Crossing the Ethical Line (LA 831)
Crossing the Ethical Line (LA 831)
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 crossing the ethical line.
Jill DeWit: Ho, ho, ho. This is a good one, I’ve been looking forward to this, ’cause this has happened to us.
Steven Butala: Yeah.
Jill DeWit: And it’s important to talk about so you are aware of it and you see it and you watch it and you know what to be looking for. Then also little things to make sure you don’t accidentally cross that line ’cause you don’t want to ever be in that position.
Steven Butala: Exactly. Before we get into it though, let’s take a question, posted by one of our members on a landinvestors.com online community. It’s free and as you’re listening or watching us on YouTube, please drop your questions into the comments section below.
Jill DeWit: Landrov, that’s his [inaudible 00:00:51] I know, his company Landrov asks, “Hi all, new guy here. I have a list of 5 acre vacant properties in a county in California. I removed duplicates, land owned by the the US government and the state of California, city owned properties, as well as land conservatory groups, there were a lot. The list went down from 1200 lines to about 800. I now have the ability to cut and paste the raw APNs into the county web GIS map. They show up as little squares all over the county. That gives an idea where the properties are and the concentration. Now I know the approximate location, does it make sense to send out a mailer with customized pricing based on an area / city or just do it by the whole county? Am I creating too much work for myself?”
Steven Butala: Oh this …
Jill DeWit: This …
Steven Butala: Jill and I say this all the time, it’s real obvious who’s going to do really well at this or not so well. Really, in the beginning, and [inaudible 00:01:54] are great, I think he said he was new right?
Jill DeWit: Mm-hmm (affirmative).
Steven Butala: No, this is not a waste of time.
Jill DeWit: New, but smart.
Steven Butala: This is not a waste of time at all and Jill and I are constantly saying this is a waste of time over here, this thing over here is a waste of time, maybe not have to worry about this. This is exactly what you’re supposed to spend time on. Scrubbing data and getting the right offers to owners in the mail and a document presented correctly, ’cause it’s going to yield transactions. If you see data by plotting it all out around one county and you see that the northeast corner is priced differently than the southeast corner, you’re going to dramatically increase your success yield on that mailer. Congratulations you are on the absolute right path to being successful at this.
Jill DeWit: You’re not creating too much work. This is the stuff that you … this is what we talk about, this is what you should be spending time on. Sitting there and figuring out though, like he just said, you’ll start to see a pattern and you can get into census tracks like when do it with houses, you’ll see subdivisions priced differently, so that’s what you’re already starting to see, LandRov, is you’re seeing all of these over here look how their priced and then now I notice shift, I might offer $900 maker over here, and over here I’m going to offer $600 maker.
Steven Butala: $300. Could be dramatic too.
Jill DeWit: Could be something real different. And yeah, like what Steven said, by doing that it’s going to increase your yield, you’ll have a better strike percentage ’cause you’re really getting in there and sending them good … sending the right people good, reasonable offers.
Steven Butala: Think about where you live right now, the property that’s on the block where you live, I bet three blocks over there’s just real different pricing per square foot. That’s just the nature of real estate markets, the more you can hone in on that the better.
Jill DeWit: Exactly. Get ready for houses, too, by the way.
Steven Butala: Yeah, you think about somebody like this guy, can you imagine where he’s going to be in 10 years, how he priced his mailers, how intelligent just how he’s thinking about it?
Jill DeWit: Right, it’s awesome.
Steven Butala: Today’s topic. Crossing the ethical line, this is the meat of the show.
Jill DeWit: This is not about how to cross the line, I would like to say, this is what to watch out for to make sure it doesn’t happen to you, by the way, number one and then number two, what you need to do to make sure you never cross the ethical line. My first go to is, if there’s a question about whether it’s ethical or not, if you’re asking yourself then, please err on the side of caution and don’t even go there.
Steven Butala: Absolutely. Exactly.
Jill DeWit: Don’t even … it’s not worth it. Don’t risk it. You always want to do the right thing, we say this often, you want to do the right thing, even if it costs more money. I don’t mean just in buying and selling property but in your business. The connections that you make you want to be an ethical person, you want people to want to run and do deals with you ’cause you’re that guy. You don’t want to be that guy. Right?
Steven Butala: Yeah.
Jill DeWit: What do you want to say about that?
Steven Butala: Just tell the truth. Always tell the truth as a seller or as a buyer, tell the truth.
Jill DeWit: Right.
Steven Butala: Jill and I have … here’s a great example of crossing the ethical line where we’ve been on the other side of the transaction obviously and we don’t do business with this person anymore. He did it to us twice, pretty big deals. Where we go in, we negotiate a price per property, both these were multi-unit transactions, a price per property, and it’s all done and we’ve got escrow, and the whole thing and it’s three weeks down the road and it’s the last minute and we’re ready to [trit 00:05:32], literally the last five minutes of the deal, he changes the price. He says, ’cause we’re selling property, “I’m not going to buy it for $580 bucks a property, I’m going to buy it for $480. Ha.”
