors.com. If in fact you become a member, you’ll see a little pro status under there, but you don’t have to be. There are many people that have been on Land Investors getting information from senior members for free for years.
So, here’s an example of a person who had no money. I mean none. They got in our group, got access to the deal board and access to the people with the money, and now since it has exploded. This person went on, got all the education, a total go-getter. Sent a bunch of mail out and retained a bunch of transactions that he had no money to buy. He didn’t have any money to spend. Talked to the right people, the senior members in our group. I have no knowledge of this until after I hear these stories four months later, by the way. I’m not sitting there watching it or monitoring it. I have other stuff to do, believe me. He became the guy, the total bird dog, got real creative about the counties that he sent this mail out in and retained these deals, and then went out in search of investors, and they split the margin.
Here’s a typical deal for these guys. They do bigger deals. They’ll buy a piece of property in the center of the country or in very pretty unlikely places for $10000 or $12000 and they’ll sell it for 40 or 50. Let’s just say buy it for 10 and sell it for 50 and make 40 grand. I’m oversimplifying. The investor gets 20 and the new guy with no dough gets 20. He sends another mailer out. Does it over and over and over again. You do 10 deals … If you make $40000 on a transaction and you do 10 deals, that’s $400000. One guy in particular in the center of the country sent one mailer out, bought a huge … He signed up a huge ranch. Went to his rich friend and sold it for $400000 more in one deal. Now does this happen? Is this absolutely this is gonna happen? No way. But these are guys that have owned businesses in the past. They know how to think and they know how to be organized and implement what’s in their head, and they make a ton of money.
We have one group, they’re not even members Jill talks to once in a while. They make half a million dollars every six months doing a few deals. They all have regular careers. So, here is my big picture point, not to sit and motivate everybody. My point is money doesn’t matter. There’s no replacement for signing up a transaction where a seller’s just dying to sell a huge piece of property or a very valuable piece of property for 50 or 100000 bucks when you know it’s worth half a million. Go for the gold.
Here’s another example. A guy had about $50000 or $60000. I only know this because this was about a year ago. We had multiple consulting calls that he paid for, because he wanted to make sure he was doing it right. This guy is a very, very thorough type personality. He took that $50000, he makes at least half a million dollars a month now. Again, going to very obscure counties. He’s a marketing genius. He was a marketer before he got to us for other people. Online marketing. Does videos for everything. If you dig around in our group, it’s not gonna be hard to find him.
Finally, there’s Luke Smith. Luke is not the most successful person in our group at all. He’s definitely in the top 10, but he is the loudest in a good way. He’s the most vocal on the internet. You should check his YouTube show out. It’s called Rural Vacant Land. He picks up a ton of subscribers. He does a video on every single property purchase. But here’s his story. He really early on, he was one of our original top maybe 10 members, maybe 15. And Jill was giving away a bunch of property, and he picked one up. He bought it. He bought the program. Sold the piece of program that we were giving away with the program. Made all his money back.
Jill DeWit: And then some.
Steven Butala: Then he sent a mailer out. Did about 20 deals really fast because he was very-
Jill DeWit: Skeptical. It was awesome.
Steven Butala: He had an online business. Yeah, he had an online business that … This was all just natural to him. And decided and understood that it was real. Then he tapped into other assets that he owned and liquidated them, and spent almost a quarter of a million bucks on real estate, on this type of land product, and he’s got … If you go to his website, probably like 1500 properties for sale at any given time. He makes millions of dollars. He makes more than we do by buying and selling land, I’ll tell you. I’m comfortable saying that.
So, money has nothing to do with it. It all has to do with where your head is. That’s my speech.
Jill DeWit: Thank you. Good speech.
Steven Butala: Half motivating. It’s motivating for the right people, and really depressing for some people.
Jill DeWit: We’ll get them there. All good. That was awesome.
Steven Butala: Well you’ve done it again. You’ve spent another 20 minutes listening to The Land Academy show. Join us tomorrow for another interesting episode where we discuss how much money can you really, really make per year. In case you haven’t noticed, this is the truth about land flipping week. We’re killing it. Absolute truth here.
Jill DeWit: And we answer your questions posted on LandAcademy.com. Go to our online community found there, and it’s free.
Steven Butala: You are not alone in your real estate ambition. This is the truth. Most people don’t believe me.
Jill DeWit: No. It’s good. I’m glad. And it’s nice to circle back around and answer that for everybody here, because that’s I’m sure a very common question. Like, “All right. Come on.” After, “Is this too good to be true?” Then, “All right, how much do I really need?”
Steven Butala: The real question I would ask, you know after all these years, you know what I would ask somebody if they had a show like this? I would say, “You know what, what’s really likely?” Not what’s possible. What really happens? What’s the average? We can talk about that. What’s the average that people make per year? How can I fail at this? Not how can I succeed, or is this real. It’s like, what does it really take? You have to have a certain personality, Jill, to make this work. And it’s not for everybody for sure.
Jill DeWit: Nope.
Steven Butala: How’s that for truth?
Jill DeWit: Exactly. Hey, share the fun by subscribing on iTunes or wherever you’re listening. And while you’re at it, please rate us there. We are Steve and Jill.
Steven Butala: We are Steve and Jill. Information.
Jill DeWit: And inspiration.
Steven Butala: To buy undervalued property.
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