You Need Time and Smarts More than Money (LA 733)

You Need Time and Smarts More than Money (LA 733)

Transcript:

Steven Butala:                   Steve and Jill here.

Jill DeWit:                            Hi.

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

Jill DeWit:                            I am Jill DeWit, broadcasting from sunny, Southern California.

Steven Butala:                   Today, Jill and I talk about … you need more time and smarts and you actually need money and we’ll explain that in great detail. It’s “I wish somebody would’ve told me all this stuff” week.

Jill DeWit:                            I can’t. It’s “Duh, I wish somebody would’ve told me all this stuff” week.

Steven Butala:                   Jill, literally, literally just got done painting her nails.

Jill DeWit:                            I did.

Steven Butala:                   We joke about it all the time. She’s bored, she’s gonna paint her nails, she’s gonna let me talk about real estate.

Jill DeWit:                            Today, I actually did.

Steven Butala:                   It actually happened for the first time.

Jill DeWit:                            It did.

Steven Butala:                   She took a picture-

Jill DeWit:                            I’m stinking up the studio … I hope that’s okay-

Steven Butala:                   That’s fine.

Jill DeWit:                            With my nail polish.

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

Jill DeWit:                            Okay. Stephen asked, “I came across a property the owner’s letting go (just started first year of tax delinquency) that I can get cheap because he was frustrated 10 years ago in gaining access to the lot (and has not been back since). I checked with the county and when the plat was done, all lots are granted legal access.”

Steven Butala:                   Ding, ding.

Jill DeWit:                            “So, ultimately, the neighbors cannot stop someone from getting to the lot (a road is drawn on the plat map, but not totally present at this time from the Google Earth image from what I can tell).”

Steven Butala:                   This is very common.

Jill DeWit:                            “The neighbor, who is the main issue, has apparently been scheming to force a tax foreclosure to pick up at auction per the county, the current owner’s opinion, trying to decide whether to pick up for 500 to $1,000 for 10 acres and be upfront with the limited amount that I know about the situation. Thoughts from the gallery?” I like that.

Steven Butala:                   What do you think?

Jill DeWit:                            This is so common, it’s hilarious. Well, my first thought is we already have the buyer. We know who wants it. It’s the person who’s trying to forcibly take it over. Why the buyer, the next door neighbor, has not gone to the person himself, I don’t know, unless it’s a Hatfield and McCoy thing.

Steven Butala:                   You took the words out of my mouth.

Jill DeWit:                            Then, the Hatfield neighbor, one of them, that McCoy does not wanna sell to the jerk, which I wouldn’t either at this point, but I also … the guy obviously, he hasn’t been to the property. He doesn’t care, he doesn’t go there. So, it’s not like he lives there. Right now, he’s done with it. He just doesn’t wanna deal with the situation. You know, this is-

Steven Butala:                   This is personal preference.

Jill DeWit:                            That’s what I was gonna say. You took the words out of my mouth ’cause you can go both ways with this.

Steven Butala:                   I wouldn’t.

Jill DeWit:                            You wouldn’t do it?

Steven Butala:                   Well, if it’s a smoking, smoking piece of property … it must be because there’s neighbors all over the place, right? It’s not just somewhere, very rural. I would actually probably spend 500 to 1,000 bucks and take a chance, but here’s what I would not do at all. I would not talk to the owner about this anymore. It’s gonna cloud your head up. You don’t wanna take on a social situation. It’s like having 10 wives. You don’t want that. There’s just gonna be a lot of talking and a lot of stuff that goes on.

Jill DeWit:                            Do you mean the current owner or the neighbor next door on that?

Steven Butala:                   The buyer, Stephen, here. He doesn’t wanna talk to this … you don’t wanna talk to the seller any longer-

Jill DeWit:                            That’s it.

Steven Butala:                   About this topic. Great. It’s got legal access, that probably is enough for me. Frankly, I wouldn’t get this far.

Jill DeWit:                            I appreciate that he shared that, that’s not something I would ask, too.

Steven Butala:                   In the end, this is what I would do. I’m not saying you should do this, but this is what I would do. Great, you got yourself a Hatfield and McCoy situation. We’re really, really sorry about that. We specialize in this stuff. However, it’s gonna cost a lot more to turn this property and make it sellable for us. I will offer you $500, kind sir. Somebody will be at your door next Thursday with a $500 cashier’s check. By the way, don’t worry about the taxes. We’ll take care of that stuff, we do it all the time. Thank you so much for giving me this background information. It’s great. Have a beautiful life. Click.

Jill DeWit:                            Jeez, you’re so funny. Yup.

