Hottest Land Markets (LA 809)

Hottest Land Markets (LA 809)

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 Jake Butala.

Jill DeWit:                            And I’m Jill DeWit. Broadcasting from sunny, southern California.

Steven Butala:                   Today Jill and I talk about the hottest land market out there.

Jill DeWit:                            You know when I first started to read this topic yesterday, I said, “Today Jill and I talk about the hottest,” I’m like what are we gotta talk about the hottest-

Steven Butala:                   Yeah, where’s he going with that?

Jill DeWit:                            Oh, no. This could be bad.

Steven Butala:                   He’s finally done it.

Jill DeWit:                            I know.

Steven Butala:                   He’s finally gone off the end.

Jill DeWit:                            Are my days numbered? We’re talking about other hot people?

Steven Butala:                   No.

Jill DeWit:                            I didn’t know.

Steven Butala:                   There’s no other hot people besides you, Jill.

Jill DeWit:                            Thank you.

Steven Butala:                   Trust me.

Jill DeWit:                            Thanks. That was good though, you got me.

Steven Butala:                   Some people who are in the public for long enough, they just go nuts. They start talking about politics, they get real mad about everything.

Jill DeWit:                            That’s funny.

Steven Butala:                   I hope that’s never me.

Jill DeWit:                            Me too.

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

Jill DeWit:                            Milan asked, “I’d like to know,” to point out by the way, this person, talk about what week [inaudible 00:01:11], this person is not a member. Never been a member, asked a lot of questions, been flipping … he’s been a non-member following us for years.

Steven Butala:                   I wonder where he gets his data.

Jill DeWit:                            It’s kind of … I don’t know. That’s a good question.

Steven Butala:                   I’m sure he’s offers to owner customer.

Jill DeWit:                            Exactly. ‘Cause some of our companies, I have little a la carte versions. So I suspect Milan might be using some of our a la carte things, which is fine.

Steven Butala:                   There’s no cheaper place to get data and there’s no cheaper place to send mail. Both of those things. If you do this for house, any type of real estate, period.

Jill DeWit:                            Exactly.

Steven Butala:                   Whatever he’s doing, he figured it out apparently.

Jill DeWit:                            It’s great.

So it said, question Milan asked, “Questions for Steve and Jill respectively. Jill, you’re a mountain land kind of girl. What land or lands did you keep and didn’t sell from your past acquisitions and why? Tell us a little about them.” That’s funny. “Steve, you’re a Little House on the Prairie kind of prairie land kind of guy. Which lands are lands that you keep from your long time acquisitions and why?  Tell us a little about them. The reason I’m asking is because I simply love land.”

Steven Butala:                   Good, obviously you do, Milan.

Jill DeWit:                            Exactly.

Steven Butala:                   So do I.

Jill DeWit:                            Do you wanna go first?

Steven Butala:                   No, go ahead.

Jill DeWit:                            Okay.

Steven Butala:                   Are you a mountain kind of girl? Mountain land.

Jill DeWit:                            Well, if I had to pick … as far as rural vacant land goes, Milan is correct. I’m not a big prairie, rolling hills, out there, I want trees and mountains and that kind of thing, that’s what I want. So my favorite properties and the one I’d really want to hang onto is some of our Arrowhead and Big Barren, Riverside ’cause we can get to it so easily from here, kind of land.

So those are my favorites. I don’t know if we have anymore in inventory I kind of held on to them, Milan, as long as I could and then I like … you know what happened? Here’s what happened. So you hang onto it as long as you can, you’re like, “Oh I love it, I love it, I love it.” And then you realize, “Why am I hanging onto this? And when I’m gonna use it, I’ll go buy another one. Its totally fine. I know how to do that so I can let this go.”

Steven Butala:                   You answered the question for me.

Jill DeWit:                            That’s exactly what happened. But those are the types that I like. I want pretty trees and hills and where there’s gonna be snow, but I’m not stuck in the snow, I’m not trapped, I’m not four hours from civilization.

Steven Butala:                   Well said.

Jill DeWit:                            I don’t like that.

Steven Butala:                   So I’m an all types of land lover, too. But I agree with Jill. That little picture of a cabin with a stream running next to it, generates its own electricity with a little paddle wheel kind of thing, I want the same dream that everybody does. So it turns out, we have a piece of property like that, Jill and I, in northern New Mexico in [inaudible 00:04:14] Valley, that I bought in a tax auction long before I ever met Jill. She’s only seen pictures.

