Good Acquisitions (LA 786)
Good Acquisitions (LA 786)
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 sunny Southern California.
Steven Butala: Today jill and I talk about good acquisitions, one of my favorite topics. In fact, all week this week.
Jill DeWit: That’s probably my most favorite-
Steven Butala: Is acquisition week. Yeah.
Jill DeWit: My most favorite topic. What’s better than that?
Steven Butala: Like, what are some of the titles here? Yeah. What’s better than good acquisitions? I mean, there’s a few things.
Jill DeWit: Well, you and I talk about it all of the time, is that so many problems, I know you’re gonna get into this, pretty much most of your problems can be solved by good acquisitions.
Steven Butala: Yeah, so all week we’ll talk about good acquisitions, bad acquisitions, how to fund your acquisitions, all that stuff. Keep you out of trouble completely.
Jill DeWit: Yay!
Steven Butala: Before we get into it though, let’s take a question posted by one of our members on the land investors online community. It’s free.
Jill DeWit: Okay. Scott asks: “What paperwork … excuse me … what extra paperwork tax disclosures, et cetera, are involved once you charge an interest rate. I’ve always just embedded the interest by charging a higher price for a term sale then dividing by the number of payments, so the rate isn’t specifically stated anywhere. There’s the financing price, then a discounted cash price, but I like the idea of charging interest though, because you can say it upfront, the price of the property’s actually lower. It appears more attractive, but you end up getting the same at the end once the interest is added on top. Most buyers won’t care to calculate the interest they will pay over the course of the note.”
Steven Butala: This is a great question.
Jill DeWit: Which is true. It’s nice, because it’s like, when you say, “I’m selling this for $21,000, and 3.5% interest. They do hear $21,000, and they hear, “Well, 3.5%. Gosh, my credit cards are 14, 15, and my car is XO. Gosh, 3.5% sounds good.” I understand the process. The thoughts.
Steven Butala: This is very, very, very, heavily regulated, this topic of financing. If you ever look at your credit card, the thing that you sign off on when you get a credit card or your mortgage, it’s very regulated. Federally, and I think there’s a bunch of state regs involved-
Jill DeWit: Right.
Steven Butala: But federal for sure, and I don’t think, don’t quote me on this, it used to be this way, I’m not sure now, that it’s legal to not charge interest. You do have to charge .0001 interest-
Jill DeWit: On seller financing stuff?
Steven Butala: Yeah, you have to charge an interest rate-
Jill DeWit: But it varies by state?
Steven Butala: By the question. We all know that almost always the buyer doesn’t care. They just want to know what their payment is.
Jill DeWit: It’s true.
Steven Butala: And they want to know how many payments they have to make.
Jill DeWit: That’s true.
Steven Butala: But I’ll tell you, you really do need to pay attention to this, and you need to calculate it according to the time value of money. I don’t want to get all brainy here, but this is actually something that needs to be done right.
Jill DeWit: Yeah.
Steven Butala: Every time you make a payment there’s a principal portion and an interest portion. Even the car commercials, when you say zero … when you see zero percent financing-
Jill DeWit: They always have that.
Steven Butala: If you really read that fine print-
Jill DeWit: They put it right on the commercial-
Steven Butala: There’s a percentage.
Jill DeWit: Yeah, yeah.
Steven Butala: It’s .0001.
Jill DeWit: Yeah.
Steven Butala: As much as I hate to say this on the show, the real answer to this question needs to be a Google search, and it requires a couple of hours of research on your part to find out-
Jill DeWit: It’s true.
Steven Butala: Where you’re selling the property, what you have to disclose, land contracts, disclosure, and deeded trusts disclosure are way different in most states.
Jill DeWit: Right.
Steven Butala: You know, this is another reason Jill’s gonna hopefully agree with me here-
Jill DeWit: I was gonna say the same thing-
Steven Butala: Is to make cash sales.
Jill DeWit: That’s where I’m going with that. That’s one of the reasons, because you have to really think about it. We even have to think about it in our business, as far as … We do all kinds of different things other than just land, right? And are we shipping things? If you ship things there’s different rules. Where people buy things from you online there are different rules.
Steven Butala: Yep.
