Commercial Property Acquisitions by Steven (LA 912)

Commercial Property Acquisitions by Steven (LA 912)


Steven Butala:                   Steve and Jill here.

Jill DeWit:                            Almost fell off my chair. Hello.

Steven Butala:                   Welcome to the Land Academy Show, entertaining land investment talk. At least you fell into me.

Jill DeWit:                            That’s true.

Steven Butala:                   I’m Steven Jack Butala.

Jill DeWit:                            I’m Jill DeWit, broadcasting from sunny southern California.

Steven Butala:                   Today Jill and I talk about commercial property, specifically commercial property acquisitions, my style. Steve’s style.

Jill DeWit:                            And I’m gonna spend 10 minutes painting my nails.

Steven Butala:                   That’s probably what’s gonna happen. Ask me some questions, like when we get into it.

Jill DeWit:                            Oh, I will. I will.

Steven Butala:                   I’ll answer them.

Jill DeWit:                            I’ll come up with some good ones.

Steven Butala:                   Let’s take a question posted by one of our members on the online community. It’s free.

Jill DeWit:                            Ben asks, “When doing research for new counties to mail to, I’ve been looking for the counties with the lowest population density, the dark green areas, as advised in Land Academy. However, when I go to RealQuest and pull in numbers for that county, I’m constantly getting less than 1,500 results or considerably less, with the only search criteria being 0% improvement and one to 50 acres. Which, after scrubbing, leaves a pretty short mailer list. So my question is, what’s the thought process on focusing on the very rural areas? If I start looking at slightly denser populated areas, are there anything I should be looking out for that may be problematic for me?”

Steven Butala:                   Something’s wrong. If you go to County Wise, start there first. That’s probably where you pulled the density maps. And for each of the counties, you’ll see a total record count of land parcels and … I think. I know there’s a total property count. So, if you look at Mojave County, Arizona, which is a dark county … And I’m not advocating selling mail there.

Jill DeWit:                            Sorry. It sounds like it came from a dark place.

Steven Butala:                   It’s not like a dark, negative place, awful-

Jill DeWit:                            It’s a dark, dreary county.

Steven Butala:                   … with trolls or anything. It’s that darker county, from a population density standpoint. Thanks, Jill.

Jill DeWit:                            You’re welcome.

Steven Butala:                   You’ll see that there’s tens of thousands of properties there. I mean, just thousands and thousands and thousands. Probably hundreds of thousands of properties there. And, like, nobody really lives there. So that lends itself, for a lot of reasons, to sending mail there. Am I saying you should do that? No. I’m saying, if you’re getting 1,500 count on a property in a county where there’s thousands and thousands of properties, hundreds of thousands of properties, something’s wrong. Something’s wrong with RealQuest, something’s wrong with how you’re using it. And-

Jill DeWit:                            Can I weigh on one thing?

Steven Butala:                   I address this in dramatic detail. Dramatically, in fact, in Land Academy 1.0, which we’re just days from releasing. In fact, it might be released by the time this airs. It should be, actually. So yes, you may absolutely … Let me end on this, before Jill answers … You need to spend hours on this. This is your livelihood. We’re not here to do real estate deals. I’m not here to do real estate deals. I’m here to become and implement sending out perfect mailer campaigns, that yield unbelievable acquisition results, for someone else to close them. That’s why I’m here. And the only way to do that is to hole myself up in a dark room, really get incredibly intimate with RealQuest or DataTree or TitlePro, or whatever you’re gonna use, and figure out how to use it properly, to your advantage.

Jill DeWit:                            That was perfect. I was gonna say … I have to say I walk by my team once in a while, and it’s a true fact that sometimes we forget the little things, like clearing cache and cookies, and it pulls it-

Steven Butala:                   Clearing cache.

Jill DeWit:                            Sometimes it pulls in some things that you’re not even realizing. You might accidentally still be pulling a zoning that you didn’t want in there.