Steven Butala:                   Then, I would post the property on the internet, everywhere, on our regular system for probably 8 to 10,000 bucks.

Jill DeWit:                            Roll it into your inventory.

Steven Butala:                   And, I would say in the body of the listing, “Roll it into your inventory”. Well said. Bottom of the listing, “Property has …” Seller says, “Property has legal access.”

Jill DeWit:                            And, it’s on the plat map.

Steven Butala:                   And, platted legal access. Potential neighbor issues? You’re … My loss is your gain.

Jill DeWit:                            Perfect. There you go.

Steven Butala:                   Check out below.

Jill DeWit:                            That’s it. And, you know what? For 500 bucks, who cares?

Steven Butala:                   That’s what I’m saying.

Jill DeWit:                            Let it sit there for six months.

Steven Butala:                   That’s what I’m saying.

Jill DeWit:                            Someone will pick it up.

Steven Butala:                   Right. So, that begs the bigger question. The real question in this … What we need to pull out of all this is that we have all been conditioned throughout our whole lives, I don’t care if you’re 22 old or 65 years olds, to really dig deep into a piece of real estate and get your claws in there, and your hands in the dirt, and find out what’s going on. Really metal in the whole situation. ‘Cause, darn it, if I can get more information and find out more stuff, I can improve this property and make more money on this one deal.

Jill DeWit:                            Right. It’s like finding it and saying, “I need to know what it’s zoned. I know I only picked presidential, but I want to double check what is, are you, whatever, 61. Maybe we can put them …” You know? Getting all, all, all into it and the minute you go down that path, like you’re sharing, Steven, thank you, that’s a waste of your time.

Steven Butala:                   I bought a property by accident in Malibu. This is before I met Jill. With an ocean view. For like four grand. And, it was in this exact situation. And, I did the exact same thing that we’re all talking about. That I just described. And, it was a legal access platted gorgeous piece of property with some very angry owners all in front of it.

                                                And, it was on top of the hill in a sub division. And, they were very clear with the signs that they were posting. And, you could see the roads right to the property. And, I could see … I went to visit this property because I’m always looking for a reason to go to Malibu. This is when we were in Arizona. This was years ago. I posted it for $89,000 and somebody bought it the first day.

Jill DeWit:                            There you go.

Steven Butala:                   I called the guy the later in life. This is after I met Jill. I don’t even know if I’ve ever told you this story. And, I said, “You know what? I made a mistake because this property is worth …” If you can figure this out. “4 million bucks.”

Jill DeWit:                            Right. Of course.

Steven Butala:                   It’s like eight acres on the ocean.

Jill DeWit:                            Oh, yeah.

Steven Butala:                   I really … I was actually really sick about it. I’m like, you know what? Dammit. I would’ve-

Jill DeWit:                            You can’t go back.

Steven Butala:                   I could’ve hired an attorney. I mean, we could be living there right now.

Jill DeWit:                            I know.

Steven Butala:                   That’s how nice it was.

Jill DeWit:                            You can’t go back.

Steven Butala:                   And, he said, “No, no. That’s a property …” This guy worked it all out. And, he had it listed for sale for like $900,000.

Jill DeWit:                            Right. You can’t go back.

Steven Butala:                   So, I understand your point here, but you just can’t get hung up in this stuff. I guess I just kind of ate my own words. I did get hung up in that property.

Jill DeWit:                            You kind of did. You can’t go back. You gotta go forward. But, that’s why it was a long time ago.

Steven Butala:                   Yeah.

Jill DeWit:                            That was then.

Steven Butala:                   Exactly. Today’s topic, you need time and smarts more than money. This is the meat of the show. Everybody thinks you need … What’s the first question people call … Jill takes calls, scheduled calls for people who want to join our group. And, she kind of interviews them. What the first thing they ask?

Jill DeWit:                            How much money does it take to get involved?

Steven Butala:                   How much money does it take to get involved in this? Again-

Jill DeWit:                            How much do I need for property?

Steven Butala:                   We’ve been conditioned.

Jill DeWit:                            Right.

Steven Butala:                   It takes tons and tons of money.

Jill DeWit:                            Right. I can’t be an investor. I don’t have $100,000.

Steven Butala:                   Right.

Jill DeWit:                            I can’t afford to just buy all this stuff.

Steven Butala:                   So, let me tell you the truth about how this works. There’s a certain percentage of people that join our group or any real [inaudible 00:08:13] … Any type of real estate venture. And, they have a knack. They have a real talent for locating properties that are undervalued. And, it’s not 90 percent. It’s a certain percentage. Do you think that if you locate an undervalued assisted living facility, six states less of you, for half of what it’s worth, that you can find the money, and the person, and the time? That you can find somebody that’s interested in buying that property that day? Yeah.

