How to Choose a County to Send Mail (LA 914)

How to Choose a County to Send Mail (LA 914)

Transcript:

Steven Butala:                   Steve and Jill here.

Jill DeWit:                            How the heck are you?

Steven Butala:                   Welcome to the Land Academy Show, entertaining land investment talk. I’m Steven Butala.

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

Steven Butala:                   Today, Jill and I talk about how to choose a county to send mail. We’re kicking it all the way straight back to the most basic stuff this week.

Jill DeWit:                            Like episode four.

Steven Butala:                   Yeah.

Jill DeWit:                            914 might sound like episode 004, just kidding.

Steven Butala:                   This whole week. What’s funny about that is when we started doing the show in 2015, how to choose a county was different.

Jill DeWit:                            Oh. Yeah, we didn’t have the tools and the resources.

Steven Butala:                   And the information and stuff.

Jill DeWit:                            And the staff and the help.

Steven Butala:                   Yeah. And the practice.

Jill DeWit:                            And the bills.

Steven Butala:                   And the three years of feedback from our members.

Jill DeWit:                            And the bank accounts. It’s gotten a lot better.

Steven Butala:                   Before we get into the topic, let’s take a question posted by one of members on landinvestors.com online community. It’s free.

Jill DeWit:                            Alice asks, hi, guys. Another quick question. I’m still a bit skittish, maybe pushing perfectionist when it comes to sending mail. I was inches away from mailing a county. It sounds like finger hovering over the button. Recent completed sales are decent. Days on market, not too long, et cetera, et cetera. Everything is good about that, then I took a quick moment to visually peruse the area in Google Earth and noticed it’s completely riddled with oil pads and rigs.

Steven Butala:                   I know, you’re in New Mexico.

Jill DeWit:                            Should I run away from oil rigs? Intuitively, it seems to me the oil pads would negatively affect value, yet, the county meets basically every other criteria that matters. Have any of you guys had success in and around oil rigs? Should I be turned off by them. Steve.

Steven Butala:                   You should be turned off by them. And yes, we have purchased property that has an existing oil rig on it, and with a lease in place, and they’re usually very, very low revenue, like $500 a year. And all it is, is really complicating what we do. I’ve never had any interest in oil and gas, or any of that stuff. It’s a whole separate industry. I mean, oil rights, it’s a completely separate deal versus surface rights, which is what we buy.

Jill DeWit:                            Right.

Steven Butala:                   So, no.

Jill DeWit:                            For me, I took it at just like, even old-school, like who would be your customer? Yes, I want to live out there. I like watching that thing go up and down. It’s very therapeutic. Could you imagine? That’s where I want to be.

Steven Butala:                   My whole goal in life is to live 20 yards from the oil rig.

Jill DeWit:                            I can hang my laundry on it.

Steven Butala:                   I don’t think that niche exists. I think of all the reasons that we sell property. We literally have a database full of people who want to buy property without access because they want to be lost like that.

Jill DeWit:                            That’s true. This is not one of them.

Steven Butala:                   Never have I seen, I want to live in an industrial center.

Jill DeWit:                            My kids love to go play on the oil rigs.

Steven Butala:                   If you want more on this topic, did you know that the City of Los Angeles has a bajillion oil rigs right in little neighborhoods just going up and down?

Jill DeWit:                            It’s really weird.

Steven Butala:                   So, if you’re bored one day, go on Google and type in functioning oil rigs in the City of Los Angeles. You’ll just crack up.

Jill DeWit:                            It’s kind of funny. It’s like you have a beautiful view off a bluff, but halfway down the buff are these rigs, and what the heck?

Steven Butala:                   Like a really nice neighborhood in Bel Air, and you see an oil rig between two mini mansions.

Jill DeWit:                            It’s hilarious.

Steven Butala:                   It’s some classic stuff.

Jill DeWit:                            Yep.

Steven Butala:                   Now, that’s my opinion. People in our group seek this stuff out and they do great with it. One group, specifically, in New Mexico that I know, they buy these properties all the time. I know exactly what you’re talking about. It’s just a little off, like, I can buy these properties for 3, 4, $8,000. It’s got a functioning oil rig with a lease from a name brand oil company.

Jill DeWit:                            Right.

Steven Butala:                   And you know, that’s what they do.

