Land Investing is Not Sexy but Money Sure is (LA 892)

Land Investing is Not Sexy but Money Sure is (LA 892)

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 how land investing is not really that sexy, but making money sure is.

Jill DeWit:                            This is from that conversation that I had with someone that was so darn funny. I love it. I’ll share it more as we get into the meat of the show where it came from, but it was a good little story.

Steven Butala:                   All the little subsections of niches that I’ve chosen in real estate since the early 90s, someone has said this sentence to me. “Oh, yeah, I understand you want to buy and sell nursing homes, but it’s not that sexy.” I’m like, I’m not sexy. I’m not trying to be sexy. I’m trying to make a bunch of dough.

Jill DeWit:                            Love it.

Steven Butala:                   It’s pretty sexy when you’re on the back of your yacht because you own a bunch of nursing homes. I’ll tell you that. That’s the whole point of this. Actually that’s the whole show right there. Before we get into it, let’s take a question posted by one of our members on TheLandInvestors.com online community. It’s free.

Jill DeWit:                            Jeff asks, “First, thank you in advance for advice and your response. I was looking at census data to find lower populated counties. Then I thought to myself, what would a good lower number, I would assume lower the better, but I could be mistaken, and should I be basing it off of the square miles? Like X amount of people in a square mile in the county? I know I would not be buying back tax properties as a priority, but I want to see how good/bad a county is with how many tax delinquent properties they have. My question is, how would I determine if a county has a high percentage based off of how many people live in the county of delinquent taxes? Thanks again for your help.”

Steven Butala:                   These are all incredibly intelligent questions, and all the answers are at a website that I put together called County Wise, and it was in response, like everything, in response to getting these types of questions. And the answer is, you know what this guy did, is he came up with by himself the three ways to pick a county of rural vacant land without actually seeing the program.

Jill DeWit:                            I thought he was a member asking more information.

Steven Butala:                   I mean, it seemed to me like-

Jill DeWit:                            I could be wrong.

Steven Butala:                   I mean he reinstated that, so either way, however you got to where you are, you’re asking the absolute right questions. So delinquent tax information is on County Wise as are population densities census maps. So you’re taking those two counts. You want a rural property, or you want to choose a rural county first of all, for rural vacant land. Once you’ve done that, they’re color coded, so it’s real easy. Once you’ve done that, you want to check the delinquent tax levels just like you’re suggesting. I wouldn’t do it in a per capita manner like you are, because the more delinquent properties there are in a county is not tied to population by any stretch. It’s tied to economic situations and some things that went on with subdivisions in the 60s and 70s.

Economic being like Detroit. There’s tons of back tax property there, and subdivision 50s, 60s, 70s laws like there are in Mojave County, Arizona, where everything got subdivided according to the rules back then and there weren’t any. Everybody just went and subdivided property. Crazy.

Then the third thing you want to do that you didn’t mention here, which is imperative, is check pricing. Check existing pricing for property all over the internet. So you could pass, a county could pass these two tests with flying colors, and then you could go on to land and farm, or anywhere else, Landpin, and find out there’s 4000 properties for sale for $200 each. Then you don’t want to waste your time on that, so you want to check the market before you dive in.

Jill DeWit:                            Would you move that step up on the list or would you still keep it as step three?

Steven Butala:                   It has to pass all three.

Jill DeWit:                            Exactly. I almost think, you know what I’m doing, you know it’s almost like what’s the fastest, easiest thing to do is probably, is I’m thinking of a county. Let’s just see what’s available in that county. Because that one, if it could pass one and two where it’s rural. It’s got a good mix of delinquent, not a lot. Okay, I’m feeling good there, and then number three, oh forget it. There’s so many properties out there I don’t want to mess with that. So I might reverse it sometimes.

Steven Butala:                   Well, the whole thing takes 30 seconds if you’ve done it a few times. I understand if you’re brand new. That’s not the case. But, you know, I get to stage three. I’ll probably check, this state now, this level, I’ll probably check 10 or 15 counties before I make a decision to send out, to really look further into one.

Jill DeWit:                            Yep.

Steven Butala:                   You know, and they’re really really rural counties. This is hard to explain because there’s … you just have to kind of feel it, and the more that you do it, the more you feel it. This is for rural vacant land only. It’s not for [inaudible] at all. You’ll get the hang of it. County Wise will really help. I don’t think … it sounds like where your question’s at, you haven’t been to County Wise yet, which is totally free for everybody, and check out the counties there. That’s why I designed County Wise, to answer your question. He could look at 20 counties at once.

Jill DeWit:                            Right.

