So You Have Completed 100 Deals Now What (LA 741)
So You Have Completed 100 Deals Now What (LA 741)
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, broadcasting from sunny Southern California.
Steven Butala: Today Jill and I talk about: “So You’ve Completed 100 Deals, Now What?” Incidentally, that’s the name of the theme this week. So you’ve completed 100 deals, what the heck do you do now? Well first of all, congratulations. I know exactly what it feels like to complete 100 deals.
Jill DeWit: I know what I would tell people to do. This ties into something cool, by the way.
Steven Butala: Incidentally, next week is: “So You’ve Completed 1,000 Deals, Now What?”
Jill DeWit: Mm-hmm (affirmative).
Steven Butala: That’s the theme for next week, but back to 100 deals, how much money should you have if you’ve completed 100 deals, Jill?
Jill DeWit: Oh my gosh.
Steven Butala: Let’s say you make two grand per deal.
Jill DeWit: Don’t ask me to do the math.
Steven Butala: It’s $200,000.00.
Jill DeWit: Okay.
Steven Butala: You should have a quarter of a million bucks in the bank-
Jill DeWit: Okay, thank you.
Steven Butala: If you’ve done 100 deals.
Jill DeWit: That’s what I was going to say, but I look at it like two becomes four, becomes eight, becomes 16. I go … I look at it that way, so you could have even more.
Steven Butala: Some of our members refuse to do a real estate acquisition unless they make $10,000.00 a deal.
Jill DeWit: I have two members … well, actually it’s these two gentlemen that are our members. It’s part of a team of three people working together, and they just shared with me in one with us they are in the millions with an “s”, not just one.
Steven Butala: Right.
Jill DeWit: More than one.
Steven Butala: Right.
Jill DeWit: It was really cool, so I had a call with them the other day. What I want to say is this ties in perfectly with what we have coming up. We are the first time ever going live, and for people who have completed more than 10 deals, even … let’s even just say that. You’re in it. You’re growing your business because a lot of what we’re going to talk about today is tied into the content for our Intermediates Live Session. So, can I explain it?
Okay, so here’s what’s going on. We are going live. If you go to LandInvestorsLive.com, you will find details for a September 21-23 event, and also, that’s for beginners, new people to Land Academy. Our brand new “do this”, you know, just someone who’s never done this before, and you’ve been thinking about it. You want to be a member, you want to do this stuff. You can go right there, check out, and now you get the program and all that good stuff. But, there’s a live event. We’re going to be doing it in person. So, that’s the first event.
Where it ties into this show today is we decided, last minute, to do [inaudible 00:02:39] schedule an Intermediate [inaudible 00:02:40] for all of our members that have been cruising along, they’re doing deals, they need some help taking it to the next level-
Steven Butala: Right.
Jill DeWit: So, that’s kind of what this week’s about too, taking it to that next level.
Steven Butala: Yeah.
Jill DeWit: Things that we’re going to talk about at that second event, it’s October 5-7, is the event, and they’re here in … It’s in Los Angeles county. It’s Hermosa Beach, but here in Los Angeles. You’ll see it all on the website.
Steven Butala: Real close to the airport. Real close to LAX.
Jill DeWit: Seven miles south of LAX, is where it is. So, it’s super easy to take a $20.00 Uber and get there.
Steven Butala: This is our first live event.
Jill DeWit: Mm-hmm (affirmative).
Steven Butala: The truth is, I fought it for years.
Jill DeWit: I know. Our members have been asking for years.
Steven Butala: I highly lost the battle with Jill.
Jill DeWit: I know. Not with me. It was like with our members. We have to do this. Everybody’s [inaudible 00:03:29], and it’s … I’ll tell you, it’s such a … It’s going to be so darn cool because it’s going to be you and me, a few other guests and things that you’re still working out for the second event, but … and it’s 40 people. That’s it. That’s the cap.
Steven Butala: So, you know-
Jill DeWit: It’s going to go fast.
Steven Butala: Yeah, I mean we’re what, half … You announced it on Friday, it was a few days ago. It’s I think, we’re one half-
Jill DeWit: I did it on Thursday.
Steven Butala: Just about full. I mean, we’re half full.
Jill DeWit: We’re doing just great.
Steven Butala: I expect it to sell out this week.
Jill DeWit: So, yeah. It’s going great. I know people are still looking at their calendars and working out their days off to do it, because it’s all day Friday, all day Saturday, a half day Sunday. But, it’s going to be cool. For the Intermediate event, it is going to be stuff like today. I guess I’ll see you before the show.
