Choosing Your Land Acquisition Niche Specialization (LA 743)

Choosing Your Land Acquisition Niche Specialization (LA 743)

Transcript:

Jill DeWit:                            Are we sure it’s okay? Sorry.

Steven Butala:                   Steven and Jill here. We’re keeping it.

Jill DeWit:                            Oh, good. All right. Hello!

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

Jill DeWit:                            I’m Jill Dewitt … Fighting, I don’t know if it’s a summer cold or what it is and broadcasting from sunny southern California

Steven Butala:                   After all, we are just real people.

Jill DeWit:                            We are.

Steven Butala:                   We don’t just have the show. We have life. Today, Jill and I talk about choosing your land acquisition niche specialization. I like this topic a lot. Before we get into it-

Jill DeWit:                            It’s wordy (laughs).

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 and this question is long.

Jill DeWit:                            Thank you for prefacing that. Joe Asks, “Hi all. I wanted to provide an update on my first mailer. I Join Land Academy as a silver member in mid December and my first mailer went out the first week in January.”

Steven Butala:                   Right!

Jill DeWit:                            “Last week I received a call from a seller and his message was clear. I accept your offer. During due diligence, I found out that he owned four more properties in the same area. I called them back to discuss other properties and he agreed to sell them all. Now for the best part, I purchased five parcels, 39 point four acres in total for $16,000-“

Steven Butala:                   Just like yesterdays!

Jill DeWit:                            “All five of the parcels are over four acres and the cheapest four acre parcel for sale in the area is $49,000 on-“

Steven Butala:                   Oh my gosh, he’s going to make a quarter of a million bucks here!

Jill DeWit:                            Right. “The cheapest four acre property sold in the last six months, went for $42,000. Recent comps suggests at least one of the parcels has a market value of over $100,000-“

Steven Butala:                   These are the kinds of deals Jill and I do-

Jill DeWit:                            “I paid $3,000 for it. Insanity. One of the other parcels is eight point one acres and does not have road access, but as accessible by ATV via an old logging trail. I wasn’t thrilled about this one, but I wanted to go easy in the seller for giving me such a smoking deal, so I just bought them all-“

Steven Butala:                   Good! That’s the right thing to do.

Jill DeWit:                            “The most significant challenge I faced thus far is trusting technology. Google Earth, GIS, Instead of going to look at the property myself. My wife says I have control issues, but she never says what I want her to say anyways. Deep down, I know that I’ll never be able to scale this business if I don’t learn to trust Google Earth and my data-“

Steven Butala:                   Yeah, you’re wife’s right-

Jill DeWit:                            “Besides the insane ROI potential in this deal is I didn’t go to look at the properties even though they’re less than an hour from my house.” I love it. I love his wife too, this is great. “Perhaps my experience-

Steven Butala:                   No, no-

Jill DeWit:                            “Perhaps some experience in beginner’s luck-

Steven Butala:                   Nope, you’re not. This is how it goes-

Jill DeWit:                            “But I’ve been sending out a mailer every two weeks and plan on sending out 6,000 on Monday, so only time will tell. I have a background working … I have a background working with Nielsen Data and have been pricing consumer package goods for different markets for over 15 years, so I felt comfortable with my analysis. I’ve even gone as far as running linear regressions on the data set to determine what the cost per acre would be in a perfect competition for a neighborhood. Is that relevant or necessary-“

Steven Butala:                   It’s absolutely relevant and if you’re comfortable doing that kind of stuff, you will dramatically succeed over the next guy because that’s the kind of stuff I do.

Jill DeWit:                            Exactly. I’m not sure how this fits. It says, “Hell no, but if anyone is going to be an expert on pricing on this area, I want it to be me. Believe it or not, I’m an extrovert and I have been in sales all my life, so if anyone is struggling to get their first mailer out, feel free to reach out. I may not be able to help you get from two to 100, but I’d happy help you get from zero to one. I appreciate everyone who contributes, contributes on the forums. I have learned a ton by looking through your posts, bring on House Academy.” I love it.

                                                At the very bottom, “Please, just the taste. I want to quit my job by the end of 2018.” What’s the name again? Joe. Awesome. Awesome. Awesome post, Joe. I can, again, say how valuable … I had no idea that our landinvestors.com online community would be.