Steven Butala:                   Today’s topic, land investing is sure not sexy, but making money is. It’s the meat of the show. So tell us about your story.

Jill DeWit:                            It was funny. It was probably about a year ago. A guy came to me and we had talked a year before. He’s a member now, and the year before when he talked, he’s like, “You know, I talked to you. I thought about it, and this whole land investing thing, yeah, I got it, but it just didn’t sound sexy. Like I don’t want to walk around, and ‘What do you do?’ ‘I buy land, and sell land,'” right? He thought that just … that was the whole thing. It didn’t sound cool. So he’s like, “You know what I did, Jill?” He said, “I went in to flipping houses, and boy did I lose money.”

Steven Butala:                   That’s worse.

Jill DeWit:                            And he just said … bless his heart. He was very honest and shared with me. He was like, “You’re not going to believe what happened to this one and that one and this one and that one. It was so much work. It was so hard. There were times I did not make money. How much energy I put into it. Four months of energy for $10,000 is not enough money,” and I’ll kind of think that. Like those numbers, I get it. He’s like, “Jill, I’m back.” He’s like, “I’m here to tell you that wow, was I, now I get it.”

And so that was this whole thing. I didn’t do it in the beginning because it wasn’t sexy. Now it’s sexy because making money is sexy. I said, “Yes, and having an easier time of it.” That’s the best part, too. And we laughed about it. I’m like, “Yeah, I don’t have to worry about anything on … I don’t worry about the roof.” He’s like, “Oh my gosh, you never know what you’re getting into.”

Steven Butala:                   Yeah, you don’t know until you get in there.

Jill DeWit:                            Exactly.

Steven Butala:                   You know exactly what you’re getting into with land.

Jill DeWit:                            Even if it goes 100% perfectly right, there’s so much more work involved that I just don’t want to do. Even if I made … I still can’t justify it. Even if I made $100,000 every flip, and I’m … think about it. I don’t want to do that much work. Do I really want to pick out the windows and babysit the contractor? Because there’s always babysitting involved, too. Even if you have the best general contractor, but you’re writing the checks. Nobody really thinks about it. No one thinks about the owner like the owner, you know what I mean? Your business like you do. So you always have to really kind of pay attention. So anyway, that’s …

Steven Butala:                   I mean a house is just one thing, but there’s so many other types of real estate that you can be involved in that … I just … here’s why I wrote this topic. I don’t think correctly making money at anything is attractive or is pretty, let’s say.

Jill DeWit:                            Correctly, will you define correctly making money?

Steven Butala:                   Sure, so let’s say I want to … let’s say I’m just sitting around saying, “You know what? I don’t want to work for a living any longer. I just want to make a bunch of money.” The process to go about that, getting from that thought, all the way to the end where you are making a ton of money and you don’t have to work anymore, on your own. It’s not sexy. You have to sit down in a dark room. You have to get a calendar out, or whatever version of this works for you, deconstruct, find someone who’s already doing it, study the heck out of them or join their group, or whatever version of that works for you. Deconstruct how they did it, step by step by step. Put it all in a calendar for yourself. There’s research, all of that. I mean none of that’s sexy.

Jill DeWit:                            There’s boring parts, like bank accounts and legal things and accounting and …

Steven Butala:                   And paperwork. And LLCs … and so all of that, that’s 80% of getting wealthy is what Jill just said. It’s a lot of crap that you have to do.

Jill DeWit:                            Right.

Steven Butala:                   And tons of talking on the phone to people that just don’t get it. Until you can reach a critical mass where renovating one house or buying one property and having it fail just doesn’t matter because there’s so much other stuff going on, money being made, or you can have … we’ve reached a critical mass in all of our, I’m happy to report, all of our businesses now-

Jill DeWit:                            It’s true.

Steven Butala:                   Where if something really failed it would be fine. Or if there’s something that I don’t personally want to do anymore, I’ve got probably 10, 15 people I can say, “Hey, will you just take this over and figure it out? Let me know.” So this is somewhat of a trap, this sexy business thing. Like I would like somebody to tell me what-

Jill DeWit:                            What is a sexy business thing?

Steven Butala:                   What is a sexy business?

Jill DeWit:                            That’s a very good question.

Steven Butala:                   I bet if you asked, and the first thing that comes to my mind right away, is acting.

Jill DeWit:                            Oh I thought yacht sales.

Steven Butala:                   Oh I bet those guys are dying.

Jill DeWit:                            You think? But it would be kind of fun to just walk … being on a boat all day, and just showing people boats. I mean I thought that would be sexy and fun. I’m not thinking about what work goes into it, that’s true.