                                                You’re never gonna have problems selling undervalued property. If you can develop this one talent. Let’s say you’re terrible at doing deeds. You don’t understand real estate itself. You’re not interested in getting on an airplane and looking at things. But, you’re good at sending letters out, and talking to people, and getting the to sell their property. Or, helping them realize whatever goal that they had was with that property then all the time you’re buying property or you’re isolating it for half of what it’s work. Do you think you need to be good at anything else?

                                                No. You need to be good at nothing else. In fact, you don’t even need to take a shower for a week if you don’t want to.

Jill DeWit:                            I was waiting for something like that.

Steven Butala:                   Just get … You know? So, people are obsessed with investment capital.

Jill DeWit:                            I had this-

Steven Butala:                   Go ahead.

Jill DeWit:                            I have this guy … Well, it’s funny. I have this guy that keeps popping in my office now. Once a week, he works with the brokerage down at the bottom of our building and for some reason, I don’t know what … You can’t tell on the building, there’s signage that’s still from the tenant before us, which is great. And, I’ll never change it.

Steven Butala:                   I think it’s a title company, right?

Jill DeWit:                            Yes. But, we’re not gonna share what. Thank you.

Steven Butala:                   I know.

Jill DeWit:                            Anyway, they have no idea who we are. They just know new tenants moved in and they see us going in and out. So, they were just … I don’t know why they’re going door to door. I don’t even know how they got a whiff of what we do. But, anyway. He and the owner popped in one day. And, this kid is hungry. So, he now comes up to see me once a week by himself to pick my brain. And, it’s the funniest thing.

                                                And, we talked about … He’s got a group of investors. He wants to be the bird dog. And, he knows that you and I are the answer. And, it’s so great. So, every week I give him a little more. And then, give him a little more information. A little more information. And, I know he goes running back to them.

Steven Butala:                   Yeah.

Jill DeWit:                            And, he’s all excited. But, he’s not … He’s still doesn’t have the confidence yet to pull the trigger. So, I actually told him that I would get him access to our data. Not for free.

Steven Butala:                   Sure.

Jill DeWit:                            But, I would get him … He doesn’t need the program, but he just needs the data.

Steven Butala:                   Yeah.

Jill DeWit:                            Kind of stuff. He knows what he’s doing. So, I said, well, I’ll get you our membership. We’ll get you into that when you’re ready. And, I keep giving him more things. Yesterday, I printed out, “From offers to owners.” The house buying template.

Steven Butala:                   Yeah.

Jill DeWit:                            I printed it out literally and handed it to him. ‘Cause he couldn’t quite grasp it a little bit. So, I just put it and he’s like, “Oh.” So, this guy is smart and this guy has the time, he himself does not have the money, but he’s got the money behind him already, which is huge. He and I … And, I shared with him, we all know that if you come up with some great deal, it doesn’t matter where it is or what it is, and you tell someone that with money whoever … Hey, I’ve got an asset worth this and I can buy it for this. They’re gonna say, ‘Hell, yes. What do you need?”

                                                And, I shared some of our experiences and all of that on the big scale. We’ve done transactions like that. So, I guess, my point is it’s just kind of funny that I have one of these people right now in person who keeps going to talk to me. It’s really, really funny. But, it’s all true. You know?

                                                And, honestly, when I read this title, I think the smart is even more than the time. If I had to put it in order, smart comes first. Time second. Money last. What do you think?

Steven Butala:                   You know, smarts is … I’m gonna narrow it down ’cause lots of people are smart. Like, there’s people who can quote Shakespeare.

Jill DeWit:                            I need street smart.

Steven Butala:                   Yeah. You need math. You need excel. Not math. But, you need to understand excel and data.

Jill DeWit:                            Right.

Steven Butala:                   And, you need to have been born that way. And, I’m sorry. You just do. You can learn it or you can get, like you did, get somebody who’s good at it like me. But, that really, really matters. So, smarts. If you can understand data and why you would do a mail merge. And, if you can understand that there’s 10,000 lines of data and that when you’re done with it a half hour later, it’s gonna translate into 10,000 actual letters or offers being printed out with all different information on it. And, picture a person opening it at a coffee table with their spouse saying, “We should really consider this.”

Jill DeWit:                            Exactly. You have to be able to see it like that.

Steven Butala:                   I didn’t realize it … It’s a huge stretch for some people. But, the first thing what you need to understand long before any of that is if there’s a piece of property that’s worth half a million bucks and you can get it for 200 grand because the person just doesn’t want it anymore, they’re tired of paying taxes … That’s what you need to understand first.