Steven Butala:                   Yeah.

Jill DeWit:                            I’m so flipping happy too. It’s so good. I knew it. I knew we needed … You know, it felt right when … I remember Claire was one of the people instrument the beginning saying, “We need to be able to talk to you guys. We need to be able to, you know, chat.” Here came the online community and now gosh, the stuff that’s going on in there is awesome.

Steven Butala:                   That’s just a fantastic comment. I mean for the last few days we haven’t really had a question. We’ve had, “Thank you,” comments.

Jill DeWit:                            I know! Where was the question? I don’t think there was a question.

Steven Butala:                   [inaudible 00:05:07] Land Academy.

Jill DeWit:                            Just a taste, that was the question. It’s coming. That’s so great.

Steven Butala:                   That’s awesome, Joe. Great work.

Jill DeWit:                            Did everything right. You know it’s … I love that … Here’s the thing, I remember Joe’s feeling. I remember thinking that, “All right, this is it, this is the one off. I’m never going to hit this again.” Then a few months later you’re like, “Oh! It happened again.” You’re like, “All right, now that’s it. I have had my two, it can’t happen again.” Then a little while goes on and you’re like, “Oh shucks! It happened again-“

Steven Butala:                   We just got three properties-

Jill DeWit:                            Maybe this is a thing-

Steven Butala:                   Three properties in LA county today, they’re each five acres and they’re all like infill lots. We’re buying them for 15 grand total. We’ll sell them for … I mean, we’ll make an easy 100 thousand bucks. Probably … Actually, probably a lot more. We might even list those on the MLS. Look, this is off of a mailer from like 2008. To answer your question, “Is it just luck?” Heck no.

Jill DeWit:                            Right.

Steven Butala:                   It’s intentional. Do you hit a home run like that all the time? No, but you hit singles all the time or you don’t buy it.

Jill DeWit:                            Exactly.

Steven Butala:                   It’s pretty simple stuff.

Jill DeWit:                            Love it. That’s so awesome. He did the right thing too, buying all the properties. Take them all off the guy. That’s a good tip. When you have multiple properties, you can negotiate a better price per acre when you’re buying a bunch like that or bigger properties.

Steven Butala:                   If they’re all adjacent, all those properties, all five of them, And you’re having one in the center that doesn’t have access, but it relies on the other ones or two of the other ones, make sure you file for an easement. It’s real simple. Then you just created access for yourself. You probably already know that.

Jill DeWit:                            Good tip. Love it.

Steven Butala:                   Today’s topic: choosing your land acquisition niche specialization. Say that three times, Jill.

Jill DeWit:                            Right.

Steven Butala:                   This is the meat of the shell.

Jill DeWit:                            Toy boat, toy boat, toy boat.

Steven Butala:                   Did you ever see a Bugsy Siegel? Ben Siegel, that movie where he says … He’s prepping to speak and he says, “20 doors did turnstiles while standing on the carpet.” That’s how we would prep like before he went… He would say that 100 times or 10 times before you speak.

Jill DeWit:                            That’s fun. I didn’t know that one, no. W

Steven Butala:                   Why do I remember stupid stuff?

Jill DeWit:                            I don’t know. Just to impress me. (laughs) I’m impressed.

Steven Butala:                   Do I impress you anymore at all?

Jill DeWit:                            Yes, you do. You do in ways that I can’t say on the air.

Steven Butala:                   (laughs) Wow.

Jill DeWit:                            Are you feeling good? Your face is red.

Steven Butala:                   You made me blush just now.

Jill DeWit:                            Wow! That was good.

Steven Butala:                   I didn’t know I could blush anymore.

Jill DeWit:                            That’s really good.

Steven Butala:                   Choosing your land acquisition niche specialization, let’s list them. There is a relatively useless desert property with no access. That’s a good niche for some people. No, I’m just kidding. You don’t want to buy that kind of property.

Jill DeWit:                            Right (laughs).

Steven Butala:                   Although we’ve purchased our share of it.

Jill DeWit:                            Yeah.