Steven Butala:                   All of that. All of that, Jill.

Jill DeWit:                            You thought you cleared it out. And as silly as it sounds, that might be goofing you up. And I’ve heard my team … And it’s got to us, so you’re not alone. I’m telling you, you’re not crazy. Sometimes it’s got to my team. They’re like, “Why am I having trouble with RealQuest?” “Have you done this, this, and this?” And it’s like, “Oh. Never mind.”

Steven Butala:                   Jill and I … This exact topic wrecked a personal relationship with a couple that Jill and I had, for years and years and years and years. They lived on the same block we did.

Jill DeWit:                            Mm-hmm (affirmative).

Steven Butala:                   And we, over some drinks and stuff, decided to give them like a $1 a month subscription. Because they’re extremely bright people, ad they have other careers and all that. They were just always intrigued by this. Everybody’s intrigued by it, you know? Then it just became this customer service disaster for us, and it was all over this topic. They were not willing to really … And I’m not saying that you’re doing this, caller/writer. I’m just saying, it takes hours and hours and hours-

Jill DeWit:                            To learn this stuff.

Steven Butala:                   … to understand RealQuest. Don’t just take my word for it, or don’t just use our education. Go out on the Internet, find other people who are doing it. There’s, you know-

Jill DeWit:                            Even you.

Steven Butala:                   Yeah. Oh, it takes me-

Jill DeWit:                            You don’t walk in knowing this right away. That’s the thing I think people … Do you know what it comes down to? This is one of those classic situations where we accidentally make things look easy. But what we didn’t share with you was, it took us eight hours to get to this point. You know? Think about this podcast.

Steven Butala:                   Or two years.

Jill DeWit:                            Well, you know, this podcast is a perfect example. How long it took us to get to this point with our podcast, where we have a audio … If you could see this room right now, you would crack up at all that’s going on. What we started with, and how many sets of equipment that we’ve gone through over the years is hilarious. And it’s funny, because I was reminded this because a friend of ours, who’s gonna be on the show tomorrow, Justin … Justin started up his own podcast, and Justin’s probably looking at us like, “Oh, all right. You guys can do this.” Well, Justin’s now getting into it and realizing, “Holy cow. There’s a lot that goes into this.” I’m like, “Yeah, you’re right.” I think we make it look easy. You sit down in five minutes, turn on lights, turn on things, and everything’s preloaded, ready to go. It took months-

Steven Butala:                   Years, actually.

Jill DeWit:                            Years and months, to figure stuff out. And then, you also still put in … You know. You put in time before every show, so we can sit down and it’s ready to go.

Steven Butala:                   Still. Like, I still improve it.

Jill DeWit:                            Yeah.

Steven Butala:                   So, yeah.

Jill DeWit:                            So that could be a thing, too. Don’t beat yourself up over you’re having a little bit of problems in RealQuest. You should. It’s totally normal. You’ll figure it out. Go into a dark room, like Steven said, and spend some time.

Steven Butala:                   Here’s the great news. What you’re doing … Inadvertently, you probably don’t even know it … is testing for reason, and it didn’t pass your reasonable test.

Jill DeWit:                            Yeah.

Steven Butala:                   It tripped your radar.

Jill DeWit:                            That’s good.

Steven Butala:                   It doesn’t make sense, and it prompted you enough to write a question about it through Land Investors.

Jill DeWit:                            Right. That’s excellent.

Steven Butala:                   So, that’s great. Test for reason comes up probably 20 times in the new chapter, that I’ve already recorded it and done it, about how to choose a new county.

Jill DeWit:                            Right.

Steven Butala:                   And so, if it’s not reasonable, go back and check it out.

Jill DeWit:                            Exactly.

