Tiny Houses RVs and Mobile Homes (LA 783)

Tiny Houses RVs and Mobile Homes (LA 783)

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 tiny houses and RVs and mobile homes as ways to improve your property. Should you do it or shouldn’t you do it? I don’t know, we’re gonna talk about the pros and cons and the whole point to all of this.

Jill DeWit:                            What’s involved and that stuff.

Steven Butala:                   Before we take a look … Before we take a question posted by … (laughs)

Jill DeWit:                            What?

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

Jill DeWit:                            Rod asks, “Hello, I have one seller with several properties he wants to sell. I don’t have the money to buy them all. What is the process to tie them all up in an agreement? I have heard this mentioned in podcasts and webinars. I don’t remember what you call this technique. I’m not talking about an option. Besides the obvious reasons, could this be done without a title company? Is there some other way to put the land into escrow? Thanks.”

Steven Butala:                   Want to do it, Jill?

Jill DeWit:                            You go ahead.

Steven Butala:                   It’s called a release or at least that’s what I call it. It’s called a lot of different things, but I call it a release, and here’s what happens. Somebody’s got 100 properties, but you only wanna spend money for 10 of ’em, and it’s a smokin’ deal, right. It’s worth going through all this stuff. So you ask the escrow agent … Yes, you ask the escrow branch that you’re working with to give you the most experienced agent in the branch, you don’t wanna do this with a brand new agent. And they will write up the deal as if it’s all 100 properties, they’ll do one title insurance policy, cheap, cheap, cheap now, and you ask them to do 10 releases.

Jill DeWit:                            Like a month, you could spread it out however you want.

Steven Butala:                   Yeah, one a month.

Jill DeWit:                            Whatever you and this seller agree on, so, and they love it.

Steven Butala:                   And now they’re “tied up” and the theory is you use those first 10 deals, the cash that you generate, so do the next release and the next release, and the next release. So, in the end you only actually have to come up for the money for the first release. I’ve done this a lot of times, I’ve done this and made millions of dollars per transaction actually.

Jill DeWit:                            Right because here’s what happens, as you’re buying them and as you’re selling ’em, now you could actually speed up the process if you want. Maybe it’s a release of 10 the first month, and then it’s now we’ve got the cash from the first 10 and by month three let’s say, the 10 that you sold in month two, or somethin’ like that, now I can go, I can buy 20 at a time, and then I can buy 40 at a time and just keep and doing it that way.

Steven Butala:                   Exactly.

Jill DeWit:                            You can, yeah, you can spread this out over whatever you and the seller agree on. The escrow agent works for you, you get to call the shots and tell ’em what you want. I love these because the seller is usually thrilled, do they really wanna go, and if you’re worried about how am I gonna talk my seller into this ’cause this is one of the things that gets to me a typical, how am I gonna talk the seller into this? That’s a no brainer, they’re so thrilled that you’re buying their whole portfolio.

Steven Butala:                   You’re not cherry picking, and all that.

Jill DeWit:                            Exactly. Yeah, and they’re not stuck with what’s leftover, and you negotiate. Here’s a couple great things, one, they love that you’re buying the whole portfolio, so that’s brilliant, and they don’t care if it takes so long, they know they’re gonna get X amount of money and at the end of that year, six months, whatever you guys work out, they’re out. They think that’s great. Then number two, everybody wins, you’re negotiating a better price, you’re taking the good and the bad and the middle properties off of their hands, and you get to negotiate a different price because we all know that these ones are really great, these ones are not so hot, I’m gonna take the whole thing, let’s negotiate this price, whatever it is. It’s awesome. And now another fact, I’m sorry, I’m so excited about these. [crosstalk 00:04:07]

Steven Butala:                   No it’s good. These deals are … I drop everything when we get a release deal.

Jill DeWit:                            Poor Steven’s like … I’m like …

Steven Butala:                   No, you’re doing a great job.

Jill DeWit:                            You’re not having to send out … But think about the business we’ve got coming in right now too. You may or may not be buying other property and this maybe consuming your thing, and you have a seller here that you’re not doing any work. You’re like this is great, all I keep doing is putting more in money into it, and selling this from the same guy. This could keep me busy for a while.

