Is There Any More Land to Buy (LA 806)

Is There Any More Land to Buy (LA 806)

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 beautiful sunny southern California.

Steven Butala:                   Today Jill and I talk about is there any more land to buy? And I have to, we, every I don’t know what? Two months, three months we do a show called like this?

Jill DeWit:                            It comes up.

Steven Butala:                   It’s our number, maybe top three question frequently asked question we get so …

Jill DeWit:                            It is. It comes up.

Steven Butala:                   Every couple of months we try to dispel it forever, but it keeps coming up. Which I understand ’caused quite honestly I had this question when I started.

Jill DeWit:                            Could you imagine though like it’s just kind of, for me, it’s I know the answer and it never concerns me and I wonder why people get hung up on it. It’s like …

Steven Butala:                   Because it’s such a good idea what we do.

Jill DeWit:                            Yeah.

Steven Butala:                   I can answer that. Jill and I we’re at a cocktail party. When was this? I don’t know, couple a weeks ago, again somebody asked us what we do for a living so Jill and I answered and this guy, I didn’t know it at the time, happened to be like a commercial real estate investor in Los Angeles. A very successful one.

Jill DeWit:                            Right.

Steven Butala:                   So I’m describing it the way I would describe it to a new member and his answer immediately was, “Well why isn’t everybody doing this?”

Jill DeWit:                            Yeah.

Steven Butala:                   And I said I ask myself that question every day. And he said, “Well I want to get involved in this.” And I said, “I think you should.” He said, “Well it’s probably too late isn’t it. Everyone’s doing it.

Jill DeWit:                            That’s …

Steven Butala:                   This is a guy that owns office buildings and stuff.

Jill DeWit:                            Exactly.

Steven Butala:                   And apartment buildings.

Jill DeWit:                            I would be more worried about his.

Steven Butala:                   And it’s his first question.

Jill DeWit:                            I know.

Steven Butala:                   His first question is am I too late to the party? So we just laughed about it and then we so we’re going to take a different approach today and a couple minutes here and try to throw some pretty big numbers. Jill, this is Jill’s idea. There are some pretty amazing statistics, big picture statistics about how much land is actually really out there and there’s no way, for the record to answer, the short answer to the question is, there’s no way we’re ever gonna trip over each other’s feet.

Jill DeWit:                            Exactly.

Steven Butala:                   But before we get into it which I [inaudible 00:01:56] sort of already did, let’s take a question posted by one of our members on thelandinvestors.com online community. It’s free.

Jill DeWit:                            Mike asks, “Hello. I have a seller who has two 16 inch pipelines buried on his property. 9 acres divided into three parcels. The pipeline, ROW, takes up about” … Is it row or R-O-W?

Steven Butala:                   Row.

Jill DeWit:                            Okay. Sorry. He capitalized it so I wasn’t sure if that was like, is that like a term?

Steven Butala:                   I think actually what he means by row is they’re all in a line.

Jill DeWit:                            Okay yeah.

Steven Butala:                   And they’re disrupting, theoretically disrupting, what he thinks he can use this property for.

Jill DeWit:                            Okay. “Takes up about one in a half acres of the land. Does anyone have any experience with pipelines? Does it make a property harder to sell? Any advice would be greatly appreciated thanks.”

Steven Butala:                   Well in my, can I answer?

Jill DeWit:                            Mm-hmm (affirmative).

Steven Butala:                   In my opinion this is a tough, with this level of information it’s really tough to answer the question.

Jill DeWit:                            It’s true.

Steven Butala:                   My gut response, and I’m sure Jill’s is the same as why do you care? Just sell the property. Resell it. My second more logical more mature more fatherly advice is just treat it like an easement ’cause I really think that’s probably what it is. And it’s probably recorded somewhere. So what you have instead of 3 acres, is an acre and a half property that you need to sell or buy and you need to price it that way, but without knowing I don’t know.

Jill DeWit:                            It’s hard to tell. I read it as like maybe if it’s one in a half acres of the total nine acres, so maybe it’s taking up a half acre on each of the three so you might have two and a half acres to work with. A.

Steven Butala:                   Yeah.

Jill DeWit:                            And then my other, my initial gut was it’s an improvement.

Steven Butala:                   Yes. That’s what I think.

Jill DeWit:                            Like hold on a moment.

Steven Butala:                   Yeah.

Jill DeWit:                            You know somebody, see … and by the way, here’s my other thing, every time I see a property and there’s something done to it, you know like this pipeline or-

Steven Butala:                   Bet there’s a great access route.

