Real Estate Investment 303 Your Small Business (LA 768)
Real Estate Investment 303 Your Small Business (LA 768)
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 our studio here in gorgeous, beautiful … can’t see it now … sunny Southern California.
Steven Butala: Today, Jill and I talk about Real Estate Investment 303: Now This Is Your Small Business, or you’re thinking about making it your small business.
Jill DeWit: You’re a junior, congratulations!
Steven Butala: This week, all week-
Jill DeWit: You can see the end.
Steven Butala: All week is real estate investment education week, the way you would think of it, learning some stuff in college or high school. Jill thinks at 303 we’re juniors.
Jill DeWit: That’s how I see it.
Steven Butala: 101 is the very beginning, go back and listen to the show if you need to. It’s all about getting that first deal done. It’s not about how you look, or whether you’ve got an LLC, or any of the stuff that trips people up. 202 is, “All right, I’ve got a few deals done and I get it. I can see how I can make some dough, and I like it.” 303 here is, “This is my business now. I can see myself soon if I haven’t quit my job already. I can see myself.”- [inaudible 00:01:09][crosstalk 00:01:09]
Jill DeWit: My school analogy does apply. “101, did I pick the right program? 202, yeah, I did, I’m enjoying it. 303, now it’s too late.”
Steven Butala: You got the bug.
Jill DeWit: No, no, no. Now it’s too late, you’re like … because you’re gonna have to go back and redo credits if you didn’t pick the right program. You better know you want to do this.
Steven Butala: Before we get into the actual topic, let’s take a question posted by one of our members on the land investors online community, it’s free.
Jill DeWit: Okay. [Waldon 00:01:40] asks, “Does the vast majority of interest in the properties you are selling fail to generate a sale?”
Steven Butala: Yes. I know what it means.
Jill DeWit: I was gonna say, where did that come from?
Steven Butala: Lots of people are interested but nobody buys it-
Jill DeWit: That’s true. I feel like-
Steven Butala: I have a lot to say about this.
Jill DeWit: Oh, good. That’s so funny. You know it’s so sweet, Steven, when-
Steven Butala: She’s not gonna read the question.
Jill DeWit: No, I’ll get to it in a second here. People who know you very well … it’s funny that you have a lot to say about a lot of things.
Steven Butala: Is it everything though? It’s like an old man who sits down and says, “In 1949…”
Jill DeWit: No.
Steven Butala: Is it that bad?
Jill DeWit: You will never tell me how to build a watch, but you will go into great detail about all the time zones. Just kidding. I’m kidding.
Steven Butala: This is how Jill … never mind.
Jill DeWit: I’m just kidding. I like when you … It’s funny when you say, “I have a lot to say about this,” and you do-
Steven Butala: Okay.
Jill DeWit: That’s the only thing. I didn’t start that.
Steven Butala: I know.
Jill DeWit: Okay. To continue Waldon’s question: “I feel like I keep getting very interested buyers who want to do a deal, and then vanish and change their mind suddenly. Is this something you commonly experience?”
Steven Butala: With the rule vacant land product type? That’s possible, but I’ll tell ya, there’s something wrong. It’s either not cheap enough, they want to feel like you did when you bought it. They want to run to the bank and say, “This is the greatest deal ever. I don’t want to lose it.”
You want to make sure that you got it priced perfectly, especially, in the beginning. Priced perfectly and the cheapest one on the market, you have the best property.
Jill DeWit: Right.
Steven Butala: With rural vacant land this can happen, but if you’re at the 303 level like we’re talking about now, you pretty much know whose gonna buy the property before you buy it.
Jill DeWit: That’s true.
Steven Butala: You’ve already accumulated a bunch of buyers in the area, in fact, they’re probably already … they’ve already owned land in that area, and you’ve contacted them to see if they want to sell, and they’ve contacted you back saying, “Hey, I don’t want to sell, but at this price if you get other people who want to sell it, call me, I’ll buy it.” You will grow out of that.
Jill DeWit: Can I add, too, there are some looky-loos. I mean, that’s just the fact, too. Like Steven was saying, “You’ll soon tell, all right, this guys is just a tire kicker, I got it. This is another tire kicker, I got it,” and you will figure that out.
Steven Butala: Here’s an example, for us, the tire kickers that are low. We’ve got some extremely expensive property, multi-million dollar property, and it’s all urban land. It’s split up urban land for developers to build houses on it, or whatever they might do with it. We always come across a guy, even at that point who is an acquisition guy for a company who wants to impress his boss, and so he tries to put it under contract, but we’re not that stupid.
Jill DeWit: Exactly.