Steven Butala: Yeah. You know, when you like a musician, do you like the studio records that they put out, or do you like the live music? Do you like them in-person? I’m a total studio person.
Jill DeWit: Oh, I like both.
Steven Butala: I think you’re live. Yeah?
Jill DeWit: Yeah, you know what? Our members [inaudible 00:04:35] are both. There’s some that are like, “Nope, nope. Don’t need to see you. I’ve got enough Jack and Jill and Steve and Jill in my life.”
Steven Butala: Exactly.
Jill DeWit: No, don’t need to get that fall.
Steven Butala: I watched you guys for 10 hours one time-
Jill DeWit: Yeah.
Steven Butala: On the program, and that’s about it for me.
Jill DeWit: Jack, I’m still having nightmares over Chapter Five.
Steven Butala: I had nightmares doing Chapter Five.
Jill DeWit: Right. Exactly.
Steven Butala: Before we get into the topic, let’s take a question posted by one of our members on the LandAcademy.com online community. It’s free.
Jill DeWit: Mike asks, “What have you pros’ experiences have been with cash sales versus term sales? Does anyone have any tips on how to transition from being a term seller to end users, to more of a whole sale cash seller? Or, alternatively, has anyone had any experience in selling notes? Since I get such a good interest rate on these land contracts, I wondered if investors are maybe interested in buying them, but I have no idea how to do that or where to start. Any advice? It’d be greatly appreciated.”
Steven Butala: Good. You know, we’re going to answer the question right now, but if you go the Land Academy community, and just keyword search Mike’s question here, there’s lot of other people that are members that have piped in and answered the questions. We all have a different … you know, everybody’s got a lot to say about it.
Jill DeWit: Which is cool.
Steven Butala: If you listen to the show at all, you know that Jill and I are cash sellers primarily. We used to be term sellers.
Jill DeWit: I know. We are now.
Steven Butala: Now it’s just all cash because we would rather sell it cheaper faster.
Jill DeWit: Mm-hmm (affirmative), and build up a bigger bank balance.
Steven Butala: Yeah.
Jill DeWit: And do other things with that.
Steven Butala: So, terms sales are much harder to manage throughout the life of the loan than cash. To answer your question directly, transitioning from a term seller to a cash seller is way the heck easier than doing it the other way. If you’re used to cash sales and you sell go-to-term sales, there’s a lot of stuff that goes on. But I will say this, there are different property types. You want to sell really high quality property on terms. You want to sell lesser quality property maybe with access issues in a lesser desirable area for cash and just kind of get it out of your life.
Jill DeWit: I noticed, because I was reading more in this thread, Mike weighed in a few little things that what he found was why he’s gotten himself in this situation is because it’s been a piece of cake for him when he puts things out there for cash to say, “You know what? It’s not selling fast enough. If I make it a term sale, people jump on it right away.”
Steven Butala: That’s perfect.
Jill DeWit: So that’s, I think, what’s been going. I totally get it, and I love it. Mike’s like, “You know what? I’m just going to be greedy,” you know what I mean? “Do I want to wait two weeks for the cash buyer, or do I want to sell it right now to a terms person and then I can call it done and start making money on it.”
Steven Butala: Right.
Jill DeWit: Which is, it’s kind of just … it’s just personal preference because when you do add up the money at the very end of the day, gosh, what you pocket on these terms sales is insane.
Steven Butala: Yeah.
Jill DeWit: You really do make more money that way dollar-wise, but it’s how do you want to structure your business, and what do you want to do.
Steven Butala: Right. Then the second part of the question he says, “Does anybody have any experience selling notes?” What he means is if you take a 40 acre property, you buy it for four, five or eight grand, and you sell it for $20,000.00, $500.00 down, and $200.00 a month for a lot of years. Just like a mortgage. After the note gets seasoned, the loan that you just created, you’re the bank. You can sell that note at a discounted rate and turn over that monthly income to somebody who buys it from you. Yes, I’ve done that many times.
There’s many, many people … There’s a website called Note MLS, I think it’s called, or if you just Google that, there’s lots of people that have a lot of properties and notes. You can sell a note on a car, you can sell a note on a house. It doesn’t have to be asset-based. There are people who sell notes for personal loans, so it’s a good racket. Buying notes, and we don’t talk about it ever and I don’t know why, but buying notes … On the flip side, if you buy a note on real estate and it defaults, you get to buy the real estate for half.