Jill DeWit:                            A whole different thing.

Steven Butala:                   Yeah.

Jill DeWit:                            It’s true.

Steven Butala:                   I think it complicates it. I mean, what do you think? Are you good with that?

Jill DeWit:                            I mean, I don’t really want to do that much work.

Steven Butala:                   That’s what it is. It’s a lot of extra work to do real estate deals.

Jill DeWit:                            That’s it. It’s like shucks.

Steven Butala:                   Your reason is better than mine.

Jill DeWit:                            Yeah.

Steven Butala:                   It’s too hard.

Jill DeWit:                            Yeah, do I really want to get involved in that?

Steven Butala:                   I want to do easy deals, easy, profitable, fast deals.

Jill DeWit:                            Right, and more of them.

Steven Butala:                   Today’s topic, how to choose a county, where to send the mail. This is the meat of the show. Right before the show, the producer, we have a new producer, a show producer, came in, he’s a young guy, and he came in and said, you’re doing a bunch of stuff wrong.

Jill DeWit:                            Please give me the list.

Steven Butala:                   I was just telling Jill, not a lot of people that come to work for us come to us and sit us down and say, you’re doing a lot of stuff wrong.

Jill DeWit:                            Not a lot of people listen to the show, in our staff.

Steven Butala:                   So, in this kid’s case, Jill has a very close friend who’s a film producer, she won an Emmy. And so, she gets these interns, these parade of film student interns, and this guy struck a chord with both of us, so we hired him full-time when Jill’s friend was done, their internship thing was done and he graduated. And so, he’s just fresh out of film school and he produces all this stuff. I’ve been producing it for years myself, and thank God it’s over. But, he had a lot of good things to say.

Jill DeWit:                            Good.

Steven Butala:                   Like, move your mic around, stop, basically, don’t be yourself.

Jill DeWit:                            Is mine okay. I don’t even know what. Don’t be yourself.

Steven Butala:                   It’s a bunch of stuff that probably won’t make any difference to the viewer/listener, but it was fun.

Jill DeWit:                            Am I set up appropriately?

Steven Butala:                   Yeah. He didn’t say anything about you. He didn’t call a meeting with you. That’s what I think is funny.

Jill DeWit:                            Oh. I got an A.

Steven Butala:                   Can you imagine if the people who complete our real estate deals, our transaction coordinators here, came and sat us down and said, you know, I think you guys are doing a bunch of stuff wrong on these real estate deals. Man, that wouldn’t go well. Our members doing it, that’s fine.

Jill DeWit:                            That would be hilarious.

Steven Butala:                   A member, Joe Martin, we’re changing all kinds of stuff because of the things he’s telling us.

Jill DeWit:                            Yeah. That’s hilarious. I looked at this topic, by the way, and I have a question, so if you want to, I can go either way, I can interview you by asking you questions.

Steven Butala:                   Sure.

Jill DeWit:                            Okay. Cool. Here’s my first question on choosing a county. Why do people get hung up here?

Steven Butala:                   I don’t know, Jill. It’s a very natural thing for me to choose where to send mail. For the people in the advanced group, never got hung up on this. I think it’s not actually being hung up on the topic. I think you can file it under, I have newbie jitters.

Jill DeWit:                            Well, what do you think like even the person that asked the question a minute ago? They’re about to push the button, now they found an issue, now they’re like, oh shucks. Do you think it’s going to make them more hesitant going forward again?

Steven Butala:                   People get hung up on this because they think that there’s this formula. In Land Academy at one point, probably by the time this airs it will be released, if not, within days of that. They think that its got to be this, it’s got to be this, fill in the equations, there’s a mathematical thing, and then there’s going to be success. That’s just not how it works. By the way, if you’re choosing a county to send mail in, it means you’re probably looking to buy rural vacant land. If you’re looking to purchase infill lots to be built on, that’s a whole different thing, then you’re going to do it by zip code, and there’s going to be lots of zip codes.

Steven Butala:                   If you’re a member, that’s what Land Academy 2.0 is, which is all released and done, and it’s getting rave reviews. 1.0, rural vacant land. 2.0, infill lots to be built on, and 3.0 in the end will probably be something like commercial real estate, or sub-dividable, massive properties, ranch-type properties. But, anyway, I’m not sure. But, they’re very different approaches, all three, on how you buy them and you analyze the data, and get it to the point where you want to send some mail out. This is about rural vacant land.