Steven Butala: We don’t put properties under contract unless there’s-
Jill DeWit: We’re really gonna do it-
Steven Butala: They’re all cash, they’re … it’s a real deal, and they put down earnest money that’s non-refundable. If it’s a bigger deal, this is off this topic of this question, but if you’re past the 303 … Now, we’re on the topic, if you’re at 303 and you’re like, “This keeps happening.” Get some money down, even a thousand bucks.
Jill DeWit: Right.
Steven Butala: That will turn away the … what is it called?-
Jill DeWit: That’s it. The very interested buyers.
Steven Butala: Oh, Jill said “looky-loo”.
Jill DeWit: I did, the looky-loo or the tire kickers-
Steven Butala: It’s hard for me to say that.
Jill DeWit: You don’t like looky-loo?
Steven Butala: It’s hard for a man to say that word.
Jill DeWit: Oh. You can say tire kicker. You can say hot mess.
Steven Butala: Like yesterday?
Jill DeWit: Yeah.
Steven Butala: Today’s topic, Real Estate Investment 303: Your Small Business. This is the meat of the show. Jill, with [inaudible 00:05:26], what do you think 303 level, that everybody should be thinking.
Jill DeWit: Oh my gosh, this is your business.
Steven Butala: Yeah.
Jill DeWit: 303 to me-
Steven Butala: Congratulations, you made it to the 303.
Jill DeWit: Is, you’ve done 20-50 transactions, and now you’re really looking ahead, and you’re like, “All right, do I want to stick with this product? Do I want to? How do I want to expand?”
Steven Butala: Add houses.
Jill DeWit: Right?
Steven Butala: Add product lines. This is great. It’s been paying the bills for a long time.
Jill DeWit: Exactly. Maybe at 303 level, too, you either have or can see telling your spouse to back off on their day job a little bit.
Steven Butala: Yeah.
Jill DeWit: “Hey, sweetheart. I see the light at the end of the tunnel we’re not gonna go crazy yet, but we now have a year of consistent revenue here. You can stop working at,” whatever the grocery store.
Steven Butala: Or, go part-time.
Jill DeWit: Or whatever it is, or go part-time, and, “you can be home with the kids now.”
Steven Butala: Here’s another important thought that you might have at 303 level. “Boy, I love buying these properties, but selling them, it’s not so much my thing.”
Jill DeWit: It’s true.
Steven Butala: “Boy, I love the data piece of this, but I’m not real interested in talking to people on the phone about sales or acquisitions.” These are the exact things that Jill and I went through-
Jill DeWit: It’s true.
Steven Butala: When we started working together. There’s some things that you’re good at, and some things maybe that your spouse is good at, or your business partner might be good at that you just can’t stand doing, and you got so much money coming in now consistently that you can start to be a little spoiled about it. You don’t have to feel bad about … I come from Michigan where it’s a big contest about who suffers the most. It’s like some weird demented version of a church cult.
Jill DeWit: That’s the weirdest thing.
Steven Butala: Jill’s from Disneyland here, almost literally, so she’s like, “I’m not gonna do anything if it doesn’t make me feel good.”
Jill DeWit: No, my work’s done, I’m out of here.
Steven Butala: “And, I come from a place where I’m not gonna do anything if it makes me feel good at all. I should feel bad all the time.” It’s terrible.
Jill DeWit: No, no, no.
Steven Butala: So, it took me a long time to get used to that.
Jill DeWit: You know, when Tim Ferriss-
Steven Butala: Now I only do the stuff that I’m real good at.
Jill DeWit: Wrote the 4-Hour Workweek book I’m like, “What do you think I’ve been doing this whole time?” I could’ve written that book.
Steven Butala: How many times can I end a sentence with a preposition? Do you do the things you’re good at? It’s awful, I said it 50 times-
Jill DeWit: You just said that?
Steven Butala: Yeah, like 50 times-
Jill DeWit: Are you picking on yourself?
Steven Butala: Yeah.
Jill DeWit: Why are you picking on yourself?
Steven Butala: Because, I’m from Michigan.
Jill DeWit: Oh.
Steven Butala: It’s awful.
Jill DeWit: It’s in your head.
Steven Butala: A big, long, self-deprecating, awful life that people from Michigan have.
Jill DeWit: Aww.
Steven Butala: Southeast Michigan, specifically. You know, if you’re listening to this, and you’re from there, you’re laughing right now.
Jill DeWit: Seth. Seth’s one, isn’t he?
Steven Butala: Yeah. Luke Smith.
Jill DeWit: Yeah. I’m trying to think who else do we know that’s from that area. We know several.
