Why Land Flipping Education is Imperative to Succeed (LA 726)
Why Land Flipping Education is Imperative to Succeed (LA 726)
Transcript:
Steven Butala: Steve and Jill here.
Hi.
Jill DeWit: Welcome to the Land Academy Show, entertaining land investment talk. I’m Steven Jack Butala.
Steven Butala: And I am Jill DeWit, broadcasting from sunny Southern California.
Jill DeWit: Today Jill and I talk about why land flipping education is so imperative to succeed. It already sounds like we’re going to talk about … This is a one big half hour commercial for our crap.
Steven Butala: It’s not.
Jill DeWit: But it’s not. It’s never a commercial, either.
Steven Butala: No, it’s like … I think we’re going to talk more about education period.
Jill DeWit: We are.
Steven Butala: I mean, it doesn’t really matter what it is.
Jill DeWit: Just get educated, is the whole point.
Steven Butala: Exactly.
Jill DeWit: It doesn’t have to be from us.
Steven Butala: No-
You want [crosstalk 00:00:35], that’s fine. If you don’t, you don’t.
Jill DeWit: Exactly. Cool.
Steven Butala: Don’t ask your spouse, that’s for sure.
Jill DeWit: Ha ha.
Steven Butala: Anyway. Before we get into it, lets take a question posted by one of our members on the LandAcademy.com online community. It’s free.
Jill DeWit: Okay, Joshua asks, “We are relatively new to the business, and potentially over-cautious.”
Steven Butala: Good.
Jill DeWit: That’s a good place to be. “But, those wholesale deal looks suspiciously like a potential fraud (I’m not accusing anyone, just our thoughts).”
Steven Butala: Good.
Jill DeWit: “Here are a few questions we have for the group: 1. Are we completely off base here? 2. What do you typically require from the seller when purchasing a wholesale property, specifically one that is under $5,000.00, and you would not get title insurance? Some of our thoughts were to have a signed contract, releasing payment once the data’s recorded and possibly ask to see their Articles of Incorporation and make sure the person trying to sell the land is legally allowed to. 3. Are there certain [inaudible 00:01:37] that you look for when doing business with other land investors? Thanks for any input.” This is funny.
Steven Butala: You want an answer?
Jill DeWit: Go for it? You want to start? You start.
Steven Butala: First of all, there needs to be some trust. I can tell you that we have not gotten stung like you’re referring to in all the almost 16,000 deals we’ve done. Here’s why, some of it’s a feeling. So, if you’re dealing with a person that’s nowhere on the Internet, they don’t have a website, you found them on Craigslist, or in the classified ads or something, and it’s just not clicking with you, don’t do the deal. I know that sounds like a silly answer, but it’s true.
Jill DeWit: Mm-hmm (affirmative).
Steven Butala: Make sure that all the stuff ties. So, you’re going to go to the county website and see who owns the property, if they own the property. That’s good. If it’s in an LLC, that’s great. Ask for the LLC documents, or look them up online. Nine times out of 10, you can really quickly see who the managing member is and see if it’s the person that you’re talking to on the phone.
If you want to go crazy, start looking these people up on Facebook. Who are you talking to? Do they have a Facebook account? Are they asking you to do some funky stuff like write a check, send it over to the Bermudas, or here’s a good one. I think I actually had this, and I killed the deal. “You know, could you write this through my brother-in-law? His name is (this), and I’m going to deed the property to you. Can you send the check to West Virginia?”
Jill DeWit: Yeah, right.
Steven Butala: Those kinds of things are huge red flags. But in the end, I’m going to quote my friend Jill here, let’s say it all goes sideways, all of it, and you’re doing 10 deals a month, 15 deals a month, 20 deals a month, or more, and one goes wrong. You’ve spent four grand on it, you know, is it the end of the world-
Jill DeWit: No.
Steven Butala: That you lost four grand, and you’re making hordes of money over here?
Jill DeWit: Exactly. You won’t do that again.
Steven Butala: Right.
Jill DeWit: That’s for sure. You’ll go, “Well, I forgot to check X, Y, Z, and I won’t do that again.”
Steven Butala: So, go ahead Jill.
Jill DeWit: You covered it all perfectly.
Steven Butala: Oh yeah?
Jill DeWit: No, it was great. I don’t really have anything to add.
Steven Butala: I will say this, this business of signing contracts, and getting people to sign-
Jill DeWit: That doesn’t mean anything.
Steven Butala: The fact is, if somebody takes you for a grand, let’s say, and they have a signed contract and everything, the t’s are crossed and the i’s are dotted, are you going to sue them? No.
