3 Stages of Successful Land Investing (LA 855)

3 Stages of Successful Land Investing (LA 855)

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 the three stages of successful land investing, and I’m pretty sure we have a different opinion on this.

Jill DeWit: I made three sets of three stages-

Steven Butala: Really?

Jill DeWit: So I have a lot to-

Steven Butala: What?

Jill DeWit: Work from, because I took it from different angles. Like, okay, this could be three stages, this could also be three stages. I had fun with this.

Steven Butala: Well, we all can agree that it’s beginning, intermediate and advanced.

Jill DeWit: And that’s not what I put down.

Steven Butala: We’ll just find what those mean, now I … I mean I understand-

Jill DeWit: Mm-hmm (affirmative), that’s not one of the ones.

Steven Butala: Defining those things can be, I’m sure, can be different for us.

Jill DeWit: Mm-hmm (affirmative).

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 your questions into the comment section below.

Jill DeWit: Ivan asks: “There are two lots and an APN legal description, tracked 1A and tracked 1B, but the seller is only selling one of them, track 1A, which is the one I want to buy. The other one is landlocked, and about 2000 feet from the one I want. Should I just go through title and let them figure out how to write the deed and generate a new APN? Or can I write the new deed with the one track that I’m buying, just leaving the out the other track? Will a county take this?”

Jill DeWit: Why is this so familiar? Did we answer this last week?

Steven Butala: It was actually a topic that came up in a different environment, but it was not on the podcast.

Jill DeWit: Oh, okay. Cool. I’m like, this seems very familiar. Maybe I’ll … well, good I was in our online community and maybe I saw it there too.

Steven Butala: It turns out my answer’s going to be the same.

Jill DeWit: Mine too.

Steven Butala: And I think it’s the same answer.

Jill DeWit: It is. You want to go?

Steven Butala: When you have one APN with two properties in it, or 22 properties, or 222, we’ve seen it all, you are going to convey with writing the deed, or the title will convey, all of them all at the same time. You are buying and selling … if you’re into this from a career standpoint, you want to take a … no one’s done this, you are in the business of buying and selling APNs, not legal descriptions, not land, not houses, APNs. So each number, each assessor’s parcel number, represents whatever the assessor says it is.

Steven Butala: So logically this guy is saying here, “Yeah, there’s two properties. I can clearly see it. I’m looking at the map. They’re not even connected, but it has one APN,” so in the eyes of the assessor, and that matters by the way, what the assessor things, it’s one property. We buy properties like this all the time. So the title is not going to fix it. You’re going to have to go through a land split procedure at the county that is not going to happen overnight by any stretch, so you’re going to technically buy one piece of real estate that’s probably two properties.

Jill DeWit: You could beautifully write out a new deed and put the one APN and call it whatever you want, have it go past the recorder and maybe get to the assessor even, it’s not going to matter. You’re not going to own-

Steven Butala: Yeah, Jill’s right.

Jill DeWit: It’s not going to work.

Steven Butala: The tragedy, I’ll tell you, there’s at least a year delay. When you send something in to the recorder, the assessor probably sees a year later, in some cases, two years, three years later. So and that’s not … when you want to correct it, because you probably sold it three times after that. Not three times, but it’s got three owners past you.

Jill DeWit: I’m glad we’re bringing this up again right now.

Steven Butala: I wouldn’t horse around with this. I would … you know what I would do? I would simply say, “Hey seller,” and say exactly what we said, “I want to buy the property.”

Jill DeWit: “Let’s do it right.”

Steven Butala: “And I’m going to buy both properties under one APN.”

Jill DeWit: Right.

Steven Butala: “And I’ll pay an extra $100.00,” or something. They’ll do it.

Jill DeWit: What I love too is … I’m glad we’re bringing this up. People think that walk out recorded, “I got it back. It’s got a stamp on it, or the sticker in the corner, I’m good to go.” No, not necessarily. They think that that’s it. The recorder is really … it’s like you know the old days when you had to turn in a paper or something and they would do their click-click, like a library book, you turn in your library book and they marked it received or something, I don’t know, or just whatever, when you put a stamp on it, and you think, “Oh, I’m done.” They didn’t notice that however many pages I ripped out or something like that, oh they’ll notice. It will catch up with you.