Steven Butala: It’s not just Michigan. I pick on Michigan because I’m from there, but-
Jill DeWit: Is it Midwest?
Steven Butala: All those rust belt states-
Jill DeWit: Rust belt, very good.
Steven Butala: Anybody who grew up on a farm knows exactly what I’m talking about. You don’t get up in the morning and work on a farm because you’re happy.
Jill DeWit: “This is my dream.” You know what’s funny about that though is … This is off-topic, of course, but I’m sure you’ve had this conversation with yourself if you’re in this, I hope you have, if not, I’m just a weirdo. I look at these properties sometimes and there’s some that I want to hold on because there’s … like, I see myself having chickens and goats-
Steven Butala: Yeah, me, too. And solar panels.
Jill DeWit: Exactly. I used to never feel that way, and now I’m even … I remember getting started in this, and maybe this is a 300-level thing, too. At the 300 level, you stop assuming what your buyers want, you just know what a good deal is, and you know that you’re gonna … It’s a good deal, and you know how you’re gonna price it, you know how you’re gonna market it, and you know it’s gonna sell to those right people. That’s okay. You know how to get the reach out there and find them. That’s easy, the sellers’ part.
What’s funny to me is, in the beginning, I thought, “Whose gonna want this? We shouldn’t buy that. That’s stupid, it’s too far out.” Now I’m becoming one of those people that, like, “I want to be out there, too. They’re not so crazy.”
Steven Butala: Yeah.
Jill DeWit: I like the tiny house movement, and I can just pick up my house and put it somewhere and be off the grid. It’s great.
Steven Butala: It turns out this is not off-topic at all.
Jill DeWit: Thank you.
Steven Butala: I just answered that question on YouTube. This guy … I did a fly over video for a property that we have. It’s 40 acres in northern Arizona. Northern Arizona is not the most heavily-treed area there ever was-
Jill DeWit: It’s true.
Steven Butala: It’s not the most water-abundant, resource-abundant place in the world, and it’s priced like that, but there’s people all over the internet that live off the grid up there happily.
Jill DeWit: Exactly.
Steven Butala: They don’t have a mortgage. You see them on YouTube everywhere. I cracked back at this guy. I said, “Look…
Jill DeWit: Oh, no. How did it go?
Steven Butala: Not everybody like wing-tipped shoes either.”
Jill DeWit: True.
Steven Butala: I didn’t say this. I was a little more harsh about it. Some people like tennis shoes. Some people only buy shoes at Payless, because they’re cheap, or wherever. I probably can’t even say that.
Jill DeWit: I don’t know, it doesn’t matter-
Steven Butala: Trademark infringement. Anyway. It’s to each his own. You know? What I really said was … We’ve done almost 16,000 deals. Some people, it turns out there actually a market for the product, that rural vacant land portion of what we do and used to do, everybody … Exactly what you said.
Jill DeWit: Yeah, I stopped guessing. You know what, some people love heavily-treed, and some people don’t want too many trees, because it blocks the view. Whenever there’s a beautiful ridge and sunset and everything.
Steven Butala: Some people just want cheap-
Jill DeWit: It’s okay.
Steven Butala: They want the cheapest-
Jill DeWit: Exactly.
Steven Butala: Property possible where they can drill a well or bring water in, or, you know?
Jill DeWit: We have a lot of people, too, that just … just the thought that, “Wow, for a couple thousand dollars I could own my own piece of land. I don’t care where it is or what it looks like, and it’s a place to start.”
Steven Butala: You know, when they check out online, and they click on that thing and checkout on our website for the real estate, I don’t ask them why.
Jill DeWit: Right.
Steven Butala: I say-
Jill DeWit: Could you imagine?
Steven Butala: We say thank you.
Jill DeWit: What are you gonna do with it? We need to know now.
Steven Butala: We question your decision as a consumer.
Jill DeWit: I want to make sure you’re doing the right thing. Oh my gosh.
Steven Butala: You know why I’m making a thing about this, because I’ve heard this for 20 years.
Jill DeWit: What?
Steven Butala: I’ve heard people say this sentence. Mostly it’s people in the real estate business, “Who would ever buy a piece of property way out there?”
Jill DeWit: So true.
Steven Butala: Or what they like to call, and I never say it, but I’m gonna say it now, “in the middle of nowhere.”
Jill DeWit: Right.
Steven Butala: Listen, it’s the 21st Century, you can get satellite feed … You can work for Microsoft and live in the middle of nowhere with an internet satellite feed and they’re not gonna know, and your cost of living-
Jill DeWit: And there’s power solutions-
Steven Butala: Is gonna go to zero.
