Real Cost of Not Educating Yourself (LA 728)

Real Cost of Not Educating Yourself (LA 728)

Transcript:

Steven Butala:                   Steve and Jill here.

Jill DeWit:                            Good day.

Steven Butala:                   Welcome to the Land Academy Show entertaining Land, investment talk. I’m Steven Jack Butala.

Jill DeWit:                            And I am Jill DeWit, broadcasting from beautiful, sunny, southern California.

Steven Butala:                   Today Jill and I talk about the real cost of not educating yourself, not just with real estate, but anything. We’ve got a bunch of funny, good examples ready.

Jill DeWit:                            This is going to be good.

Steven Butala:                   How costly is it to not teach yourself to drive? Teach yourself to drive, get in the car, get on the expressway, and get in an accident. How much does that cost?

Jill DeWit:                            Every job has training. Every single job. Just think of the new employee that just started last week. It was a pretty good, long week training. For one entity. Not even the whole big thing.

Steven Butala:                   We also have a list of things that, for whatever reason, education is not associated with. And how awful they turn out. Like raising children.

Jill DeWit:                            Say that again. What did you say? You have a working example of what …

Steven Butala:                   We have lots of examples of … You don’t get any education about raising children. You just use your own experience doing that. It often turns disastrous.

Jill DeWit:                            Repeating the same mistakes. I’m not going to do that, and guess what, you just did it. Yep.

Steven Butala:                   Before we get into that, let’s take a question posted by one of our members on Land Academy.com online community. It’s free.

Jill DeWit:                            Okay. Jeff asks: hello all, I listen to many podcasts (yes I was the one that Jack and Jill had fun with, my name Jeff Yu).

Steven Butala:                   You remember that? Jeff Yu.

Jill DeWit:                            Jeff Yu.  Thank you Jeff. I forgot about that. That was so darn funny that day. Jeff Yu. You just started it again Jeff. Now we’re going to walk around the house doing that to each other. Every time this happens too, our kids are like oh no, here they go again. Don’t make eye contact.

Steven Butala:                   Don’t encourage them.

Jill DeWit:                            Exactly. I have noticed … I’ll get back to the real question. I have noticed that a lot of people that have been in the land business for some time end up either moving into a totally different direction in real estate, or they keep the land business going and dabble in other areas of real estate.

Steven Butala:                   Yes.

Jill DeWit:                            This is really, really, really, really good.

Steven Butala:                   Just like us.

Jill DeWit:                            Example, I know Jack and Jill are now also getting into houses. Yes, they are still going strong with land. The other land investors get into apartment or house renters, et cetera. My question is why?

Steven Butala:                   I’m so qualified to answer this.

Jill DeWit:                            I have thought about this and come up with a few possible reasons such as, they want to do less buying and selling to make the same amount of money, partially. Maybe, it’s about diversification.

Steven Butala:                   Yep.

Jill DeWit:                            They feel like maybe land sales will slow down in the future. If they own other types of property that will allow them to diversify.

Steven Butala:                   That’s part of it.

Jill DeWit:                            What are your thoughts?

Steven Butala:                   Here’s the real answer, and it’s short. They, like us, long ago understand and embrace the power of sending offers to owners, unsolicited, blind offers to owners. With the value in it, and a time frame. The value is in what you can immediately re-sell it for. That’s why. Put yourself in my position, or any of our successful member’s position. You didn’t know it was going to work. You didn’t know it was going to work. You didn’t know it was going to work. You try … You finally got that first mailer out and it worked. You bought one or two properties and resold them. You doubled your money.

                                                Maybe it was a $500 property and you sold it for $1,500. That got the wheels turning. So you bought an $8,000 property and sold it for 15. Or maybe $25,000 property and you sold it for 75. These are all real examples, recent ones, from members that tell us what goes on. Then you get to thinking, well I can mechanize that. I can get my wife to answer the phone. Now great, that’s running in the background. And you’ve gotten it to a point where maybe you’re making 20 grand a month, maybe 30. And then you sit and think, well wait a second, if this worked with this, how about houses? What if I make 10 to 15,000 bucks selling houses? How many housing markets are there?

                                                Then you lose a whole weekend ’cause you’re on your internet searching how many housing markets there are, MSAs. There are 377, by the way.

Jill DeWit:                            Mm-hmm (affirmative).

Steven Butala:                   And so you decide to send a mailer out, just to see. Spend $1,5000 on a mailer and send out 3,000 offers. What? You buy a house.

Jill DeWit:                            Mm-hmm (affirmative). That works.

