Up and Coming Area means Ghetto (LA 847)
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: I’m Jill DeWit broadcasting from sunny Southern California.
Steven Butala: Today, Jill and I talk about up-and-coming area in a real estate listing really means ghetto. All week. All week to this week, we’re talking about infuriating real estate cliches.
Jill DeWit: The things you think of. The crap Jack says. Remember that?
Steven Butala: It’s up-and-coming area.
Jill DeWit: I bet some of our listeners right now remember that. That was a whole thing for a while.
Steven Butala: Yeah, the crap Jack says.
Jill DeWit: I think there was even a thread. I think there was a thread. It might still be there. I’m sure it’s still there in our online community about the crap Jack says. That was fun.
Steven Butala: All these cliches are used to describe real estate, and they’re basically apologies in advance for something that’s wrong with the property.
Jill DeWit: That’s true.
Steven Butala: All last week we talked about cliches that actually are meaningful like location, location, location. That’s not so bad. But in an up-and-coming area just means that it’s in a bad neighborhood.
Jill DeWit: Exactly. There’s something else going on. Thank you.
Steven Butala: Before we get into it though, let’s take a question. That was actually the whole show. We’re going to talk about statistics later about housing markets and why they’re good or bad for what we do.
Jill DeWit: Okay.
Steven Butala: Before we get into it, let’s take a question posted by one of our members on the landinvestors.com online community. It’s free. As you’re listening to us, please drop your questions into the comment section below.
Jill DeWit: Ivan asked, “I have a deal I’m working on, and when I do my due diligence, I found a judgment against the owner of the property I’m looking at buying. The plaintiff in the judgment is a state of Texas if that matters.”
Steven Butala: It doesn’t.
Jill DeWit: “I had a title report run for the property and for further confirmation, and they identified this abstracted judgment under personal liens which may affect title. There are no outstanding real property liens that were identified. Can the owner legally sell me the property? This is seven-figure judgment. If I can even buy- ”
Steven Butala: Jeez.
Jill DeWit: … “the property, I would go through a title company at this point. I appreciate the guidance on this deal.”
Steven Butala: Okay, so what a judgment is in case you don’t know is there’s a lawsuit, and he lost. In this case, people lose lawsuits and there’s a judgment. Whether it’s civil or criminal, they get … You know, you’ve seen lawsuits a million times even on TV where you do something wrong, somebody sues you, and you owe them money. But in this case, seven figures. He owes the state of Texas seven figures for whatever he did, and they can put a lien on everything you own, personally, corporate-wise and everything. It can destroy your life, and he hasn’t paid it back so there’s a judgment, which means that … Here, the long story short is don’t do this sale.
Jill DeWit: I have a question about this seriously. I could understand they can go after everything he owns at that time. But if I sell it, what if I had a … I mean, you know how people move things around in these situations?
Steven Butala: Yeah, yeah.
Jill DeWit: They move homes around. They move assets around, so this guy sells his property, and it’s now not his anymore. It went from property to cash in the bank, so that’s fine. They seize that. Why should they stop the transaction?
Steven Butala: Okay, so then-
Jill DeWit: Based on my Jill theory.
Steven Butala: What’s this guy’s name?
Jill DeWit: I do not know.
Steven Butala: The question asker.
Jill DeWit: Ivan.
Steven Butala: Ivan. So, Ivan then sells the property, right? Everything’s great. He buys a property for 10,000 bucks and sells it for 30,000 just like we’d all do every day in our group. He’s happily going along, and two years later gets a phone call and says that property that you sold. I think it’s from the person. He gets a phone call from the person that he sold it to. Or worse yet, three people later, which is more of like what would really happen.
Steven Butala: Maybe they built a house on it now, and the state of Texas [inaudible 00:03:57] comes in and says, “No, no, no. That’s our … We’re seizing this whole thing because when this guy owned it, he had a judgment against him, and it’s over.
