Holidays, Good or Bad for Real Estate Business (LA 879)

Holidays, Good or Bad for Real Estate Business (LA 879)


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, “Are the holidays good or bad for the real estate business?” I have to tell you, for 10 years, Jill and I have had a differing opinion on this, so this time we’re going to actually go look back at the data …

Jill DeWit:                            Okay.

Steven Butala:                   … look back at what’s happened and probably not settle it at all. Before we get into it, let’s take a question posted by one of our members on online community, it’s free.

Jill DeWit:                            Greg asks, “Hi, folks. Say I want to set up an LLC before I start. This has multiple reasons. I’m determined to get into this business …”

Steven Butala:                   Excellent.

Jill DeWit:                            “… so being a non-resident, I really want to have my LLC in place first. One question for sure is,” excuse me, “one question is for sure in which state to found.” I’m sorry. I don’t understand. “From what I’ve read so far,” oh, what state to found your LLC, got it. “From what I’ve read so far, Arizona and Nevada are good ones, but why? I also read that you have to register for a foreign LLC for every state you’re doing business with. Or, another recommendation I got was, just do an LLC in the state you want to work with. But if I’m targeting multiple states, does this mean that I have to found or register a foreign LLC in every state. Maybe someone can clarify this a little, since this for me has been a bit of a blocker. Thanks.”

Steven Butala:                   I’ll try to be … this is not typically … well, I’ll try to answer these questions directly. The reason that you form an LLC is for legal reasons but there’s tax implications too and then there’s, let’s call them, secrecy issues on top of it. Let’s tackle them one by one. Number one, an LLC in any state is going to serve the legal function for you so that is to say if a real estate deal goes bad and the property’s in the name of the LLC, the person who is upset about whatever on either side of the transaction sues the LLC, they don’t sue you personally as the owner of the property. That’s good and it doesn’t matter what state that’s in.

Number two, tax reasons. The tax implications of where you form an LLC generally don’t matter. It’s where you live that you have to file a state tax return and if you’ve got it structured the way that Jill and I do, it all rolls up into one anyway. So, where you live and where your offices are and all that, that’s where you generally … in general, these are all general … don’t take my word for it, this is just my opinion.

Then, the third reason is, and that’s where this state to state to state issue consistently comes up is why … can someone track me down if I own an LLC? If I own Large Land Business in Nevada, it’s a lot harder to find the fact that Steve Butala owns that LLC in Nevada and in Delaware. There are state laws that govern who … what’s public information and what’s not. In Arizona, it’s a 10 second Google search to find out who owns what. Jill and I we don’t hide. All of our LLCs are in Arizona, with exception of a couple so that’s what this LLC business is all about. That’s said, Jill’s going to agree with me here, we’ve already spent too much time on this topic in my opinion. I don’t mean to pick on the person that asked the question, just get one done.

If you are going to get into this business and it sounds like you are, you’re going to have many, many LLCs. Jill and I file for them all the time. You don’t have to make this one perfect. Go get an Arizona LLC, here’s my direct recommendation, go get an Arizona LLC on the internet and if it takes you 15 minutes, something’s really wrong. You’ll get all the paperwork back, sign the stuff, you now have an LLC that you put property in and your done. Check. Next, get a phone number. Check. Next, all the stuff to get … we talk about this in 2.0.

Jill DeWit:                            Mm-hmm (affirmative).

Steven Butala:                   Takes maybe 15, not 15 minutes. Maybe two hours on a weekday to get every single thing done to get you started. So, it’s a good question and it comes up a lot, but hopefully I answered it directly.

Jill DeWit:                            Mm-hmm (affirmative). I think you did.

Steven Butala:                   Do you have anything?

Jill DeWit:                            Nope.

Steven Butala:                   Good for you, how lucky are you? You get the next question tomorrow.

Jill DeWit:                            Thanks.

Steven Butala:                   Today’s topic, are the holidays good or bad for the real estate business? This is the meat of the show. What does this mean to you, Jill? ‘Cause I know you and I have differing opinions on this.

Jill DeWit:                            Some people think that being in real estate means you close up for the holidays and you just take December off and just plan on nothing happening. I never even try for it, I never plan for it and every year I’m pleasantly surprised because we have properties bought, we have properties sold. Our business does not shut down for the holidays. So, that’s my point. Seriously. You used to have that mindset, please, let’s back up and say, “Why did you feel the way you did?”

Steven Butala:                   Well, because my roots are in commercial real estate.

Jill DeWit:                            Okay.

Steven Butala:                   After that, professional accounting and consulting. All through there are undertones of acquisitions, like being a vice president of acquisitions. I was always in an acquisition capacity in those things and it absolutely shuts down. I mean, it shuts down from December 15th to the point where it’s like, “You know what? I think this might be over.”

Jill DeWit:                            Does it shut down or do people shut it down?

Steven Butala:                   Professional people generally stop working at around December 15th and start working again around January 5th.

Jill DeWit:                            Do you do that?

Steven Butala:                   Heck, no.

