Land Academy Deal Funding Explained (LA 901)
Land Academy Deal Funding Explained (LA 901)
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 land, the Land Academy Deal Funding Explained.
Jill DeWit: Yup. I gotta ask, too, by the way. I did a little adjusting my hair here before. Did you keep that in the video? Did you keep that rolling?
Steven Butala: No.
Jill DeWit: Okay, God. I was making sure that wasn’t gonna make final cut here or not.
Steven Butala: No. I should have though.
Jill DeWit: Sorry about that. I had to take a moment and, to have a hair moment.
Steven Butala: It seems like we’re talking about Deal Funding a lot lately. And we are. And because it’s just been a smash hit.
Jill DeWit: It is.
Steven Butala: If people are using it the way it’s intended to be used, I think people are making a ton of money. If you submit a deal to us and for whatever reason, it doesn’t fit our criteria, we’re developing now a network of people, other people, that are funding deals in our community, that will get it done.
Jill DeWit: Exactly, yup.
Steven Butala: So [inaudible] on, I’m excited as heck about when stuff works.
Jill DeWit: Me too. I have more to say, but I’ll save it.
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.
Jill DeWit: Okay. Abby asked, “Hi guys, I received a couple of signed offers for properties that have no access. Even though I priced them right and they’re pretty cheap, I’m still hesitant to buy them. Does anyone have success at selling landlocked property? How do you market them? Obviously, I don’t intend to hide anything in my property listing. Thanks.”
Steven Butala: Yeah. I mean, we have a whole long history of success selling those types of property, and you’d be shocked at how many people love to buy property that doesn’t have physical and/or legal access for a bunch of reasons.
Jill DeWit: And a lot of them are legal.
Steven Butala: Yeah.
Jill DeWit: Legit, not just running from the law.
Steven Butala: One of the reasons, and I think one of the best reasons, is to buy property because it’s so cheap. But then they don’t get access.
Jill DeWit: That’s true.
Steven Butala: Maybe a neighboring property owner has the means to give access to this landlocked property. They’re rezoned property already. So it’s a huge bargain for him. And then he gets it accessed, so. There’s a whole business model in getting access to properties that don’t already have it. And a lot of our members do that.
Number two, you’d be shocked and amazed at how many people use the property, and they don’t want it to have access.
Jill DeWit: Yeah, they don’t want to drive up road. They like to be out there bidding a little bit. They want the privacy.
Steven Butala: But you nailed it. Actually, if you know their property doesn’t have any access, you don’t want to pretend that it just doesn’t exist. You want to disclose that.
Jill DeWit: Exactly.
Steven Butala: The way that we disclose it, we don’t personally buy property without access any longer. We work on very large, much larger dollar-wise deals. But there’s, again, you just want to make sure that you’re clear about it. And the way that we would deal with it in a posting on the internet is, “Please confirm access. Here’s a phone number to the county.” Have a talk about it.
Jill DeWit: Well, and you’re gonna have accurate photos of it, showing where it is. Everyone can see that. And the accurate GPS coordinates so they can look it up, and they see, and they know it. And if they ask, you’re just gonna say, “Yeah, that’s right. And that’s why it’s priced this way.”
Steven Butala: Yup, exactly.
Jill DeWit: And that’s it. ‘Cause if you don’t, if you do it the other way, you’re gonna have 18 refunds, and people mad at you, and it’s a hassle. And it’s expensive undoing those transactions.
Steven Butala: And you don’t want to run your business that way.
Jill DeWit: Exactly.
Steven Butala: You want to tell the truth.
Jill DeWit: Yeah. It’s funny, ’cause we all have funny stories about times that we had some that were just kind of really way out there. And man, all you gotta do is reach the right person. And the right guy’s gonna get all excited that he needs 4-wheel drive and GPS coordinates to find his property. He thinks that’s cool.
