How to buy and sell Land with Justin Sliva (LA 866)
How to buy and sell Land with Justin Sliva (LA 866)
Transcript:
Steven Butala: Steve and Jason here this time. Welcome to the Land Academy show, entertaining land investment talk. I’m Steven Jack Butala with super member Justin Sliva, broadcasting from southern, sunny southern California today.
Steven Butala: Today we talk about how to buy and sell land with Justin Sliva. I’ll tell you, if you’re a member and you’ve been with us for a while, we talk about Justin all the time. We’ve decided to promote him within the group from just a guy who gets invited to all of our live events and he’s kind of like a consigliere or he’s like Yoda.
Justin Sliva: I wouldn’t say Yoda. That’s a little bit of a stretch.
Steven Butala: We got him out here to Los Angeles to do a couple of shows with us. He’s gonna be on the member call this week, and basically just picked his brain and see how he does stuff because the truth is, I think he’s better at buying and selling real estate than we might be.
Justin Sliva: Well …
Steven Butala: We’ll see.
Justin Sliva: Oh. I’ll take that-
Steven Butala: We’ll be the judge of that later.
Justin Sliva: Yeah, I’ll take that as a compliment.
Steven Butala: Before we get into that, let’s take a question posted by one of the members on the landinvestors.com online community, aptly enough.
Steven Butala: John S. Says, “Justin, what have you been doing since we last saw you at the live event?”
Justin Sliva: Wow, since the last live event, throwing me off a little bit. First time with ear plugs on. See you out there, make it look so easy. But since the last event, we’ve been really growing the Plum side of our private funding and investment side.
Steven Butala: Yeah, talk about Plum, because I know what Plum is, but talk to me about [crosstalk 00:01:39].
Justin Sliva: Plum, a lot of people think that the name itself is something hidden meaning in that or something. My last name’s Sliva. You can’t spell Sliva. People can’t pronounce it. It actually means Plum.
Steven Butala: Oh, okay.
Justin Sliva: Yeah, it’s actually super simple. Yeah. It’s not that complicated. But what it is is we do some consulting, we do some private funding, we buy some notes, and what we’ve seen is that the need for money to get guys scale up and ladies scale their business up, we’ve been able to do that and make that work for them. We’ve seen some success with some guys that were a little bit nervous about buying some property and they’re hitting home runs right now-
Steven Butala: Awesome.
Justin Sliva: And it’s good to see.
Steven Butala: The question’s actually really covered in that, it’s kind of the meat of the show topic, so let’s get into it.
Justin Sliva: Okay.
Steven Butala: Today’s topic, how to buy and sell land by Justin Sliva. This is the meat of the show.
Steven Butala: Walk us through a … I have two questions. Walk us, number one, through a transaction that you generate yourself from start to finish, please. Then a secondary basis, walk us through a deal where a Land Academy member or somebody from I think other land groups out there bring you a deal.
Justin Sliva: Yeah. First on for me, when I start to do it, it kind of depends on what I’m looking for in the market right then. Whether it’s houses, it’s land, if it’s payments, whatever that kind of works into. Say if I’m wanting to increase our monthly cash flow a little bit, I may say, hey, okay. Let’s go shop a desert area and throw a couple thousand buck properties out there, pick them up, and then put them on terms for 84 months. We run through our automation with our auto draft and things like that, and it just kind of adds to what our monthly is.
Justin Sliva: On the second side, if I’m saying hey, I want to hit some home runs, then I look at kind of have a rule that I want a $1000 to $2000 land anywhere in the country. It doesn’t matter to me. It’s just land. It’s numbers. We go out and we send out a bunch of mail to it, buy those, and as they fill in, they go through pat live. We’ll look at them, parcel fact, get a clear title, get a title company, get title on it, and then get them listed. Try to use MLS, flat listing and we do our land stuff, too.