Jill DeWit:                            You won’t let that one go.

Steven Butala:                   I just won’t. Will we ever use it? There’s like a 99% chance we’ll never use it, probably never see it, but there’s something about that piece of property. The tax bill comes every year and I just whip out the check book as fast as I can.

I used to have a whole subdirectory of property that I would keep called … it was in our kids names actually. And it’s just what Jill said, it’s like what are we doing? Paying taxes on this every year.

Jill DeWit:                            We can go get more.

Steven Butala:                   We can go within the stroke of a pen. Jam a bunch of letters through Offer to Owners and knowingly pay not rock bottom prices like we do, but pay like half of what the retail instead of like 20% and pick up any kind of property that we want.

At this point in our life, here’s where we’ll answer the question. We’ll just go buy a house. That picture I just painted, and over pay for it. Because there’s so many other properties that we can turn to pay for it. It doesn’t make sense to actually-

Jill DeWit:                            Hang onto the land and build our own.

Steven Butala:                   Hang onto it or obsess not his piece of dirt that you bought really to resell.

Jill DeWit:                            Right.

Steven Butala:                   So now if Jill and I wanna buy something, any kind of asset, a boat, or any of that stuff, we send out a bunch of letters and we buy it for 20% of what you would pay for it if it’s listed on the internet.

Jill DeWit:                            Exactly.

Steven Butala:                   So there’s huge value in this question.

If you wanna buy your next primary residence, this is how you do it.

Jill DeWit:                            Ts true. That’s very true.

Steven Butala:                   I think I answered it.

Jill DeWit:                            You did.

Steven Butala:                   Today’s topic, the hottest land market in the country. What is the hottest land market right now? This is actually a very, very useful show, it’s the meat of the show. On Realtor.com, I’m gonna directly answer the question, starting with you.

Jill DeWit:                            You should.

Steven Butala:                   On Realtor.com, both Realtor.com and Redfin.com have a huge data component that’s all free that no one knows about. So Realtor.com itself allows you to download some data that they’ve complied all over the country based on zip code and based on MSA and several other variables. And then they wrote an algorithm, basically what’s the lowest days-on-market, a bunch of statistics and then they rank them. So if you wanna know where it makes the absolute most sense to buy, let’s say an info lot, this is not for rural vacant land, those zip codes aren’t in this because not enough property changes hands to make it a hot market.

Huge component of the hotness of a market is days-on-market, the lower the better. Days-on-market, if you don’t know, means this. You list a piece of property and seven days later it’s under contract or it sells. So days-on-market would be seven days. And every municipality looks at that differently. Sometimes it’s when it goes under contract, that’s off the market, sometimes when it’s closed and recorded it’s off the market. So it’s not a complete apples-to-apples comparison, but it’ll get you there way more than never looking at it at all.

And so obviously, everyone, hopefully, is running to Realtor.com to find out what the hottest market is right now. Please guess Jill. You’ll never get it ’cause I fell out of my chair when I saw it.

Jill DeWit:                            I’m thinking. Then it’s not Seattle, is it Dallas?

Steven Butala:                   It’s Indianapolis, Indiana. And here’s why, algorithm looks at days-on-market and it looks on … it’s only numbers, right? The weather’s not in there, I’m sure. And it looks at things like-

Jill DeWit:                            It’s only right now, today, like this month, it’s not a year over year.

Steven Butala:                   One of the components of a hotness factor is month over month price increases for that zip code or county or zip code or MSA. And for whatever reason, I think probably ’cause Indiana started at close to zero after the downturn, so it’s picking up, as a percentage, it’s good.

Jill DeWit:                            Yeah.

Steven Butala:                   And so buying info lots, that may not work for us. I’m just saying. I personally am not scrambling to go get real estate info lots in Indiana and here’s why, we sell info lots to developers. And I’m not sure that’s the hottest new home development in the country.

Jill DeWit:                            Right, just because everything else lines up.

Steven Butala:                   Well here’s why, if an average price of a property in a zip code in let’s say urban Indiana is $80,000 for a 1,200 square foot house, there’s no way you can build a house for … it’s way too low. It’s lower than replacement cost. So you’d be better of as a consumer just to go buy an older house and clean it up. And builders know that, they’re not gonna build a masterpiece in an $80,000 house neighborhood and buy in info lots from you for 20 or $30,000 bucks. The math doesn’t work. So I cover all of this in Land Academy 2.0.

You’re looking at me like this is too confusing.

Jill DeWit:                            No, it’s not.