Jill DeWit: There’s so much … There are a lot of moving parts, and I’m glad you’re asking this question and you’re thinking about it. You know what I would say too, and I think you’re right, if you’re worried about this right now, and you don’t have the time to devote to it, don’t do term sales for a while, do some cash sales. Build up your balance.
Build up your balance and hire someone to figure this out for you. Not kidding. I’m not kidding-
Steven Butala: No, I think that’s actually a great idea.
Jill DeWit: Maybe hire up, save up $5,000 to get a good accountant-
Steven Butala: Accountant will do it.
Jill DeWit: Exactly, and who will tell you exactly what you need to do and set you all up. That would be my first choice. Then I don’t have to do the work.
Steven Butala: Just by asking this question though-
Jill DeWit: I don’t need to be that pro.
Steven Butala: You’re capable of it.
Jill DeWit: Yeah.
Steven Butala: This is something you don’t want to … Do you ever hear those stories about … What’s going on with this celebrity you mentioned a couple month’s earlier? He was making like … He doesn’t have any money left. It’s the guy in the Pirates of the Caribbean.
Jill DeWit: Oh, Johnny Depp. Oh, you don’t want to do that. Where his-
Steven Butala: I just don’t think that this … It might not be the kind of thing you want to sub out. The people in our group are very bright. They’re not like actors.
Jill DeWit: You got to find the right person, that’s true, the right accountant whose doing this for other companies.
Steven Butala: Or you just learn it yourself. It’s really not that hard and understand it. It’s the time value of money, principle and interest, future value and cash flow. I grew up with an HP 12C, and we did this all on a calculator.
Jill DeWit: I’m sitting here trying to decide if we really answered the question.
Steven Butala: Well, here’s the answer to the question. It’s a great question, you need to be really concerned about it-
Jill DeWit: Smart question.
Steven Butala: It’s not something you want to horse around with, it’s regulated by the feds, and if somebody complains you’re gonna get … there’s gonna be problems-
Jill DeWit: You could be in trouble.
Steven Butala: Learn it yourself, learn it well yourself, and then if you want to hire somebody so you can check their work, that’s what I would recommend. You don’t want to end up like a celebrity where you give … they give their finance people all the money and they wonder why there’s nothing left.
Jill DeWit: I know.
Steven Butala: But in the end here’s the real answer: sell it for cash.
Jill DeWit: Yeah. Fear or concern: sell it for cash.
Steven Butala: We should make a limerick or something.
Jill DeWit: Exactly.
Steven Butala: “If the glove doesn’t fit: acquit.” That kind of thing. Today’s topic-
Jill DeWit: What the heck? You don’t want to quit.
Steven Butala: Acquit.
Jill DeWit: Oh.
Steven Butala: With O.J. Simpson.
Jill DeWit: I thought you said-
Steven Butala: “If the glove doesn’t fit: acquit.”
Jill DeWit: Oh, that’s bad. You can’t say that.
Steven Butala: That was a Johnny Cochran saying. He made a limerick out of everything.
Jill DeWit: He did do that?
Steven Butala: Yeah.
Jill DeWit: Where was I?
Steven Butala: This is real. I’m not making that up.
Jill DeWit: Oh my gosh. I don’t remember that. Was that on T-shirts, too?
Steven Butala: Probably.
Jill DeWit: Okay. I don’t remember that.
Steven Butala: Today’s topic … It just makes me-
Jill DeWit: I blocked that out.
Steven Butala: It just makes me love you more.
Jill DeWit: Thank you.
Steven Butala: You don’t remember stuff like that.
Jill DeWit: I remember the whole incident, and I remember seeing … watching him, but I don’t remember that part of it. I think I tuned out.
Steven Butala: You tuned out after the white Bronco incident.
Jill DeWit: Yes, I did. I was bored halfway through the white Bronco incident. You know? Like, “Are we done?”
Steven Butala: This is a boring-
Jill DeWit: Why are we watching this guy?
Steven Butala: “This is a really boring car chase.”
Jill DeWit: Can you imagine? Why are we … Exactly … “He’s going the speed limit. Why are we watching this?”
Steven Butala: O.J. Simpson was a big deal.
Jill DeWit: Yeah.
Steven Butala: From a sports’ standpoint.
Jill DeWit: I do know that.