                                                So, if you’re gonna make $300,000 on a piece of property just for moving some stuff around and calling some people, you do not need the half a million dollars to close the sale.

Jill DeWit:                            Yup.

Steven Butala:                   I think it stops 50 to 70 percent … It stopped me for a long time.

Jill DeWit:                            Yeah.

Steven Butala:                   I’m as bent. And, I’m only using my own money. For years. And, it worked out great. I accumulated a ton of cash.

Jill DeWit:                            Yup.

Steven Butala:                   And, kept everything really lean. But, if you want to get yourself and airplane, and a boat, and the whole American thing-

Jill DeWit:                            American dream?

Steven Butala:                   You need some partners. Right now, there’s people scouring the internet with hoards of money.

Jill DeWit:                            Looking for you.

Steven Butala:                   Looking for somebody who has your talent that can just be a cash machine.

Jill DeWit:                            Right. And, they don’t want to do it. If you have the time, and you have the money, and you can just come up with these things, game over, man.

Steven Butala:                   Yup. Time. I’m not sure. That’s easy.

Jill DeWit:                            Right.

Steven Butala:                   Don’t you think?

Jill DeWit:                            I do. That’s why I said that comes … To me, not as important as smart.

Steven Butala:                   And, you don’t need any money.

Jill DeWit:                            Correct.

Steven Butala:                   You need … You can do this after work. Before work. On the weekends. The whole thing.

Jill DeWit:                            Right.

Steven Butala:                   But, yeah, you do have … You know what? You’re right, Jill. You gotta understand that you’re not … And, just like a couple of shows ago, make all the mistakes 100 miles an hour. But, [inaudible 00:14:45] through it like a crazy person.

Jill DeWit:                            You’ll get smart.

Steven Butala:                   Yeah.

Jill DeWit:                            Make those mistakes. You know what? Learn from your mistakes too. Gosh. That’s how you get smarter. Pay attention. You know? It’s been a few minutes. Dissect what happened. You know? Oh, gosh. Here’s my pricing error. I know exactly where I went wrong in my formula and what I could have done better. And, I won’t do that again.

Steven Butala:                   Just gotta get better every day. All right? Just make sure the whole thing is kinda going in the upward direction and not the other way.

Jill DeWit:                            Now, you’re talking my-

Steven Butala:                   Yeah.

Jill DeWit:                            I love it. The Toyota way.

Steven Butala:                   Yeah.

Jill DeWit:                            You have to be improving every day.

Steven Butala:                   Right.

Jill DeWit:                            I agree.

Steven Butala:                   You can’t look back.

Jill DeWit:                            Yup.

Steven Butala:                   Well, you’ve done it again. You’ve spent another 15 minutes with us listening to The Land Academy Show. Join us tomorrow for another interesting episode where we discuss it takes two years to get trashing in anything.

Jill DeWit:                            And, we answer your question posted on our free online community found out of landacademy.com. Or, you can go straight there through landinvestors.com.

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

Jill DeWit:                            Ha, ha, ha.

Steven Butala:                   You know? You think that I’ve said that sentence enough-

Jill DeWit:                            Right.

Steven Butala:                   That I could actually deliver it.

Jill DeWit:                            Right. You would. You would. One would. But, that’s okay.

Steven Butala:                   Maybe I don’t have enough smarts. Want to hear something? Well, I’ll have to save it for the end. Go ahead.

Jill DeWit:                            This is the end.

Steven Butala:                   Oh. This is the after talk. I am terrible. I just had to order a new teleprompter at memorizing lines. ‘Cause I’m right in the middle of recording Land Academy 2.0.

Jill DeWit:                            Oh.

Steven Butala:                   So, when I sit here and say stuff like this, I flippantly say it. If you don’t understand excel or data, forget it. Go get another career.

Jill DeWit:                            That’s hilarious.

Steven Butala:                   Well, you know what? I have a second career right now. I have a side job called educating people about how to do this. My first job is to actually do it. And, I suck at memorizing lines, and presenting, and all that stuff. But, it’s still very successful. So-

Jill DeWit:                            Imagine if you were good?

Steven Butala:                   I know. Imagine if I had some on screen talent.

Jill DeWit:                            Wow. Oh, boy. Wouldn’t that be nice? You … It’s like, you have a face for radio.

Steven Butala:                   So, honestly, I never let it stop me. I’m not … You know what? So what. I can’t memorize lines? Great. I’m gonna go buy a teleprompter and figure it out that way.

Jill DeWit:                            I’m proud of you. That’s great. Share the fun by subscribing at iTunes or wherever you’re listening. And, 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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