Why Playing at Your Level is Imperative (LA 863)

Why Playing at Your Level is Imperative (LA 863)

Transcript:

Speaker 1:           Steven and Jill here.

Speaker 2:           Hi there.

Speaker 1:           Welcome to the Land academy show, entertaining land investment talk. I’m Steven Jack Butala.

Speaker 2:           And I’m Jill DeWit broadcasting from the sunny southern California.

Speaker 1:           Today Jill and I are talking about why playing at your level is imperative.

Speaker 2:           Steven do you always play at your level?

Speaker 1:           Yeah, actually I probably do. I try to play slightly above my current level.

Speaker 2:           I think that’s the best place to be.

Speaker 1:           I mean the best analogy I can use, is imagine if you just decided yesterday you wanted to start playing basketball and you’re 12 years old, and you got thrown into the MBA.

Speaker 2:           Or even the varsity team.

Speaker 1:           Or even with whatever. So you’re never gonna play basketball again. But you might a Michael Jordan waiting to happen.

Speaker 2:           That’s not gonna do you any good.

Speaker 1:           So it’s the same thing with this. You don’t even wanna … and if you’re an extremely good born basketball player, and you’re gonna have to play kindergarten level basketball you’re never gonna do it again either.

Speaker 2:           Yeah talk about a quick way to get frustrated, and give up and think this sucks, and not for me I’m out.

Speaker 1:           Before we get into the topic, let’s take a question posted by one of our members. That may have been the best part of this show and it’s just over. Like, click, now I got it, thanks.

Speaker 2:           I was gonna say, this is a good prelude to My Land academy light too by the way.

Speaker 1:           Took a question by, posted by one of our members on the landinvestors.com online community and it’s free. And as you’re listening please drop your questions in the comments section below.

Speaker 2:           Or drop your comments in the comment section below like you guys, just kidding. Mark asked, “I know you say you need ten deals to feel comfortable. I felt comfortable at two.

Speaker 1:           Which is perfect for this topic.

Speaker 2:           It is. So now I’m 15 deals in. How do I know I’m ready for info lots or houses? Am i ready? How do you think? I think he is.

Speaker 1:           Well just by the fact that you’ve got that confidence and you do have some deals under your belt you’re way ahead of the curve so. You’re ready. That’s how you know. Or it’s like having a kid, you’re just never ready you just do it, and you just figure it out as you go.

Speaker 2:           Right I think for if you really wanna have a checklist, A have you made a profit on your properties. You figured that part out check. Are you understanding all the deeds and all the transfers and everything like that. Yeah. Check. Does it feel right in you? Check. You wanna be, you know what, this is perfect. You wanna be a little bit uncomfortable. You don’t wanna stay at your level until you’re complacent and bored. Then you’ll burn out. You wanna push yourself a little bit. And I think that’s where Mark is. And I think, I’m sure he’s ready. And I’m sure Mark has 2.0 and he’s probably watched it all this last weekend.

Speaker 1:           Yeah, he sounds like a … Do you know who this is?

Speaker 2:           No.

Speaker 1:           He sounds like a go getter. He just can’t get enough, and it can’t be fast enough. I mean that’s kinda how I am too. I’ve always been like that.

Speaker 2:           That’s true.

Speaker 1:           I think the most … I went into a convenience store recently, and the guy behind the counter was clearly the guy that owned the place, and he was happy and smiling and talking to the customers and ringing people up. And they loved him, and he loved them and that … I can’t imagine him buying and selling real estate. I think that he loves people. It’s always baffled me when a business is based on the people walking through the door. I wonder how many people are gonna walk through the door today. I really don’t have any control over it.

Speaker 2:           I think you do.

Speaker 1:           Six people might walk through my door, and buy a diet coke. Or 600 people might walk through the door and buy milk, and we’re gonna run out, and on and on and on. There’s this constant. There’s so much risk. You just don’t know what’s gonna happen. With our business, if I send 3000 letters out, to a well placed mailing campaign to a zip code that I picked out, for info lots or houses, I know exactly what’s gonna happen and when it’s gonna happen.

Speaker 2:           Exactly. Yep.

Speaker 1:           If I send 6000 out, I’m gonna buy two houses. If I send 6000 mail letters out to my info lots, I’m gonna buy six properties. There’s a slight variable on how fast I’m gonna sell, but I know I’m gonna sell them. And I can almost tell you exactly how much I’m gonna sell them for, it’s just the time. There’s a little bit of a time variable. And I didn’t spend any money.

Speaker 2:           I agree.

Speaker 1:           I spend just money on mail.

Speaker 2:           Exactly.