Justin Sliva: What we’ve found is that some of us make it so difficult on ourself with hey, I’m gonna have seven Instagram accounts, Facebook accounts, because I have a lot of Instagram and Facebook accounts. But that’s kind of just to keep knowing what our land’s doing. But some of the most successful I see that their team is based on they have a deal come in, they have a title person do the deal, they give it to a realtor, hand it off to a realtor, and walk away from it. Realtor calls them when title’s done, they sign their paperwork and get their check and go from there.
Steven Butala: Wow.
Justin Sliva: We’re seeing people uber successful doing that. First year I got a guy that worked with his first year, I think he’s gonna do $300,000 in profit, and he has no Facebook, no Instagram, no buy website, no sell website.
Steven Butala: Amazing.
Justin Sliva: Yeah. Just nuts.
Steven Butala: He did everything we say not to do.
Justin Sliva: Yup.
Steven Butala: And still making money.
Justin Sliva: Still making, but it’s the deal. It’s the art of the deal. How do you get the deal and drive that for yourself?
Steven Butala: One thing you can avoid, in my opinion, under any circumstance, is not sending out mail.
Justin Sliva: Yup.
Steven Butala: You have to mail out blind offer campaigns like a machine.
Justin Sliva: Yup. Exactly.
Steven Butala: To generate that kind of money.
Justin Sliva: No, you’re exactly right, and that’s the thing. He’s figured out how he wants to price his price methodology and does that, and he runs through the deal that way.
Justin Sliva: For myself, we’ve picked up, I think right now we’ve got maybe 20 properties in inventory. A lot of ours we’ll put on Facebook and just hey, investors welcome, and we’ll sell them that day on Facebook.
Steven Butala: That’s great.
Justin Sliva: Just quick to other investors, we mark them up a little bit. But again, at the beginning of the year, we hit a bunch of, I don’t want to call them bunch of home runs, but we hit quite a few, made quite a bit of money, then we just turned it all back into Plum and said hey, we’re gonna put as much money back into this as we can, and help these other guys scale because it’s easier to have oh, 20 or 30 guys looking at property for you than doing it yourself.
Steven Butala: Absolutely.
Justin Sliva: That’s a cool thing about that.
Steven Butala: So, somebody brings you a deal, in the simplest terms they bring you, I don’t know, 40 acre property, it’s got good access, maybe they spent $10,000 on it in northern Arizona. Would you do that deal?
Justin Sliva: What we do is somebody says, “Hey, I got this property under contract.” I actually had one in Arizona yesterday we looked at, and we funded it. It was five acres. It was $6,000 comps out. The closest comp is $75,000 for 18 acres, and it’s actually the next property over.
Steven Butala: Jeez.
Justin Sliva: So you’re like, yeah.
Steven Butala: Wow.
Justin Sliva: We’ll do that deal with you.
Steven Butala: What’s not to do?
Justin Sliva: Normally what we ask for is the county, the APN, what you have it under contract price for, ask that you go to the website, schedule that call, because we’ve had some people that kind of shop, “Hey, will you do this deal?” Then they ghost us and we’re kind of … I don’t want-
Steven Butala: Are they checking to see if it’s a good deal?
Justin Sliva: They’re checking to see if it’s a good deal without having to call you and schedule it with you. You get kind of, come on guys. Let’s be real here. Let’s be adults.
Justin Sliva: But at the same time, we’ll get that information from them. I’ll run through the comps. I’ll usually have it done in about, usually same day but sometimes it’s the next morning depending on what time they get us.
Justin Sliva: Then we’ll green light them. We send an investor agreement over, and then we tell them to get ahold of title.
Steven Butala: What’s your equity percentage in the deal?
Justin Sliva: We typically, right now we’re doing 50%.
Steven Butala: You fund a $10,000 deal, it’s worth $30,000. You fund the $10,000, you take 10, the other person-
Justin Sliva: Yeah. We take the money we funded back first, and then we split the HUD. What the HUD says, the HUD in says $10,100, we’ll pull our 10 one first, and then the difference between the 10 one and the closing, the settlement statement on the last HUD when we sell. Because we run everything through titles, so-
Steven Butala: Every single thing?