Steven Butala:                   You know what? It is confusing.

Jill DeWit:                            Well you know what?

Steven Butala:                   So is planning a [inaudible 00:09:21]

Jill DeWit:                            I love you. I’m going to request, tie this back into me as land. Tie this back into me. I understand I should be looking at these figures. Will you please reiterate for me what triggers I should see and how it relates to me and land.

Steven Butala:                   Yeah, so absolutely.

Jill DeWit:                            Thank you.

Steven Butala:                   If you live in Indiana and what you wanna do is take … regionally look at where the days-on-market are the lowest and look at an average price where houses are selling, the median household price that properties are selling for that are, I don’t know, 30% above replacement costs. It has to be replacement costs for this to work.

Jill DeWit:                            Can you give me it in land?

Steven Butala:                   Well that’s how you set that.

Jill DeWit:                            Okay.

Steven Butala:                   Replacement costs for a house sets the info lot price. You wanna be at 10 to 20% of replacement cost.

Jill DeWit:                            So it’s the hottest land, AKA info lot market?

Steven Butala:                   Yeah. So this is not rural vacant land at all.

Jill DeWit:                            That’s where I was a little bit lost right now. I’m just making sure, I’m like, “Am I missing something here?” Is there one more step down? And so let’s remind everyone, info lot is land. It is really easy. Let’s think about this for just a moment. The reason we’re doing this show is because info lots are so valuable and sometimes people miss them. They skate right over the top. Buy an info lot, a quarter acre or less, even .17, who flippin’ cares? Info lot in an awesome subdivision where you already have the access and you already have all that stuff, again, you can buy it side unseen. You can do it the same way we do it all and they’re worth even more.

Steven Butala:                   They’re worth more, you make more per transaction and the data is dramatically there. Way more than rural vacant land.

Jill DeWit:                            For me, that’s the whole point here. That’s why I wanted to do this show.

Steven Butala:                   It by no means replaces rural vacant land, everybody loves rural vacant language in our group. But adding a product line, the same way … Walmart doesn’t sell one per product, they don’t just seel a coffee maker, they sell lots of products. Some products they make money on, some not as much. Why should we be doing any different?

Jill DeWit:                            Well a lot of it is too, this is where a lot of you will naturally progress. You’re gonna naturally start going, “All right, I’m done with these stupid … ” you’re gonna start realizing, “I’m done with these stupid five acres of $5,000 transactions because the same amount of work goes into it as these other bigger … it’s more valuable property types.

And let me tell you something even better. These are even easier because if you’re spending $20,000 or $15,000, let’s just say on an awesome info lot that’s worth 50, ’cause you’re gonna try and sell it for 30, you’re doing even less work. Why? ‘Cause now you’re bringing in a title company, so they’re doing it for you. So for me, I even get more excited about these, when you’re ready and you build up your bank balance, you’re doing it all right, you’re buying stuff for a couple thousand dollars, doubling your money, now you’re staring at $50,000 in your account when you started with five.

And this is what our members do, now you start making some different decisions. “All right, do I wanna keep doing this or do I wanna do these other ones? Oh, maybe I’ll do both.” You know? And then watch what happens, again, this is what happens to a lot of our members. You turn around and you look and go, “Now you have $200,000 in your account when you started with five.” Now once again, “Oh, I can start making some different decisions.” And then your history and we don’t hear from you is what happens a lot.

Steven Butala:                   The math is real simple. You’re chuggin’ along, you’ve done ten deals, you’ve turned it and you understand how to get mail offers out using Offertoowners.com.

Jill DeWit:                            Right.

Steven Butala:                   And so you’re sitting around saying. “Okay, great. This works. I’ve made some pretty good money, I wanna make more than $15,000 a deal now. I’ve made $1,000 and $5,000 and all that, but let’s kick this thing up.” That’s info lots.

Jill DeWit:                            Now you start buying … or even bigger acreage.

Steven Butala:                   And then, you just keep moving up.

Jill DeWit:                            Exactly. Thank you.

Steven Butala:                   Well, you’ve done it again. You spent another 15 minutes or so listening to the Land Academy Show. Join us next time where we discuss a profile of people who get it.

Why is that funny? Hold on, stop, stop. Why is this funny to you? This whole week this has been going on.

Jill DeWit:                            This is actually good, no, I really like it. These ae some very interesting and … this is the stuff you and I talk about behind the scenes, but we don’t talk about on the show.

Steven Butala:                   That is exactly what this is.