Jill DeWit: Yeah.
Steven Butala: It’s a great business.
Jill DeWit: It’s true.
Steven Butala: Some people, that’s their whole business. They buy defaulted notes on houses and stuff. I asked a real experienced note guy one time, “Why do you buy defaulted notes?” He said, “I’ll tell you,” because the vast majority of the time the owner’s in the house, he’d buy a note for half of what the house is worth, and he’d call the guy and say, “Look, you need to start paying, or you need to get out.” He said nine times out of ten, they’d just say, “Tell me where to send the check.” They just literally didn’t have any contact.
Jill DeWit: Right.
Steven Butala: It’s usually something simple like that.
Jill DeWit: Right.
Steven Butala: Today’s topic: “So You’ve Completed 100 Deals, Now What?” This is the meat of the show. Jill, you have a lot to say about this, don’t you?
Jill DeWit: Well, I was thinking about … A lot of this, the things you need to think about here are some of the things that we’re going to talk about in great, great, great detail in person at our second live event. Things like budgeting, things like automating-
Steven Butala: Automating.
Jill DeWit: Getting your mailing efforts into a machine, basically, automating that. Growing your business … What do you need … You know, maybe getting an LLC at this point-
Steven Butala: All that.
Jill DeWit: Upping your website game. Now you’re not just a landing page. Do you have a real good selling site? What else?
Steven Butala: Are you mechanizing everything? So, you should be asking yourself this question after 100 deals probably way before 100 deals, after maybe 20 or 30. You should be asking yourself, “What’s the secret here? Why am I good at this?” Your answer’s going to be some version of this, “I’m really good at buying real estate. I’m not good at selling it.” You don’t need to be good at selling it, it sells itself when you buy it right.
Jill DeWit: Mm-hmm (affirmative).
Steven Butala: What you want to do is remove yourself entirely from actually working in your own company, and just be an acquisitions expert.
Jill DeWit: And don’t do it by pawning it off on your significant other.
Steven Butala: It sounds like you have some experience in that.
Jill DeWit: Oh, no. Just throwing it out there.
Steven Butala: One time I was talking … I was scheming with-
Jill DeWit: Scheming is right.
Steven Butala: Scheming with somebody, and Jill is just looking at me like, “Just go ahead and finish your thought, because it’s all going to on me anyway.”
Jill DeWit: Totally. Here it comes. It’s okay, don’t hold back.
Steven Butala: Oh, probably to start another company this weekend.
Jill DeWit: What are we doing? Go ahead and bring it. Don’t hold back. I’d rather know now than be surprised later.
Steven Butala: How bad is it, really?
Jill DeWit: Oh, it’s … I can’t answer that question. I don’t want to throw you under the bus.
Steven Butala: Go ahead.
Jill DeWit: No.
Steven Butala: Even now where we are in our careers, some of the stuff that we start doesn’t work. That’s just the way it is. Some companies really work well. Like, [inaudible 00:11:54] is just dreamy.
Jill DeWit: Mm-hmm (affirmative).
Steven Butala: It’s a great company for everybody.
Jill DeWit: I’ve got to say that honestly-
Steven Butala: Title IX, disaster. Go ahead.
Jill DeWit: Well, I don’t … I think it could work. We just don’t have the stomach for it.
Steven Butala: Mm-hmm (affirmative).
Jill DeWit: It’s just a tough product, and it’s a tough thing. I just don’t want to do it.
Steven Butala: Right.
Jill DeWit: You know, that’s what happens. It’s … you know, in our business. You find a product that sings to you. You might branch it. You know, here’s a good example, you start buying and selling land and there’s always going to be deals that come to you that are just deed nightmares. Someone’s not alive anymore, they’ve moved away, we don’t even know what this is going on over here. You know, those kinds of situations.
So, you start cherry picking and picking the things, picking the good ones, but you should. So, we cherry pick our businesses, I think. It’s kind of where I’m going. I feel like, you know what, that was too hard, and I want to do it.
Steven Butala: It’s too hard.
Jill DeWit: It’s just too hard.
Steven Butala: Not that it’s not possible-
Jill DeWit: Yeah.
Steven Butala: It’s just not worth it.
Jill DeWit: That’s it.
Steven Butala: We are two people with staff, and there’s only so much stuff we can do.
Jill DeWit: Mm-hmm (affirmative).
Steven Butala: So we might as well make it good. That’s what I say.