Steven Butala: The recorder doesn’t review the transaction for accuracy-

Jill DeWit: No.

Steven Butala: At all. They just do what their name says. They just record it.

Jill DeWit: Mm-hmm (affirmative).

Steven Butala: And they shove it in a box, literally, shove it in a box usually below their desk that used to have a case of Coke in it.

Jill DeWit: And then eventually get to the assessor and then they start doing their homework.

Steven Butala: Stamp, stamp, record, bang, and-

Jill DeWit: Have a nice day, here’s-

Steven Butala: Finish that-

Jill DeWit: Your receipt.

Steven Butala: Big piece of cake you started working on.

Jill DeWit: Steven. All right back to the cake. Not to the cake. Moving on.

Steven Butala: Today’s topic, the three stages of success of land investing. This is the meat of the show. We’ve already established that there’s a beginning, a middle and an end everything, just like a marriage. There’s a beginning, a middle and an end-

Jill DeWit: Steven.

Steven Butala: Sometimes it ends in death.

Jill DeWit: There’s not … oh geesh. You’re awful. You are awful. I can’t believe you did that.

Steven Butala: No, it’s just honest.

Jill DeWit: Come on. I hope your marriage ends in death. Actually, for me, I hope it ends in death.

Steven Butala: Oh my gosh, death and marriage, that’s the name of the show right there, an episode.

Jill DeWit: What the heck?

Steven Butala: Marriage and death.

Jill DeWit: Oh, all right. Anyway.

Steven Butala: Enlighten us, Jill.

Jill DeWit: Oh gosh. Okay, you had the beginner, intermediate … okay, so I have a couple of different versions. I have three things I want to share, three stages of three stages. One is okay, the beginning. What does this mean? You’re becoming an investor. This is new to you, you’re getting your feet wet, you want to … at the end of the year, you’re going to be, “I’m an investor. I bought and sold property successfully. I am officially an investor.” Next, now you’re making this your business. That’s kind of the intermediate version here. Now you might be transitioning out of another job, another career, something. This is now taking over your life really, and it’s becoming your business. Then the third level is partnering and/or funding to complete bigger deals.

Steven Butala: Yeah, to execute a massive long term goal.

Jill DeWit: Mm-hmm (affirmative).

Steven Butala: Institutionalizing the whole thing.

Jill DeWit: Exactly.

Steven Butala: It’s hard to argue with those two stages.

Jill DeWit: Thank you.

Steven Butala: I mean my opinion actually would just be slightly different. I would look at it like this, everybody is in some stage, forget about the labels, some stage of this, research. I truly don’t think that you’re listening or watching this show because you’re entertained. I think that you’re doing it because you’re wondering if you should be doing something else with your life, buying and selling land, or you know.

Jill DeWit: Finding another show.

Steven Butala: There’s an education portion, or not the education, but the research … is this for real? A research portion of, “Yeah, I always wondered … my parents made a bunch of money and they sold their house. I always thought to myself-” this is true, my parents made a ton of money on their first house deal. This is back in the 70s and my immediate thought was, when they shared the numbers with me was, “Well why don’t you just go buy all the houses on the block and do that, and then you make way more money doing that than you would at your regular job.”

Jill DeWit: Yeah, what’s to think about, dad?

Steven Butala: And they all laughed at me and looked at me cross-eyed and said … I said that out loud in the back of the car. I remember it. They’re looking at me going, “What the heck?”

Jill DeWit: Isn’t that funny?

Steven Butala: Like, “What are you talking about buy all these houses?”

Jill DeWit: And you’re right.