Steven Butala: I did a huge deal one time, a long time ago. There was about four or five deals that really, before I met Jill, that put me on the map. And this was a nonprofit up in Northern Arizona that had just been donated years, and years, and years, decades, of people donating property. And they sold it all to me. And almost all of it was really like this. And I sold it all to one guy ’cause he was one of these guys with like a Moab Jeep. He had a Jeep. And he just loved to go out on his own property, he was a pretty wealthy guy, with these Jeeps, and stay overnight. Right out of a cowboy movie.
Jill DeWit: Exactly.
Steven Butala: And he wanted to get lost. He wanted there to be no chance, unless someone gets there on a horse or a helicopter, that he could be found. To each his own, you know?
Jill DeWit: Exactly.
Steven Butala: It’s really funny, people that are really experienced in the real estate business, especially commercial real estate people, like lifers that are older than me, how much disgust and disdain they have.
Jill DeWit: Over what?
Steven Butala: Access, access property. They just think it’s garbage. They think it’s just a terrible, terrible thing to even talk about it.
Jill DeWit: Well, there’s people that also think that-
Steven Butala: It ridiculous!
Jill DeWit: … if it’s not on a perfectly maintained road, with a payout already there, on the side of a lake with a dock, sitting there. I understand. It’s like, “Come on.” And that’s the thing. You have, until you get into it. I mean, there’s always something for someone.
Steven Butala: Always.
Jill DeWit: Come on. Some people like blondes, some people like brunettes. It’s the same thing. Everybody has their own personal preference. And just because it’s not what sings to me doesn’t mean it’s not what you want. So I want beach. You like the mountains.
Steven Butala: That’s true.
Jill DeWit: There’s lots of things that go on just with us, so.
Steven Butala: I always come back to the car analogy. If you find a great classic model car in a barn that’s just been sitting there for 25 years, 30 years, you don’t expect to pay retail for it. You expect it to be improved.
Jill DeWit: It’s true.
Steven Butala: And then you-
Jill DeWit: It might not start.
Steven Butala: You might have to do some stuff to it.
Jill DeWit: Exactly. But that’s why you’re getting it for the price you’re getting it.
Steven Butala: That’s what goes on with a lot of this land. People just don’t believe. They don’t, it’s hard to communicate that. Unless they’ve had that thought already, improving land is … We could sit here all day and talk about that. I’d rather talk about Deal Funding.
Jill DeWit: Okay.
Steven Butala: Today’s topic, Land Academy Deal Funding Explained. This is the meat of the show. Go Jill.
Jill DeWit: Oh, I was gonna say that to you.
Steven Butala: If you’re watching on YouTube, you go to Land Academy, oh sorry, Land Investors or Land Academy, and you click on-
Jill DeWit: Steven’s gonna show it. Okay, so here’s what’s showing right now on the screen.
Steven Butala: Deal Funding.
Jill DeWit: On our screen right now, it shows the website, LandInvestors.com. And at the very top, there’s a menu item that says, Deal Funding. Click on Deal Funding, and it opens up a Deal Funding Contact Form. And if you scroll down, there’s a little bit about, a few little paragraphs, about what it is. There’s a link where you can see the Partnership Agreement. So it’s really clearly spelled out what we’re responsible for, what you are responsible for. If you’re submitting a deal, you’re called the manager of the transaction. And I’ll go into more of that in just a minute here. But then it also shows what we need to know. We need to know your name, of course, all your contact information, whether or not you’re a member. Is that a deal breaker?
Steve & Jill: No
Steven Butala: No.
Jill DeWit: As of right now, we’re accepting deals from anyone, whether or not you’re a member. But it tells me a lot about you and what you know, if you’re a member. So that’s why I want to know that. I like to know the number of transactions you’ve completed. I want to know if you’ve got a good track record. Or if you’ve already marketed and sold 100 properties, I’m have a lot fewer questions for you than if you’ve done two, when you’re submitting them.
Steven Butala: And here’s why. We don’t get involved in the transaction with you at all. We basically act as the bank, as your partner.
Jill DeWit: Exactly. Now, I’m gonna go through that, too, more in just a minute, after the form.
Steven Butala: Okay, okay.