Jill DeWit:                            A power line. Exactly. There’s definitely access because they had to get there to lay the power. So I’m like well that solves that.

Steven Butala:                   And maintain it.

Jill DeWit:                            So I’m like that, for me, I just see it as a positive. Yeah.

Steven Butala:                   Here’s what, I mean along these lines do you want a property that’s hard to get to and super cheap and really has no attributes or do you want a semi-improved property that’s got some stuff that’s unique about it that’s really really inexpensive?

Jill DeWit:                            Right.

Steven Butala:                   I choose B.

Jill DeWit:                            Exactly.

Steven Butala:                   Then that’s what, hopefully, that’s what this is so all these little quirky things about, Oh my gosh I found this surprise on this acquisition candidate. It seems to me people are looking for something wrong.

Jill DeWit:                            Yeah they kind of are. You know what it, it’s like they’re second guessing themselves sometimes.

Steven Butala:                   Yeah.

Jill DeWit:                            It’s like home runs do happen. It’s okay.

Steven Butala:                   Yes, yes. Well said.

Jill DeWit:                            Don’t worry about it.

Steven Butala:                   Home runs happen.

Jill DeWit:                            You know you did everything right. Check your, check, you know what to do. You did do your due diligence when these offers come back signed ready to go like this one trust it and yeah don’t look for problems. I think that’s it. You know what I think too it’s like people are still kind of scratching their heads going, “This can’t be real.”

Steven Butala:                   I know.

Jill DeWit:                            And that’s why they’re looking for problems like they think there’s something wrong and I’m here to tell you-

Steven Butala:                   For 25 years.

Jill DeWit:                            Our most successful members don’t do that anymore. Or if they did it lasted this long.

Steven Butala:                   They got over it.

Jill DeWit:                            They said, “Oh my gosh. Holy cow. Steve and Jill are right. I’m running all the way to the bank on these deals and that’s it.

Steven Butala:                   Yeah.

Jill DeWit:                            So thank you.

Steven Butala:                   So I had a question, I mean I had a conversation a really long time ago, we were, again, at a cocktail party and I was talking to this one-

Jill DeWit:                            It sounds like we have a lot of cocktail parties.

Steven Butala:                   Maybe we have too many. I don’t know why these-

Jill DeWit:                            That’s hilarious.

Steven Butala:                   ‘Cause you want to know why? ‘Cause that’s the environment everybody says, “What do you do for al living?” You know everybody’s kind of socially comfortable before their third drink.

Jill DeWit:                            That’s true. Yeah.

Steven Butala:                   All these conversations happen before the third drink then after their third drink Jill and I tell the truth about, “Oh my gosh yeah we turn 14 properties a week.” And then everybody calms down about it. That’s really what they want to hear. They don’t want to hear another can X of how to do it or anything.

Jill DeWit:                            No.

Steven Butala:                   They just want to hear that skipping along the top positive stuff.

Jill DeWit:                            Exactly.

Steven Butala:                   This woman asks me, “How do,” she kept saying this sentence. “How do you know?” I’m like what are you talking about? “How do you really know?” What she meant was how do you know that it’s a good deal? How do you know like and she’s a nurse. And I said, I just look at all the data and it tells me. I don’t really have a feeling about it. And she couldn’t get past that. So do you have feelings about the land we buy?

Jill DeWit:                            Nope.

Steven Butala:                   I don’t have any feelings at all.

Jill DeWit:                            Nope. No the only feeling I have is like here’s my only feeling it’s like, “Holy cow I can’t believe we just got it for that quickly.”

Steven Butala:                   Elation.

Jill DeWit:                            We need to run to the bank. Quick before they change their mind close that deal. Yeah

Steven Butala:                   Jill and I, before we sat down here-

Jill DeWit:                            That’s the most feelings that I have about these.

Steven Butala:                   Before Jill and I sat down here she opened her, insist open the mail ’cause we have a purchase agreement.

Jill DeWit:                            Yay that’s good to show. That’s-

Steven Butala:                   From a house.

Jill DeWit:                            For a house.

Steven Butala:                   And here’s the note. Can you read this?

Jill DeWit:                            Yeah. This is so cute.

Steven Butala:                   Here’s the note. They signed our offer by the way.