Justin Sliva: Yeah.
Steven Butala: Okay. I think that’s the right thing to do, too.
Justin Sliva: Yeah. It’s a little bit more cumbersome, but it keeps honest people honest.
Steven Butala: We do the same thing, only for SFRs now.
Justin Sliva: Okay.
Steven Butala: All the land we still fund ourselves, 100% of it. Even the expensive info lots. We do it out of HUD, too. Out of the HUD one.
Justin Sliva: Yup.
Steven Butala: We split, and our investors we don’t pay, I think a lot like you. The typical hard money lending scenario is you take a percentage the way a real estate agent would. Percentage of what they lend. It kind of leaves you hanging.
Justin Sliva: Yup.
Steven Butala: You’re taking a risk. It sounds like a lot. I’m taking 50% of the deal, but really, you’re taking the risk with them.
Justin Sliva: Yeah, and they-
Steven Butala: If it doesn’t work, half of nothing is nothing.
Justin Sliva: Yup, and that’s exactly right. We take the risk and we’re along the line with you, and that’s what we tell people. We’re a partner in this. We’ll double check it with you. We’re gonna check the comp. We gotta do everything, shake out all the risk, and then help you if you’re not getting traction, we chart moving into some of our co-ops that we’re in with land and then get them listed on there.
Steven Butala: Shake out all the risk.
Justin Sliva: Yeah.
Steven Butala: I’m gonna use that.
Justin Sliva: Shake-
Steven Butala: That’s gonna be a title next week.
Justin Sliva: Okay.
Steven Butala: That’s awesome, man. All right. What other, I’m just gonna ask you a bunch of questions here.
Justin Sliva: Okay.
Steven Butala: Tell us your story.
Justin Sliva: We started in ’16. We bought it, it was the September special y’all had, you got a free piece of property. We bought it then. It was for my wife, and as she started to-
Steven Butala: The Land Academy.
Justin Sliva: The Land Academy, yeah. I was just gonna fund it for her. I had a good job, made great money, she wanted something to do that she didn’t have to go teach part-time with the kids school, so we got that going. We took that piece of property, sold it on eBay the first day we got the deed and we put the deed in the mail, put it on eBay. Then we went to the CUSO site, bought four pieces of property there as the video was going through, did that, and so that was about Christmas of that year.
Justin Sliva: In January 29th of ’17, we sent our first big mailer out, and I think it’s funny that you remember the dates of those days that you do that.
Steven Butala: Yeah, and you remember the first deal.
Justin Sliva: Yup. We bought-
Steven Butala: You always remember the first deal.
Justin Sliva: Yeah, she was a lady out of New England. Her husband had died. It was in Texas, a little property down there that was 20 acres. She owed $1000 in back taxes, and we gave her $1000 to get rid of the property and we’d take care of the back taxes for her.
Steven Butala: Wow. What’d you sell it for?
Justin Sliva: We sold that for $4,800.
Steven Butala: Wow. That’s a perfect first deal to just get it all out of your system.
Justin Sliva: But we had 21 of those like that, that were between five and 40 acres on our first one, and we spent-
Steven Butala: Oh my God.
Justin Sliva: Yeah. On our first mailer, so we ended up making $70,000 in that county.
Steven Butala: Was she convinced?
Justin Sliva: No, she hated it. She gave me the business. That’s why I’m here and she’s not.
Steven Butala: What did she not like about it?
Justin Sliva: She didn’t like dealing with the people. We didn’t have pat live. We were answering live, and so I was driving home from work, it was a 35 minute drive home, and I’m on the phone calling these people back with a notepad after she’s giving me all the dope on the properties. Kind of went through there. It was interesting to say the least.
Steven Butala: Were you hooked?