Jill DeWit: Well, how come they didn’t take it back right then and there?
Steven Butala: Because it’s a government. They’re disorganized.
Jill DeWit: Oh, so the bottom … they can be weird.
Steven Butala: That could happen or … I mean, this is probably more likely nothing. Will it ever happen? It’s probably going to be fine.
Jill DeWit: That’s why I’m asking, as we all know people that that has happened. We all know people that have been in pickles and who knows? For clothes situations and all kinds of things, they move things around. They got him out of their name. They willed them to their mom.
Steven Butala: Yeah.
Jill DeWit: Not kidding, and nothing came of it because they put it in their mom’s name before the hammer came down.
Steven Butala: That’s right.
Jill DeWit: Okay, thank you.
Steven Butala: Oh, you’re talking about like bankers and stuff?
Jill DeWit: Yeah, or even in this situation, what if he sold … I mean, he’s got a judgment against him that they haven’t seized it yet.
Steven Butala: The guy was smart. He should have removed … Well, this lawsuit was happening and all that.
Jill DeWit: Done it before then. Sold it before it all happened.
Steven Butala: He’s obviously not smart.
Jill DeWit: Got it. I understand. But in the-
Steven Butala: There’s too many deals. The way we send a mail out, there’s too many good deals to do. This is one thing. I love your spirit, Jill, and I know you love to-
Jill DeWit: No, I was going to say what you’re saying right now.
Steven Butala: I love your spirit, like you really want to make deals work.
Jill DeWit: Right, if it’s-
Steven Butala: That’s why we get along, one of the reasons we get along so well.
Jill DeWit: Thank you. I do agree with you what you’re saying, and I just told someone that yesterday or the other just on my Wednesday weekly Facebook Live show that I’m doing right now for people getting started. That was one of the questions. There’s a time in each transaction where when you’re doing your due diligence, if something like this pops up, you have to take a step back and ask yourself, “Is it worth it?” This is one of those times, Ivan that where you go is it worth it? Because it’s too easy, like see, when you were going to say just now, “Send out more mail and move on.”
Steven Butala: Yep.
Jill DeWit: That’s it and I agree.
Steven Butala: Today’s topic, up-and-coming area as a real estate cliché really means the property’s in the ghetto. That’s the meat of the show. All week, we’ve been talking about infuriating real estate cliches, and I don’t get it.
Jill DeWit: I know. I think of up-and-coming … Look, there’s a couple things that I think of when I hear up-and-coming. I’m like, “All right. Uh-oh.” That means it’s going to all … Yeah, up-and-coming area.
Steven Butala: It’s like red light, red flag.
Jill DeWit: My first thought uh-oh. It’s old and rundown.
Steven Butala: Yep, that’s what I think too in a bad neighborhood.
Jill DeWit: Yep, well, that’s it. Then the second thing that I hear up-and-coming area is bad stuff happened there.
Steven Butala: Oh really?
Jill DeWit: Yeah.
Steven Butala: Yikes, like murder?
Jill DeWit: Was there a riot? Why is it? What went down? Up and coming. I’m like, “Uh-oh.” Then my third thing that runs on my hood is it was cheap. Now, they’re trying to increase the market value. Up-and-coming area to me, they were like that … We did a house flip a while back, and we had a woman investor come through our door. We had an investor open house. It was so cool. We were there just drumming up, new buyers, and it’s kind of the same with what they’re looking for in the area and what’s going on. It was great. It was just a couple hours, and I’m glad we did it.
Jill DeWit: This one woman came through, and she was over the moon because she could’ve officially say … As of that day, she just sold a house at the highest price per square foot. That whole ZIP code, she was responsible of that, and she was bragging.
Steven Butala: Her peacock feathers are [crosstalk 00:07:40].
Jill DeWit: Million bucks. Then she left. I’m like, “I won’t want to brag about that.”
Steven Butala: I wouldn’t even see this.