Steven Butala: Anyway, they dismissed it and I obviously didn’t. That’s the research stage, is you’ve heard these things and these stories. Let me say this, you already know fortunes can be made in real estate. That’s like step zero. Step one is, “All right, I’m going to listen to a podcast and see how other people are doing it, check out the Internet and let’s horse around and Google, listen to some stuff, watch some things on YouTube, see if this for real,” and what they’re going to find very quickly during that stage is that 80% of the people out there who are standing on a stage professing all this crap are wrong. They’re just guru idiots that … they could be talking about how to build a canoe. They might as well be talking about how to build a canoe, because that’s as much as they know about real estate.

Jill DeWit: That’s true.

Steven Butala: Unfortunately, that is the battle we have. We decided a long time ago, Jill and I, to let people find us versus us going out there and trying to find you. So congratulations, you found us. That’s step one, for me. Step two then is, Okay, I’ve got a few deals done. Or I’ve got one deal done, or eight, or nine, or some small number of deals done, and I like it. And I understand that I made a couple thousand bucks per deal. Maybe I hit a triple on one, and made $30,000.00. Maybe I failed that one, but fully realized the potential. So you’re staring at $50,000.00 or $60,000.00 that you made, some number like that, and then stage three is institutionalizing, taking it down that path.

Jill DeWit: That’s great. Do want to hear my … I have two other versions.

Steven Butala: Yeah.

Jill DeWit: Another one is … I wrote these down and I wanted to hide it because I wanted to … because I think one of them is funny. One is, stage one can be land, stage two could be in fill lots, and stage three could be houses.

Steven Butala: Wow, that’s true.

Jill DeWit: Yeah, like that?

Steven Butala: Yeah, I like it.

Jill DeWit: They’re like 1.0, 2.0, 3.0-

Steven Butala: Yeah, you’re right.

Jill DeWit: We should probably call House Academy 3.0, almost.

Steven Butala: Right.

Jill DeWit: So I thought that was good. And then my final version was … this is-

Steven Butala: She’s hiding it from me.

Jill DeWit: I am because it’s so funny-

Steven Butala: She’s hiding her notes from me.

Jill DeWit: Here’s the stages of our life, and this is describing us.

Steven Butala: That’s why you’re excited about doing this show.

Jill DeWit: It’s actually funny. Stage one is, congratulations, you can afford to eat tacos on the floor. Stage two is, congratulations, now you can afford that high end sushi place in San Francisco that you like.

Steven Butala: Oh yeah.

Jill DeWit: You know the one I’m talking about.

Steven Butala: I love that place.

Jill DeWit: Then stage three is, you’re back to eating tacos on the floor like we did today. That’s why I thought of it.

Steven Butala: Jill, that’s brilliant.

Jill DeWit: How did we go from tacos on the floor, to wow, we can eat wherever we want, and now we’re so damn busy again, we’re eating tacos on the floor.

Steven Butala: Yeah. You’re right. Everything just comes full circle.

Jill DeWit: Yep, that’s what’s happening.

Steven Butala: I bought a frying pan recently, with a glass top on it, and it was on clearance. I don’t even remember what it was-

Jill DeWit: I know.

Steven Butala: The whole thing cost $13.00.

Jill DeWit: I remember.

Steven Butala: No, it was like $7.00, and we put a lot of miles on that.

Jill DeWit: Right.

Steven Butala: Our number kid’s like, “What the hell is wrong with you people that-“

Jill DeWit: You’re so excited.

Steven Butala: “You have these sports cars, and all this … we live on the ocean, but a $7.00 frying pan gets you jacked up and happy.”

Jill DeWit: Oh yeah.

Steven Butala: You know, and I tried to explain to him, when you get older, it’s just these little tiny things that just change your life for some reason. I don’t know why.

Jill DeWit: Mm-hmm (affirmative).

Steven Butala: At his age, I’m sure he’s just shaking his head. If somebody told me that when I was 15, I would say, “You guys are idiots.”

Jill DeWit: Yep.

Steven Butala: I’m sure that’s what he’s saying.

Jill DeWit: Totally. That’s funny. I’m trying to think … it is the little things. I’m trying to think what I had recently. I had one that got me all excited too, and I can’t remember what it was now, but it was as simple as finding the awesome white and dark chocolate bark that I love at Costco. That was exciting for me the other day.