Jill DeWit:                            They did. They-

Steven Butala:                   We’re gonna make about a 100-

Jill DeWit:                            And they included a nice little part. They got our offer on the house. They just agreed to it immediately. Signed it, sent it back and included a sweet little note that said. “The ceiling fan in the spare bedroom needs to be replaced and may be unsafe to turn on during inspection. Thank you.” Isn’t that sweet? And it’s so darn cute. And they both, you can tell husband and wife both signed it personally.

Steven Butala:                   Did they really?

Jill DeWit:                            Yeah you could tell it’s different writing.

Steven Butala:                   Put that in front of the camera.

Jill DeWit:                            It’s so darn cute. See they-

Steven Butala:                   You’re like really up here.

Jill DeWit:                            Yeah. It does-

Steven Butala:                   If you’re on YouTube you look you could of see it.

Jill DeWit:                            Exactly. It’s so cute.

Steven Butala:                   So these things happen.

Jill DeWit:                            Mm-hmm (affirmative).

Steven Butala:                   Anyway how do I know? Because when I did the data dump for Arizona I priced this property at 153631 and 24 cents and it’s worth probably, after we clean it up and not renovate it.

Jill DeWit:                            Oh and put replace the ceiling fan.

Steven Butala:                   After replace the ceiling fan and clean the carpet-

Jill DeWit:                            That’s about it.

Steven Butala:                   And really really have a professional cleaning company come in there. I don’t mean renovate the house. I don’t even mean paint or carpet or anything. It’s probably worth 225 we’ll sell it for 180, 190.

Jill DeWit:                            Yeah.

Steven Butala:                   And they just want to, they live in Illinois. They don’t use the house in Arizona anymore.

Jill DeWit:                            Exactly. It’s perfect.

Steven Butala:                   Yeah. Today’s topic, is there anymore land to buy? This is the meat of the show. Before we sat down again Jill asked me to pull up a statistic because a guy, we had our member call yesterday and he read it, a typed out and copied and pasted a statistic for us to read. So Jill’s going to read it again and I’ll play.

Jill DeWit:                            It was cool. He said he read it in a textbook so he’s taking some class on something, I don’t know what it was, but he’s like it was just a nice little thing that he shared on our member call like, “Hey everybody. I just read something that confirmed what Steven’s been saying all along so chill out about this.” So …

Steven Butala:                   There’s a whole chapter in Land Academy 2.0 devoted to this topic and I break it down numbers, by numbers, by numbers to stop the madness about the fact that there’s enough land to buy.

Jill DeWit:                            Exactly. So you want me to read this?

Steven Butala:                   That’d be great.

Jill DeWit:                            Okay. “The land surface of the United States covers 2.3 billion acres.”

Steven Butala:                   You could stop right there. I don’t want you to, but you could stop right there.

Jill DeWit:                            Exactly.

Steven Butala:                   And private owners hold 61% of that. Go ahead. That’s 1.3 billion acres. We’re not gonna run out of property to buy.

Jill DeWit:                            Mm-hmm (affirmative).

Steven Butala:                   Our 300, what now 350 member group is not gonna buy 1.4 billion acres.

Jill DeWit:                            Could you imagine? I know. Oh my gosh. That’s amazing. Yeah we[inaudible 00:09:41] going to the federal government has 28%, state and local 9, and any reservations 3. It’s nice that they made the list. Nice that my people made the list.

Steven Butala:                   And here’s another thing that they added at the end of this. Which is really actually good for us.

Jill DeWit:                            Have to leave them in and still politically correct and not exclude them.

Steven Butala:                   Virtually all cropland is privately owned. As is, which is really usable land.

Jill DeWit:                            That’s true.

Steven Butala:                   As is 3/5th’s of grass land, pasture, and range. Over half of forest land is privately owned.

Jill DeWit:                            Isn’t that cool?

Steven Butala:                   So like good property.

Jill DeWit:                            That fun? We like that.

Steven Butala:                   Useful property is owned by, is privately held.

Jill DeWit:                            That comes up often too. People go, “I just bought a piece of property and it’s next to a forest or it’s in the middle of forest land.

Steven Butala:                   Yeah.

Jill DeWit:                            Or [inaudible 00:10:25] and they’re a little bit worried about it. And we’re like, “No that’s great.

Steven Butala:                   Just like the question today.

Jill DeWit:                            Yeah. It’s protected. How great is that? No one’s going to build around it. I think that’s wonderful.

Steven Butala:                   So it occurred to me that what people aren’t really asking is is there enough to go around? What they’re asking is what this nurse asked me a lot of years ago. How do you know if you should be buying this or not? I think they make up reasons like it’s just not, I’m too late to the party and I can’t do it.