Steven Butala:                   There’s infill lots in the inner city that you can’t spend a dollar on if you tried. People give it away. You don’t want a [inaudible 00:08:11] niche. Right? There’s two niches you don’t want. You do not want inner city infill lots in the rust belt specifically. I can say that because I’m from Detroit. You don’t want middle of nowhere desert like in imperial county where there was a world war two bombing range. Imperial county, California.

Jill DeWit:                            I love it.

Steven Butala:                   I turned the deal down imperial county last year. I remember a guy called me … He’s a total hippie and he said, “Can you just give me a thousand bucks for all this property?” It was like 500 acres. Do you remember that deal? I don’t even think we even put it in the system. I said, “No, I don’t even want it if it’s free.”

Jill DeWit:                            Exactly.

Steven Butala:                   You know what? We should probably start doing those deals and just give that property to somebody who’s brand new.

Jill DeWit:                            Maybe. What is a good land acquisition niche specialization, Steven?

Steven Butala:                   Infill lots in a fantastic little small town, like a small town in Oklahoma, that’s got two houses on either side and then there’s an empty vacant lot for a thousand dollars. That’s a fantastic specialization. Large acreage where you could put a ranch, a working ranch that’s next to a working ranch kind of thing. Agricultural land, any kind of farmland that’s commodity, fantastic specialization. We have a few people in our group that do that.

Jill DeWit:                            What about cabin lots?

Steven Butala:                   Vacation properties, fantastic. Here’s another one you probably want to avoid, recreation use only land. There’s a lot of property in Pennsylvania that is wet. It’s wetlands and it cannot be used for anything. What they did was … Somebody went in and subdivided it and explained to everybody that you cannot build anything on this property. You’re welcome to, most of the time, park an RV here and maybe you get a little boat slip with it, but it’s just recreation. You don’t want that at all. It’s hard to sell. Any kind of property that is unique in some way is great.

Jill DeWit:                            Mobiles. I love commercial where you can put … Commercial property that’s approved for a mobile, one of my favorites.

Steven Butala:                   Mobiles are great. We talked about real estate, actual real estate niches but here’s another niche that you should really consider, buying property from dead people.

Jill DeWit:                            Oh.

Steven Butala:                   That is a great specialization because you have to get in there and undo a bunch of legal stuff. Undo and redo correctly, a bunch of legal things. The example would, be a person owns a bunch of property and they have a will and the will says, “My … Singles, my only son or daughter gets all my stuff when I die.” Right? But they never, ever transferred the land. It’s still in their name. That person passes away and they’re sitting there happily thinking, “Well, it’s not going to be a problem for my son at all because I gave him … Here’s my will.” He has to spend a tremendous amount of time … The son does, after the parent passes away, getting that property in his name and working the estate out.

                                                If you can specialize in that … Because here’s why. The son probably got maybe … If it’s a house, for sure, he got a bunch of letters already saying, “Do you want to sell it?” Not so much with land. There’s no real competition with land. He’s got to figure this all out. If you come along and say, “I’m happy to buy this property for-” It’s worth 100 grand, right? “Happy to buy for $10,000 and I’ll fix all these problems for you for free.”

Jill DeWit:                            Right.

Steven Butala:                   That is a great specialization and it’s not possible in some states. It’s easier in some states and harder in some states based on the laws. It’s called adverse possession. How’re you doing today, Jill?

Jill DeWit:                            I’m fine! You’re just going off on some … I’m like, “Okay.”

Steven Butala:                   What kind of niche do you like?

Jill DeWit:                            I kind of talked about my niches-

Steven Butala:                   You’re just sitting here twisting your hair like you’re 12 years old. You’re day dreaming. What are you day dreaming about right now?

Jill DeWit:                            (laughs)

Steven Butala:                   Can you fly?

Jill DeWit:                            Why?

Steven Butala:                   Do you have a cape?

Jill DeWit:                            Is that what you think I’m doing?

Steven Butala:                   Yeah! I think you’re day dreaming.

Jill DeWit:                            Like I’m smoking something?

Steven Butala:                   No.

Jill DeWit:                            No, no, no.

Steven Butala:                   I think you think you’re Wonder Woman-

Jill DeWit:                            No, I just wasn’t sure where you were going and how far you were going to take us there. That’s really what it was.