Jill DeWit: Right.
Steven Butala: You’re really not. What you’re going to do is just keep moving forward on the other land deals to make up for it.
Jill DeWit: Right. The bottom line is, Joshua, the fact that you put this in here tells me you shouldn’t do the deal.
Steven Butala: Yeah, or if he’s so brand new and it’s in an LLC, I mean-
Jill DeWit: Okay, that would make sense, but-
Steven Butala: Right.
Jill DeWit: Yeah.
Steven Butala: I had somebody one time, this was a lot of years ago, that forged my name. I owned so much property in one subdivision … Not one subdivision, but one county, and somebody just deeded a bunch of property themselves. Fortunately, the recorder realized the signature wasn’t right-
Jill DeWit: Right, and caught it.
Steven Butala: Yeah.
Jill DeWit: That’s good. You know what I’m wondering? The only thing Joshua didn’t put in here is what it is that’s tripping his radar?
Steven Butala: I think he’s just being cautious, and he’s new.
Jill DeWit: Okay, but he said that it looks suspicious like potential fraud. Hmm, I’m kind of wondering what is it that’s tripping his radar.
Steven Butala: Yeah.
Jill DeWit: There maybe something.
Steven Butala: Obviously, whoever received the letter called you.
Jill DeWit: Yeah.
Steven Butala: That’s good.
Jill DeWit: Mm-hmm (affirmative).
Steven Butala: You know, that’s always in the back of my mind, too. When you send these letters out, that’s one of the reasons that you need to use data instead of buying a list, because you need a fresh owner.
Jill DeWit: Mm-hmm (affirmative).
Steven Butala: You could do all the research you want on the planet, and if somebody sold the property and deeded it one minute before they got your letter and they called you, you’re not going to catch that. A title agent wouldn’t even catch that.
Jill DeWit: Right. You know what’s sort of cool about this? This is kind of along what you’re saying. When these calls come in, the minute they come in, not to plug Parcel Fact, but I am going to plug Parcel Fact. Our site is here to solve this. We have a site called ParcelFact.com, and it’s so easy. When this call comes in, as you’re talking to the person on the phone, Joshua, pop in the APN, look it up and double check who you’re talking to right then.
Steven Butala: Yeah, that’s right.
Jill DeWit: Then look at the property right then. That’s how-
Steven Butala: That’s how we do it.
Jill DeWit: Yeah, and you can start making decisions right then. You know, [inaudible 00:05:57] want at this point, are you going to go down that path and research all this now further. I mean, 30 seconds will save you hours.
Steven Butala: In 30 seconds, you can tell from Parcel Fact, which is free by the way to our members, where the property is, you get five or six maps, you get to see if there’s road access. There’s a ton of research you can do, like Jill said, in 30 seconds. Who owns it, what the taxes are-
Jill DeWit: Where it’s recorded.
Steven Butala: All of that.
Jill DeWit: You can see the type of deed it was.
Steven Butala: What it’s zone, how large it is.
Jill DeWit: You can often see the purchase price, what they paid, the date they paid it.
Steven Butala: It’s made to make your life easy.
Jill DeWit: It’s awesome. Legal description, it’s all right there.
Steven Butala: So, in a perfect world when this guy called you back, you’d pull it up on Parcel Fact, you’d look at the actual property and say, “It’s actually worth it for me to continue forward on this thing, because this actually is a good property for the right price.” Check, number one. Number two, he says [inaudible 00:06:47], and he owns a company called Smith, LLC., in Nevada. Does it say that on Parcel Fact? Oh yeah, check. It does, it says that. Okay, next step.
Jill DeWit: Mm-hmm (affirmative).
Steven Butala: That’s what’s that’s designed for. I just did it in real time. It’s literally that fast.
Jill DeWit: Exactly.
Steven Butala: You just need an APN and a state/county.
Jill DeWit: Mm-hmm (affirmative).
Steven Butala: If those things past your test and then you maybe do a quick little search and find out, especially if he’s in the land business, that he’s got a website, and maybe he’s active in some Facebook groups, that would make me feel really good.
Jill DeWit: Totally. Yep. Awesome.
Steven Butala: Today’s topic: Why Land Flipping Education is Imperative to Succeed. That, we just talked about. We just educated, we just did it.
Jill DeWit: Yep.
Steven Butala: This is the meat of the show. Jill, what do you think? I mean, why is education so important in anything?
Jill DeWit: Let me back up and ask you this question, Steven. Could you imagine … You started in 91-whatever, let’s just say … Let’s call ’99 and we’ll split for hairs. Imagine in ’99 you’re just kind of figuring out this thing and then one year later, you found us.