Steven Butala: So it’s stuff like that.

Jill DeWit: I bought it, and I bought it to the office. It will not make it to the house. It stays at the office. What do I do? I leave my desk often to go to our kitchen to get a bite of bark.

Steven Butala: You know, if you’re trying to get your-

Jill DeWit: But at least I burned my calories going there.

Steven Butala: You can translate that to real estate deals, like all the stages in a regular real estate deal-

Jill DeWit: Yeah?

Steven Butala: The best stage in any real estate deal is not when you do the mail, it’s, for me, it’s not when you’re scrubbing the data or any of that, although I do have fun doing that. It’s when you open that letter and you get a signed offer because you know when you send a letter out, how you price it-

Jill DeWit: Yeah.

Steven Butala: If somebody signs it and sends it back, it’s A) either a total winner, or B) there’s some other real structural thing like everybody’s dead and somebody just signed it just to poke fun, which almost never happens.

Jill DeWit: Right.

Steven Butala: But it’s that moment where … then you scramble, you get to the computer to check out assets and make sure it’s all cool. Nine times out of 10, for houses, and in fill lots, it works great. Then it’s all … I mean I’ll tell you honestly, but I just shove it … now it goes into a system and I don’t know what happens after that.

Jill DeWit: I know.

Steven Butala: It’s that point of elation of that it’s totally, like literally, literally, getting high, releasing endorphins.

Jill DeWit: I thought you were going to say foreplay.

Steven Butala: I guess that’s getting high too.

Jill DeWit: You came up with something better, like getting high. Thanks.

Steven Butala: Would you rather have foreplay, or get high?

Jill DeWit: What do you think?

Steven Butala: Probably foreplay.

Jill DeWit: Yeah. Yeah, we gotta change this show. People right now are quickly turning down the volume because their kids are asking, “What’s that, daddy?”

Steven Butala: And they’re sitting in the backseat of the car asking the parents stuff like, “What’s foreplay.”

Jill DeWit: That’s awful.

Steven Butala: To that, I say welcome to being a parent. It’s your turn. I’m glad it’s your turn because I’ve had my turn.

Jill DeWit: Right, that’s true.

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, if you go back to 1980 … sorry, if we could go back to 1998, what would we change?

Jill DeWit: And answer your questions posted on our online community at landinvestors.com. It’s free.

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

Jill DeWit: I’m so excited. We are one day closer to what’s coming up. We have a big Black Friday special that involves 2.0. I cannot wait for that to come out, and it’s coming out early in the morning. Did I tell you this?

Steven Butala: No.

Jill DeWit: I asked our team … I want everyone, because it’s for everyone who is a current member or a member that day, with a special right now, gets Land Academy 2.0 free, included with 1.0. And I wanted where they wake up that Friday morning, and they go onto their computers, and it’s there.

Steven Butala: And that’s happening?

Jill DeWit: And that’s happening. I can’t wait.

Steven Butala: You know, Jill and I held a couple of live events in 2018, and that’s where we … specifically at the second intermediate one, we debuted Land Academy 2.0 and we walked through the whole thing, and the spreadsheets that are involved, and the process of buying in fill lots, which is completely different than buying rural vacant land.

Jill DeWit: Right.

Steven Butala: There’s so much more information available in an urban setting than rural ones at the county level and everything else. Everybody loved it.

Jill DeWit: Yep.

Steven Butala: You never know what’s going to happen when you release those things.

Jill DeWit: That’s true.

Steven Butala: Everybody just couldn’t wait-

Jill DeWit: Oh yeah.

Steven Butala: To get the whole program.

Jill DeWit: I’m excited. Please be sure to hit the subscribe button, and stay up to date on our podcast. Like us and comment on what you would like to see in future shows. And if you’re watching us on iTunes, or listening on iTunes, please rate us there.

Steve & Jill: We are Steve and Jill.

Steven Butala: Information.

Jill DeWit: And inspiration.

Steven Butala: To buy undervalued property.

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