Steven Butala: Today’s topic-
Jill DeWit: I do know that. That’s the part I know, yeah.
Steven Butala: Good acquisitions. This is the meat of the show.
Jill DeWit: Remember the other day, by the way, we were watching the … Yeah, the NFL-
Steven Butala: Trying to make it the meat of the show.
Jill DeWit: The Hall of Fame. Okay, well, I’m sorry, I’m totally messing you up here.
Steven Butala: It’s okay.
Jill DeWit: The other day we were watching the NFL Hall of Fame and all these guys [inaudible 00:07:19]. I’m willing to bet … I picked out Fran Tarkenton. I’m like, “I know that guy. I know that guy.” I know O.J., I know Joe Namath. I could recognize all these old guys and stuff.
Anyway, I’m pretty sure that if O.J. … I’m pretty sure O.J. was probably in the Hall of Fame, and I’m pretty sure he’s out of the Hall of Fame.
Steven Butala: That’s a pretty good … Boy, we’re gonna get some emails on this.
Jill DeWit: Sorry.
Steven Butala: It’s okay. I have to guess, too. Totally guess-
Jill DeWit: I’m just guessing-
Steven Butala: Totally uneducated guess, I would think that’s probably the case. I don’t know, I mean-
Jill DeWit: Yeah. I’m not lending an opinion.
Steven Butala: Maybe they don’t take guys out. Maybe in sports they’re like-
Jill DeWit: Is there a three felony strike? Three felony rule. Maybe there should be a three felony rule. Kind of like dating.
Steven Butala: Because, he never … he didn’t get convicted for that. [crosstalk 00:08:08]
Jill DeWit: I’ve heard of girls that have done background checks on guys.
Steven Butala: He didn’t get convicted for that, so-
Jill DeWit: Uh-oh.
Steven Butala: He just … He got acquitted-
Jill DeWit: But the whole gambling thing.
Steven Butala: Yeah.
Jill DeWit: I don’t know.
Steven Butala: yeah, I mean, I don’t know.
Jill DeWit: All right. Never mind. Sorry.
Steven Butala: It doesn’t matter.
Jill DeWit: It doesn’t matter. Again, I tuned out.
Steven Butala: You know who got kicked out of the Hall of Fame for gambling is Pete Rose.
Jill DeWit: Oh.
Steven Butala: And that’s tragic. It always comes back to baseball on this show.
Jill DeWit: Yeah. Okay.
Steven Butala: He’s a great player.
Jill DeWit: Exactly.
Steven Butala: But apparently he can’t gamble.
Jill DeWit: Apparently not.
Steven Butala: Yeah. Today’s topic is good acquisitions. What’s a good acquisition? What’s a perfect acquisition? What’s a bad acquisition? I’m gonna bring … I’m gonna tell a sports story from my … When I played sports-
Jill DeWit: Since we’re talking sports today.
Steven Butala: Yeah. There was a football game we played and we won. We crushed them, actually. And we got back in the locker room … this was in high school … We got back in the locker room and the coach was livid. He’s like, “That’s the worst game you guys ever played.” And we’re all sitting there high-fiving each other, because we just clocked these guys.
Jill DeWit: Oh, yeah.
Steven Butala: His point was, “You didn’t execute right, you ran the wrong plays, you looked like a disaster out there, and it’s really lucky that the other team was way, way worse than you are. You were really bad, but they were worse so you won.”
Jill DeWit: Yeah.
Steven Butala: It really opened my eyes to … just how to run a business. You know? Just because you’re making money and doing well, doesn’t mean that you’re doing anything right, actually.
Jill DeWit: I love it. That’s a good one.
Steven Butala: This kind of stuff, by the way-
Jill DeWit: That’s the crap Steve says-
Steven Butala: This kind of stuff really, really sends Jill to the moon.
Jill DeWit: It’s just because you’re making money-
Steven Butala: There’s a constant-
Jill DeWit: And doing well doesn’t mean you’re doing it right … or doing a good job.
Steven Butala: There’s a constant-
Jill DeWit: Just what every kid wants to hear.
Steven Butala: In our house there’s this constant overtone of this kind of … Just because you got an A doesn’t mean that-
Jill DeWit: That’s true-
Steven Butala: You know this material at all, you just figured out how to get an A-
Jill DeWit: Just because … “I’m proud of you, son, it comes naturally to you, but you still need to learn how to study.” Right?