Steven Butala: Oh my gosh.
Jill DeWit: Where do you think you’d be right now?
Steven Butala: I’d be … I don’t know.
Jill DeWit: Could you imagine?
Steven Butala: No, I can’t.
Jill DeWit: Back when you were putting this all together and just kind of realizing, “Hey, there’s money to be made here in this land thing. Everybody’s worried about this. But wow, there’s a little untaft market called land flipping where I don’t even have to do anything,” and then you found someone that’s been successfully doing it for years, and they can teach you in a weekend everything you need to know-
Steven Butala: Yeah, that’d be pretty cool.
Jill DeWit: Where would you be right now? You would be … I don’t even want to know.
Steven Butala: I mean, we wouldn’t have any more money, if that’s what you mean. Would I be doing this show? Probably. I’d probably be helping other people do it.
Jill DeWit: You would’ve had the same amount of money, but a lot faster.
Steven Butala: You know what? Here’s what would have happened. The things that have happened between then and now would be a heck of a lot different.
Jill DeWit: Mm-hmm (affirmative).
Steven Butala: You know, we developed these tools from the ground up, mostly by failing and then re-doing it, and failing, and re-doing it. So, we could have skipped all that. Here’s what I think … To directly answer your question, the most successful people that are members and that are aware of are people who take our stuff and then they redevelop it for themselves. Now, they find some little crazy niche in some place … I don’t know, just for example, Montana, or some place in California, and they sub-divide property and kill it.
If I knew about us back in the late 90s or early 00s, that’s what would have happened. We would have ended up with a great little massively profitable niche that’s probably local to something versus a nationwide shotgun approach to flipping.
Jill DeWit: You know, Jack, I can’t imagine you settling for anything. No, I think for you, nationwide is your little niche.
Steven Butala: Yeah, maybe. I mean, I didn’t know how to answer that.
Jill DeWit: That’s good. What’s your niche? Um, the United States. That’s the way you do things. You know, I’ve dabbled in Canada, but I think I-
Steven Butala: I have.
Jill DeWit: I know you have. But I’m just saying, and I know you’ve done Mexico, I think you did some Caribbean, but I know you. Like, you know what? You’re going to find your niche. Mine happens to be the United States.
Steven Butala: [inaudible 00:10:17] breaking into houses. Seriously, [inaudible 00:10:19]. Breaking into houses, listen to me-
Jill DeWit: Exactly. [crosstalk 00:10:23]
Steven Butala: It was a Freudian slip.
Jill DeWit: That’s awesome. That’s really good. How do you find them? We break in. How do you know they want to sell?
Steven Butala: We were breaking into the house flipping market. Jill and I have been doing it for years-
Jill DeWit: That’s awesome.
Steven Butala: In House Academy, we’ve been doing it, but-
Jill DeWit: Yeah.
Steven Butala: We’re making it … You’re right.
Jill DeWit: Yeah.
Steven Butala: You know what? You’re right. I would not settle for one little area.
Jill DeWit: Well, here’s why education is so important, too. I’ll talk about land in the big picture, but you know, for our members and everything, a lot of time-saving. That’s it. I have watched people that there’s a little shimmer in their eye, they get it, they’re missing some pieces, they understand the concept, and they may have … This is what I love, too. Some of our members have come to us like they’ve done a few deals. They get it, but they’re missing some pieces about how they can do it better, or faster, or, “Oh, that’s how you handle those people,” or, “That’s how I can find them even better,” or whatever it is. But, those are the attributes I should be looking for, and why they sell so fast for you guys, whatever it is.
You know, education has shaved years off of their troubleshooting. One of the common ones that I have got is people calling me. They’re like, “Okay, Jill. I’m doing it. I have property right now for sale, I can’t sell it.” I’m like, “Okay, well tell me about your property.” It’s usually two things. One, it’s overpriced; And two, more commonly, they have it posted in one place. Like, really? You have it on Craigslist, and that’s it. [inaudible 00:11:58] I’m just waiting. Really?
Steven Butala: Get comfortable.
Jill DeWit: Exactly. So I’m like, “Boy, can we help you.” Then they get in and then they understand. I mean there’s a lot of other little things that … You said it best, Jack, or Steven, both of you, that there are these missing pieces … Shucks, what was it … I’m trying to think of the wording you just used, the trial and error-
Steven Butala: Fill in the gaps.
Jill DeWit: And filling in the gaps.
Steven Butala: Yeah.