Steven Butala:                   There’s apartment buildings. There’s mobile home parks. And on, and on, and on. I mean, I hope I’m painting an accurate picture of … This is exactly what happens with me.

Jill DeWit:                            Mm-hmm (affirmative).

Steven Butala:                   We are … this is the Land Academy show so we don’t talk about it too much. We are starting the House Academy show here in a couple months. We are absolutely killing it buying and selling houses.

Jill DeWit:                            Mm-hmm (affirmative).

Steven Butala:                   We’re making ten to $15,000 a house.

Jill DeWit:                            Mm-hmm (affirmative).

Steven Butala:                   And it’s like water. The gross … The investor makes a bunch and the boots on the ground make some. But yeah.

Jill DeWit:                            Mm-hmm (affirmative).

Steven Butala:                   It is a logical extension. It’s not that people are abandoning land. That it didn’t treat them right or it didn’t work. It’s just that there’s other places to make money sending blind offers out. We actually … we have members who are contractors who use this concept to get people who need new roofs.

Jill DeWit:                            Mm-hmm (affirmative).

Steven Butala:                   They send out blind letters saying, based on the statistics I know about your house, we can replace your roof for X, and it works.

Jill DeWit:                            Mm-hmm (affirmative).

Steven Butala:                   Go ahead.

Jill DeWit:                            Yeah, it’s not about … I don’t think it’s about worry or diversification. I think that so many people in our community … We are all some form of self starters. We’re not complacent people. You wouldn’t be here. I don’t think there’s … there may be out there. I don’t generally find people in our community or our world that are happy with well, I’ve got $10,000 a month coming in. I’m just going to sit back and coast and do nothing. Now I’m going to paint my nails, I’m going to work on the yard, I’m going to plant those flowers I always wanted to do.

Steven Butala:                   I can buy better vodka now.

Jill DeWit:                            Right? Nope. That’s not what they’re doing. They’re like, if I can do ten, I can do 20. And if I can do 20, I can do 40. If I could do 40, I could do 80. Now they’re going, wow maybe this works for other things. Oops, it does.

Steven Butala:                   Jill runs a whole crew in an office building of people. They run all the academy companies. They handle the call and transaction processing for the deals that we do. I do other stuff. She runs it on this one concept. We always have to get better. Not tons better, but always has to go up.

Jill DeWit:                            The Toyota way.

Steven Butala:                   Yeah. And so, that works great. Our revenue has to go up every month. It doesn’t have to double itself. But, one, or two, or three percent and the systems have to get better no matter … It’s just never satisfied. It doesn’t work in a marriage but …

Jill DeWit:                            Oh, baby. Oh boy. I think we can each get better just a little bit every single day.

Steven Butala:                   Which is hard, if you’re getting older.

Jill DeWit:                            No, I’ll show you the way.

Steven Butala:                   Do you have some ideas?

Jill DeWit:                            I do.

Steven Butala:                   Do share. Do share about how our marriage could be …

Jill DeWit:                            Oh wow, let’s start with … It’s okay.

Steven Butala:                   No, let’s hear it. I can see the wheels turning.

Jill DeWit:                            Well, I’ve never liked that shirt.

Steven Butala:                   I don’t actually like this shirt either. I don’t know why …

Jill DeWit:                            How did that make the cut?

Steven Butala:                   I don’t know? I’ll throw this away tonight.

Jill DeWit:                            Okay. See, it just got better. What can I do?

Steven Butala:                   Are you kidding me? That’s the biggest trap there ever was.

Jill DeWit:                            Come on.

Steven Butala:                   You think I’m going to answer that? No.

Jill DeWit:                            Come on Brant.

Steven Butala:                   I choose life.

Jill DeWit:                            Oh, you chicken. You can give me one.

Steven Butala:                   I’ll try to think of it by the end of the show.

Jill DeWit:                            Alright. Jeez.

Steven Butala:                   Did we even start the topic yet?

Jill DeWit:                            No.

Steven Butala:                   Today’s topic …

Jill DeWit:                            Hey, you know what? Jeff Yu for giving us that question. That was so good.

Steven Butala:                   Today’s topic: the real cost of not educating yourself.

Jill DeWit:                            The sad reality is, this show … We could not be more real on this show. This is how you and I walk around every single day. If you should ever see us on our bikes on the strand you will see us cracking up at something ridiculous.

Steven Butala:                   Yeah. It’s true.

Jill DeWit:                            So, that is truly how we role.

Steven Butala:                   You know what could be better in our marriage? Here’s what.

Jill DeWit:                            Bring it.