Jill DeWit: So on the form, the number of parcels. These are all free fields. You can just fill them in however much you want to put in there, state, county, APN, acreage, purchase price. And purchase price here is your signed purchase agreement offer price that they’ve committed to, whatever it is. Contemplated sales price, that’s what I want you to go … You’ve already done your homework. You looked up and said, “All right. I already pulled a bunch of, looked at six sites. And I know we can buy it for this and sell it for this. That’s what I want.” And you’re anticipated for sale time because we all know that the lower dollar amounts usually go a little bit quicker than if it’s $100,000 or more property. Those might be 90 days, or 180 days, or something like that for sale time.
A few other little questions where you can fill in additional comments and submit. And then it goes straight, straight into our emails, both of us, and my team. And from there, straight to us, straight to our team, thank you. And we’re switching back to us on the screen for those of you who are listening, who showed up. We reveal if the process starts immediately. And usually, within even 12 hours, you’re gonna get a reply. I say 12, but put 24 to 48 hours there, but it’s more like a few hours, especially during the week when we’re all here running and looking at deals all day long. You’ll get a response back. Either we’re taking it to the next level, or we have some questions, or this doesn’t work for us, and here’s why. And then-
Steven Butala: And with your permission, we’ll send that to other members who probably will fund it.
Jill DeWit: Ding, ding. Unless there’s something. Every now and then, there’s some that, there’s a big problem. Did you know that, I don’t think anybody’s gonna, no one’s gonna want this deal because we just uncovered this huge problem.
Steven Butala: Like it’s in a massive flood plain.
Jill DeWit: Right. And we’re not gonna push the problem onto somebody else.
Steven Butala: That’s right.
Jill DeWit: And it’s really usually clear. Anytime I’ve had those situations, both go, “Oh yeah. You’re right. Okay. I get it. We’re not even gonna bother with that.”
Steven Butala: Or it’s just too expensive. I just reviewed a deal today by someone who we fund often. And he said right in there, “I offered $9,000 for this property and the guy will only take $50,000, period.” And so she laughs. But you know what?
Jill DeWit: No wait, then we don’t have a side purchase agreement, too.
Steven Butala: We’re doing the deal.
Jill DeWit: So well, what’s it worth?
Steven Butala: ‘Cause it’s worth 200.
Jill DeWit: Okay. So that’s good. No, and that’s okay. So that would have been one of those, “We need more information,” or, “I need to look at whatever,” so. So I’d like you, before it gets to me, I’d like you to have that ironed out and already know it’s a good deal.
Steven Butala: I agree.
Jill DeWit: So I really don’t want you to come to me, “I offered 9, he wants 50. What should we do?” That’s not what the Deal Funding is about. The Deal Funding is, “I offered 9. The guy said 50. I still think it’s worth 50. I don’t have 50. I have 9. That’s why I’m submitting it to Deal Funding, ’cause I think it’s worth it for us to spend the 50 ’cause it’s worth 120, and we split that, or 200, or whatever you think it’s worth,” that’s fine.
Steven Butala: Every day, Jill and I, usually before we get into the office, have some version of this conversation, “Is it worth our time to spend any amount of time working,” excuse me, “working on X?”
Jill DeWit: That’s true.
Steven Butala: Parcel Fact, this is a fantastic idea, an overnight success. Land Academy itself, overnight success. It took a lot to get there, but those were definitely worth working on. Offers 2 Owners was a massive success. It was a long time coming, but it’s very, very helpful to our members. This Deal Funding thing is more valuable than all of those put together. And I really mean it. It’s making us, quite honestly, making us hordes of money. It’s making our members independently wealthy. So-
Jill DeWit: Ard why?
Steven Butala: I can’t say enough good stuff about it. Go ahead.
Jill DeWit: Because now, they and you, are no longer limited by your bank balance. I love that.
Steven Butala: Forever, I’ve been running out land operation based on how much money we have allocated for acquisitions that month. So when you really think about that for a second, “Okay, I’ve got $300,000 to spend this month, and I’m gonna turn it into 600.” Now it’s limitless.
