MLS Land Listings Pros and Cons (LA 851)
MLS Land Listings Pros and Cons (LA 851)
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 MLS land listings, the pros and cons.
Steven Butala: I can honestly say, I was just thinking, honestly say, I don’t think I’ve ever listed a piece of land in the MLS.
Jill DeWit: Yes, we have. Do you remember?
Steven Butala: Back in the day I never did.
Jill DeWit: Back in the day, but we have recently.
Steven Butala: You and I have?
Jill DeWit: Yeah, yeah. We had a 40 and … shucks, which one was that? ‘Cause we were playing around with that to test it to see if it works.
Steven Butala: That sold really fast, didn’t it?
Jill DeWit: That’s my point here.
Steven Butala: Oh.
Jill DeWit: That’s why we’re talking about this today.
Steven Butala: Get to know what goes on in your own company, Steve,
Jill DeWit: You like this?
Steven Butala: Especially, you have a radio show about it. Geez.
Jill DeWit: Man, might wanna do some homework. Just kidding.
Jill DeWit: Get to know your own company, this is good.
Steven Butala: I’m the last one to know anything around here.
Jill DeWit: Yeah, we do this, Steven, and it works quite well. I’ll fill you in.
Steven Butala: All right.
Jill DeWit: I’ll tell you all about it in a minute here.
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 and as you’re listening, please drop us your questions into the comment section below, especially on YouTube.
Jill DeWit: Classic.
Jill DeWit: Joe Smith asked, “I think there are a fair number of sellers out there who would gladly sell their property for a low price or just give the property to you for a promise of future cash flow. Some of them lack the sophistication or time to set up a terms deal. For whatever reason, it would just be easier for them to let someone else do it. Does anyone ever work with sellers to sell or resell their property on terms, service the debt, and split the proceeds with the seller? If so, what did the contract look like? What kind of split did you do? Who held the deed?”
Jill DeWit: I know a funny one.
Steven Butala: Go ahead.
Jill DeWit: I know that Luke has done this before. He has sold, Luke Smith, in our community, has sold property and then people have said, “Hey, I think it’s worth even more. Will you mark it up more? Help me resell it.” And Luke said, “Sure, fine.” Like he already all cashed out.
Steven Butala: Saw it three times, yeah.
Jill DeWit: He posted it back up at a higher number and now it’s on their dime and I think he charges them for it, by the way he does. And then they split whatever profit of that sale, however long it takes, he doesn’t care. I’m like that’s hilarious, that’s a loan I could pick up. That does, but it’s not a bad idea. You know? Do it for somebody else once you figure it out, sure.
Steven Butala: So walk me through it.
Jill DeWit: Walk me through the couple different-
Steven Butala: The Luke Smith deal.
Jill DeWit: The Luke Smith model?
Steven Butala: Yeah.
Jill DeWit: So, I buy a property for $1,000, I’m just gonna play around. I sell it for three. And I’m happy I’m out. The guy who bought it for three, ’cause it’s still a good price.
Steven Butala: Oh, I see. That’s not what they’re talking about here.
Jill DeWit: Now it’s worth for whatever.
Steven Butala: I understand.
Jill DeWit: So he’s done that kind of a reselling.
Steven Butala: That’s a great idea.
Jill DeWit: But yeah, so Luke has done that. ‘Cause he charges to post properties on his site and then he also, whatever, anyways.
Steven Butala: Here’s what I think Jill’s saying.
Jill DeWit: But for terms things, he’s talking for terms.
Steven Butala: Here’s what I think Jill’s saying, “Hey seller, I wanna buy your property for $10,000 bucks, but I don’t have $10,000. So I’m gonna pay you $100 a month until it’s paid off.” “Okay.” And the seller says, “Okay.” So I write a $100 check and there’s a contract. And then I’m essentially buying the … the seller’s providing seller financing. And so, I go and sell the property for $10,000. And I pay the $1,000 off to the seller and I keep $9,000 for myself and I’m done.