Jill DeWit: Exactly. I really want to pick, like these property deals, I just want to pick the ones with the high return. That’s it.
Steven Butala: Yep.
Jill DeWit: I’m not messing around here.
Steven Butala: Yeah.
Jill DeWit: I’m here to get wealthy.
Steven Butala: Oh, really?
Jill DeWit: Yeah.
Steven Butala: You’re such the right girl for me.
Jill DeWit: Thank you.
Steven Butala: I’m here to get wealthy, too.
Jill DeWit: I’m not here to hold Mrs. Smith’s hand, and meet her and show her the trees, and help her think about what direction she’d like the porch to face. You know what I mean?
Steven Butala: I’m not here to answer questions that buyers have about real estate.
Jill DeWit: Yeah, that’s what I mean.
Steven Butala: What else aren’t you here for?
Jill DeWit: Oh my gosh.
Steven Butala: I refuse to do that.
Jill DeWit: Diaper changes.
Steven Butala: Yeah.
Jill DeWit: You want to explain that one?
Steven Butala: Yeah, when people … “My mouse doesn’t work,” that’s a diaper change.
Jill DeWit: Or even like when people … honestly, it’s like when people are calling in … if they call in and say, “So what taxes are they? Do you know what page they’re on?”
Steven Butala: Yeah, taxes.
Jill DeWit: Scroll down, please.
Steven Butala: Right.
Jill DeWit: It’s right there.
Steven Butala: A lot of tax questions constantly.
Jill DeWit: Yeah. It’s kind of funny. My favorite, too, is “How long can I leave my RV there?”
Steven Butala: Yeah.
Jill DeWit: Oh, boy.
Steven Butala: So, if you’ve completed 100 deals, you’ve worked all this by now.
Jill DeWit: You’ve had all these calls.
Steven Butala: Your FA2 is jammed up on your website.
Jill DeWit: And you know what a tire kicker is, and you know who’s a real buyer.
Steven Butala: Right, so the whole point of the show is get rid of all that stuff. You may have to, depending on how you operate, find staff to do it, or outsource it overseas maybe. We do some version of all this. But, you do not want … I’ll tell you right now, you have to figure out how to staff the phone because with a deal machine like this, the phone will destroy your business, in my opinion.
Jill DeWit: If that’s your … If you’re the only person, I totally agree with that. You can’t be the one person that does the only … answers the phones, because yeah, you’re limited to what you can do in one day.
Steven Butala: If you’ve completed 100 deals-
Jill DeWit: That’s hard.
Steven Butala: You’ve figured out … also figured out that you have to accept credit cards online.
Jill DeWit: Yeah.
Steven Butala: The ideal.
Jill DeWit: Good point.
Steven Butala: So you have to, in your head, replicate the perfect real estate deal. In my mind, the perfect real estate deal is you send a bunch of letters out, somebody signs it, and thy mail it back, or they took a picture of it and sent it to you, email it to you, and then at that moment you schedule the closing right there with the person. Pick up the phone, or somebody who works for you, picks up the phone and you schedule the closing and send them all the documents that minute. Maybe even email them and send a notary over to their house, they sign it, send a cashier’s check with it.
The acquisition’s done, and in a perfect world while this is all happening, you’re posting it for sale everywhere simultaneously, even before you own it. It sells. So, you’re driving all your traffic back, wherever you posted online, back to your website, somebody sees it on Facebook, let’s say, they to go your website and they put their credit number in, and they’re the new owner.
Jill DeWit: Right, not necessarily before you own it, but before … because the minute it’s signed, you own it technically. That’s, I think, what Steven means. Once it’s signed and you see it coming back to you from the notary, now you can post it for sale. Have at it.
Steven Butala: So, you’ve had exactly one conversation with the seller, and zero conversations with the buyer. Now, you’re sending out deed information for the new buyer.
Jill DeWit: That’s a perfect thing.
Steven Butala: That’s it. That’s what you should be shooting for.
Jill DeWit: Right.
Steven Butala: Ideally, where we are now, I don’t ever talk to anybody. I don’t think you do, anymore.
Jill DeWit: Well, I am a little bit right now because I’m doing a little temperature check and setting up scripts and things for my team for House Academy.
Steven Butala: Mm-hmm (affirmative).
Jill DeWit: So that’s why. I’m involved in the House Academy calls, which I like.
Steven Butala: Yeah.
Jill DeWit: I like this stuff. This is the hard part, too, you guys-
Steven Butala: Buying a house is fun.