Steven Butala: Or, you still need to-
Jill DeWit: Try!
Steven Butala: Yeah. Or, you still need to be … maybe have a better attitude about it.
Jill DeWit: That’s true. Don’t be cocky.
Steven Butala: Yeah.
Jill DeWit: Yeah. That’s true-
Steven Butala: So I think that’s part of what the coach was upset about. Here’s the thing with … How does this apply to acquisitions? How long is it gonna take this guy to get to the point?
Jill DeWit: Yeah, where does this tie together, please? I’m a little confused.
Steven Butala: The best acquisition on the planet for us is one that perfectly fits our acquisition criteria, and then we execute it, we buy it, and we sell it, and it all kind of goes off without a hitch.
Jill and I have made hundreds and hundreds of thousands of dollars. I don’t think we’ve cleared a million bucks on one deal yet.
Jill DeWit: Not on one.
Steven Butala: We’re very close though. Hundreds and hundreds of thousands of dollars on a deal. It comes in, it doesn’t fit our acquisition criteria. For whatever reason it just hasn’t happened lately. We decide to do it, and it takes longer, and there’s all kinds of stuff involved, and we got to pull in people. We do okay.
Knocking on wood here, we don’t lose money on these deals, but it didn’t go off without a hitch. Good acquisitions are ones … The best people in this business do this: they stick to their acquisition criteria, and they look at it like it’s a machine. They just stamp one deal out, one, two, three, 20, 30 deals out-
Jill DeWit: And they don’t get hung up on the … hung up on something. Move on. Good acquisitions to me is picking the best ones, moving on in your system, and now and then a great one. A great one’s mixed in there.
Steven Butala: Yeah.
Jill DeWit: Which is a run-to-the-bank one.
Steven Butala: Right, but that still fits your acquisition criteria.
Jill DeWit: It does.
Steven Butala: My point is, take a couple steps back from that, and there’s no way that you’re gonna succeed at this if you don’t have a good acquisition criteria before you even send any mail out.
Jill DeWit: That’s true.
Steven Butala: You got to really sit down and say, “What am I here for?” Rural 40-acre properties: done. Yes I want to do those.
Jill DeWit: Yeah.
Steven Butala: Rural five acre properties. Yep, that fits my mark. Rural 20 acres, yes. Rural .25 acres in an HOA subdivision in the middle of the desert, not so much. Info lots that are zoned industrial. For us not so much.
Jill DeWit: Mm-hmm (affirmative).
Steven Butala: But do they come across our desk? All the time. Yeah. You sit there and you just start sweating and say, “I know I can make $25,000 on this.” How big are your cajones to say, “I’m not gonna do this deal.”
Jill DeWit: Right. All these examples that Steven’s pointing out, we don’t want you to do it all at the same time. He’s just giving example, you can go this direction, this direction, this direction, this direction.
I encourage people, try them all. You know, if this sings to you, do it. That worked out. Then, one of them you’re gonna go, “Wow, I’m the 20-acre subdivide king.”
Steven Butala: Yes.
Jill DeWit: You know, something like that-
Steven Butala: And then you do that again.
Jill DeWit: They just keep doing it over and over, and over again. But it all starts with good acquisitions, and I thought I would like to cover a little bit more detail about what is a good acquisition, not just the concept. But, a good acquisition is, you did your mail right, number one, you priced it well, number two.
Good acquisitions are, the letters came back, or a phone call, or an email, or something, because it’s all on your offer there. Where your price sung to them, and it’s right where it should be, and they’re easy to act on. The right people, they’ve been paying their taxes on it, husband and wife still alive. These are my favorite things. Easy to transfer-
Steven Butala: Yeah, if the legal part kind of fits your criteria, yeah.
Jill DeWit: You know what you can sell it for. You’re looking at this deal going, “Oh my goodness, how nice is this? Mr. and Mrs. Jones just signed and sent back my offer for $3,000. I know I can sell it for six and it’s worth nine to 12. That’s perfect, and they’re happy with this, too.”
Steven Butala: And sell it fast.
Jill DeWit: You could sell it fast. What I was saying, too, before, good acquisitions, just like that, when you find a pocket of sellers, and everybody’s happy and it’s great, they … that makes up for so many other issues, potential issues down the road.