Jill DeWit: I thought the question was … can you scroll back up for me, please?
Steven Butala: Sure.
Jill DeWit: I thought the question was doing financing. So scroll down a little bit here.
Steven Butala: Joe says, “I think there ar a fair amount of sellers out there who would gladly sell their property for a low price or just give their property to you for the promise for future cash flow.”
Jill DeWit: Like they wanna do payment, they want you to set up the payments for them and do it for them.
Steven Butala: Or they want you to make payments and say-
Jill DeWit: Either way, they don’t care I’m sure. Someone’s gonna make the payments on it and then do it on a terms thing.
Jill DeWit: So I wouldn’t do that, personally. I wouldn’t do a terms-
Steven Butala: I think this is one of the worst ideas I’ve ever heard.
Jill DeWit: Yeah.
Steven Butala: It’s sneaky, it reeks of potential representation without a license.
Jill DeWit: Yeah, ’cause if you’re doing-
Steven Butala: There’s financial implications … it’s one thing if you do it with a piece of property you own, all right. Then it’s a whole different ballgame. You know, we talked about this recently. What he’s doing is representing a property owner in a purchase and sale of his property.
Jill DeWit: Yeah.
Steven Butala: A, that’s a huge massive problem, legally. B, he’s incorporating all kinds of financial instruments situations. So not only now is it a DRE, a permanent real estate issue, it’s now like an SCC financial issue.
Jill DeWit: That’s what I was wondering.
Jill DeWit: If you’re taking a $250 a month payment to give this guy a $200 payment, whatever it is, ’cause you’re servicing the loan and doing all of that. Yeah, I wouldn’t wanna do all of that.
Steven Butala: Here’s what’s going on. There’s one or two things going on here. Number one, this person has one of those sneaky personality types, where they think that they’re a snake oil salesman and they think they have to cheat to win. I doubt that’s the case.
Jill DeWit: I didn’t know of the snake oil.
Steven Butala: Or number two, they have it in their head, this person has it in their head that they need to have the money to do complete real estate deals. And you don’t, you don’t need to have your own money to complete a real estate deal at all. In fact, what you should do, Joe, in this deal is sign a contract with this person to purchase their property for … like we do, for less than it’s worth. And go out on the Landinvestors.com and find a partner, buy the property, control the asset, you own it, and resell it.
Jill DeWit: Ding, ding.
Steven Butala: And not veer from that model until you’re way into your two, three, 400,000 deals under your belt. Then you can get a little creative.
Jill DeWit: How nutty and confusing could this possibly be? That’s pretty confusing, by the way.
Steven Butala: It’s seriously setting yourself up for some problems.
Jill DeWit: Yeah, and babysit the transaction and babysit the seller and all the things that could … there’s alto of things that could go wrong with that.
Steven Butala: Yeah.
Jill DeWit: I’m not into it. Thank you.
Steven Butala: Today’s topic, which Jill seems to be quite excited about, and which I seem to have no knowledge of. MLS land listings, the pros and cons. This is the meat of the show.
Jill DeWit: Okay. Here are the pros. Listing land on the MLS is awesome. There’s not a lot out there, and there especially not a lot priced the way we do it. The only time I see people that care enough to post property on the MLS is they’re making up their own retail number. I don’t even know where they’re coming from. And usually, I think it’s because there’s a real estate agent involved and they’re only gonna get involved if it’s a piece of property that’s priced so high so their commission makes sense.
Jill DeWit: I almost think that they … and they don’t know how to price land, a lot of people don’t know how to price them. We do, that’s why you’re here. And you do know how to price land by land. But [inaudible 00:07:22] don’t know how to price roll vacant land. I don’t know how they come up with their numbers. They look at a house and take a percentage off of that or something, I don’t even know.
Steven Butala: There’s no thought that goes into it.
Jill DeWit: Okay, thank you, they just say, “Hey, I think it’s worth $100,000. Yup, let’s do that.”
Steven Butala: That’s what happens.