Steven Butala:                   Yeah, for a year, for years actually.

Jill DeWit:                            I love it.

Steven Butala:                   I’ve done deals … I did a deal in Grants, New Mexico in Sabula County where a real estate developer picked up 100 properties at a tax sale a lot of years ago. Very, he’s a wealthy guy, and he said I can’t stand these properties any longer, here’s my price for release, let’s just do it. We’ll do some release work, and I made, I don’t know, I cleared $1.5 million in less than 12 months.

Jill DeWit:                            ‘Cause they don’t wanna do it.

Steven Butala:                   Yeah.

Jill DeWit:                            Yeah.

Steven Butala:                   And he knew it, and he’s like congratulations, man, good work. This is your thing, not mine.

Jill DeWit:                            Well you know what’s so funny with people like that, people sometimes will go yeah, why would he not do it? ‘Cause you know what, he doesn’t need the money.

Steven Butala:                   Well he’s just … That’s …

Jill DeWit:                            He’s done.

Steven Butala:                   Why … If somebody came to me and said here’s a heavy industrial building from the ’60s that you can buy for half a million bucks, and I’m sure it’s worth $2 million, I’m just not interested and you know what I’d say? No thanks.

Jill DeWit:                            Yeah ’cause we didn’t even want that property type.

Steven Butala:                   I don’t want industrial property, it’s not my thing. So it’s not even that I don’t need the money, everybody could use an extra million bucks, every … I don’t care who you are. But it’s just I don’t wanna go deal with industrial property. So many other things that it’s so suited for other people that know about environmental cleanup and understand getting approvals from the EPA, and it’s just so out of my wheelhouse, by the time I figure it all out, I will have made a million bucks somewhere else.

Jill DeWit:                            Exactly. It’s like renovations. We decided not to go that path.

Steven Butala:                   Same thing.

Jill DeWit:                            If we had decided to go that path, we would be all in-

Steven Butala:                   Yeah, we’d be killing it.

Jill DeWit:                            And we’d be doing it like-

Steven Butala:                   That’s right, Jill.

Jill DeWit:                            Well like the other people and have a slew of contractors, maybe even our own contracting company at this point, you know what I mean? We would be all in and probably doing it for others.

Steven Butala:                   We chose data.

Jill DeWit:                            We just decided we don’t wanna do that.

Steven Butala:                   We chose data instead.

Jill DeWit:                            Exactly.

Steven Butala:                   It’s a good decision.

Jill DeWit:                            I chose you.

Steven Butala:                   That’s not my problem, it’s your problem.

Today’s topic: tiny houses, RVs, and mobile homes. You can throw these things on top of the property that you buy … Are you …

Jill DeWit:                            Sorry, I just thought of something funny.

Steven Butala:                   Were you yawning?

Jill DeWit:                            No, I thought of something funny. Tiny houses, RVs and mobile homes sounds like planes, trains and automobiles, like this is another movie, this is another … What was his name?

Steven Butala:                   Danny DeVito.

Jill DeWit:                            Well who else is in that movie?

Steven Butala:                   I don’t remember.

Jill DeWit:                            Okay, but yeah, that’s what it made me think of.

Steven Butala:                   This is the meat of the show. What I mean is you can put, let’s say you buy a piece of property. I just bought two pieces of property in Coconino County, Arizona in a subdivision that I absolutely love. We probably paid slightly too much, but we’re gonna come out of it great just because I’ve been to the subdivision. It’s actually a member who sent us a deal and said they don’t wanna do it anymore. For whatever reason, it’s two one acre lots, they’re not contiguous, for $750 for paying each, we’ll sell ’em for $5,000-10,000 each. But I know the first thing I thought on because I’ve been in this subdivision is that there’s a lot of abandoned mobile homes there. So I said, you know what, maybe we should just … I always have these stupid thoughts, right when we buy I always end up not doing it.

Jill DeWit:                            Thank goodness. I’m just kidding.

Steven Butala:                   Let’s find a guy, a prop, a mobile home or an RV even on Craigslist that’s up there in Flagstaff and let’s pay somebody to put it on a flatbed …

Jill DeWit:                            Totally.