Jill DeWit:                            There-

Steven Butala:                   It’s the head thing.

Jill DeWit:                            Yeah.

Steven Butala:                   It’s not a math thing.

Jill DeWit:                            And that’s okay.

Steven Butala:                   ‘Cause the math, the math is clear.

Jill DeWit:                            And that’s okay. Yeah you have to not get emotional. You have to see it as a line item. See you know and that’s for me that’s how you know. How do I know? Well I looked at the numbers. How do I know I did all my homework. I made sure that it checks all my boxes, it’s got the four A’s. I know what I’m buying it for. I’ve confirmed all the [inaudible 00:11:19] available for sell property so I know I’m gonna kill it here. That’s how you know. It’s not a guessing game. Maybe that’s it.

Steven Butala:                   It’s really it.

Jill DeWit:                            They don’t, I think people who are new to this business and don’t really understand land wholesaling. They think that it is-

Steven Butala:                   It’s risky.

Jill DeWit:                            And they think that there’s a, you have to have, how about this? They think that you probably have to have years of experience like we do to really make it and they don’t realize that not only do, you don’t need years of experience. Sure experience helps with all kinds of things, but you know that’s what Land Academy is about. We have properly showed people here’s what we look at. You don’t need to have years of experience. You just need a checklist like I do and just make sure you, does it have access? Is it acreage? Is it look at the, whatever. Did you check for any possible back taxes or things like that so you know-

Steven Butala:                   Did you check what’s it for sale?

Jill DeWit:                            Did you make sure that, do you know if is it in a HOA? Do you know about the HOA? You know all those little things like that. That’s how you know. And then you go, “Well, yep I got all the answers. I’m buying it.”

Steven Butala:                   It checks all the boxes.

Jill DeWit:                            I know what’s gonna happen.

Steven Butala:                   It checks all the boxes and there’s a bunch of other property for sale on a mediate area that’s about the same size. Let’s say five acres and mines priced at half for sale. So I mean there’s a 98% chance I’m gonna do great on this property.

Jill DeWit:                            Exactly.

Steven Butala:                   You know what there’s a 2% chance you’re going to lose your money. If that’s totally unacceptable to you I think you should go back to your corporate job. Seriously I really think that’s the vast majority-

Jill DeWit:                            Well that’s why you do all your homework.

Steven Butala:                   Hold on there. The vast majority of conversations that come up like this are from people that are in that 2%.

Jill DeWit:                            I don’t know.

Steven Butala:                   They don’t want to do anything anyway. They’re just, they want to find something wrong with it so that they can watch TV.

Jill DeWit:                            I don’t know. I don’t think so. I think, I don’t think that it’s not that they don’t want to do it, they’re just not comfortable. And you know what, let’s put it out there. It’s because they don’t have people like us.

Steven Butala:                   Yeah.

Jill DeWit:                            I mean think of, I would never, how about this I’m going to put myself in their shoes. Imagine I meet someone who owns 10 Mcdonalds and he’s killing it. I mean he obviously would be if he owns 10 McDonald’s. I met this, I’m at our cocktail party.

Steven Butala:                   It’s like 1.2 million a year.

Jill DeWit:                            Right. So this guy owns 10 McDonald’s am I really gonna go out and try to do this all on my own, from scratch, knowing nothing. Heck no.

Steven Butala:                   Buy McDonald’s you mean?

Jill DeWit:                            Right. Would I try or even recreate it or whatever.

Steven Butala:                   Oh right geez.

Jill DeWit:                            Yeah.

Steven Butala:                   Oh my gosh owning a hamburger stand that would be crazy.

Jill DeWit:                            No way.

Steven Butala:                   That’s so risky.

Jill DeWit:                            So I’m putting myself in like this person’s shoes or someone else’s shoes who’s looking at us from the outside. You know I would not do that. I would seek out someone who’s done it before and then-

Steven Butala:                   Yeah that’s my girl.

Jill DeWit:                            Do a lot of research on it even before I talk to this person. It’s a whole nother conversation, but anyway, and so I would second guess myself. I would say you know until-

Steven Butala:                   You just made me blush just now.

Jill DeWit:                            Why?

Steven Butala:                   ‘Cause it’s like your level of hotness just went up.

Jill DeWit:                            Oh thanks.

Steven Butala:                   You’re just so confidently saying, “Why would I recreate the wheel?”