Speaker 1:           So it’s just … this is either sings to or it’s just like I don’t think that I can really say, “It doesn’t work.” What I hear people saying is like this guy who own a convenience store. I don’t wanna do that. That seems like a lot of work or I could just stand behind this cash register.

Speaker 2:           I hear you. It’s –

Speaker 1:           So I think the person who asked this question is not one of those people. I think he’s like, ‘yeah I wanna, let’s do this.”

Speaker 2:           Well along your lines, it’s kinda like I’m not gonna spell it out who it is. But there’s a relative of mine let’s just say.

Speaker 1:           Same gender, same last name.

Speaker 2:           Oh come on.

Speaker 1:           Oh sorry, I have to cut that out.

Speaker 2:           Nevermind I’ll share it later. You’re good.

Speaker 1:           I’ll cut it out.

Speaker 2:           No you’re good. Anyway it was just a funny thing that someone said about making different choices in life, and ask … I’ll cover more here in this next section.

Speaker 1:           Today’s topic, ‘Why playing at your level is imperative”. This is the meat of the show.

Speaker 2:           Why is this imperative?

Speaker 1:           Well I think the basketball analogy spoke to it all, and I think this whole week the theme has been I don’t know what the exact theme was but it’s just –

Speaker 2:           Was there a theme?

Speaker 1:           We are bifurcating, and trifurcating the Land Academy, slash soon to be House Academy Group. And it’s becoming more and more apparent to Jill and I, and we didn’t plan for this, that the things that brand new people need are very different than intermediate and advanced people need. And all are super important. No one gets left behind here.

Speaker 2:           Right, and you know what’s funny, when I say need, we all need the same access to the same tools, and cheap mail, and getting data and all that stuff, but we’re using it in different ways. And we need different people to talk to, and build our business. I was just thinking about at the second event, the second live event, we had a big discussion about heading zero, to what you’re doing. And some people are like oh, God that makes sense.

Speaker 1:           Chasing zero.

Speaker 2:           No, no not chasing zero, adding a zero. So instead of doing ten thousand dollar properties, do a hundred thousand dollar properties. Or maybe you’re doing 1000 dollar properties doing 10 thousand dollar properties. Adding a zero to the end of what you’re buying and flipping and that kind of thing, and it’s funny because at the intermediate event, people are like oh you know, most of them are like I get it, that makes so much sense. And they are there. The beginner event, it’s not … it’s a little bit scary, it’s a little bit daunting. They just wanna do more of 1000 dollar events, not just add zero. Does that make sense?

Speaker 1:           Yeah, it’s makes sense, it’s actually brilliant. And I wrote it down and I’ll do a whole thing on it. Adding a zero is, that’s why we’re all here. I think that’s what this shows about. Start with thousand dollar properties. It would be crazy to start with ten or 100 thousand dollar properties.

Speaker 2:           Flip until you’re bored.

Speaker 1:           I understand everyone wants to get there faster, but buying and selling a few hundred thousand dollar properties, and understanding the mechanics of it, and what it takes.

Speaker 2:           You mean thousand dollar properties.

Speaker 1:           Yes, sorry, thousand dollar properties.

Speaker 2:           N then

Speaker 1:           And then adding a zero to do like an info lot. So rural vacant land, you can easily buy properties for a thousand bucks, sell them for two thousand. Info lots, easily ten, fifteen thousand bucks, sell them 20, 25, all day long. And at the 100 thousand dollar level, you’re probably looking at, you’re starting to get to the ranch level, even though most of them cost a little bit more than that, but you could certainly buy houses for 100 thousand dollars too, Jill and I have multiple houses under contract right now in that range that will sell for 125 to 150. So adding a zero is –

Speaker 2:           It’s easy.

Speaker 1:           This is an easy way for us.

Speaker 2:           That’s a great part … that’s how Ill just define the group, are you adding a zero? When you’re ready, adding a zero doesn’t scare you, now you’re ready for the next level, and that’s … so playing at your level, stay at a thousand dollars for a little bit to get comfortable if that’s what you’re working with. You know there’s some people that come to us, that are still newbies, but to them 10 thousand dollars of properties no big deal. I’m like fine, still flip a bunch of 10 thousand dollar properties, figure this all out a little bit. Make sure it’s right for you, then go on. Now do 100 thousand dollar and then go up.

Speaker 1:           Into a million.

Speaker 2:           And then we’re at this next big thing. I know what’s coming. I know that you’re gonna come up with some property, and it’s gonna be some astronomical amount, and it’s gonna be so valuable, even at that price that someone’s gonna throw 500 thousand dollars at it, and just do the whole deal. And not leave room for anybody else, and that’s OK.

Speaker 1:           Buying property in southern California as so far as for a million, like between 900 thousand, and a million one, and selling them for 1.2 to 1.3 wholesaling, in their current condition. It’s like drinking water. So it probably seems like a lot but we’re doing those deals too. And it’s not hard to make a million dollars a month, when you do five or six of those deals.