Jill DeWit:                            But you’re a professional.

Steven Butala:                   Well, I also own my own company and have a bunch of people working for me.

Jill DeWit:                            I know, that’s what I’m saying.

Steven Butala:                   I mean people who have vice president jobs who work for someone else, executive level positions. They’re just done.

Jill DeWit:                            Right. I don’t want to get into an argument on the air but this is what I’m saying, I’m not working with them. I’m dealing with buyers and sellers and the people I’m dealing with, they have a lot of time off between the holidays. Maybe that’s why I feel the way I do, ’cause you know what? There are people trolling our website on December 26th because presents are all done and the family’s driving them nuts and they’re looking for properties or something. They’re online and they’re actually checking out buying stuff in December.

Steven Butala:                   All right. You can’t argue with that.

Jill DeWit:                            Well, it’s funny, I remember my mom even at way back when real estate days, she would say too that was … you could write an offer on Christmas Eve. Things like that do happen. It’s not crazy. When I think about it, maybe it is slower and maybe there’s less people but for those of us who show up, fine, I’m going to get those sales.

Steven Butala:                   I think for the Land Academy business, our Land Academy business, I think that December’s usually a good month. I think for land sales, I think it’s historically slightly down. I guess to answer the question, are holidays good or bad for the real estate business? I think it depends on what you’re doing. If you’re buying info lots, and selling them to a builder, which is what we’ve been doing lately, I’m not so sure this is the best time to do that.

Jill DeWit:                            That’s fair.

Steven Butala:                   If you’re buying and selling or leasing office space, I can tell you from experience in any commercial capacity, if you’re acquisitions for apartment buildings or any of that, it almost is a dead stop or dead slow.

Jill DeWit:                            That’s fair. Right.

Steven Butala:                   The education business, the Land Academy part, it’s good.

Jill DeWit:                            Mm-hmm (affirmative). Thank you. How about just buying and selling land?

Steven Butala:                   I think it’s a great time to buy land, but I think sales are slower. That’s just my opinion.

Jill DeWit:                            Got it. Either way, still it’s worth showing up, isn’t it?

Steven Butala:                   I think it’s a great time to catch up on … what I do at the end of the year, I’m into it right now, I think it’s December 24 today, is just planning. I take the down time to plan where I want to be in December in 2019.

Jill DeWit:                            That’s good.

Steven Butala:                   Schedule it all out. Scheduling.

Jill DeWit:                            That’s good.

Steven Butala:                   That’s actually another show this week, I think.

Jill DeWit:                            What about the chances of finding another home run by the end of the year because someone needs to get some property out of their life by the end of the year?

Steven Butala:                   You know what I’ve noticed over the years, I’m glad you bring that up, there used to be just this mad rush at the end of December for tax planning purposes to do stuff. I just don’t see people running around like that anymore.

Jill DeWit:                            Okay.

Steven Butala:                   Maybe I travel in different circles? I don’t know.

Jill DeWit:                            Okay. That’s partially where I’m coming from too ’cause I’ve had those experiences so gosh, I’m ready for a phone call on December 28th going, “If we can get this completed by the 31st …”

Steven Butala:                   From a seller?

Jill DeWit:                            Uh-huh. “I’ll give you this and this and this ’cause I got to get them off my books.”

Steven Butala:                   Yeah, I guess you know I understand your point. We’re both … you come from a sales background, I come from an accounting background and those are both very fiscal, decisions are made based on the 29th of the month kind of thing.

Jill DeWit:                            Mm-hmm (affirmative), exactly.

Steven Butala:                   So, I guess it’s all what you make of it.

Jill DeWit:                            Mm-hmm (affirmative). So, we didn’t really answer the question at all, did we?

Steven Butala:                   Well, I think we surely did. If you lease office space and that’s your thing, it’s dead slow.

Jill DeWit:                            Right.

Steven Butala:                   If you buy apartment buildings, dead slow.

Jill DeWit:                            Right. How about houses? What do you think about that in general? I think honestly, I think if I was a general real estate agent buying and selling houses, I would venture to guess that the holidays, maybe not the right time but people are moving at that time. Seems like summer time or when the kids are … I think of school kids school schedules. People have time off to look at stuff around the holidays.

Steven Butala:                   That’s the thing. Researching and buying and selling houses is my hobby. It’s a sport for me the way that going to a movie is.

Jill DeWit:                            Right.

Steven Butala:                   Christmas day is the biggest movie going day ever in the whole season, isn’t it? Christmas or thanksgiving?

Jill DeWit:                            Something like that, yeah.

Steven Butala:                   When I have down time, I’m constantly looking for new markets to send mail in. But that’s me. Like we just said, it’s what you make it. I think the regular consumer probably thinks that moving and buying a house is a huge chore.

Jill DeWit:                            It’s true.

Steven Butala:                   It’s not something that they want to do on their day off.

Jill DeWit:                            Yeah.

Steven Butala:                   So, I don’t know. I should research this. Our sales numbers have not … I looked back on it, our land sales numbers have not materially been different in December. In fact, our lowest sales numbers are in the deep summer.