Jill DeWit: We did it wrong. I mean, that’s-
Steven Butala: Oh my gosh. I can’t even-
Jill DeWit: I love telling people that. I’m like, “Look-“
Steven Butala: Begin to tell you-
Jill DeWit: Trust me.
Steven Butala: How much wrong stuff we’ve done.
Jill DeWit: We did it all wrong. I can help you. Yeah, you know 15,000 transactions, [inaudible 00:12:46] 16,000, you’ve made a few mistakes. I personally, I can’t tell you how many times, especially … I’m over it now. The first deed that gets sent back to you because you did something wrong, a lot of people fall apart. I’m like, get over it. It’s going to happen. So what. Send them another check with the right amount this time, and you know what? For a while, you’re going to call them every time and go through it. I did that. “Hey, I’m staring at this. I want to make sure I’m doing it right,” you know? Then, you got it. It’s no big deal.
Steven Butala: I mean, here’s a few things that people … You would never try without being educated, so I’m not sure why people think that starting up a wholesale real estate company without any experience or any education is okay.
Jill DeWit: Right.
Steven Butala: It’s like learning to drive a car. You would never send your kids out-
Jill DeWit: With the keys and go, “Good luck.”
Steven Butala: “Teach yourself.”
Jill DeWit: Wouldn’t that be hilarious?
Steven Butala: Maybe there’re some kids that actually deserve that, but you know, it’s insane.
Jill DeWit: It’s true.
Steven Butala: How about like anything in healthcare? You have to go through … Any kind of healthcare career, even at rock bottom, nursing assistant, from a rank standpoint, there’s a lot of education that goes on. Not only classroom education, but hands-on experience with somebody standing right next to you teaching you how to do it.
Jill DeWit: Well, I was listening to [inaudible 00:14:07] the other day in the car about franchises. I mean, that’s kind of an education, even right there.
Steven Butala: Yeah.
Jill DeWit: If I wanted to buy a Subway, I’m not going to go out and try to recreate Subway. That would be silly. Boy, you better believe I’m going to tap into their knowledge. They already have the best prices for things. I don’t know if that’s the best example, but-
Steven Butala: No, it’s a great example.
Jill DeWit: Okay.
Steven Butala: Because here’s the thing you give up with franchises, the word franchise to me, from an accounting standpoint, is like timeshare. I mean, it’s immediately negative. It’s immediately like, “Hey, let’s take a great thing like owning a company and make it like a pile of crap. Let’s take a great thing about owning a piece of real estate,” even like resort real estate, ” And make it a pile of crap with the timeshare. Let’s just dilute it all and kill it, and just beat it to its death.”
Jill DeWit: And sell it, and sell every last little fraction. And, it’s called fractional ownership, by the way, for a reason.
Steven Butala: Sure.
Jill DeWit: Okay.
Steven Butala: So the thing about franchises is that you have to go into it knowing that if I did start Steve and Jill’s Subway shop on the corner, the learning curve would be way longer.
Jill DeWit: Right.
Steven Butala: How much money it would take in the end would probably cost a lot more. Advertising, and all that stuff-
Jill DeWit: I don’t have the buying power-
Steven Butala: And how to-
Jill DeWit: To get the equipment that cheap, too, by the way.
Steven Butala: Oh yeah. So, what you accept, what you have to swallow with a franchise is yep, it costs a little bit more money, and yep, for the rest of my life, I’m going to have to be paying these dues as percentage of revenue, or however its calculated. But, my success rate, my success percentage, the chances of me succeeding are so much higher.
Jill DeWit: Oh, perfect.
Steven Butala: That’s for me, at this point in my life anyway, that’s a totally acceptable trade-off.
Jill DeWit: Yeah.
Steven Butala: I’ll pay a little bit more to make sure that it’s successful, and I won’t make as much money. The answer is then, if you really sit and think about it for more than 30 seconds, get the education the franchisor is offering, and then just buy like 50 shops one after another.
Jill DeWit: Yeah. They’ll get you there faster.
Steven Butala: They will get you there faster.
Jill DeWit: I love it.
Steven Butala: For most people.
Jill DeWit: Exactly.
Steven Butala: There are some crazy super-star people that have the Midas touch, who touch, and that’s not me, where you touch something and it just works.
Jill DeWit: Right. Well, and then that’s good for them.
Steven Butala: Yeah.
Jill DeWit: That’s the top 1%, and that’s okay.
Steven Butala: Yeah, or like … Actually, Jill and I have a buddy who’s just dialed into the community we live in. Like, he knows every concierge in all the hotels and he’s just so … If you have that kind of personality type, a franchise may not be for you. To put his name on the sign, Chris’ Burgers, it’s probably going to work just because he knows everybody.