Jill DeWit: Yeah, “‘Cause you know what? Then my commission makes sense, okay, we’re going with $100,000.” That’s what we decided.
Steven Butala: Every real estate agent knows how to multiply .06 to any number.
Jill DeWit: It’s true. So yes.
Jill DeWit: So, I think that posting the pros are those reasons. There’s not a lot out there, like I said. You know how to take pictures and make it look good. Everything I see on the MLS, too, they don’t really make it count. Some say, if you’re gonna post on the MLS, you know, make it count. You know you priced it right and it’s awesome.
Steven Butala: Exactly.
Jill DeWit: Now, the cons posting on the MLS are number one, you’re gonna confuse people because your price is so low. They might not get it. They’re gonna be like, you know, whatever. But I don’t price it, I don’t use the MLS for anything below, let’s just say, at least probably 10 or $15,000 because it doesn’t really make sense.
Jill DeWit: Use it toward the larger dollar amounts and also bigger properties, maybe it’s a 40 acre property or an awesome info lot. Sometimes that’s worth 20, 30, $40,000 what I’m selling it for. Because I’m selling for, say, $20,000 ’cause it’s worth 50, that kind of a thing. That makes so much sense on the MLS.
Steven Butala: There’s a lot of power to be the cheapest person in the MLS, which ends up happening.
Jill DeWit: Yeah, it’s good.
Jill DeWit: Yeah, usually the cheapest you’re gonna find out there, what we found, is $300 to post it. So you wanna budget for that-
Steven Butala: You mean the cost?
Jill DeWit: The cost.
Steven Butala: The cost to actually post a fixed priced listing.
Jill DeWit: Right. And there are multiple companies out there that you can Google and find. You don’t have to be a realtor, you don’t have to be associated with them. You can just pay them a flat fee and go through that realtor, that broker, and they’ll post it for you. And you can even say, “Look, I’m either paying commission or I’m not paying commission.” It’s a flat fee and that’s how they’re getting paid and they’re good with that. It’s wonderful.
Jill DeWit: The other thing is the little dollar amounts, often, these are bigger transactions and they don’t sometimes close as quickly. So, because of that reason, on the little properties, I wouldn’t put on the MLS. I’m just kind of quickly going through the list. But some of my bigger ones I’m kind of counting on. You know? The right buyer coming along. It’s another reason to reach the right buyer. Maybe it’s, I don’t know, it’s in a great area, close to some substantial growth and it might be a bigger builder that might be stumbling across it or whose looking for it. And they will look on the MLS.
Steven Butala: Everybody sees data differently. There’s more and more data about real estate that’s available now. It’s amazing what’s available on any given piece of property. So if you go to a place like Realtor.com, which is a compilation or a collection of all of the MLSs. There’s three or 400 separate MLSs all over the country that feed right into that thing. So if you have a piece of property, Map You is the most popular right now.
Steven Butala: So if you have a piece of property that you could pull up a map and you can see 10 or 15 other pieces of property speckled out, and you’re the, by leaps and bounds, the cheapest one, you’re gonna win. Hats how you really win on the MLS. I think there are price buyers on the MLS for land, they’re not like users.
Jill DeWit: “Let’s see what $10,000 will get me?” Kind of thing?
Steven Butala: I think that if you had an information lot in some urban area and, yeah, if you’re half the price of everybody else that’s out there, I think that someone’s gonna see that and just buy it.
Jill DeWit: Yeah.
Steven Butala: You know, the vast majority of people that buy our real estate, and users like that, are just people that they don’t have any questions, they’re like, “Yeah, let’s buy it. I’m gonna buy it, tell me what to do.”
Jill DeWit: Yeah. What’s funny is I just was kind of saying, plan on it taking a little time. It’s the MLS/ however. Every time we have used the MLS, it does goes fast and I think it’s because of those reasons. People come along, and you know what? We’ve done it right. We have good photos, it’s well described, a good description, it’s priced obviously well. You know, everything’s right there. So people go, “Wow, it’s easy.”