Jill DeWit: I feel like that to me, it’s like-
Steven Butala: Why would shoot [crosstalk 00:07:47] that?
Jill DeWit: It’s hard. So these cliches, like I took someone for more than anyone ever took them for and talked to them into spending more than anyone has ever spent. I’m like, “What the heck?”
Steven Butala: I don’t know how you could be happy about that.
Jill DeWit: That was so strange.
Steven Butala: It’s pathological.
Jill DeWit: What was interesting too is she was an agent/investor, like they did the renovation. She did the work and really tried to get and did get top dollar for it. She’s trying to … I don’t know what that was. I don’t think that in her heart she’s … I don’t think that … Here’s what I don’t think.
Jill DeWit: If in her heart her whole goal was to try to increase the value of the property in the neighborhood to help … Everyone in that ZIP code, I would be 100% onboard, right?
Steven Butala: It’s not it at all.
Jill DeWit: Because then everybody would all go, “Oh, look how great this is.”
Steven Butala: She’s bragging about her spread.
Jill DeWit: That’s exactly it. That’s not what she was-
Steven Butala: Her financial’s spreading a deal.
Jill DeWit: Exactly. It was like, “Whoo-hoo. We did it. I talked him into it.” It just bums me out. So when I hear this … I’m with you. This is a good one. Up-and-coming area like, “Okay, come on. What’s … ” What up-and-coming area is really, “Come on. What’s going on? Tell me the truth.” If you’re ever looking at a house in an up-and-coming area, if it’s not your first question, it should be your first question like, “What is really going on? What do I need to know and why?”
Steven Butala: Right.
Jill DeWit: Thank you.
Steven Butala: Speaking of ghettos, let’s look at this.
Jill DeWit: You’re dying.
Steven Butala: This is America’s 10 cheapest housing markets.
Jill DeWit: This is cool. So if you’re watching us on YouTube, right now, Steven is showing us this website with some of these statistics.
Steven Butala: Number one cheapest ZIP code, Marion, Indiana. Median home price is $66,000.
Jill DeWit: Wait, wait. This is the cheap … What year is this if you don’t mind my asking? Do we know?
Steven Butala: It is two thousand and …
Jill DeWit: ’18, so probably 2017, I’m guessing?
Steven Butala: ’17 or ’16.
Jill DeWit: All right.
Steven Butala: US home prices have risen about 5% over the past few years.
Jill DeWit: That’s kind of cool.
Steven Butala: For an annual rate of 5% for the past few years. It used to be you could bank on 11%. Marion, Indiana, 66,000 bucks. Danville, Illinois, 69,000. Ottsville, Pennsylvania-
Jill DeWit: Cheapest-
Steven Butala: 69, nine. Bay City, Michigan, 88. They also have the cheapest ZIP code within these MSAs, which I won’t read.
Jill DeWit: They [inaudible 00:10:18] which are even cheaper.
Steven Butala: Weirton, West Virginia, 90,000. Pine Bluff, Arkansas, 95,000. Lima, Ohio, 95,000.
Jill DeWit: Look at the variation. I got to point that out.
Steven Butala: Yeah, go ahead.
Jill DeWit: That’s so interesting right now.
Steven Butala: So Pine Bluff, Arkansas, the median home price was 94, five. But the cheapest ZIP code median price is 25,000.
Jill DeWit: Isn’t that interesting. So in Pine Bluff, a different ZIP code would be $25,000. Then a ZIP code over is $94,000. That’s insane.
Steven Butala: So as a house flipper or of info lot … The reason that I bring this up is if you’re buying and selling info lots, like many, many members and like we are, of ours do. You want to avoid these markets like the plague. Info lot, let’s say, in South Bay, Los Angeles, it costs half a million dollars because the house you’re going to put on, it’s all priced based on the house that’s going to go up. So it takes the exact same amount of energy for you and all your people that work with you. Since you have a $500,000 deal as it does $25,000 deal. Would you rather make a 100,000 on this spread and a whole [inaudible 00:11:33] spread or 5,000? That’s why I bring this up.