Steven Butala:                   Here’s the other thing, really quickly, to write down and to note about RealQuest or any of these data providers. They aggregate data from assessors. And so, the data that they collect is very different quality from, let’s say Los Angeles County, or New York City, or Manhattan County, and rural Arkansas, but they jam it into one format for us users, so we get used to using with one format. So, lots of stuff’s missing. That zero percentage improvement value could be different from county to county. It could be missing. So, if you’re in a county that’s in a very rural, they might not be using that at all.

Jill DeWit:                            It’s true.

Steven Butala:                   And so, you’re smoking it out. You’re testing it for reason and it’s not passing, you’re gonna have to go to something else. I had one person a couple years ago email me, and say, “Hey, thanks for having that podcast,” whatever we were talking about. “I took out all the properties in this urban area that didn’t have swimming pools, and I got the record count I needed.”

Jill DeWit:                            There you go. Something like that.

Steven Butala:                   That field happened to be helpful and populated. And bedrooms. I hear a lot of people use three bedrooms, two bedrooms, because that seems to be a very popular … The assessors love how many bedrooms there are, for some reason.

Jill DeWit:                            Right.

Steven Butala:                   So, it’s impossible for me to address all these things in an education format. It would take like 100 hours. It might kill me.

Jill DeWit:                            Well, here’s the reality for someone just listening. What we’re talking about, this data is so specific. We have something like 382 fields of data.

Steven Butala:                   Yeah, that’s right.

Jill DeWit:                            So, what this person’s talking about, it’s almost like, “Are you really telling me, Steven, I should keep pulling the data over and over and over again, and checking the record count 382 times, only hitting those filters?” And part of me is saying, “Yeah.”

Steven Butala:                   Not 382, but she’s right.

Jill DeWit:                            Not 382, but you could still-

Steven Butala:                   Maybe 80.

Jill DeWit:                            But the top 50 that you know-

Steven Butala:                   Yeah.

Jill DeWit:                            … that you think are gonna be needed. You’re gonna sit and pull that one? Nope, turn it off. Turn this one, and then click this one. Pull it. Okay, uncheck it. Now do the next one. Yup, okay. Until you get there.

Steven Butala:                   This is a huge topic at the live event.

Jill DeWit:                            Mm-hmm (affirmative).

Steven Butala:                   You know. As soon as this type of topic came up … All the people that do a lot of deals in our group were there, or the people who do … There are very successful people there. Some of them more successful than us.

Jill DeWit:                            Right.

Steven Butala:                   And they’re like, “Oh, no, no. In that county, it doesn’t work.” All this inside stuff came out. Luke Smith was one of them. He said, you know, “This is what I use. I use this, this, this, and this.” That’s something I never even thought about doing.

Jill DeWit:                            Yup. These are the conversations that are going on right now, today, in our online community. They’re all talking about it. They’re all sharing it with each other. As our community gets bigger, and more time passes, we’re solving all these little details. By now, when you sit down, if you’re new to Land Academy, and you’re looking in XYZ County, Texas, you could probably put a thing in there and go, “I’m not getting the number count I want. All right. Who’s pulled data in XYZ County? What am I missing?”

Steven Butala:                   That’s it.

Jill DeWit:                            And you’re gonna have six people going, “Yeah, had it too. Here’s what you do.”

Steven Butala:                   Excellent, Jill.

Jill DeWit:                            Thank you. And then once you know that county, by the way, now you’ve got, “Okay. Now I’ve pulled up five acres. Now I’m gonna pull the 10 acres. Now I’m gonna pull the 20 acres. Now I’m gonna pull the 40 acres.” Now you’re gonna be busy there for a while. So, thank you.

Steven Butala:                   Today’s topic? Commercial real estate acquisitions by me, Steven. This is the meat of the show.

Commercial real estate acquisitions are exactly what I cut my teeth on, or what I began when I began in real estate. I immediately knew that I wanted to go into commercial real estate, and I did so in Detroit, as a full commission real estate broker. And very, very quickly, realized that it’s an incredibly saturated [inaudible]. You know, imagine a 22 year old kid out of college, with dollar signs in my eyes. I go into this situation. I’m like, “What?” I was leasing office space … Because that’s the worst part of commercial real estate, in my opinion. They just shoved me over there. I did a few deals, and made enough to eat, and very quickly realized that, you know, I have a finance/accounting background. That I can put this to better use somehow.