Jill DeWit: One of the things about the MLS is, once you know how to do this in post property, make it look good, it’s easy to compete with everybody else because they’re all doing it wrong.
Steven Butala: Exactly, Jill.
Jill DeWit: That’s why I think ours go so quickly. It’s like, “Wow, well look at this one. Here’s the map, here’s the roads, here’s all the tax information. Here how to pay for it. You know, everything’s done and spelled out.”
Steven Butala: Can you imagine of you went on Amazon to buy some stuff, you had to go through like six steps to buy it? No, for one guy, he’s selling stuff and then there’s another person that’s selling some stuff and it’s sort of like that and they’re priced about the same. But with one person, you only have one picture and it takes six steps to close it. Or the other person, maybe it’s a little bit more expensive, slightly more expensive but you click, click, click and it shows up at your door.
Steven Butala: It’s just common sense. Real estate, for whatever reason, hasn’t gotten there yet, but it will within our lifetime.
Jill DeWit: It’s true.
Steven Butala: There will be a point and click and purchase and done.
Jill DeWit: We’re working on it, we’re doing it.
Steven Butala: We are.
Jill DeWit: We are doing it, we’re gonna do more.
Steven Butala: The MLS is good. Paying real estate agents is bad. So people think that it’s the same thing. They think that, “If I’m involved in the MLS, then I must have to have a real estate agent, I just have to pay a real estate agent on the other side.” And none of that’s true. These fixed price listings pay the person three, $400, that’s a licensed real estate agent. All the rules, dot the I’s, cross the T’s. You send them three or $400 bucks, you send them all the information, you logged in, you post it just like you would post it on Trulia. A little bit more complicated than that but the same concept.
Steven Butala: And it’s out there for all to see. And you announce the fact that you only take cash, there’s no financing and you’re not gonna pay any real estate agents. And, well, “Steve, I mean, I thought that’s the real estate agent playground?” No, because it’s gonna show up on Realtor.com where the whole public can see it anyway. And they’re gonna contact their listing agent, which you just paid three or $400 to list it, and they’re gonna immediately … and sometimes, in an IT automatic way, get the message right to you. They don’t wanna talk to that person, they’re not gonna make anything on it.
Steven Butala: So you contact the person back and you do the deal.
Jill DeWit: Exactly.
Steven Butala: And if you can send them a link where they can check out, like we do with the credit cards, it’s done. Or a down payment, at least, so it can go to escrow. That’s how you do this.
Jill DeWit: Exactly.
Steven Butala: MLS is your friend now.
Jill DeWit: Totally.
Steven Butala: But like Jill said, not for every property, but for a lot of properties. Plus, you start building a good A-list, too.
Jill DeWit: It’s very true.
Steven Butala: You find out-
Jill DeWit: Lots of good things.
Steven Butala: Yeah.
Steven Butala: Well, you’ve done it again. You’ve spent another 15 minutes or so listening to the Land Academy Show. Join us next time where we discuss successful people, create and implement goals.
Jill DeWit: And we answer your questions posted on our online community, Landinvestors.com. It’s free.
Steven Butala: You are not alone in your real estate ambition.
Jill DeWit: Trying to think, we all send our business that I don’t know about or you don’t know about. I sure there’s many things that go on like-
Steven Butala: You know, and I don’t know about at all anymore is marketing.
Jill DeWit: Oh.
Steven Butala: We have a whole marketing department and I don’t know what they do. And this stuff just seems to sell.
Jill DeWit: And sales.
Steven Butala: Yeah.
Jill DeWit: We have all kinds of great promos and plans lined up, coming up, lots of good things coming up.
Steven Butala: I know about doing this show.
Jill DeWit: I’ll tell you one right now.
Steven Butala: I know exactly what’s going on in the acquisition situation in our place.
Jill DeWit: There’s a big Black Friday promo coming, by the way. It’s gonna be good.
Steven Butala: Awesome.
Jill DeWit: Yeah.
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