Jill DeWit: Water solutions.
Steven Butala: Yeah.
Jill DeWit: All of that’s all-
Steven Butala: All of that’s all new because of technology-
Jill DeWit: And it’s getting better and better.
Steven Butala: Exactly.
Jill DeWit: Exactly. That’s, I think, too-
Steven Butala: Some people are trying to get lost.
Jill DeWit: At the 300-level you’re there, you’re seeing it. At the 300-level, too, you are now officially at a dinner party when people say, “You buy and sell what?,” and you just roll your eyes because you know they’re not gonna get it, and that’s just fine. Never mind that all this property paid for this awesome party that you’re throwing.
Steven Butala: Oh, you’re the host?
Jill DeWit: Yeah, yeah. You’re the host.
Steven Butala: What’s that party look like that you threw?
Jill DeWit: Oh, it’s awesome.
Steven Butala: Tell me all about it.
Jill DeWit: It’s a $10,000 event, and you have a reggae band in your front yard. But, anyway-
Steven Butala: [inaudible 00:12:50]. Paint a picture for us.
Jill DeWit: That’s the picture? Oh, yeah. Okay.
Steven Butala: Paint a big picture for-
Jill DeWit: You want the big picture?
Steven Butala: Yeah.
Jill DeWit: It’s a catered event, you have an official reggae bar, a reggae … yeah, you have a whole catered … you have an open bar, you have a reggae band that you hired, who’s the top reggae band, by the way. You have a door man, you have kind of a bouncer, and you pulled a permit.
Steven Butala: This just happened actually. This is all real.
Jill DeWit: So, yeah … but, yeah.
Steven Butala: We just pulled all this off just recently-
Jill DeWit: I wasn’t really talking about our party. I was talking about, like, your party, any party, but at the 300-level you have people that are going, “What?” But, then on the other hand you also have a handful of people that are going, “What the heck are you doing, and can you teach me? Please, can I be in your fox hole?” That’s-
Steven Butala: We have a lot of people that come to us.
Jill DeWit: That’s true.
Steven Butala: Saying, “What the heck?”
Jill DeWit: “Can you show me?” I’m like, “Kinda, yeah. That’s why we made Land Academy,” because we had too many people asking us that. It was all one-offs. That’s Land Academy.
Steven Butala: You tired again? You spent another 15 minutes or so listening to The Land Academy Show. Join us next time, or tomorrow, where we discuss Real Estate Investment 404: Now You’re Accumulating Wealth.
Jill DeWit: Nice. And we answer your questions posted on our free online community at landinvestors.com.
Steven Butala: You are not alone in your real estate ambition. It’s interesting to produce the show while its happening.
Jill DeWit: I noticed this.
Steven Butala: And-
Jill DeWit: I like this.
Steven Butala: It’s kind of like, there’s certain rock bands where one guy just does everything. Rush comes to mind.
Jill DeWit: What are you saying?
Steven Butala: Or Geddy Lee just sits … He’s basically … he’s got a drummer that sits behind him, but he sings and does everything, and he totally pulls it off-
Jill DeWit: Are you saying I don’t do anything?
Steven Butala: And he totally pulls it off.
Jill DeWit: What are you saying? Will you hand me my nail polish? No. What are you saying?
Steven Butala: This is what Jill … the sentence that Jill asked me … I’m producing this whole show, I do all of it. We have a content producer, and that’s it, who’s actually Jill’s assistant, but that’s a different story.
Jill DeWit: Right.
Steven Butala: This is the sentence Jill asked me before we sat down, “Is my lipstick good enough?” Recording audio at the same … video … this is all live-
Jill DeWit: This is actually true.
Steven Butala: This is a lot, and what could go wrong?
Jill DeWit: This is true.
Steven Butala: I’m running the lights and everything. There’s no one else here, it’s me.
Jill DeWit: I wanted to make sure my lipstick would show up.
Steven Butala: All about your lipstick, sweetheart.
Jill DeWit: Thank you. Did I do okay?
Steven Butala: Yeah.
Jill DeWit: Thank you.
Steven Butala: You did great.
Jill DeWit: Oh, good.
Steven Butala: You’re the reason people watch this [inaudible 00:15:18], it’s not me.
Jill DeWit: Thank you. You’re awesome.
Steven Butala: You’re the talent.
Jill DeWit: Share the fun by subscribing on iTunes or wherever you are listening, and hopefully on YouTube. While you’re at it please rate us there. We are Steve and Jill [crosstalk 00:15:29]
Steven Butala: We are Steve and Jill. Information…
Jill DeWit: And inspiration…
Steven Butala: To by undervalued property.
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