Steven Butala:                   And just dump it on there. It doesn’t even have to be even connected to anything or anything. I’ll tell you what, it’ll double, maybe triple the value of the property.

Jill DeWit:                            Is it because it’s different or you think someone’s gonna use it?

Steven Butala:                   It’s no longer a vacant land deal, it’s a house deal. Disclose all of that, I’m not trying to lie or anything, I’m just gonna say, yeah we had this mobile home moved down here. I’ve no idea if you can hook it up to anything, and I don’t care.

Jill DeWit:                            But it’s there.

Steven Butala:                   Yeah, but it’s not a piece of vacant land any longer.

Jill DeWit:                            That’s true.

Steven Butala:                   In fact, I’d probably would write the description like this, this mobile home was intentionally put here after we purchased a property to show you what’s possible. We haven’t seen the mobile home, we haven’t been to the property. Chances are you can’t connect it to anything and it’s gonna be a disaster. Here’s the price of the property. Click here to check out with your credit card, and they will flock to it ’cause they think they’re gettin’ a great deal.

Jill DeWit:                            That’s true.

Steven Butala:                   Most people before they get to us, we try to lie about it, and say this is a mobile home I lived in, and …

Jill DeWit:                            Right.

Steven Butala:                   No you never wanna do anything like that.

Jill DeWit:                            It’s gorgeous, no.

Steven Butala:                   Ever, ever. Gorgeous is okay, but at that place is gorgeous.

Jill DeWit:                            The properties gorgeous, not the mobile.

Steven Butala:                   That property is I don’t know 15 miles from the Grand Canyon maybe. If you’re into that outdoors-

Jill DeWit:                            I know the area.

Steven Butala:                   The high desert, with foliage, outdoors and you’re into the Grand Canyon.

Jill DeWit:                            Trees. I could smell it.

Steven Butala:                   Me too, I can too, Jill.

Jill DeWit:                            It has a smell up there, I can smell the trees right now, I know that area.

Steven Butala:                   See now it’s times like these I start thinking, well maybe we should keep one of ’em. Then 10 years later-

Jill DeWit:                            That’s …

Steven Butala:                   Then 10 tax bills later, 10 years later Jill gets the tax bill and her staff doesn’t. [crosstalk 00:09:45]

Jill DeWit:                            We still want it.

Steven Butala:                   You’ve paid 22x more than the acquisition price in taxes

Jill DeWit:                            Yep, by the way.

Steven Butala:                   (laughs)

Jill DeWit:                            So, it’s so funny. You’re so fake. I lost where I was going with that. That’s okay.

Steven Butala:                   Stinky RV on ’em.

Jill DeWit:                            The smell and the trees and the area. Oh, that’s what I was gonna say. That’s one of the downfalls of one of the things why you would not go look at your property. ‘Cause you don’t wanna stand there and go “Alright, this is awesome” and consider keeping it. There will be lots more awesome, so don’t hang onto, yeah. Remember why you’re here.

Steven Butala:                   I use it as a personal indicator about whether or not it’s a good deal.

Jill DeWit:                            Huh, that’s true.

Steven Butala:                   Like if I sit there and say … have you ever had an old car, and you clean it all up and you have it all completely done and you look at it and you’re like “You know, I should…”

Jill DeWit:                            I should hate to sell it!

Steven Butala:                   “This is what it looked like when I bought it!” I should probably keep this.

Jill DeWit:                            The [inaudible 00:10:36] and detail.

Steven Butala:                   That’s the feeling you want about real estate. Then you know you did a good deal.

Jill DeWit:                            True.

Steven Butala:                   You subconsciously communicate that in how you post it and how you present it. It’ll sell fast.

Jill DeWit:                            I completely agree. That ties into … my mom used to tell me “You know it’s a good gift when you don’t wanna give it.” You don’t wanna give it away!

Steven Butala:                   When you wanna keep it? (laughs)

Jill DeWit:                            Yeah! It means it’s a good gift.

Steven Butala:                   I never heard that before.

Jill DeWit:                            Yeah, my mom used to tell me that, I’m like “Look at this necklace, isn’t it gorgeous? I kinda wanna keep it.”