That’s what I want to talk about, too, with good acquisitions. If you have good acquisitions and a good acquisition system, and a good acquisition team, it’s gonna make up for a lot of things down the road.
Steven Butala: Yeah. I mean, when you buy it right, it solves all the sales problems. We’ve said it a million times.
Jill DeWit: Like, your website’s not so pretty. That’s okay.
Steven Butala: That’s okay, because it’s a great piece of property.
Jill DeWit: Exactly.
Steven Butala: Yep.
Jill DeWit: You missed your-
Steven Butala: You’re right, Jill.
Jill DeWit: Your posting’s riddled with misspellings, again, that’s okay-
Steven Butala: A lot of times-
Jill DeWit: They’re looking at the price, and the-
Steven Butala: A lot of times it really works for … it works for you, not against you, because people are … potential buyers are looking at it, saying, “Oh, I found this…”-
Jill DeWit: “This guy can’t spell it, but, look.”
Steven Butala: Yeah. “This is a great piece of property. It’s in a corner of the internet that nobody’s looking at it.” I found this-
Jill DeWit: That could be your strategy.
Steven Butala: Yeah!
Jill DeWit: “I’m the only one that found it.”
Steven Butala: It’s like … reality TV.
Jill DeWit: Yeah, let them think that they’re the lucky ones that found your way too low price, and they’re just … they’re gonna sneak in and grab it and win. That’s exactly what you want them to feel, that’s true.
Steven Butala: Back to my point. You have to have a checklist of acquisition criteria, and you need to follow it. Specially in the beginning of your career, you need to follow it, crazy follow it.
Jill DeWit: Yeah.
Steven Butala: And get used to doing it. It will pay off in spades. In commercial real estate, where I … I started out in commercial real estate, and I’ve seen … This has crushed companies. I’ll give you an example: I was a VP of acquisitions for a long-term care company, you know, assisted living facilities. This was in the ’90s.
I would constantly come up with really good deals that were making a lot of money, and the guy who was making the decisions, the CEO of the company, I’d bring these deals daily. Bring these deals to these guys and they would say, “This is a fantastic property and thanks very much, but it’s four years older than our acquisition criteria.” And I’d pull my hair out, because it’s not easy to find these things.
Jill DeWit: Wait, will you define that? Four years older than our?
Steven Butala: The building itself.
Jill DeWit: Oh, okay.
Steven Butala: Is actually four years older. “Oh, yeah, congratulations, it’s hits the debt service coverage ratio. It’s the number of beds, this is a great location, and it’s probably got a real useful life”-
Jill DeWit: But they want it four years and newer building.
Steven Butala: But, “The physical plant, the building itself, is four years older than we require. So, no. Pass.”
Jill DeWit: Then what would you do?
Steven Butala: I would go cry, because I got paid based on buying these deals … buying these facilities. No. What would I really do? I have never said this before, I would go send it to the other people that I know would buy it, and they would pay me.
Jill DeWit: Okay.
Steven Butala: And that worked out good for me.
Jill DeWit: Okay.
Steven Butala: My point is, they really sucked to their acquisition criteria. I see apartment guys waiver or stray from their criteria all the time. Apartments will kill you-
Jill DeWit: Well, back to your-
Steven Butala: Especially because of geography.
Jill DeWit: Back to your example. Based after their criteria … did that make you … I’m gonna ask you a question, please. Did that make you feel like it was the right path, or the wrong path?
Steven Butala: In the position I was in. If it was the right path for me personally I would’ve been there. I’d be there right now.
Jill DeWit: So you didn’t agree with them.
Steven Butala: I agreed, I understand, and I learned from why they were so stringent on their acquisition criteria-
Jill DeWit: That’s what I was wondering-
Steven Butala: It worked out great for them. Jill and I’d go over there for Christmas and stuff.
Jill DeWit: Yeah.
Steven Butala: We still talked to those guys, so it worked out great.
Jill DeWit: That’s it.
Steven Butala: You know?