Jill DeWit: I like all this stuff. I hate to say it, I love … Buyers are not so fun.
Steven Butala: Mm-hmm (affirmative).
Jill DeWit: Buyers are kind of … Buyers are a whole different category. They’re not as exciting to talk to. The sellers, I [inaudible 00:16:47] talking to.
Steven Butala: When you get deals met … because you’ve done 100 deals now, you know that feeling. You know where the euphoria is. For me, it’s when I get a signed offer back, I go to Parcel Fact if it’s a piece of land, ParcelFact.com, and I look it up immediately. Slap in the APN, the Assessor’s Parcel Number, and I look at it. Within seconds, I know exactly how much. We’re going to make 10, 20, 30, $40,000.00 on it.
Jill DeWit: Right.
Steven Butala: Or, we’re not going to buy it. That’s the euphoric moment for me.
Jill DeWit: Mm-hmm (affirmative).
Steven Butala: Then my involvement stops. In fact, I don’t even usually do that.
Jill DeWit: Right.
Steven Butala: Then, turning it into cash is easy.
Jill DeWit: Yep.
Steven Butala: You have complete control over what you pay for real estate.
Jill DeWit: Exactly.
Steven Butala: [crosstalk 00:17:31] people sitting around going, “Oh my gosh, this is a terrible real estate market. What’s going to happen?” You know?
Jill DeWit: Yeah.
Steven Butala: I’m like, what are you talking about?
Jill DeWit: Isn’t that funny?
Steven Butala: You … gotcha. You put yourself in this position. If you’ve paid too much for real estate, I see it all the time with newlyweds and stuff.
Jill DeWit: Oh, that’s true. It’s not selling.
Steven Butala: You paid too much for the real estate-
Jill DeWit: That’s why.
Steven Butala: And you signed a terrible mortgage.
Jill DeWit: Yeah.
Steven Butala: That’s what happened.
Jill DeWit: That’s the thing. Can’t undo that, unfortunately.
Steven Butala: Jill and I run around the office celebrating on this stuff-
Jill DeWit: Yeah.
Steven Butala: Or we don’t buy it.
Jill DeWit: Right.
Steven Butala: You know? I’m either jumping up and down, or we’re saying no.
Jill DeWit: That’s an interesting point, too. And you’ve done this. By 100 deals now, you’ve done this. You’ve had people call back and you’ve had to politely let them down. That’s okay.
Steven Butala: Or, push them off … like you run out of money. Usually, you should be running out of money every month.
Jill DeWit: Right.
Steven Butala: Even we run out of money once in a while, because we buy so much real estate. So, you’ve got to … I call it, “Play the balance sheet game.” You have to manage money … At any given point, you have a bunch of cash, and yo have a bunch of real estate. In a perfect world, it’s free and clear. Again, in a perfect world, you would never theoretically own any real estate. You would buy it and sell it so fast that you own it for a minute.
Jill DeWit: Right, exactly.
Steven Butala: That’s what we shoot for.
Jill DeWit: Mm-hmm (affirmative).
Steven Butala: If you’ve already done 100 deals, you know all this stuff. Well, you spent another almost 20 minutes listening to us. If you’ve done 100 deals, you probably got interrupted six times during this podcast.
Jill DeWit: Hopefully you did.
Steven Butala: Yeah, buying property.
Jill DeWit: There you go.
Steven Butala: Join us tomorrow for another interesting episode where we discuss: “Leave Your Job When Your Job Actually Starts Costing You Money.”
Jill DeWit: And we answer your questions posted on our free online community. You can find it off of LandAcademy.com, or go straight there, it’s LandInvestors.com.
Steven Butala: You are not alone in your real estate ambition. You know, it’s fun talking about this stuff, Jill.
Jill DeWit: Why?
Steven Butala: 100 deals?
Jill DeWit: Oh, I know.
Steven Butala: That’s a bunch of dough.
Jill DeWit: Yeah, it is.
Steven Butala: We’ve got a few people in our group. Jill mentioned some earlier, but we’ve got a few people that maybe will never do 100 deals because the deals that they do, they make a million bucks per deal.
Jill DeWit: Right.
Steven Butala: One member specifically does one or two deals a year, tries to make 100 grand on it. That’s a-
Jill DeWit: Mm-hmm (affirmative). That’s all she wants to do.
Steven Butala: Right.
Jill DeWit: Exactly. Share the fun by subscribing on iTunes or wherever you’re listening. While you’re at it, please rate us there.
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