Jill DeWit: Exactly.
Steven Butala: You can grow your business that much faster. As fast as you can get that mail out, correctly priced, that’s as fast as you’re gonna buy and sell real estate. And again, it’s blessed by us.
Jill DeWit: Exactly.
Steven Butala: I think the name of the show tomorrow is, There’s Nobody That’s Better at This Than Us, or some version of that. There’s no one in this country that’s better at buying land than the two people in front of you right now. So do you want to be partners with us? You’d be crazy not to.
Jill DeWit: Well, let me explain one more thing, too. Here’s what even is better. Like you said, you’re not held back. These deals are not self-closed deals. These are all bear deals. So neither you nor I am doing that at work. That’s why we have a title agent involved. It’s all getting closed, bought and sold, through a title agent. We’re not chasing people down and doing the notary closed, and getting it recorded. We all know those little things that slow us down.
The big part of the work is once you found the deal, right? We all agree on it, great. We all pass it off to a title agent. While the title agent’s closing the deal on buy side, you, manager, are putting the posting together. And man, the day that it’s funded and we own it, boom, now it’s for sale, period.
Steven Butala: There’s always a little plan I put together with each deal that we accept. For instance, the plan that I put together on two properties this morning was, yeah, you know what? It’s gonna take six months to sell these properties. But they’re so valuable that we are not gonna immediately wholesale these out. We are gonna actually price them a little closer to retail ’cause they’re commercial in nature. One of them we’re gonna split into three properties. Actually, the member is. What do we call them?
Jill DeWit: Manager.
Steven Butala: The manager is. So that’s all free consulting to you. The person that brought those properties to us would never, and they’re actually pretty experienced, it’s two separate people on those two examples that I gave, wouldn’t have thought to do that. And it’ll triple, the cut-up commercial property, will triple the amount of money that we will both make on it, so. And then the retail one, or close to retail price, it’s gonna take at least six months to sell it. But it’s gonna be a huge, huge paycheck, as it happens, for both of us. It’ll be, we’ll each make more than well over $100,000 on it. So it’s worth the wait. It’s our money. It’s not your money.
Jill DeWit: Exactly.
Steven Butala: What do you care if it takes three months or six months, right?
Jill DeWit: Mm-hmm (affirmative). Exactly. Totally [inaudible].
Steven Butala: If I’m not conveying how excited I am about this, I’m probably not. I’m sure I’m not accurately conveying how much this is gonna change our members’ lives, and add a bunch paychecks, and a paycheck’s for us.
Jill DeWit: Right. But I want to set up, I’m here to set up proper expectations so you really know. You really are the manager of the transaction. You really are running the show. I’m funding the deal and taking care of that on the back end. I’m not here to market it with you and say, “Did you post it here? Did you post it there?” That’s really on you. I want it to be sold for off of your website. Not mine, yours, however you do that. If you take a deposit, then the rest goes through escrow. That’s traditionally how they go with these size of transactions. So super excited. This is really, really good.
Steven Butala: Today is Wednesday, January 23rd. And our product manager, Erin, senior manager, wants us to say something. Jill, can you do it?
Jill DeWit: I have it here, too. You’re good. We both got the email. And you wrote it down. I’m so proud of you.
All right, so, just so you know. Enrollment, that is closed right now. There will be an announcement coming out on Friday. So please make sure you are in our email loop to be notified when it comes out on this Friday, in two days. How do you know that you’re in our email loop? Go get our eBook. If you haven’t got it, go download the eBook. It’s not your normal eBook. And you are in the loop, and you will get advanced notification of excitement, stuff coming for … I’m just gonna leave it at that. Watch your email. Thank you.
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 for an episode called, No One Knows Your Deals Better Than Us.
Jill DeWit: And we answer your questions posted on our online community, LandInvestors.com. It’s free.
Steven Butala: You are not alone in your real estate ambition. I said that 901 times.
Jill DeWit: Apparently, you have. I think that’s cool. You know what? Careful, it might become your thing.
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