Jill DeWit: That’s good. That’s a great story, because you were young. It sounds like you were young and you were learning, and-
Steven Butala: Very young-
Jill DeWit: You learned from them, and that’s what we’re doing right now, as a matter of fact-
Steven Butala: We’re the old people now- [crosstalk 00:17:47]
Jill DeWit: We’re older. I know, we’re teaching the younger guys. You know, don’t send out a mass mailer for 18 sizes, and all this, you’re gonna be … don’t jump on every single one, you will go crazy.
Steven Butala: Yeah.
Jill DeWit: It will pull you down and you won’t get anything done. It’s good.
Steven Butala: I see a lot of people in our group, so, obviously, Jill and I spend a tremendous amount of time answering questions. We have a Thursday webinar for our members, and anybody can answer a question … ask a question and we answer it in detail.
Then we also have landinvestors.com, which is a whole free forum for any … it’s free for our members and for people-
Jill DeWit: Whoever wants to. Yeah-
Steven Butala: Who buy and sell land, and so we’re constantly asking questions. That’s where the questions come from on the podcasts.
Jill DeWit: Yeah.
Steven Butala: It’s really, really amazing to hear them … I could answer every question by saying … Well, here’s an example.
Jill and I get this question every 12th question, some version of this: “I have this great property, but I’m not sure that you can get to it. It’s an access-related question.”
Jill DeWit: It is.
Steven Butala: I’m gonna start answering it like this, “What’s your acquisition criteria? Do you buy property … Do you seek properties out with questionable access?”
Jill DeWit: If it is, then I guess it fits.
Steven Butala: Who puts questionable access in their acquisition criteria? “Oh, no. I actually am seeking out properties that I’m not sure the seller can get to-
Jill DeWit: Exactly.
Steven Butala: Or the buyer can get to.” Nobody.
Jill DeWit: Because I have a list of buyers with four-wheel drive and GP … and dying to go find their property with the GPS coordinates. Okay.
Steven Butala: Those buyers actually exist-
Jill DeWit: It’s true.
Steven Butala: But they’re not the main sell.
Jill DeWit: That’s true.
Steven Butala: Imagine this-
Jill DeWit: That could be your criteria. Yeah-
Steven Butala: Have this fantasy with me for a second. Have this numbers fantasy-
Jill DeWit: Oh, good. Oh, I thought, oh shucks. Shucks, you just put me on a desert island. “Have this fantasy with me.”-
Steven Butala: I want to hear your fantasy after mine-
Jill DeWit: Yeah, like, wait a minute.
Steven Butala: You should go first, actually.
Jill DeWit: We just went to a desert island.
Steven Butala: What would you do on that desert island?
Jill DeWit: Lay in the sun and nap.
Steven Butala: Oh my gosh.
Jill DeWit: Drink.
Steven Butala: What would you drink? What’s your drink? What would you have?
Jill DeWit: I used to like … I like Pina Colada’s. I would drink a Mai Tai. When I’m in that environment I like those coconutty kind of good drinks-
Steven Butala: Mm-hmm (affirmative). Ah, this is a much better fantasy than mine-
Jill DeWit: Yeah, I would do that. It’s better than yours. “Go on this fantasy with me.” “All right.”
Steven Butala: Does it cost any money to get to this island? Because I can help with that.
Jill DeWit: No. It was actually something that came up … out of whatever acquisition criteria, and this island popped up, and we bought it-
Steven Butala: See, in my mind, I love your fantasy and I want to partake in it, but we got to get a bunch of stuff done first to get to there.
Jill DeWit: I understand that.
Steven Butala: How boring is that?
Jill DeWit: No, we just take a helicopter and just land. Mine’s easy.
Steven Butala: If you send out 10,000 mailers and all the stuff comes back, all the … predictable percentage are signed and sent back, people call back, and all you do is just sit there and say, “Here’s my acquisition criteria, and here’s this deal. Check, check, check, check, check, yep, buy it. Check, check, check, check, oh, nope. It doesn’t have the right access, throw it away. Check, check, check.”
Do you know how much more money you would make?
Jill DeWit: It’s true.
Steven Butala: Versus this, “Check, check, check, check. Okay, buy it. Next one. Oh, questionable access.”
Jill DeWit: “Okay, research.”
Steven Butala: “Stop the train. Stop the train. We’re not gonna look at any more deals, we’re gonna waste hoards of time trying to figure out the access on this one property.”
