Grow Your Wealth by Buying Related Companies (LA 755)

Grow Your Wealth by Buying Related Companies (LA 755)

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:                            And I'm Jill DeWit broadcasting from beautiful South Lake Tahoe, we've been here all week.
Steven Butala:                   Today Jill and I talk about growing your wealth by buying related companies, related to real estate and online sales potentially. We're going to go through a few companies that we've purchased that worked out great for us, and we're going to go through a few that are no longer in operation for a lot of reasons.
Jill DeWit:                            And ones that you've talked about that I've pleasantly reminded you "Do we really want to go there?"
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:                            Ariel asks: "I've been looking at listings to get a feel for prices in some California counties. Looking for lower priced areas and smaller parcels for an offer of $500,000, could be 10 to 20% of resale value. I'm finding parcels that meet this are small and way out of in southern California desert areas, which seems like there is a lack of attributes. Can offers as low as $500,000 work in areas that I see are listed at much higher prices?  What's been your highest resell value for an offer this low? Thanks for your help."
Steven Butala:                   This is a great question, Ariel.
Jill DeWit:                            I love it.
Steven Butala:                   I mean it. There are a lot of people that come into our group, and for whatever reason they receive this message from me, and I do the best I can do undo this message, for some reason they get this. You can buy property anywhere for $500, because people just sign the offers, they just want $500, and they don't really care about their $350,000 [inaudible 00:01:47] lot in Hollywood. That couldn't be further from the truth.
Jill DeWit:                            Right.
Steven Butala:                   It's just not. You're wasting their time, you're wasting your time and money on postage, and, no. Can you buy $500 to a $1,000 quarter-acre lots in California City? Maybe. But do you really want to?
You want to buy a $1,000 lot and resell it on the internet for $1,500 constantly? It's a long road to retirement. Does it work? Possibly. Once in a great while you're gonna get somebody who signs it and sends it, and everything works, and, yeah, and you do well. But, you would do much, much, much better, and I say this truthfully ... I use $500 in the example in chapter five in the first Land Academy program, and I think that's where this message gets convoluted. That's for practicing, just do a few deals like that just so you can understand the process, and make sure it's something you want to do, make sure you can handle some of the backlash or the hate that you get from some angry sellers, because it all happens, and everybody needs to be aware of it. Jill doesn't let me talk about it on the show too much.
Jill DeWit:                            Oh, it's fine. It's not that big of a deal.
Steven Butala:                   But once you're done ... The most successful people in our group buy 30, 40, 50, $60,000 properties and sell them for $120,000.
Jill DeWit:                            Or even a $1,000 property, or even like a couple thousand dollar property-
Steven Butala:                   Like $5,000.
Jill DeWit:                            Yeah, let's say $3,000, $4,000, sell it for $12,000, those are great things people do all day long. I don't ... I guess ... yeah. I think you're getting a little-
Steven Butala:                   It's too low-
Jill DeWit:                            Hung up on some of the ... You don't want to go in too low, because you won't get anything good out of it. That's the main thing.
Steven Butala:                   Yeah.
Jill DeWit:                            You want to really be accurate for the area. If you have that small budget, then, yes, you might be buying those ... some properties that are way out there, but ... and, you know what, you're gonna be marketing to those people that didn't even know that they could buy a property for $1,500 or $2,000, and that's what you're doing. You're learning the process, and you're getting more money, by the way. Now you have more money to play with after this exercise is done.
You started with $10,000, by the time you're all done, now you have $20,000, and you did ten deals. You know a lot more.
Steven Butala:                   Yeah.
Jill DeWit:                            Now with $20,000 you can start making some different decisions, and then you have $40,000, and then you have $80,000, and that's how it goes.
Steven Butala:                   Then you're in.
Jill DeWit:                            Right.
Steven Butala:                   I'm not knocking these tiny little deals, use them for practice if you need to, but it's really scraping the bottom.
Jill DeWit:                            It's true.
Steven Butala:                   People are not, they're just gonna get annoyed. I never send out an offer for less than $500 when we're doing rural vacant land, even if the map works out differently, so-
Jill DeWit:                            We used to-
Steven Butala:                   Like I said, yesterday ... well, I never-
Jill DeWit:                            Back in the day, but that was a long time ago-
Steven Butala:                   I never sent an offer for less than $500 ever-
Jill DeWit:                            Less than $500?
Steven Butala:                   Ever, never.
Jill DeWit:                            Oh, okay.
Steven Butala:                   Like I said in the show yesterday, where do you want to spend your time? Right?
Jill DeWit:                            True.