“Knock it off. It’s a good gift, you should give it.”

Steven Butala:                   Oh, I see.

Jill DeWit:                            That’s what she would say.

Steven Butala:                   I thought you meant … you know, you received a good gift and you don’t wanna re-gift it.”

Jill DeWit:                            No, I mean you’re finding the gift. Oh gosh.

You know what’s funny about that? I’m not a re-gifter. I’m way more sentimental about things people give me and I have some interesting things that I’ve been given over the year.

Steven Butala:                   This year?

Jill DeWit:                            Oh gosh, I have to think. You’re putting me on the spot right now! Well, okay, alright. Well, let’s put it this way … I’m sure I’m not alone on this one. How many of you out there have children that have made lovely pottery? For you, our paintings, our drawings, come on … you have some, don’t you?

Steven Butala:                   Oh yeah.

Jill DeWit:                            Thank you.

Steven Butala:                   Tons of that stuff.

Jill DeWit:                            Thank you. So, that’s a little more there because it was, your child made it and did something for you. But even I’ve had interesting gifts that children have bought me that I keep because they bought me it. So, thank you. Usually, I don’t really have stuff from you like that. I’m trying to think…

Steven Butala:                   You wanna take gifts from me?

Jill DeWit:                            No! No, you are a really good gift giver, you really put … you make sure that it’s something that I’m gonna love sometimes. You know it, when you buy it. So, it’s not an issue. I’m trying to think, if I’ve done that to you though, have I given you gifts that you’re like “Why did she buy this for me?”

Steven Butala:                   No. Never.

Jill DeWit:                            Are you sure?

Steven Butala:                   Yeah, 100%, we’re just at a point in our life where it’s like “What do you want for your birthday?” “I want a vest bow.”

Jill DeWit:                            Exactly.

Steven Butala:                   “I want a diamond ring.” “Okay let’s go pick it out together”

Jill DeWit:                            Exactly.

Steven Butala:                   That’s truly what happens, and then there’s usually some other side gift that’s like … the perfect coffee cup that you’ll use forever. That doesn’t cost a lot of money but it’s perfect for you.

Jill DeWit:                            ‘Cause it’s on sale. It’s cute. Exactly, thank you.

Steven Butala:                   Like that leafy cup that I bought you recently.

Jill DeWit:                            That looks like a flower, yeah it’s awesome.

So, what is the end story? Do I do it? Do I not do it? What’s worth it? What’s not worth it?

Steven Butala:                   Well, the same mobile home that [Saraia 00:13:13] just described can happen with tiny houses ’cause there’s a tiny house craze right now. I keep thinking it’s gonna go away. Or even easier, RVs. If you go onto Craigslist, you can find a drivable RV and have somebody drive it out there, it’s gonna be cheaper and easier to move a junky mobile home or it’s way cheaper than a tiny house. For less than 5 grand, I’m talking about. Go park it out there, and when they buy the property, send them the keys. So last time when the guy drove it out there, it started but I don’t know if it’s gonna start for you. This opens you up to a whole different type of buyer. Somebody who’s really ready to pay for this. Really ready to move onto the property. I’ll tell you what’s good about this … it takes about 20 minutes to do the whole thing. Just make sure the property’s set up from a USTAND point where he can actually park and RPI. You don’t wanna do this in an info lot and a $220,000 HOA driven subdivision.

Jill DeWit:                            Tick off all the neighbors.

Steven Butala:                   Make sure it’s possible. The good news is that, this is all of the weekend. If you’re a do it yourself-er, you can do it yourself, obviously. It’s not like a tour we’re talking about, at access. Or splitting property … that takes months and months. Of all the things that you can do to improve it, to make it way more valuable, this is on the top of my list.

Jill DeWit:                            That’s good. I even think if now I’m just making it more valuable, making it stand out from everything else available. If you’ve ever gone on LandWatch or Landpin, our site, and you’re scrolling down the property, it’s all vacant land and nothing on it, trees or whatever. And all of the sudden, you see it with the structure or an RV or a mobile, you’re like, it makes you stop. “Wait a minute, the price is not far off from all these other ones and it’s got something on it”

Steven Butala:                   Exactly.