Steven Butala:                   I was waiting for you to interrupt me.

Jill DeWit:                            Oh. I’m being polite.

Steven Butala:                   (laughs)

Jill DeWit:                            I was just being polite. I’m trying to think. I like your tangent though because it’s not just about the property niche, but about the product niche. What another niche is, are you going to be a terms person or a cash person? You know, think about that. You want … At the end of the day, we’ve talked about this a lot, you think you’re choosing your niche, when really your niche is choosing you.

Steven Butala:                   You nailed it.

Jill DeWit:                            That’s what will happen. You want to go in, when you’re starting buying property, having an acquisition criteria because if you don’t start with a criteria, you’re constantly chasing something shiny. Every time somebody calls with something, you’re trying to solve this and solve that, buy this and buy that. Then, you spent a week and you didn’t buy anything because none of them were your property type. You ended up learning about all these other counties and all these other areas and all these other properties that you hadn’t really started with.

                                                In the beginning, that’s the best. Start with one. Get to know another county. Get to know their property size. As your during term … Are you during terms properties? Maybe do a few for cash. I don’t know. Start expanding a little bit that way. Then, you also want to start expanding not only in sizes and how you’re going to do your properties but expanding in the other areas. Maybe I want to buy two states over. Maybe I want to try this [inaudible 00:13:49]. The most … Having a variety on your website is going to sing to somebody and that just helps all your sales-

Steven Butala:                   Right.

Jill DeWit:                            You don’t want all of the same properties, ten of them in a row.

Steven Butala:                   That’s right.

Jill DeWit:                            How boring is that for someone to go and find?

Steven Butala:                   Exactly.

Jill DeWit:                            Then, what will often happen through this whole process, you’re going to realize, “Wow, I just figured out how to do this over in this area. Boy, that was easy for me. I don’t think it’s easy for everybody else, so I’m going to go head first into this. This is going to be my niche over here. I’m going to be the only one in Colorado that knows how to do X. I’m going to kill it over here.” There you go. That’s how your niche will find you.

Steven Butala:                   I mean, you know enough that you are smart enough to listen to the show. You know that real estate … Ridiculous amounts … Fortunes can be made in real estate. You already know all that.

Jill DeWit:                            Right.

Steven Butala:                   Having a niche … Putting all of your options on the table and realizing … Some people only refuse to do a deal … They only do deals where they make 100 grand.

Jill DeWit:                            Yeah.

Steven Butala:                   That’s a niche too.

Jill DeWit:                            Sure.

Steven Butala:                   Really spend some time on this and think about what you want because it will happen. The way this mail works, it will happen eventually. Maybe you want to do very few deals but very profitable ones. Maybe you want to do a ton of deals, which is what we choose to do … A ton of deals with real low margins, so that there’s no sales issues ever.

Jill DeWit:                            Exactly.

Steven Butala:                   It’s really worth-

Jill DeWit:                            They slip fast.

Steven Butala:                   Just know this, you have complete control over your real estate career. You have more control over this than maybe almost anything.

Jill DeWit:                            Right.

Steven Butala:                   [inaudible 00:15:28] works. We all know that.

Jill DeWit:                            Sure does.

Steven Butala:                   Have fun with it. That’s what I say.

Jill DeWit:                            Thank you.

Steven Butala:                   [inaudible 00:15:37] spent about 15 minutes with us, listening to the Land Academy Show. Join us tomorrow for another interesting episode where we discuss what your average day… What your average workday looks like and by the way, you’ve done 100 deals, now what? That’s the theme for this week.

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

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

Jill DeWit:                            Can you tell my voice is weird?

Steven Butala:                   Yeah.

Jill DeWit:                            Oh, okay.

Steven Butala:                   Both of us are like, “My gosh.”

Jill DeWit:                            I know. What were we thinking? It seemed like a good idea at the time.

Steven Butala:                   It’s going to be 8:30 tonight.

Jill DeWit:                            Sure. I got this. No problem. I can record tomorrow, sure. It’s going to be fine. Don’t worry about it. Share the fun by subscribing on iTunes or wherever you are 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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