Jill DeWit: “I’m gonna call the county, I’m gonna go out there myself.”-
Steven Butala: Everybody makes this mistake.
Jill DeWit: “I’m gonna send someone out.”
Steven Butala: Yeah.
Jill DeWit: You’re right. I know. I hear ya.
Steven Butala: To try to find some value, that chances are, in the land business, anyway, isn’t there?
Jill DeWit: Yeah. Then at the end for that it’s just, send more mail. I love it-
Steven Butala: Here’s why, the piece of property itself that has questionable access is a great piece of property, and you’re probably buying it for super cheap. People, whether there’s people at the county, or people that have a gate locked out there, or some version are gonna stand in your way as hard as they can.
It’s gonna take you time, tons of time to change their mind on whatever you’re trying to do. You could’ve bought 25 deals that meet all your acquisition criteria before you fix that one. It’s so hard, because you have to unlearn everything about real estate when you get into this business-
Jill DeWit: It’s true.
Steven Butala: To throw away a perfectly good deal that has questionable access.
Jill DeWit: Two things: number one, I don’t think everyone understands that. It’s not hard. Send more mail.
Steven Butala: Send more mail.
Jill DeWit: This whole concept, people are like-
Steven Butala: Send more mail.
Jill DeWit: “I need to grab every deal,” because most people are looking for deals. If you have a deal come in you feel like you need to do that. No you don’t. Send more mail. Number one.
Number two, I still am trying to understand, maybe you know, if you do, enlighten me-
Steven Butala: I’m sure I don’t.
Jill DeWit: Why do people feel like it’s their duty, their calling, or whatever, to figure that one out?
Steven Butala: Why is that?
Jill DeWit: When it’s too easy just to move on? You know what it is? It’s like, when I first … I don’t know if I’ve said this in a while, but when I first was reading … I used to hate to read.
Steven Butala: Really?
Jill DeWit: The reason was, I thought that if you started a book you had to finish it. I did not know …seriously. I just thought, “I started this book and now it’s my duty to finish it.” I don’t know why I didn’t think I could put it down.
If you get a third of the way in, 10 pages in, halfway in, who flipping cares? By the way, it’s the same with movies, sometimes I catch myself, and I make myself watch a movie-
Steven Butala: I don’t-
Jill DeWit: I think it’s gonna get better, and I shouldn’t. I should just turn it off and call it done. But I feel like I have to finish it. Well, it’s kind of like-
Steven Butala: I have no problems with either one of these things.
Jill DeWit: Okay. Well, it’s kind of like that. So, yeah. I had to learn that you don’t have to do that. Just like these deals, one comes in, big flipping deal. They sign it and send it back, you don’t even have to do anything if you don’t want to, by the way.
Steven Butala: Yeah.
Jill DeWit: You could just go dark if you really wanted to. But if you want to be nice and call them and say, “Thank you very much, Mr. and Mrs. Smith, I really appreciate it. I got your thing. Remember those things at the bottom? Well, I did my due diligence and it doesn’t meet my acquisition criteria. I’m not gonna purchase this one. Have a great day.” That’s it. That’s all you have to do, by the way.
Steven Butala: I agree.
Jill DeWit: This is stuff that we talk about a lot. I know we’ll have more questions like that.
Steven Butala: We went way over in time. This kind of goes over to the next show, which is bad acquisitions.
Jill DeWit: Oh, good. We’ll cover more of that then.
Steven Butala: Well, you’ve done it again, you’ve spent another 15 minutes listening to The Land Academy Show. Join us next time where we talk about bad acquisitions.
Jill DeWit: And we answer your questions posted on our free online community that we talked about a few minutes ago. Go to landinvestors.com.
Steven Butala: You are not alone in your real estate ambition.
Jill DeWit: We have a new set-up and I wasn’t sure. I don’t know where our time clock is, so I apologize-
Steven Butala: It’s right here.
Jill DeWit: We went way over. Okay, it was hidden for a little while. That’s why. Okay, I didn’t see the time clock. Share the fun by subscribing on iTunes or wherever you are listening or watching, maybe it’s YouTube. Please, please rate us there.
Steven Butala: We are Steve and Jill. Information…
Jill DeWit: …and inspiration.
Steven Butala: To buy undervalued property.
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