Steven Butala:                   Today's topic: grow your wealth by buying related companies. This is the meat of the show. What do I mean by this? As you may or may not know there's tons of companies for sale all over the place. Mostly because people are retiring. You can get ... If you're like me, the people ... Guys who sell franchises, for like Little Caesar's and stuff, they won't leave me alone. I'm in their database for some reason.
Jill DeWit:                            I know why. You placed yourself there.  [crosstalk 00:05:16]
Steven Butala:                   This is the fastest way to grow. This is actually ... I spent an hour on this on our ... in our live gatherings. The single fastest way to grow your personal wealth is through acquisitions, and guess what? That's what we teach. Acquisitions: buying property with an equity position, buying it cheaper than it's worth. You can do the same thing with companies.
What you're not just learning here, how to buy property and run your own company and creating wealth, you're learning how the value of leveraging your time and your money, so the same thing works with companies. Maybe you love the marketing piece of this. We have a member who just loves it. He's since branched out into selling other stuff online, and he's a great marketer, and he does very, very well.  Maybe you love the survey process, or you love to actually go and visit the property. Now you can start a photography business, or a survey company-
Jill DeWit:                            I was gonna say that. Drone footage-
Steven Butala:                   Drone footage is good. Maybe you buy ... bought into the whole thing, and you got a piece of property, and you moved out there, and you want to blade in roads for everybody else who buys your property. You can upsell-
Jill DeWit:                            What about-
Steven Butala:                   Everybody who buys property from you by blading in a road for them.
Jill DeWit:                            What about one of our members, who I think is brilliant, who mirrored her husband's business, which is fixing up Airstreams and making them gorgeous, and she's learning how to buy property really, really well. Imagine this, she buys a property, they put Airstreams on them, and they rent them out like it's a-
Steven Butala:                   Like a motel-
Jill DeWit:                            Like it's an Airbnb situation.
Steven Butala:                   Yeah.
Jill DeWit:                            That's a beautiful thing to do-
Steven Butala:                   Exactly-
Jill DeWit:                            In natural progression, and talk about killing it. That's the greatest thing. Give us some examples, please, Steven, of things that we shouldn't be looking at.
Steven Butala:                   I talk about this in our live event. Here's some things that's a no ... I veto it immediately. If you have to walk through the door, if your customer has to walk physically through a door, then that's not a company for me, a restaurant, a bar, a boutique shop, all that. It's not worth it. If you have to buy stuff, stuff, actual stuff that comes in a box-
Jill DeWit:                            Inventory.
Steven Butala:                   Yeah, and you can't very easily and immediately sell it for twice to four times what ... in a retail shop, in a gift shop, that person, whatever you're buying, it has to be marked up four times for them to make any money.
Maybe you want to be a landlord, you love that. You bought a bunch of properties and you sold it on terms, and you ... it works out great, and so you want to buy an apartment building, that's perfect. Guess what? You learned how to buy cheap real estate, you can buy apartments.
Jill DeWit:                            That's very true.
Steven Butala:                   Maybe you're an interior decorator. You love design work and stuff. Team up with somebody else in the group who buys real cheap houses and clean them up in your area.
Jill DeWit:                            I think the point of what you're trying to say, or correct me if I'm wrong, is use what you learned.
Steven Butala:                   Yeah.
Jill DeWit:                            Use what you know.  If you really have a brain desire to start on a whole different career path, more power to ya, but you'd be smart to just expand on what you know, and what you've learned, and you'd do so well. This is your real estate investment career where this is your career. Make your career grow, your business grow, by only investing in businesses and things that will further your business.
Steven Butala:                   That's correct, so what you're learning here is not just to buy property, undervalued property, you're learning how to buy undervalued companies, let's say. You're learning about ... Last week we had Justin [Sliva 00:08:49] on our show, on a webinar for our group, and he and I had a good laugh, because every single thing he does he turns into a company. He's buying these classic cars now, that sort of side company.
Jill DeWit:                            Love it.
Steven Butala:                   He's buying them cheap and reselling them.
Jill DeWit:                            Beautiful.
Steven Butala:                   Specifically the ... a type ... one specific type of old Ford.
Jill DeWit:                            Mm-hmm (affirmative). Starts with a C.
Steven Butala:                   Yeah. It does.  Truly amazing opportunities are out there.
Jill DeWit:                            Yeah.
Steven Butala:                   Truly amazing. There's a lot of examples of what ... I don't even touch. I don't even get involved in.
Jill DeWit:                            Would you recommend buying an existing company over starting your own?