Jill DeWit:                            That’s what you just did. You got so many more eyes on your property, it’s awesome. Don’t pretend it, by the way. Please don’t Photoshop a thing on there, ’cause that’s not cool. Make it real.

Steven Butala:                   We had a person who worked for us and he didn’t work here for very long, who had the mentality that you’ll suck him up. “Oh wicked, I wanna make this look perfect.”

Jill DeWit:                            Right.

Steven Butala:                   I’ll tell you a funny personal story too.

Jill DeWit:                            I like those.

Steven Butala:                   Jill and I had a bunch of professional photos taken a while ago. This is like two years ago. ‘Cause the silly showed us so well, and we decided to promote it and we sent out these pictures to be, like cleaned up.

Jill DeWit:                            Right.

Steven Butala:                   And it came back. Jill looked like a hooker. She looked like she was a 22 year old biker.

Jill DeWit:                            That’s hilarious.

Steven Butala:                   She was perfect, seriously, no flaw on her face.

Jill DeWit:                            If only it was real!

Steven Butala:                   No flaw on her face, makeup was perfect.

Jill DeWit:                            I got flaws!

Steven Butala:                   Like a cartoon character. I looked like the same person, they did the same stuff to me, I looked like a clown. That’s what I looked like.

Jill DeWit:                            Yeah, it was a little too much.

Steven Butala:                   So, you don’t wanna turn your pictures into property, into that and all. Or maybe you do.

Jill DeWit:                            It’s not real, it’s fake.

Steven Butala:                   That’s not really who you are, you wanna trick somebody into buying something from you, cause this is what this person’s personality was. Oh, you can’t tell him the truth. Now he won’t sell anything. Life is horrible. He kinda worked for us for like, a week.

Jill DeWit:                            I don’t remember who it was.

Steven Butala:                   That’s why.

Jill DeWit:                            Okay. (laughs) I love it.

Steven Butala:                   I said what I need to say on this topic. Have you?

Jill DeWit:                            I have.

Steven Butala:                   It’s a good idea, if you wanna improve the property, it’s a great idea. This is for real vacant land, by the way. This is not … don’t do anything like this for houses. Or, info lots.

Well, you’ve done it again. You’ve spent another, I don’t know, 15 minutes, listening to the Land Academy Show. Join us next time, where we talk about creating access to your land.

Jill DeWit:                            And answer your questions posted on our free online community, LandInvestors.com

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

Jill DeWit:                            That was good.

Steven Butala:                   It was?

Jill DeWit:                            Do you have any [inaudible 00:17:19] if there’s anything to add. I see … this is one of those things too, try it. See. I don’t know. None of this is crazy. Look at this week, it’s all good ideas. Helping you think about what’s possible and getting you to think about what’s possible and sharing with you, ’cause this is what we’re all about, the truth about it, like ‘alright here’s what you need to think about’ and do it the right way and ‘how much time do you really wanna invest in this?’

A weekend thing is one thing, a 90 day project is another thing ’cause it’s gonna consume you for 90 days when you could be making more money.

Steven Butala:                   We should have talked about this in the post yesterday … that there are some counties, specifically in Texas, that allow you to split property really easily. You just submit some paperwork and a re-completed [Plat 00:18:10] map and they don’t really look at it too closely.

Jill DeWit:                            Application fee.

Steven Butala:                   They tend to be these smaller rural counties that would rather have a 40 acre property split up into 5 acre properties so that it’s all separate [APNs 00:18:26] to increase their tax base. They’re usually a small county where everybody’s talking and saying “You know what, let’s do this because it’s gonna increase the tax base.”

Jill DeWit:                            20 buyers, 20 people, our chances of getting money out of this property from 80% of these 20 people versus this one person makes a difference.

Steven Butala:                   Exactly, which is really, in my opinion, logical but government logic doesn’t go hand in hand.

Jill DeWit:                            Oh my gosh, share the fun by subscribing at iTunes or wherever you’re listening and while you’re at it, please rate us there.

Steve and Jill:                     We are Steve and Jill.

Steven Butala:                   Information.

Jill DeWit:                            And inspiration.

Steven Butala:                   So bye, I’m your [inaudible 00:19:00] property.

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