Speaker 2:           Exactly.

Speaker 1:           At all. And it’s the same amount of work.

Speaker 2:           Isn’t that great. Think about that.

Speaker 1:           Exactly, the same amount of work.

Speaker 2:           You’re level doing five deals per month, and you make 200 thousand dollars a deal. I’m good with that.

Speaker 1:           Yeah, and I think that it won’t be long before those numbers … if the days on market support those quick flips like that, and I’m not sure they do it after that level, I think now you’re getting into a luxury home, that for any market that’s getting expensive, so it’s gonna take longer. But the sweet spot for us right now is 700 to 1.1. making one to 200 thousand bucks on it.

Speaker 2:           That’s what I like.

Speaker 1:           It’s hard to have a talk show about that, because a lot of people don’t believe that goes on. And it’s hard, and it’s same as the MBA example at the beginning of the show. I think to bring somebody in who’s brand new, and really, really intelligent and eager, to say look we can do this right now, I think that’s scary. You have to take step by step by step, the scariest part about doing a million dollar deal is raising the capital. It’s not the deal itself. The deal itself, you analyze a million dollar FSR wholesale flip just like you do a rural vacant land property for a thousand. And then they should sell in about the same amount of time. The buyer’s completely different, but you gotta raise some capital. That’s what House academy is really all about is raising capital.

Speaker 2:           But you know, I think it’s only scary in the beginning. Once you got that person, once you have that relationship and you have those people, like over that, it’s not a big deal. I mean we’re at the point now where they know us. They know our comfort level, which is actually, we’re a little bit overly cautious sometimes, and I’m glad about that. We turn away deals all the time.

Speaker 1:           We’re way conservative.

Speaker 2:           By the time, and I haven’t talked about this for a while, but that’s one of the great things about you Steven, is you really do your homework, so by the time it gets to me, I’m like where do I sign. I don’t really care. What do you wanna do now? Great. Cause I know you’ve run different scenarios on it. It’s gonna work, whatever it is. That’s great. Well that’s how our investors. I know that’s how our investors feel. By the time it gets to them, and like whatever, where do I wire the money. ‘Cause we all know, you’ve proven it, and that’s just who you are too in a very good way.

Speaker 1:           Yeah, I’ve passed on multiple deals in the last two months that are on main roads, like really busy traffic roads. For some reason, it just doesn’t. And I’ve seen what happened to those assets, ’cause they’re close to where we are. And they get flipped effectively.

Speaker 2:           I know, it’s still OK, you’ll never hurt my feelings for … break my heart, hurt my feelings, became break my feelings. You’ll never do either of those, or all three combined. So anyway by doing too much do due diligence, or being a little cautious, there’s a sweet spot and you got it. I’m trying to compliment you.

Speaker 1:           I know and I take it that way. I actually don’t know any other way. I’ve always been like that. Just a little bit, I mean really aggressive, but just err on the side of caution when it comes to deals that you do. Super aggressive in the number of mailing units that you send out, aggressive on your pricing, but just pick and choose exactly which deal.

Speaker 2:           Cause your time.

Speaker 1:           In the beginning it’s run to the bank.

Speaker 2:           Yeah, our times worth a lot now, I think that a lot of it. It comes down to I’m only picking the best ones cause I don’t wanna waste my time on this silly ones. Thank you.

Speaker 1:           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 another interesting episode.

Speaker 2:           And we answer your questions, post it on our online community landinvestors.com. It’s free.

Speaker 1:           You are not alone in your real estate ambition. Man you are onto something.

Speaker 2:           Oh you like that?

Speaker 1:           With the adding the zero.

Speaker 2:           Thank you.

Speaker 1:           I mean I think it’s such an easy explanation to say in the beginning, it’s a thousand, intermediate it’s 10 thousand.

Speaker 2:           Advanced it’s 100 thousand. Thank you, I’m glad that you were writing a note of something positive I said, not something like you have lipstick on your teeth.

Speaker 1:           Or your mustache is showing again. I don’t have a mustache.

Speaker 2:           You’re so silly.

Speaker 1:           Just joking. I’m teasing you. No, no we can’t end it.

Speaker 2:           Well why can’t you. I don’t remember what to say.

Speaker 1:           The kids need to us kissing in the kitchen. OK well they got that thank you. Please be sure and hit the subscribe button to 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 listening on iTunes please rate us there.

Speaker 1:           We are Steve and Jill.

Speaker 2:           We are Steve and Jill.

Speaker 1:           Information

Speaker 2:           And inspiration.

Speaker 1:           To buy undervalued property.

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