Steven Butala:                   People get hung up because they are afraid that they’re going to miss something and screw up a mailer. You know what? You are going to screw it up. That’s the problem.

Jill DeWit:                            Right.

Steven Butala:                   The problem is that you don’t know you’re going to screw it up, and you’re just hoping, and then think that it’s going to right the first time, and it’s probably not.

Jill DeWit:                            Exactly. That ties into my second question too. What would you share as the biggest mistake that new people doing this make?

Steven Butala:                   Pricing. I’ve never heard somebody say, sometimes people come to us and they say, you know what, this first mailer, this is very infrequent, but once in a while somebody will contact me and say, I made this mistake on this mailer. It’s never, oh, I shouldn’t have mailed this county, it’s never that, never. I’ve never heard one person say that. What I’ve heard them say is pricing, I priced it too high or I priced it too low, and I didn’t get any response. That’s not what this is about, this episode. How to price a mailer is like tomorrow.

Jill DeWit:                            Cool. Yes. How about, what do you think as a new person starting this and choosing a county, how much time do you think they need to spend to get good at it?

Steven Butala:                   Hours, and hours, and hours. If before I sent my first mailer out, if I was starting out now, I would be on countywise.com, which is a site that Jill and I released. It’s all free. And, on something like realtor.com, not like realtor.com, on realtor.com, going through the motions of what I talk about in 1.0.

Steven Butala:                   Let me just get into it. If you’re the kind of person who takes notes during these episodes, this is a good note taking show for you. Before you even start looking at geography on where to send a mailer, you have to get this in your head and it needs to stay there throughout your career, until you send out your last mailer, which I hope is never. I hope you do it forever. You’re trying to buy rural vacant real estate for between 25 and 45% of its retail value, not wholesale, retail. That is the starting point. That is where you start the race, not demographics, not back tax property, not access, none of it. Those things are all important. You have to keep money straight in your mind, all the time because if you don’t, you’re going to start paying too much for property. Jill and I are seeing this a little bit, when we get deal funding submissions off of landinvestors.com, where people are submitting really good real estate, but it’s just they sent the mailer out for way too much money.

Jill DeWit:                            It’s true. Too high.

Steven Butala:                   25 to 45% of what it’s worth. Once you got that, then there is a three step process to picking a county.

Steven Butala:                   Number one, find a place where people want to buy real estate. I know this sounds crazy. I know it sounds like Captain Obvious, but do people want to buy real estate that’s just outside of town where they can take their family and go to a lake? Yeah. Where it’s one-tenth of the price. There’s neighborhoods, little areas all over Los Angeles where it’s like, literally, one-tenth of the price to buy a piece of real estate, than Los Angeles, itself.

Jill DeWit:                            Right.

Steven Butala:                   That’s a place people want to buy real estate. Do you want to real estate there? That’s a good test. It needs to be in proximity to a large city. For convenience, on County Wise, I put a demographic density map, where you see the darker green it is, the county, in general, it means that there’s less population, and stuff tends to be cheaper where there’s few people. Use that test.

Steven Butala:                   Outside of Manhattan, New York, you can go about an hour north and start buy some crazy cheap properties. Am I saying you should run out and those two counties and do it? No. Outside of De Moines, Iowa there’s probably cheap real estate too, not farmland, recreation land. It’s not going to take long for you to find, I’m sure whoever you are, there’s multiple vacation spots. Am I saying just vacation spots? No. Just places that are way, way, way cheaper than what people do. You want them to be shocked at the price. People know how much real estate is where they live, and then when they find out it’s one-tenth of the price, two hours away, that’s a good thing.

Jill DeWit:                            Thanks for doing this show, by the way. I’m over here. I’m just kidding.

Steven Butala:                   Number two, now you’ve got an idea, let’s say, outside of Los Angeles, or Manhattan, New York, or whatever. Even Detroit and Chicago, upstate Michigan, or in Wisconsin, there’s, two hours away, super cheap places. Go there on realtor.com, we’re in number two now, and start pricing houses and land, the for sale stuff, not completed sales, for sale. Completed sales and comps, that’s all 1971. We have so much data right at the fingertips for free now. Completed sales just don’t matter anymore.