Jill DeWit: Ding. Ding. I want to point this out real quick for the listeners that are here with us right now, who came to one of our live events, who experienced Steven talking about what’s coming in 2.0 and how to use statistics to find and buy info lots. One of the things that we all know what he talked about was you’re looking for consistency.
Steven Butala: Right.
Jill DeWit: So based on this information that he’s showing us right now on the screen, if you’re watching, you can see like Pine Bluff, Arkansas.
Steven Butala: Look, there’s an advertisement for Land Academy on the website.
Jill DeWit: That’s nice.
Steven Butala: [crosstalk 00:12:20] plan it.
Jill DeWit: That’s really cool. We popped up.
Steven Butala: That’s hilarious.
Jill DeWit: All right, that’s really great.
Steven Butala: Anyway, go ahead.
Jill DeWit: But that’s awesome. Then there’s Infusionsoft, which we have.
Steven Butala: Which we use.
Jill DeWit: That’s great. Yay. Whoever on the right market here is awesome. All right, but what I’m saying is what Steven’s showing, like we talked about consistency for pricing info lots. Based on the information I’m staring at right now, I wouldn’t do Pine Bluff, Arkansas.
Steven Butala: I wouldn’t do … Maybe it’s on this list. They didn’t even come close.
Jill DeWit: Not consistent. Elmira, New York, same thing. If you don’t mind me jumping ahead, can I read that?
Steven Butala: Yeah, sure. Go ahead.
Jill DeWit: Elmira in New York, which is number eight on the list for the cheapest. The median home price, $109,000. However, still within Elmira, New York. Just a different ZIP code. Same city. The media home prices is 59,900. There you go. It’s like talk about inconsistent. Wouldn’t want to be messing with that to make it easy by the way.
Steven Butala: Topeka, Kansas, median home price is 109. Cheapest ZIP code in that area is 61,000. Cumberland, Maryland, median home price is 110. Cheapest in the ZIP code is 94.
Jill DeWit: That one I do. I like that. The cheapest ZIP code is 949, and the median’s 110. That’s consistent.
Steven Butala: Well, I’ll tell you the problem with all these. You want a price info lots at about 10 to 20%, about 10 to 20% of the existing average home price. So now you’re down to 10,000, 20,000. Buying it for 10,000, selling it for 20,000. You’re making 10 grand for a lot of work. You could be making 100,000 in a lot of different other … more expensive markets.
Jill DeWit: Love it. Love it.
Steven Butala: On that theme …
Jill DeWit: Yes.
Steven Butala: This article on the internet talks about the best and the worst, first-time home buyer markets. These are the top 10 best markets, they say. Broken Arrow, Oklahoma. I have no idea why. Tampa, Florida. Centennial, Colorado, totally get it. Boise, Idaho, totally get it.
Jill DeWit: Grand Rapids.
Steven Butala: Grand Rapids, Michigan. It always shows up in these lists.
Jill DeWit: Wow.
Steven Butala: I wouldn’t touch it. Just for this fact alone, it’s got the worst weather of anywhere that I’ve ever been ever. Thornton, Colorado, totally get it. Frisco, Texas? McKinney, Texas?
Jill DeWit: I get it. I get it. I get it. These are all Dallas, Fort Worth’s suburbs.
Steven Butala: Is that good there?
Jill DeWit: Totally. Heck, yeah. Are you kidding?
Steven Butala: Is the weather bad?
Jill DeWit: Well, it depends. Certain times of year, they have ice, and they have other things going on, tornadoes. But talk about business and growing. Come on.
Steven Butala: Oh, business.
Jill DeWit: By the way, no state income tax. Texas is great for that stuff.
Steven Butala: Currie, North Carolina.
Jill DeWit: Pretty lakes, got it.
Steven Butala: Gilbert, Arizona.