Steven Butala:                   If you go to business school and you have a good instructor, the first thing they say is, "Never do a startup." Almost never do a startup.
Jill DeWit:                            Really?
Steven Butala:                   Yeah, can you believe that?
Jill DeWit:                            Oh my gosh!
Steven Butala:                   They say buy an existing company. Here's an example. Here's the best way you can leverage your time and money.  You are a great Facebook marketer, let's say. Let's say you even have a Facebook marketing company, and you buy a company that ... In Ohio, let's say, manufactures pocket knives, and it's specialty pocket knives, and it's got a great revenue stream, and the only people you sell these knives to are Smith & Wesson, for example.
Well, you can take a company like that, that's already profitable and start selling ... use your knowledge about Facebook marketing, and the current owner doesn't even like Facebook, and doesn't even have a Facebook account because he's 82. You can triple the revenue overnight for that company because of the stuff that you learned here, or because you're bringing something to the table that these ... That is a perfect ideal situation.
Maybe it's software. Maybe you buy a small manufacturing company, like an auto parts supplier, and the guy so old and so crotchety that nothing's online. There's no computer system, he just walks around the shop yelling at everybody all day.  The thing is profitable already, so you walk in, you're a young person who understands software and why they can benefit, and automation and everything. Spend a few hundred thousand bucks, now you got yourself a multi-bajillion dollar company with a different customer base and all that.
That's the kind of stuff we actually talked about in these live events, because, especially the intermediate one, because everybody's kind of decided that this is their career now, and they're always looking for new revenue streams. Here's another one: you're really good at buying land. Why wouldn't you just start buying and selling houses then, too? It's such a logical progression.
Jill DeWit:                            Who? Who knew? Wow!
Steven Butala:                   That's what House Academy is-
Jill DeWit:                            We might be going that way, huh.
Steven Butala:                   That's why we started houseacademy.com, because people kept asking us. You can dramatically grow your wealth by buying or starting these related companies, but from what you learn here about buying undervalued property.
Jill DeWit:                            That's so true. I tell people that all the time. Even in our core initial program, you have all the answers, you have all the data, it's all right there. It has to be tweaked. There are little variations, whether you're seeking out an apartment building, single family home residence, whatever you're looking for, but all the core stuff you have it. Sending out offers, using data to do the heavy lifting, all this other stuff that we show you how to do, you can do it.
Steven Butala:                   What's that kids movie about the panda? Jack Black's the voice?
Jill DeWit:                            Kung Fu-
Steven Butala:                   Yeah, Kung Fu Panda.
Jill DeWit:                            Yes.
Steven Butala:                   If you've never seen this. If you have kids you know exactly what I'm talking about. The whole premise to that story is that he's a very unlikely, overweight panda who's never ... He gets out of breath walking upstairs. He ends up being the leader of this Kung Fu/group to ... save the world, and it was all in his soul in the first place. He just needed some education, and he needed to hang out with the right people to make him into what he was, or help him to educate him to help himself to get where he needed to be, or get where he really truly belonged.
Jill DeWit:                            Exactly.
Steven Butala:                   That's what this is. I don't want to get all philosophical here, but we talk a lot about this stuff at these live events.
Jill DeWit:                            Yeah, exactly.
Steven Butala:                   Well, you've done it again, you've spent another 15 minutes listening to the Land Academy Show. Join us tomorrow for another interesting episode.
Jill DeWit:                            Where we discuss ... to be continued. And we answer your questions posted on landacademy.com-
Steven Butala:                   We haven't written the next title yet, that's why-
Jill DeWit:                            We haven't. We will. It's gonna be good, I promise.
Steven Butala:                   But it threw Jill for a loop. Finally, one time-
Jill DeWit:                            You did!
Steven Butala:                   Finally, it's not me who doesn't know how to read script.
Jill DeWit:                            All right. I'm gonna end this. You're not alone in your real estate ambition.
Steven Butala:                   Thank you.
Jill DeWit:                            You're welcome.
Steven Butala:                   You just made my day.
Jill DeWit:                            How funny is that? We're so like on vacation mode-
Steven Butala:                   I know.
Jill DeWit:                            We haven't even thought about next week. That's okay.
Steven Butala:                   Let's go water skiing.
Jill DeWit:                            I think that's a great idea. I would love that. Share the fun by subscribing on iTunes, or wherever you are listening ... hopefully, on water skis, and, while you're at it, rate us there. We are Steve and Jill.
Steven Butala:                   Steve and Jill. Information-
Jill DeWit:                            And inspiration.
Steven Butala:                   To buy undervalued property.
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