Steven Butala:                   When people say, what about the comps, man? I know exactly how old they are. Younger people only look at what’s listed for sale because the sale prices and the close prices are almost the same in every market. Establish some consistency on realtor.com and find, not for land, for houses and see that it’s relatively consistent. The last thing you want is these huge varying prices because it’s impossible, when you’re new, to correctly price your mailer, so look for consistency.

Steven Butala:                   Test it for reason. Are there too many properties for sale? If you go to Detroit on realtor.com right now, you’ll see thousands, and thousands, and thousands of properties for sale. Do you want to get in that mess? No. You want to find a place where there’s not too much stuff for sale, but there’s not nothing for sale. You want to be at the top of that bell curve.

Jill DeWit:                            Not nothing, you need to know how to price it.

Steven Butala:                   There needs to be enough data so you can price it.

Jill DeWit:                            Exactly.

Steven Butala:                   Exactly, Jill. Again, you should be shocked at how cheap it is based on the urban area. Then, the final step is to test it for reason. Does it make sense if I buy four acres outside of XYZ urban area, two hours north, let’s say, for a few thousand dollars, that I can sell it for $8,000 or $12,000? Are there a lot of properties for sale for $12,000? If there are, then you better be buying it for two or three.

Steven Butala:                   This isn’t about pricing. This is about testing it for reason. Then, on top of that, this is number three now, built into number three, check the volume of back tax properties. If there’s tons, and tons, and tons, this is all on County Wise, of back tax properties available, that generally is not a good idea to, again, do you want to get in that soup? No. That’s an indication of a super problematic inner city situation, or a paper subdivision situation, usually out west, where there’s so many properties in a county, like Mohave County, Arizona. You just don’t want to play there. Now, that said, Jill and I have made hoards of money in these situations. I’m just saying it’s not for the new people.

Jill DeWit:                            Thank you.

Steven Butala:                   So, that’s the three step process. I can’t overstate this enough. It just needs to make sense to you.

Jill DeWit:                            It does.

Steven Butala:                   Some of the most successful members in our group have taken the information that I’ve just shared with you and twisted it to make it their own version of it and they’re printing money.

Jill DeWit:                            Right. I’d like to add one thing that we don’t tell you too, is it doesn’t matter where it is. There’s not secret county. There’s not special place. If anyone says it’s a secret county, let them have it. Go somewhere else because now you know how to choose a county. That’s what is going on in our community, and with our members in our world, and they are hitting areas that we never heard of, and are killing it.

Steven Butala:                   People ask me all the time, where doesn’t this work or where does this work?

Jill DeWit:                            Right.

Steven Butala:                   It works in every single county. There’s 3,144 counties/parishes in this country. It works in every single one. What will make or break your career in this, is pricing. You can’t price Manhattan, New York at $500 an acre. You’re wasting your time. You’re going to upset a lot of people, and you’re going to frustrate yourself, and waste money.

Jill DeWit:                            Exactly.

Steven Butala:                   But, in lots of places in Nevada and Arizona, $500 an acre is way too much.

Jill DeWit:                            Sure.

Steven Butala:                   In fact, in most counties, I would not pay. Jill is more conservative than in am when it comes to pricing.

Jill DeWit:                            I kind of am.

Steven Butala:                   I green light stuff sometimes, that we get in, and she’s like, nope. It used to be the other way.

Jill DeWit:                            Isn’t that funny. That’s very true. It’s changed a little bit. That’s really funny. That’s good.

Steven Butala:                   Well, you spent another 20 minutes or so listening to the Land Academy Show. Join us next time for the show, how to price a mailer.

Jill DeWit:                            And we answer your questions posted on our online community landinvestors.com. It is free.

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

Jill DeWit:                            I forgot what that felt like. It’s kind of nice. A lot of our shows, it’s like 50/50, and then there’s shows that we do that it’s like all me, that I’m doing all the talking. This show was definitely all you. That was a nice little break. I hope this week goes the same way.

Steven Butala:                   I think I made myself perspire, I talked so much.

Jill DeWit:                            I was going to say, that was a lot. That was really good. I love it. Wherever you are listening or watching, please 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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