Jill DeWit: Newer homes, cheap. Got it. No, I get it. I get it all. Broken Arrow, Oklahoma, there’s lakes around Oklahoma. Oklahoma’s pretty. Certain times there’s tornado. You don’t want to be in a doublewide in Broken Arrow probably. But … What?
Steven Butala: I’m not sure you want to be in a doublewide anyway.
Jill DeWit: This is true.
Steven Butala: Here’s the worst cities for new home buyers. Anchorage, Alaska. What the heck? Newark, New Jersey. You don’t even want to go there. Let alone own anything there. Elizabeth, New Jersey, same thing. Miami Beach, Florida, probably too expensive. Real high crime rate. Oakland, California, same thing. Expensive, high crime rate. San Mateo, California.
Jill DeWit: [crosstalk 00:15:46]. Just kidding.
Steven Butala: San Francisco. I don’t understand why San Francisco gets bashed.
Jill DeWit: Wow, I think honestly I’ve seen it pop up on numerous articles that people are leaving that-
Steven Butala: Why?
Jill DeWit: … they’re just sick of it. They’re sick of the money and the costs and the traffic. I have been reading and hearing a lot of people.
Steven Butala: I love San Francisco. I would live there.
Jill DeWit: I know, but they’re leaving because of those reasons. A lot of it is the cost. It’s driving them crazy. That’s what I hear.
Steven Butala: Number eight is Flint, Michigan. Number nine is Detroit, Michigan. I’m from Detroit, and I don’t need to finish that sentence, and number 10 is Berkeley, California. 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 bring your imagination as a real estate cliché, means untenable.
Jill DeWit: That’s hilarious. We answer your questions. Post it on our online community, landinvestors.com. It’s free.
Steven Butala: You are not alone in your real estate ambition. I like the statistic thing.
Jill DeWit: Are we going to be showing anything today?
Steven Butala: Oh, sorry.
Jill DeWit: That’s okay. I don’t know if it was a Hide Behind the Curtain Day. That’s fine.
Steven Butala: I fell asleep at the wheel.
Jill DeWit: It’s all right. I understand.
Steven Butala: My little podcast show doesn’t have two full-time producers like your YouTube show does.
Jill DeWit: Thank you.
Steven Butala: Jill has a cute little what we thought was going to be a cute littler show-
Jill DeWit: Cute little show.
Steven Butala: … ended up being ridiculously popular.
Jill DeWit: Thank you.
Steven Butala: It’s a live Facebook. Soon, it’d be a live YouTube show every Wednesday-
Jill DeWit: Wednesday.
Steven Butala: … at?
Jill DeWit: 2:00 Pacific. Join us, join me. I was in costume last night.
Steven Butala: Wildly successful. Actually, it turns out-
Jill DeWit: Well, for Halloween, not last time.
Steven Butala: Here’s what we were just talking about over breakfast. It turns out that Jill appeals to people that are just getting into this business much more than I do.
Jill DeWit: You think?
Steven Butala: I appeal to some of the people that are in our group and out of our group that have been doing this and are now doing it as a full-time career. I want to ramp up, and their advanced. Jill’s good with the beginners. It turns out I’m good with advanced people. Jill has a lot more patience.
Jill DeWit: I prefer to call your group as special. I’m kidding.
Steven Butala: Jill has patience where I don’t have a lot of patience for a lot.
Jill DeWit: Nope, not at all. Awesome. But yeah, please tune in and watch, ask questions. It’s fun. It’s great. Ask anything. I don’t care. Please be sure and hit the Subscribe button to stay up to date on our podcast. Like us and comment what, like you would see in our future shows. If you’re listening on iTunes, please rate us there.
Steven Butala: We’re Steve and Jill.
Jill DeWit: We’re Steve and Jill.
Steven Butala: Information-
Jill DeWit: And inspiration.
Steven Butala: To buy undervalued property.
If you have any questions or comments, please feel free to email me directly at steven@BuWit.com.
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