Jill DeWit: Right.
Steven Butala: But those people are far and few in between.
Jill DeWit: That’s true. That’s very true. I know we’re going to do something with that guy. I know you’re working on it.
Steven Butala: Franchise, actually I’m really talking to myself more than anyone else. Franchises are not that bad.
Jill DeWit: Thank you. Well, see … Thank you. It comes back to education, you know? Whatever it is, this is a land show, so we talk about land, but for the kids in the car who might be listening, or somebody else-
Steven Butala: They’re sleeping now.
Jill DeWit: That’s right. Yeah, the minute it came on and they heard our voices-
Steven Butala: They’re like, “Steve and Jill, you know what? They could use this business as a sleepy toy.”
Jill DeWit: That’s exactly … I am absolutely positive that there somewhere out there are couples that say, “I know how to get the kid to sleep,” and then they put the kid in the car in the car seat, they put us on in the car, and then they’re driving around right now because we lull their kids to sleep.
Steven Butala: Remember when the kids were little you’d tell them a story, and they’d be out in 30 seconds?
Jill DeWit: It’s hilarious.
Steven Butala: It’s the same thing.
Jill DeWit: Yep.
Steven Butala: Well, you’ve done it again. You’ve put your kids to sleep with our voices.
Jill DeWit: There we go.
Steven Butala: And you spent another almost 20 minutes with us here on the Land Academy Show. Join us tomorrow for another interesting episode where we discuss Land Academy versus Self-Starting. We’ve kind of alluded to it just now.
Jill DeWit: We did. And, we answer your questions that you post on our free online community, LandInvestors.com or you can find it from LandAcademy.com.
Steven Butala: You are not alone in your real estate ambition.
Jill DeWit: I didn’t think about that. So, if you’re driving around, the kids are like, “Oh, that soothing voice,” clonked.
Steven Butala: Right, I know.
Jill DeWit: So then you get to the point where you can just put it on in their bedroom. You don’t even have to drive around.
Steven Butala: Right.
Jill DeWit: That’s [inaudible 00:18:24] kids conditioned.
Steven Butala: I really can’t … I mean, back to getting into reality here, I cannot imagine starting anything without getting some type of education, even just like asking a guy out for a cup of coffee or a beer, who’s already [inaudible 00:18:40], just to say, “Am I on the right track here?”
Jill DeWit: Well, I think you’re just defining the definition of these REI meet-ups. That’s why you go. You go to learn from people. You know what I do? I pick up a book. When I want to start something new-
Steven Butala: Yeah, I don’t.
Jill DeWit: I’m picking up a book and learning about it.
Steven Butala: What I do is get on Google. I did this yesterday. This is what happened yesterday. I don’t want to go way over on time here, but we are constantly out-spending the money that we have for whole selling houses and land constantly, and it’s becoming now a situation where we shove off the deals that we have to the next month.
Jill DeWit: Mm-hmm (affirmative).
Steven Butala: Which is not good.
Jill DeWit: Right.
Steven Butala: We’ve proven our concept for years now. Thousands and thousands of transaction. My gut was like, “All right, I’m going to go start a real estate fund.” You know, a Wall Street-based fund. It took me about 15 minutes on the Internet, and actually I talked to one guy who was an expert and a lawyer who didn’t charge me at all. He sat here in LA and he said, “You’re maybe the craziest person on the planet if you really want to start this. You’re going to give up two years of your life, you’ve got to do this, this, this and this.” Then he said, “It’s way easier to find and take on-” Which we have.
Jill DeWit: Mm-hmm (affirmative)
Steven Butala: We have a lot, “Private investors, make them a partner on each deal, and be real organized about it.” That’s what we’ve been doing anyway for quite some time.
Jill DeWit: Right.
Steven Butala: We just needed to ramp it up.
Jill DeWit: Right.
Steven Butala: So, I educated myself before I spent a bunch of time on something that would have ended up being a disaster for us.
Jill DeWit: You could have gone two years down that path, and then talk to that guy, and all he would have confirmed is what you had just figured out.
Steven Butala: Yeah, that’s right.
Jill DeWit: Good job.
Steven Butala: That’s education, man.
Jill DeWit: I love it.
Steven Butala: Free education.
Jill DeWit: Thank you. Share the fun by subscribing on iTunes, or wherever you’re listening. While you’re at it, please rate us there.
Steve and Jill: We are Steve and Jill.
Steven Butala: Information.
Jill DeWit: And inspiration.
Steven Butala: To buy undervalued property.
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