Steven Butala:                   Oh the paperwork and the stuff, and there’s boats in the back no one knows about that are rotting.

Jill DeWit:                            How about just being a yacht … is there one fun job in there? I don’t know.

Steven Butala:                   This is the whole thought process I went into writing this thing, because there isn’t one.

Jill DeWit:                            Yeah.

Steven Butala:                   You can’t think of one, can you? And I can’t either.

Jill DeWit:                            No everything takes work.

Steven Butala:                   All the stuff at the end is fun.

Jill DeWit:                            Yeah.

Steven Butala:                   Like, where we are now, it’s a blast for me.

Jill DeWit:                            Like, okay well let us play this game for just a second, though. Follow me. You’re walking into a party, and any occupation. What occupation would you use at a dinner party where we go, “That’s a cool job,”?

Steven Butala:                   I would probably say … I would have to think about it, but it would have to be like … there’s a line in Caddyshack where he says, “You know, what do you do for a living?” And he says, “I own a bunch of lumberyards, but I’m not sure where they are.” Something like that, so is a lumberyard sexy? No, but owning 10 of them and not knowing where they are is.

Jill DeWit:                            How about-

Steven Butala:                   Which is my point. The money part of it is.

Jill DeWit:                            I’d choose, I personally get to choose the leather that goes into interior of Mercedes-Benz vehicles.

Steven Butala:                   The letter?

Jill DeWit:                            The leather.

Steven Butala:                   Oh leather.

Jill DeWit:                            I would like that job. For me, that’s a sexy job.

Steven Butala:                   Then you gotta go to Italy and meet with a bunch of people.

Jill DeWit:                            That’s what I mean. Yeah.

Steven Butala:                   And they’re all going to say they cost this much.

Jill DeWit:                            And they wine and dine me … oh no, no, no. I’m just good to do that.

Steven Butala:                   It costs this much. Then they gotta do all the paperwork.

Jill DeWit:                            No you’re thinking of it … I’m just saying dinner party, initial dinner party. Follow me on this. It’s only the initial dinner party reaction. I’d be like, “I choose the Mercedes-Benz leather.” Mic drop.

Steven Butala:                   [crosstalk] college basketball consultant [crosstalk].

Jill DeWit:                            Yeah, that was my go to thing. I’m a college basketball analyst. That would be initially cool because that means you’re sitting at every college basketball game. Yep, I am.

Steven Butala:                   I just think on the surface of it, on the surface of anything, it’s always way better than you think it is until you get into it and then it’s like, “Oh, this is the same thing as last time.”

Jill DeWit:                            Well, let’s … I would like to follow that for just a second. Then you’ve gotta make sure … there are jobs … okay, let’s be honest. Everything we just covered, everything is good and bad. We’ve got that. But how much bad can you handle that makes it good for you? Like for me personally, what we do right now, there’s a lot of work involved obviously, but the pros outweigh the consequently. Clearly we wouldn’t be here. We wouldn’t be smiling. We wouldn’t be making this show. I’d be in a corner crying.

Steven Butala:                   [crosstalk] Making my whole point. Yep.

Jill DeWit:                            Or I would’ve let. I would’ve done something else.

Steven Butala:                   Right, so, and you’re really wrapping this up the way that, and I’m glad that you are. But that’s the same conclusion I came to. There’s all this stuff involved in everything. There’s customer service in anything you do. There’s setting up a phone system in anything you do, so you’d better make it count. That’s my whole point. So sexy’s not the point. Making the money is.

Jill DeWit:                            Got it. I understand. There’s nothing I can say that’s going to make your point any better. You just … that was perfect.

Steven Butala:                   Well then let’s do this. Well, you’ve done it again. You’ve spent another 15 minutes or so listening to the Land Academy Show. Join us next time for Finance Friday with me, Steven Butala, and [inaudible].

Jill DeWit:                            And we answer your questions posted on our online community at LandInvestors.com it is free.

Steven Butala:                   You’re not alone in your real estate ambition. I think we made our point.

Jill DeWit:                            I think so also. I like coming into shows where I wasn’t really sure where it was going to go. You know I knew what I wanted to kind of cover, and then we got to the same conclusion. I think that was great. I think we got our point across. What’s so funny?

Steven Butala:                   I agree with you. We got to the same conclusion.

Jill DeWit:                            Yep.

Steven Butala:                   I think that helps everything.

Jill DeWit:                            The pros have to outweigh the cons, so that’s good. Hey so wherever you are listening or watching, please rate us there. We are Steve and Jill.

Steven Butala:                   Information.

Jill DeWit:                            And inspiration.

Steven Butala:                   To buy undervalued property.

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