Jill DeWit: Something.
Steven Butala: Haha, I won.
Jill DeWit: Yeah, it’s at the 11th hour.
Steven Butala: Like a three year old.
Jill DeWit: That’s mean. That’s unethical and we stopped doing business with that guy.
Steven Butala: Yes. And it caught up with him. He’s called us a year later and said hey do you have any more out there? I’m like, “You got to be kidding me.”
Jill DeWit: Nope, we’re not doing anything with you.
Steven Butala: You got to be kidding me. I’m going to what, keep you on my A list because of that?
Jill DeWit: Exactly.
Steven Butala: No way.
Jill DeWit: No.
Steven Butala: Did he do anything illegal? No. The name of the show is not crossing the illegal line, that’s not the name of the show.
Jill DeWit: It’s unethical.
Steven Butala: It’s ethical.
Jill DeWit: That was really unethical.
Steven Butala: Here’s some general real world advice. Always disclose what you know about the property that you’re selling, always. Now if you want to spend two or three hours collecting information on the property that you own please be prepared to have a tremendously long, large posting on the internet and disclose every single thing you learned. That’s the ethical and the right thing to do. And I’ll leave it at that.
Jill DeWit: And if you don’t know something, this is ethical, I would like to say this too. If someone asks you a question and you don’t know, then it’s ethical to say I don’t know, you’re not expected to know, but I would take it a step further and say, “You know, I honestly don’t know that. Where you can find that information is here at planning and zoning at the county, here’s their phone number.” If you even want to go that far, you don’t have to, but the right thing to do would be to tell them where they can get that information, I’m not sure if you can have an RV sitting there for 365 days a year, I honestly don’t know. That’s one of the things that comes up that I never … I’m not going to go that far and make the six phone calls to figure out on every property, I’m just not going to do that. Because not every person may be in that situation so it’s extra work that’s not needed but I do know where to get the answer, so if I do have a buyer is calling and wants to know that, I direct them there and let them ask the questions and they find out for themselves. That is the right ethical way to do it.
Steven Butala: Another thing that we do with rural vacant land all the time, we’ve been doing this for a decade is we say, right in the post, and on the phone I hear our staff say it all the time, “That’s a great question, potential buyer, we don’t have the answer and here’s why.” We buy and sell a lot of real estate and we just don’t have the time or the resources to find out those specific questions and then point them in right direction like Jill said.
Jill DeWit: Exactly.
Steven Butala: There’s nothing wrong with saying I don’t know, probably not going to even go find out for you.
Jill DeWit: Right.
Steven Butala: We just do so much business and we’re in this business that it doesn’t make sense to find out. The RV thing is a great example, actually. Is that unethical? Absolutely not, you’re totally telling the truth.
Jill DeWit: Exactly. What isn’t ethical, if you said, “Oh sure.” Did you think, or you’re assuming or you just want to sell the property and you just say, “Oh heck yeah.” You never want to do that. Now it’s unethical.
Steven Butala: Oh yeah, you can put a … the property’s airport ready, just drop another airport there.
Jill DeWit: Sure, oh yeah, you can do anything you want, absolutely. It’s 40 acres, I’m sure you can put a casino there, no one’s going to know, who’s going to care? No. Can’t do stuff like that. No. Never shoot from the hip in gas. You either know, or you don’t know.
Steven Butala: You were, as a real estate professional, the ethics portion of this was probably your completed … that was all done when you were about 13 years old, this is not about real estate.
Jill DeWit: Oh. That’s true, it’s just doing the right thing 101?
Steven Butala: This is about who you are, making good choices like we tell the kids.
Jill DeWit: You didn’t have to say that, you didn’t have to bring that up. I do that with our kids every time they’re going off somewhere, I’m like, “Make good choices.” And they’re like, “Yeah, right.” We all know how that’s going to end. That’s so funny. But yeah, but it does apply here. Make good choices.
Steven Butala: Join us next time where we discuss how to start your own internet show. This is actually fun for … that’s going to be a lot of fun.
Jill DeWit: And we answer your questions post at our online community landinvestors.com it’s free.
Steven Butala: You’re not alone in your real estate ambition.
Jill DeWit: That’s a good show. I think we got our point across.
Steven Butala: Me too.
Jill DeWit: Don’t you? Yes. Share the fun by subscribing on well, excuse me, share the fun by hitting the subscribe button on YouTube if you’re watching us there and that way you will stay up to date on our podcasts and connect to us to our channel. Please like us and comment, we like you seeing future shows. If you’re listening on iTunes, please rate us there.
Jill DeWit: We are Steve and Jill.
Steven Butala: We are Steve and Jill.
Steven Butala: Information.
Jill DeWit: And inspiration.
Steven Butala: To buy undervalued property.
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