Jill DeWit:                            Is that funny? That’s where I feel it. I feel that’s what’s so true. I feel that in the summertime when the kids are off school and everyone’s taking vacations like July and August …

Steven Butala:                   Yeah, July and August.

Jill DeWit:                            … are rough months for us in a lot of areas of our business. People are just not thinking about work, they’re just having fun.

Steven Butala:                   Right. Right.

Jill DeWit:                            It’s interesting. I think maybe that’s part of it in December, people don’t usually have months off at a time. They only have days or weeks off.

Steven Butala:                   Yeah.

Jill DeWit:                            It’s not as much time.

Steven Butala:                   So, I guess what we’re both saying is, and for the group of people that listen to this show regularly, don’t stop.

Jill DeWit:                            Yeah.

Steven Butala:                   Do not stop. Don’t stop sending mail out for sure ’cause if you send a mailer out now, it’s going to hit in mid-January which is great. That’s when I really think … you know what? Send mail out now …

Jill DeWit:                            That’s what I think.

Steven Butala:                   … because in the beginning of January, everybody’s planning and thinking about stuff and they want to get rid of that property at that point.

Jill DeWit:                            Making some big changes.

Steven Butala:                   Yeah.

Jill DeWit:                            Maybe they’re going to buy their retirement property or whatever in January.

Steven Butala:                   Yeah, or maybe they met with their family over the holidays and …

Jill DeWit:                            They want to move.

Steven Butala:                   … they want to sell all their stuff.

Jill DeWit:                            They want to really go off the grid. They want to hide from their family now.

Steven Butala:                   Well, you’ve done it again, spent another- go ahead.

Jill DeWit:                            No, [inaudible].

Steven Butala:                   You’ve spent another 15 minutes or so listening to the Land Academy show. Join us next time for this topic. You must be dedicated if you’re listening on Christmas day.

Jill DeWit:                            We answer your question posted on our online community,, it’s free.

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

Jill DeWit:                            What I was going to say is one thing I’ve learned here is just to never assume.

Steven Butala:                   Yep.

Jill DeWit:                            That’s really the point to make here over the holidays. If you think you can just close up shop, nothing’s going to happen, turn off your phone and go to voicemail, you might miss something good. Never assume that nothing good’s going to come of it. Just still be available and around and in your business.

Steven Butala:                   You know, you had Joe Martin, one of our members who just quit his job, a very, very good job, on your live show …

Jill DeWit:                            Last week.

Steven Butala:                   … on yeah, just recently.

Jill DeWit:                            On Wednesday.

Steven Butala:                   You had him on your, I want to say, is it on YouTube yet?

Jill DeWit:                            Yeah, it’s on YouTube by now, yes, it’s on YouTube now.

Steven Butala:                   You had some … people typed in questions and what the underlying theme was, what is it? ‘Cause you’re obviously killing it. He’s making 100000 dollars … not average, but he has made in his [crosstalk].

Jill DeWit:                            On a transaction.

Steven Butala:                   Per transaction so, the underlying question was why and how, what makes you so different? What I heard him say was, “I just never gave myself any other option.”

Jill DeWit:                            Yeah.

Steven Butala:                   I get up at 5:00 in the morning until it just happened.

Jill DeWit:                            Exactly.

Steven Butala:                   Did you hear anything else? What do you think was so … I wonder what he’s doing this holiday season, is he sitting around? I doubt it.

Jill DeWit:                            Last I heard he was renting a house somewhere and going to be on a balmy beach relaxing and still working on his business, but from a very great location since he doesn’t have to show up anywhere anymore.

Steven Butala:                   I see.

Jill DeWit:                            That was the last what I heard. I think you’re right, I think he just did it and what was great, he said a couple times, “Yeah, I had mailers that failed. So what? I fixed it, I moved on.”

Steven Butala:                   Yeah.

Jill DeWit:                            I had spent some time on it, I figured it out. We all agree too, and it’s still a process ’cause once you figure out one county, now you’re in another county and there’s some nuances there. So, you’re always learning and tweaking but he also said too, he’s finally got himself in a position where he can now do the stuff he’s good at and he’s really enjoying that. He’s building a little team.

Steven Butala:                   Right.

Jill DeWit:                            That’s great.

Steven Butala:                   Man, I know that feeling.

Jill DeWit:                            Exactly.

Steven Butala:                   Man, once you get over that hump where you don’t have to do the deed yourself and some other that just have one assistant, I remember that first assistant that I hired. It was a life altering two weeks where all the stuff that I was doing I could just hand to her and tell her how to do it and it was just the greatest thing ever. This was back in, geez, 1999 probably.

Jill DeWit:                            That’s good. Hey, thank you for watching and listening and please wherever you are, please rate us there and be sure and post your questions on our online community at, it’s free.

Steven Butala:                   We are Steve and Jill. Information.

Jill DeWit:                            And inspiration.

Steven Butala:                   To buy undervalued property.

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