Jill DeWit:                            It’s just dumb.

Steven Butala:                   Find somebody that knows all about it and make them a partner.

Jill DeWit:                            I wouldn’t even do that.

Steven Butala:                   Or just learn from them.

Jill DeWit:                            That’s what I would do. I don’t want to split it. I love you, but I don’t wan to share it. This is enough equity here I mean I don’t want to share it again. So …

Steven Butala:                   I’ll share it in a McDonald’s franchise. Actually that’s a bad idea.

Jill DeWit:                            But you know what, hold on a moment, this person doesn’t need me. We all know that. So my thing was just saying I can understand why they’re a little bit uncomfortable and that’s why we’re here.

Steven Butala:                   I mean yeah. Not to sit here and debate the point, but you know I think it’s way beyond a little uncomfortable. The people who are a little bit uncomfortable really don’t talk about it. They just say, “Yeah. I accept the 5%, 2% risk in this deal.” And they buy it and they say-

Jill DeWit:                            And they do it.

Steven Butala:                   “Yeah, maybe I’m going to lose all my money. I’m not sure.” But there’s a 98% chance I’m going to double my money.

Jill DeWit:                            Well and if they did it right and they listened to us it doesn’t matter because they bought 10 properties and not one.

Steven Butala:                   Thank you.

Jill DeWit:                            And then the other 9 carried the one that they messed up on while they’re learning. Big deal.

Steven Butala:                   Which never happens by the way.

Jill DeWit:                            Oh instead of making $20000 I only made $18000 ’cause I goofed up on that one. Big deal. You can afford that. That’s how you do it.

Steven Butala:                   You know I look at, instead of acreage like we just talked about how many acres are out there, I look at parcels. You know because what you’re really buying is an APN and there’s a 150 million properties that make up apparently 150 million properties that are available to purchase that are privately owned in the country.

Jill DeWit:                            That make up the 1.4 billion acres equals your APN number.

Steven Butala:                   Yeah so divide by that, but people say they’re not making anymore land, but they are because that number goes up every year because subdivisions.

Jill DeWit:                            Right. That’s be a whole nother-

Steven Butala:                   So it’s all, this whole thing can be broken down into, it’s not an infinite universe of risk and people think that because they renovate houses and then they put them on the market and they pray.

Jill DeWit:                            Right.

Steven Butala:                   We don’t do anything like that. We know exactly where we’re going to sell it, who we’re going to sell it, most of the time, who we’re going to sell it to, because they own property around that property, they own property around the one that you own.

Jill DeWit:                            Right.

Steven Butala:                   And how much. You know remember when we renovated those houses back in the day and we just prayed for like a month.

Jill DeWit:                            Yep.

Steven Butala:                   Well you’re doing it again, just spent another 15 minutes listening to the Land Academy show. Join us next time where we discuss do you have the startup capital necessary to do this?

Jill DeWit:                            And we answer your questions posted on our free online community and you can find it at landinvestors.com.

Steven Butala:                   You are not alone in your real estate ambition. Do you think we dispelled that concept? No.

Jill DeWit:                            Oh yeah. Actually no I think that was-

Steven Butala:                   Absolutely not.

Jill DeWit:                            I’m glad that we did that. No I think, ’cause you know what we often talk about parcels which is a smaller number. We don’t talk about the total acreage. And so for me when you hear the billion in there and it’s like 1.4 billion acres of private land, I mean come on. Are we  gonna really trip on each other? No. We had a guy the other day and a member call mention a southern state that I’m not gonna say here, but he I really don’t know of anyone in our community doing anything in that state and I love it. And it was funny because he looked at like oh am I crazy because I’m the only one that’s pursuing this state and I’m like, “No you might be the smart one. Go out there, kill it in that state.”

Steven Butala:                   You are the smart one for being a little bit creative. After you get the basics down and you’ve done ten deals like the rest of us have done-

Jill DeWit:                            Think outside the box.

Steven Butala:                   Absolutely. Just like anything.

Jill DeWit:                            Totally. Yeah. Share the fun by subscribing on iTunes or wherever you’re listening and maybe you’re watching us on YouTube.

Steven Butala:                   Yeah.

Jill DeWit:                            So while you’re at it please rate us there. We are Steve and Jill.

Steven Butala:                   We are Steve and Jill.

Jill DeWit:                            Information.

Steven Butala:                   And inspiration.

Jill DeWit:                            To buy undervalued property.

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