Jill DeWit:                            Yeah.

Steven Butala:                   This is right when computers were-

Jill DeWit:                            I love this story.

Steven Butala:                   … really kicking in, and I was the right age for it and the right mentality, so I really used computers to my advantage. And, you know, everybody I knew who was in commercial real estate was driving the fastest car there ever was. I mean, everybody was really successful.

Jill DeWit:                            Is that why you picked it?

Steven Butala:                   Well, yeah.

Jill DeWit:                            All right. Truth comes out.

Steven Butala:                   I mean, young men love money.

Jill DeWit:                            “I don’t have commercial real estate in my soul, but I have that car in my soul.”

Steven Butala:                   Yeah. Yeah.

Jill DeWit:                            Now I know. Thank you.

Steven Butala:                   Yeah. Everybody’s all, like, good-looking in commercial real estate. All that. And you don’t have to work on the weekends.

Jill DeWit:                            Hot girls?

Steven Butala:                   All that. Yes. I wasn’t gonna say it.

Jill DeWit:                            Oh. Well, I said it.

Steven Butala:                   Then everybody in residential real estate from where I was from, they were all working on Sundays, and angry, and never had any money, and they were driving around Volvos and stuff.

Jill DeWit:                            Oh. Makes sense.

Steven Butala:                   So, that’s just … It was an easy choice for me. And nobody in residential real estate knows how to do any math.

Jill DeWit:                            By the way, I never knew this.

Steven Butala:                   Really?

Jill DeWit:                            That was new information for me. I did not know why you chose that.

Steven Butala:                   I think this is a universal topic.

Jill DeWit:                            I thought, my sister went residential, so I’m gonna go commercial.

Steven Butala:                   No, no.

Jill DeWit:                            Rock, paper, scissors. Let’s see how this goes. Smart.

Steven Butala:                   I think they’re so different. I mean, if you talk to any commercial real estate agent that’s good at this, it’s all math driven. All of it.

Jill DeWit:                            Yeah.

Steven Butala:                   It’s not sales driven. Residential real estate is sales driven and silliness driven. This is just my opinion. You probably agree with me if you’re listening to this show.

Jill DeWit:                            I understand.

Steven Butala:                   If you don’t agree with me, just turn it off.

Jill DeWit:                            I didn’t know why. You’re good.

Steven Butala:                   I veery quickly realized that sending blind offers to people who own commercial real estate, and very specifically sending them commercial real estate types … In my case, it was long-term care facilities, and back then it was faxing, because we didn’t have the access. You know, RealQuest didn’t exist, or DataTree or any of it. But I could get healthcare lists, because of the way licensing was, and it is, and get their fax numbers and send them a fax, back when it was still legal.

That set the stage for all of this. And even now, that basic foundation is what we do when we send out a mailer for commercially zoned land. I’m gonna be super clear. These data aggregators, and IT people in general, specifically developers, have no real respect for the end user, in my opinion. They don’t want to give you all access to the data, because they don’t trust you, and they don’t think you know what you’re doing, and they are all looking down their nose at us users. So, they make these cute little clicky buttons that say, “Click on this for commercial real estate. Click on this for residential. All residential.” And that means cabins and all kinds of stuff that you don’t want in there.

Here’s the beauty about commercial real estate. It’s all zoned, and it’s usually meticulously zoned by the assessor’s office when it gets subdivided, because it’s all a part of a big urban plan. So, you can very easily never click on that silly little button when it’s residential or commercial. Do a lot of research about the property that you want to buy, based on its zoning. Let’s say you know the Vice President of Acquisitions at McDonald’s, and you know that they’re in the Columbus, Ohio area, because they want to do three more units this year. And you know what they want. You go look at the other 18 McDonald’s that are in that three or four mile area, and you know what they’re zoned, and you know [crosstalk].