Steven Butala:                   It’s all food related for men. It’s not junk food. I don’t want to eat cake for dinner, you know that. I like to eat real health. But, I’ll tell you what, it’s just because of our lives and how busy we are … I wish we could automate that some how and outsource it so that good, health stuff that meets what you and I eat … If we could have it ready when we get home.

Jill DeWit:                            You know, I tried that.

Steven Butala:                   I know.

Jill DeWit:                            And I had a chef.

Steven Butala:                   I know.

Jill DeWit:                            Here was the problem. She started dressing differently to deliver food to you.

Steven Butala:                   I know.

Jill DeWit:                            And it got sluttier and sluttier. So we can’t go that path. I thought I was doing a good thing. I got a personal chef. I would put in our orders. I realized she was delivering the food when I was not there.

Steven Butala:                   Mom, what’s sluttier? That’s what people are saying right now. Why did she say slutty?

Jill DeWit:                            All I know is that her attire was changing. Based on you telling me what was going on.

Steven Butala:                   It was ridiculous actually.

Jill DeWit:                            I had to fire the personal chef. Good idea, but that didn’t work. We need to find a guy or something.

Steven Butala:                   We can’t quit there, you know? That’s what we tell our members. The first deal didn’t work? That’s okay. Try another.

Jill DeWit:                            That’s true. I got distracted. So, I’ll try to do that again. so you want me to find someone to make that easier?

Steven Butala:                   No, I don’t want to give you something else to do. I’m just saying … No, the answer is no. And I mean that.

Jill DeWit:                            Okay. Thank you.

Steven Butala:                   I don’t want to assign any more stuff.

Jill DeWit:                            Thank you.

Steven Butala:                   But it would be good if we could automate it. If there was some kind of non-processed health food that …

Jill DeWit:                            I think the whole planet is looking for that.

Steven Butala:                   Yeah, I do too. There’s a good business idea.

Jill DeWit:                            That’s true. Not us.

Steven Butala:                   Yeah, we’re not going to get into the food processing business.

Jill DeWit:                            Thank you.

Steven Butala:                   The real cost of not educating yourself? Really just think about that for a second. How much does it really cost? Let’s use land and then we’ll talk about some other funny stuff. You have a couple choices. You can educate yourself, not with us, just somewhere. Even if you use Land Academy, the land investors, the online community, and nothing else … Which is all free.

Jill DeWit:                            It’s true.

Steven Butala:                   To go on there and ask 100 questions. Should I do this? Should I do this? Does this county work? Does this county work?

Jill DeWit:                            Right.

Steven Butala:                   On, and on, and on. Where do you get a mailer? How do you do it? How much is it going to cost? How much time does it take? All that stuff. If you spend an hour, maybe two hours, bare minimum in a community like that, or on Facebook, or wherever you do it, and just get the lay of the land, you are going to save yourself massive amounts of time and money. Almost immediately.

Jill DeWit:                            You’re right.

Steven Butala:                   I always come back to the medical doctor example. You go to school and then you do an internship. The internship is almost as long as school. Because you’re walking around, following around someone who knows how to do it and who has a lot of experience. They’re teaching you. How many times have you hear this? Now that you’re out of school, I’m going to undo everything that they taught you.

Jill DeWit:                            Yeah.

Steven Butala:                   I’m going to tell you really how it is.

Jill DeWit:                            This is really how it goes.

Steven Butala:                   Yeah.

Jill DeWit:                            Exactly.

Steven Butala:                   That’s what you want.

Jill DeWit:                            You’ve got the foundation.

Steven Butala:                   Exactly.

Jill DeWit:                            Now you need to working model.

Steven Butala:                   Doing something without educating yourself at least just a little bit is nothing short of just being head strong.

Jill DeWit:                            Right.

Steven Butala:                   It’s silly.

Jill DeWit:                            Exactly.

Steven Butala:                   Back to the car example. You’ve turned 16. You have had no education in any way about driving a car except watching your parents do it for 15 years. You get in the car. You’re going to get in an accident.

Jill DeWit:                            Yeah.

Steven Butala:                   Period. That’s just what’s going to happen.

Jill DeWit:                            Exactly.

Steven Butala:                   You don’t have the saddle time.

Jill DeWit:                            Mm-hmm (affirmative).

Steven Butala:                   Riding a horse. I just said it, saddle time. You’re going to kill yourself on a horse if you don’t get educated first. And have somebody help you.

Jill DeWit:                            It’s true. Literally.

Steven Butala:                   Why is it that so many people buy a house with no education at all and expect to make money and flip it?

Jill DeWit:                            That’s a good point.

Steven Butala:                   What is it about this … they watch HGTV, which is all fiction by the way.