Jill DeWit:                            So that’s why I’m laughing. And in case you didn’t know, I often don’t know the show’s that coming until this moment. This is exactly when I know the show that’s coming next. And it’s funny to me because I’m like, “Are we really gonna talk about this? This is hilarious to me” in my head, I’m like, “Oh, I have a lot to say.”

Steven Butala:                   You know what’s great about this whole thing is that we don’t need to be here. So we can talk about what we want.

Jill DeWit:                            What does that mean?

Steven Butala:                   I just think there’s a lot of people who … the space that we’re in is real estate, whatever. Real estate education, let’s call it.

Jill DeWit:                            Okay.

Steven Butala:                   And there’s so much negative, bad real estate education of people just trying to swindle you out of money. That’s exactly what this is not.

Jill DeWit:                            Right.

Steven Butala:                   We’re gonna tell you if you should be here or not on this next show. People who get it and people who don’t. And so if that really offends you, then you should go listen go one of these real estate guru’s who just blow smoke, who don’t really tell you how to do anything.

Jill DeWit:                            Got it.

Steven Butala:                   This is the kind of stuff we talk about at night, Jill and I.

Jill DeWit:                            Totally. And what we don’t do … no, just kidding.

And by the way, if you have some questions, hey, we’d love to answer them right here for you. So please post them on our free online community and you can find it at Landinvestors.com.

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

Jill DeWit:                            I wrote something down, a funny comment that you made, and I wanted to ask you about this. ’cause you said, “The components of a hotness marker.” We all know that we talked about for property, I just had a teenage boy thought. That would be a teenage boy thing. “The components of hotness.” Like COH. I can hear two-

Steven Butala:                   What’s COH?

Jill DeWit:                            17 year old boys walking around going, “Hey, COH. Her COH is nine.” I can totally hear that, right?

Steven Butala:                   I’m writing this down. COH.

Jill DeWit:                            “Her COH is a nine, that COH is a two.”

Steven Butala:                   What are the COH’s for girls?

Jill DeWit:                            Components of hotness.

“Oh, his COH is a five.”

Steven Butala:                   Yeah, but what are they? I wanna know.

Jill DeWit:                            Oh, components of hotness for girls? Okay, well your COH is a-

Steven Butala:                   Oh, I don’t want my number. That’s awful knowing that, I’m afraid of my number.

Jill DeWit:                            All right, I won’t give you your number. The components of hotness are made up against appearance.

Steven Butala:                   Appearance, I thought you said parents. I’m like well, that’s not gonna work.

Jill DeWit:                            Appearance, your personality, your-

Steven Butala:                   So nebulous, Jill.

Jill DeWit:                            Are you a nice person? Your appearance, are you attractive? Personality, are you a nice person or are you a jerk?

Steven Butala:                   This is awesome.

Jill DeWit:                            How about manners? Are you kind and respectful? Do you open the door for us? Do you buy us all drinks when we’re out with our friends? This is important to us, everyone, in case you didn’t know this.

So hey, anyone listening, if you haven’t done this, next time you’re out somewhere with your wife and her girlfriends, you need to buy them all a drink. Just flat out say, “Hi.”

Steven Butala:                   You know what? You’re in the minority on this.

Jill DeWit:                            You show up late. You think so?

Steven Butala:                   Yeah.

Jill DeWit:                            I think every woman, married or not married, will fall over when her husband or partner walks up, seriously, and says, “Hi guys, I’m here. I’m gonna buy you all a drink. What would you like?”

Steven Butala:                   I’ll tell you what, Jill.

Jill DeWit:                            You think?

Steven Butala:                   To be respectful, you’re in a minority ’cause most-

Jill DeWit:                            Already my friends fall over when you buy them all drinks.

Steven Butala:                   Well that’s ’cause they’re your friends and they’re the minority too. But most women are gonna say, “What are you spending?” Especially if they’re married. “Why are you spending $50 of our money buying drinks for other people?” And specifically other women. Absolutely Jill, I’ll telling you.

Jill DeWit:                            All right. Well try it and then get back to us. Let me know.

Steven Butala:                   I would recommend having that type of conversation with your wife first.

Jill DeWit:                            I think it’s hot. For me, it’s a COH.

Steven Butala:                   Okay.

Jill DeWit:                            I guess the COH is different for every women. And we’ll leave it at that.

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We are Steve and Jill.

Steven Butala:                   Information.

Jill DeWit:                            And inspiration.

Steven Butala:                   To buy under valued property.

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