Jill DeWit:                            Right. [crosstalk] the traffic counts. Can you get that?

Steven Butala:                   No, not traffic counts. Hold on.

Jill DeWit:                            [crosstalk].

Steven Butala:                   This is shooting fish in the barrel here. I’m telling you.

Jill DeWit:                            Okay.

Steven Butala:                   So, now you have all this information from all these fast food vice presidents of acquisitions, and you know that they’re expanding. You basically can look into a crystal ball and say, “These guys are gonna need to buy X amount of properties within this amount of time. They need to be zoned this, and they need to be in these four counties.” Now you’re talking about sending a 2,000 unit mailer out, maybe. Maybe less. And you know what they’re willing to pay, because you talked to them all on the phone. This is exactly how I started all of this land silliness, Land Academy. And you send a mailer out, just like that.

Now, is it just McDonald’s? Nope. Maybe it’s a new industrial park is going in. Maybe even, better yet, it’s … Walmart is constantly expanding. They have a totally different zoning requirement. Or how about Toll Brothers? You know, the largest home developer. Talk to those guys. If you pick up the phone at the main front desk at Toll Brothers and you say, “I have 85 acres that’s just outside of Phoenix, that I’d like to talk to … I’d like to sell it,” they will-

Jill DeWit:                            Get you to-

Steven Butala:                   Trust me. Because I’ve worked in these companies. Everybody will drop what they’re doing, including the CEO, because it’s all about getting land to expand on. And expansion, especially if they’re publicly traded, they are glued to expansion and growth. So, you are in the driver’s seat. What you have to do to secure your position in this situation is understand zoning, understand the market, and understand how there’s just this lust for commercial land. “Well, that’s great, Steve. If it’s so great, why didn’t you start the whole program with this? Why are you with this rural vacant land?”

Jill DeWit:                            “Yeah, why not? Yeah, what’s that?”

Steven Butala:                   “What is this SFR 2.0 residential business?”

Jill DeWit:                            “Tell us.”

Steven Butala:                   “Are you trickling it out? Are you just baiting us?” You have to walk before you run.

Jill DeWit:                            Perfect.

Steven Butala:                   And doing small properties, and cutting your teeth, and moving along like this, is how it’s gonna happen. And you know what? There’s mobile home parks you can do. There’s mobile home properties. You’ve heard Jill and I talk about it a million times. There’s limitless types of land to purchase, and understanding rural vacant land is the basis for all of that. And it’s the fastest way to get deals done with 500 bucks, which everybody wants to do. The best deals that Jill and I are doing right now are commercial property.

Jill DeWit:                            Yup.

Steven Butala:                   We have a handful of people that we’re continuing to fund, that know this. They’ve figured it out. So no, I’m not withholding anything, but it just makes sense. Commercial property rocks.

Jill DeWit:                            Thank you. Well, you’ve done it again. You’ve wasted another 15 minutes or so listening to the Land Academy Show. Join us next time, tomorrow, for Finance Friday with Steven, myself, and Justin, and we answer your questions posted on our online community, Land Investors. It’s free.

Steven Butala:                   You are not alone in your real estate ambition. Was that just too much of a rant?

Jill DeWit:                            No, it was good.

Steven Butala:                   It’s just [crosstalk].

Jill DeWit:                            It was a perfect beginning, middle, and an end. I thought, “You know what? I have nothing to add.” It was like, mic drop. You did perfect.

Steven Butala:                   All right. Awesome.

Jill DeWit:                            Hey, wherever you are watching or listening, please subscribe and rate us there. We are Steve and Jill.

Steven Butala:                   We are Steve and Jill. Information …

Jill DeWit:                            And inspiration …

Steven Butala:                   … to buy undervalued property.

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