Jill DeWit:                            Exactly. You’re not really seeing what’s going on. You’re seeing the highlights.

Steven Butala:                   Right.

Jill DeWit:                            You’re seeing how pretty it looks before and after.

Steven Butala:                   Right.

Jill DeWit:                            That’s it.

Steven Butala:                   Yeah, really. It’s just a decorator show.

Jill DeWit:                            Yeah. Like …

Steven Butala:                   It’s a whiny, decorator reality show.

Jill DeWit:                            I want a sink like that. Not, what’s involved in a sink like that.

Steven Butala:                   Right.

Jill DeWit:                            And am I set up for that? How much does it cost? How do you install it? Who installs it? How long does it take?

Steven Butala:                   Here’s the real, tragic cost in the real estate example. You buy a house. You go on the MLS, you buy a house. Your sister-in-law is a broker. She buys it for you. You go get a loan. And you know … I wrote a whole blog on this. Everybody makes money except you. At the end of it … You want to rent it out or renovate it.

Jill DeWit:                            Right.

Steven Butala:                   You’re standing there with keys in your hand. You’ve spent God knows how much money and time. Everybody has taken a little piece. It’s time to rent it. You rent it out. You rent it to the wrong person, of course, ’cause you’re brand new.

Jill DeWit:                            Right.

Steven Butala:                   You never sought out any advice.

Jill DeWit:                            Right.

Steven Butala:                   And they don’t pay you.

Jill DeWit:                            Right.

Steven Butala:                   What’s going to happen to almost all of us, me included, in that situation? You’re going to say, you know what? Real estate sucks.

Jill DeWit:                            Exactly.

Steven Butala:                   I’m going to go back to my job. Or I’m going to start a convenience store. It’s just … It’s too hard.

Jill DeWit:                            Right.

Steven Butala:                   That is tragic.

Jill DeWit:                            It is.

Steven Butala:                   Real estate is fantastic. It’s the greatest business there ever was, at least for us anyway. You just have to do it right. Got to get educated a little bit. I put you to sleep didn’t I?

Jill DeWit:                            I like this. I’m just kind of sitting here listening, commenting now and then. You have a lot to say. I’m just letting you go. It’s perfect.

Steven Butala:                   It just gets frustrating when … I’m not trying to hock anything, I’m really not. I don’t care where you get educated, but please get educated.

Jill DeWit:                            Do you think everybody knows this?

Steven Butala:                   No. I think no one knows it.

Jill DeWit:                            What?

Steven Butala:                   You know why? [inaudible 00:15:15].

Jill DeWit:                            Wait, you’re right.

Steven Butala:                   And every body just thinks …

Jill DeWit:                            They’re going to be a natural. Or they think it’s not that hard. If that guy can do it.

Steven Butala:                   Yeah. It isn’t that hard, if you get the right education.

Jill DeWit:                            Yeah. But you know what, it’s two parts though too. You have to … You really have to get educated. You have to have the right mindset. If you don’t have the, I will die trying, I’m going to make this happen mindset … I know I can get this down. I know I can do this. Even with the right education, doesn’t mean it’s fail proof.

Steven Butala:                   Right. When I say education I don’t mean this is how you use data. I don’t mean that. This is what I mean … that’s part of it.

Jill DeWit:                            Mm-hmm (affirmative).

Steven Butala:                   You just nailed it. The education I mean is preparing yourself. Part of it is taking the mystery out of it, or the risk. And so, the first thing that I would say to somebody who is ready to stat in real estate or they’re ready to buy a company, or they’re ready to do a start-up, or start an online Amazon, anything …The first thing I would say, all the stuff that you think is important like buying the right house, choosing the right product, is not.

Jill DeWit:                            Mm-hmm (affirmative).

Steven Butala:                   What’s important is, you’re going to have to role with the punches. It’s like this for every single company.

Jill DeWit:                            Right.

Steven Butala:                   Whether it’s real estate or not. Prepare yourself for being beaten down to your knees by customers, employees, and suppliers, and whatever else. Once you get passed the fact that, alright, this is not going to be like having a job.

Jill DeWit:                            Right.

Steven Butala:                   It’s going to be tough.

Jill DeWit:                            Yeah.

Steven Butala:                   You’ve got to put your thick skin suit on.

Jill DeWit:                            Yep.

Steven Butala:                   Once you’re prepared for that, and you see it coming before it actually is there, then you’re going to kill it.

Jill DeWit:                            Exactly.

Steven Butala:                   That’s part of the education process. Flipping the house and learning data and stuff, that’s not that hard.