Justin Sliva: Yeah. Oh, yeah. I was like, this is a million dollar company.
Steven Butala: That’s what happened to me.
Justin Sliva: Yeah. It’s a million dollar company. You can see the scalability extremely quickly, but you have to find what you like about it. That was one of the big things for me is I saw it, and I was like, okay, well, it works on $100 an acre property, how do I move it up to $1000 an acre property?
Steven Butala: Add a zero.
Justin Sliva: Yup. Add a zero. We’ve had that conversation several times, and that’s an important thing that people don’t realize is, yeah, it’s great to do 500, 1000. I talked to a guy not too long ago and he’s done a couple hundred deals and he said, “Man, I still feel like I’m spinning my wheels. I need to get onto that next thing.”
Justin Sliva: I’m like, “What properties are you buying that you’re adding a zero?” Because we can all do a bunch of properties where we’re paying $400 and selling them for $1200. It’s great ROI, but do you ever get ahead when you go to dinner on your wife, you take her on vacation, you’re spending that money faster than you can turn it back into your business.
Steven Butala: There’s no replacement for days on markets. There’s this mythological concept out there that more expensive property takes longer to sell. That’s just not the case. You can hedge that off before you send a mail by researching days on market.
Justin Sliva: Yeah. Yeah, and that’s one of the things that we’re starting to work on a little bit more. We’re starting to get a little bit more into the data side on the back end of the selling now as we start to get into the bigger properties and looking at what they do, but we’re just zooming in on what the comps are and what we’re seeing. We’re seeing that it’s a lot nicer to have a $20,000 profit property once a month than selling one property a month and then doing $500 profit. You’re like, oh, yeah. Double my money, but yeah, it was a $500 profit on a $500 property.
Steven Butala: I think rule vacant land deals like under $1500, their real use for them this day and age, Jill and I just talked about it on yesterday’s show, the real use for those this day and age is to get you without a lot of money risk comfortable with the process.
Justin Sliva: Exactly.
Steven Butala: The thing that I brought up yesterday is that’s great. Why are you now, Steve, why are you now talking about info lots? Are you just eking this out? Why didn’t you talk about info lots two years ago on the show?
Steven Butala: The fact is we didn’t have the data then.
Justin Sliva: Yup.
Steven Butala: We didn’t have data like RealQuest, not RealQuest-
Justin Sliva: The Redfin data.
Steven Butala: [crosstalk 00:12:03] and market data, prevalent free market data like Redfin and realtor.com provide. It opened up that whole market for us, and now it’s opening up the SFR market like I’ve never seen it.
Justin Sliva: Yeah.
Steven Butala: Info lots are, typically info lot is buy for 15 or 20 and sell it for 30 to 50.
Justin Sliva: Yeah. That’s a machine for us. The Plum side, that doesn’t necessarily work for my business model there because we’re putting up $20,000 and it’s not necessarily a machine. You need bridge funding or something like that, so get your buyers list built for that. For us, our bread and butter’s that $10,000 property that’s 20 acres in wherever America that you’re gonna sell for $25,000, $30,000 and we’re there for you and you don’t need us then for the second one. We want you to graduate from that. We don’t necessarily want you to keep calling me every time. I don’t mind, but-
Steven Butala: I do.
Justin Sliva: Yeah. Yeah.
Steven Butala: Justin and I are actually developing software right now where you can put a deal in, and we’re gonna let you know really quickly whether or not as a group we can fund it, and get you on your way without a lot of talking.
Justin Sliva: Yeah.
Steven Butala: It’s not that we don’t want to talk to you. It’s just inefficient.
Justin Sliva: Automation. Automation. Leverage technology.
Steven Butala: Well, you’ve done it again. You’ve spent another 15 minutes or so listening to the Land Academy show. Join Justin and I tomorrow where we discuss mastering transaction workflow with Justin Sliva, and we’ll answer your questions as we always do on landinvestors.com.
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