Jill DeWit:                            Right.

Steven Butala:                   What would your advice be to a 24 year old kid who’s ready to do it.

Jill DeWit:                            I would say, watch somebody for a while. Don’t get all excited and jump in. Don’t just jump in the deep end. Watch somebody for a while. Be … Follow them around. Be on his site. There’s nothing more flattering than someone coming to you and saying, can I follow you around for a couple weeks? And by the way, I’ll do anything you want. I’ll work for you for free ’cause I really want to learn what you’re doing. Nothing cooler than that.

Steven Butala:                   Yeah.

Jill DeWit:                            If I was on a job site and I was flipping something and I had someone walk up to me and said, I really want to learn this. Can I just fall in your shadow? I would do that. I would start there and be a sponge.

Steven Butala:                   Mm-hmm (affirmative).

Jill DeWit:                            Learn.

Steven Butala:                   Like an intern.

Jill DeWit:                            Mm-hmm (affirmative). All that I can. I would be first to arrive, last to leave. Follow everything. Then, I would still say too, let’s do this right. Don’t jump in crazy. Don’t go … Save up money and do it right. I want to set people up to succeed. If they’re going to do it themselves, they’ve got to build a team. Maybe they could work with this person.

Steven Butala:                   Right.

Jill DeWit:                            Are we talking about a house? You want to be a house flipper.

Steven Butala:                   That’s what comes to brand new people’s heads.

Jill DeWit:                            That’s what they think they want to do.

Steven Butala:                   It’s not for whatever reason. It’s ’cause they watched their parents do and make some money.

Jill DeWit:                            Right. And they’re watching these shows.

Steven Butala:                   Yeah.

Jill DeWit:                            They think is [crosstalk 00:18:41] Some people artificially think it’s so easy and it’s not.

Steven Butala:                   If you take ten people from different walks of life, ten American people, who are into HGTV and you sat them down in a room and said, what do you think it takes to be successful at this? They would get wildly different answers.

Jill DeWit:                            Mm-hmm (affirmative).

Steven Butala:                   None of them would get it right. The real answer is this, you have to understand data. You have to understand what it’s like to own a business. How money works, how to calculate ROY. It’s all money. And Excel. And good people skills.

Jill DeWit:                            Mm-hmm (affirmative). Thank you. I wanted to get that in there.

Steven Butala:                   Almost nothing to do with the actual piece of real estate, which is exactly what they focus on on these shows, the real estate itself and not anything else.

Jill DeWit:                            Exactly.

Steven Butala:                   It’s completely insignificant.

Jill DeWit:                            Yeah. Once you understand, I’ve got to flip it this fast. Now I’ve got to find the right lendor or whatever it is. This is our time line. We’ve got to get these rates. We’ve got to do it this fast. The right contractor. You’ve got to understand that stuff and have the people skills to push it forward and make it happen.

Steven Butala:                   With land it’s even easier than that. You’re not going to change anything on the land. Nobody expects you to. You just need to make sure there’s a way to get there, that it has reasonable access. And make sure it’s a good piece of property and you’re buying it real cheap.

Jill DeWit:                            Mm-hmm (affirmative).

Steven Butala:                   Get into the right environments online. They’re already pre-made for you like Land and Farm.

Jill DeWit:                            Mm-hmm (affirmative).

Steven Butala:                   You just have to sell it. Land doesn’t take long to learn.

Jill DeWit:                            That’s it.

Steven Butala:                   There’s a show coming up… I’m not sure how soon it is but it’s about how to … The mistakes that you’re supposed to make and what really, really matters. We’ll cover it there in great detail.

Jill DeWit:                            Yep.

Steven Butala:                   Join us tomorrow for another interesting episode where we discuss the path of professional real estate acquisitions. So, you’ve started down the path. How do you go pro?

Jill DeWit:                            Love it. And we answer your questions posted on our free online community found off of landacademy.com.

Steven Butala:                   You are not alone in your real estate ambition.

Jill DeWit:                            That was long. I didn’t think we had that much to say about it.

Steven Butala:                   I need to take a drink of water or something.

Jill DeWit:                            Or something. I love it. I love Jeff Yu. That’s so good. I forgot about that. That was so darn funny. That was good.

Steven Butala:                   Haven’t heard that in awhile.

Jill DeWit:                            Mm-hmm (affirmative). Share the fun by subscribing on iTunes, or wherever you’re listening. While you’re at it, please rate us there. We are Steve and Jill.

Steven Butala:                   Information…

Jill DeWit:                            And inspiration …

Steven Butala:                   To buy undervalued property.

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