Wholesale vs. Improvement Equity (LA 920)
Steven Butala: Steve and Jill here.
Jill Dewitt: Guten tag.
Steven Butala: Welcome to the Land Academy show, entertaining land investment talk. I’m Steven Jack Butala.
Jill Dewitt: I’m Jill Dewitt, doing my best to entertain Steven, broadcasting from sunny southern California.
Steven Butala: Today Jill and I talk about wholesale versus improvement equity, and how to create it. You cracked me up with that.
Jill Dewitt: Thank you.
Steven Butala: We set this up so that she can make everyone, mostly me, laugh with how she responds to this.
Jill Dewitt: Oh, good. Thank you.
Steven Butala: Jill, we’re in the beginning. It’s working.
Jill Dewitt: Thank you.
Steven Butala: You have an endless creative approach to saying hello, Jill.
Jill Dewitt: I have some very other-
Steven Butala: You have stuff in the bag?
Jill Dewitt: Well, not … Oh, I’m sorry. You meant appropriate ones. I have other ways I can say hello to you, so I don’t think you want that right now.
Steven Butala: Oh, I’m speechless.
Jill Dewitt: I have some ways to say good morning and I have ways to say goodnight.
Steven Butala: Geez, woman. Wow. It’s good we’re talking about real estate today.
Jill Dewitt: Thank you. Focus, babe. Focus.
Steven Butala: Here, hold this hand grenade and focus.
Jill Dewitt: Yeah.
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 Dewitt: Dalton asks, “Hello. I’m in need for honest no BS advice. I’m in the search for a land investing course. I’ve been all over the internet looking at what’s available out there. I found Land Academy, the Land Geek, RE Tipster, Land Flippers, Land Profit Generator so far. Has anyone recently bought any of these courses and applied what they teach? And have you had success o failures? Please give me the good and the ugly. I want it all before I commit to anything. Thanks.” This is cool. I’m really glad this is the kind of stuff that goes on in our online community. It is completely 100% unedited, by the way. People write in answers and our people answer them truthfully, and I love it. And I see I’ve got a couple answers here.
One person, Chris said, “Dalton, I bought Land Academy after looking at and trying some others. I bought some bits from RE Tipster and I have nothing but good things to say about Seth, but I needed a more complete all inclusive training than he offered in 2016. The Land Academy training is exactly what they advertise it to be, everything you need to know to do the land business. It does not contain hard work, common sense” … Does not, am I reading that right?
Steven Butala: I don’t know yet.
Jill Dewitt: “Hard work, common sense, and startup money of $10000 to $15000.” Oh I see what you mean. You have to bring your own hard work, common sense, and startup money. That’s true. You must supply those pieces.
Steven Butala: Maybe we should supply the startup money too, Jill.
Jill Dewitt: “Keep searching this forum and you will read more about individual experience with Land Academy. Good luck to you.” That’s really nice and that was really cool, and that is very true. We don’t supply … Good luck. What was he saying? Hard work, common sense.
Steven Butala: Common sense. Just a lot of common sense.
Jill Dewitt: And just some money to send out some mailers and get your business rolling. That’s very true.
Steven Butala: There’s about 20 replies in LandInvestors.com.
Jill Dewitt: You can read it.
Steven Butala: If you have the same question or if you just generally want to be entertained, go in there and check it out.
Jill Dewitt: You could search by the keywords too if you want to find this exact thread. It’s pretty cool.
Steven Butala: I mean, here’s the basic difference. Again, I’m not selling anything. The Land Geek, Mark was my first student. He constantly refers here through his stuff, this guy that he used to work with.
Jill Dewitt: I love it. For me, it’s like look how successful-
Steven Butala: And that was me.
Jill Dewitt: It’s great.
Steven Butala: Yeah, it’s a great positive thing.
Jill Dewitt: That’s what I mean.
Steven Butala: Seth, I can’t say enough good stuff, just like the writer of the question. We’re good friends with Seth and we talk to him not infrequently. The other two, I don’t know actually much about the other two. You know, I don’t know. Jill and I-
Jill Dewitt: I know them, but I don’t know them.
Steven Butala: Jill and I buy and sell real estate as our primary business, so Land Academy is not our primary business. I think that should just tell it all.
Jill Dewitt: You know what I think too? My whole take on this whole thing is do whatever sings to you because you’re gonna connect with somebody, whoever it is, and that’s all that matters if you want to get into this business. If you’re a data person and I see us as we’re the people that if it’s data and you really want to make this a business and grow it to something big, that’s where we come in. If this is just a part time gig and you’re not interested in really hitting it hard, it’s like I don’t want to say hobby, but it’s maybe just something to do a little … Maybe somebody else’s approach is a little lighter, a little less involved, and maybe that sings to you. I understand.
Steven Butala: Land Academy is data-centric. Period. All these other programs, all of them, the ones on HGTV and all of it are all real estate-centric. If you’re a data person like, I don’t know, if you’re in finance-
Jill Dewitt: You’re an accountant.
Steven Butala: Or accounting.
Jill Dewitt: Anything analytical.
Steven Butala: Or even if you’re an analytic salesperson that looks at data and then you make a bunch of calls, this is gonna be great for you. If you love to rehab houses or if you are the kind of person that is very successful at … If you have a real estate agent, let’s say, and they call you and they say, “This house isn’t on the market yet, but I can get it for X, and you can do your magic like you do and clean it all up.”
Jill Dewitt: You like to swing a hammer.
Steven Butala: This is not for you.
Jill Dewitt: And order the windows.
Steven Butala: This will not work for you. 80% of what I do is in a spreadsheet in a dark room somewhere getting offers to owners that make sense financially, and for a bunch of reasons from data reasons and real estate reasons, but mostly data reasons. Then I show them when the phone rings, she handles it from there. That’s the truth. I can’t be more truthful than that. If you’re in it for the money, just to make hoards and hoards of money, which actually quite frankly Jill and I do, and a lot of our members do, that’s not gonna work for you either. You have to be a data person and you have to understand Excel within reason and understand the power of sending out 10000 offers a month. I’m not saying you send 10000 out in the beginning. Certainly not. That’s just the truth of it. I don’t know how else to say it.
Jill Dewitt: Perfect.
Steven Butala: It’s gonna turn off a lot of people. What I just said-
Jill Dewitt: But I want the right people though. I don’t want that-
Steven Butala: What I just said is gonna turn off half the people that are thinking about doing this program.
Jill Dewitt: But that’s good because they’re not … This isn’t for them and that’s totally fine. We started to do that one time. Remember we talked about that? Maybe I should screen people because I want to make sure everybody knows, and that’s what we do with my team. If you schedule a call with my team, we’re gonna tell you the good, the bad, and the ugly because we want you to come into this knowing exactly what you’re getting into. If you’re freaked out by Excel and you love to hand-write letters and put sticky notes on people’s doors and swing a hammer, this is not for you.
Steven Butala: This requires a vision. Honestly it requires seeing past the end of your nose. It requires looking at 10000 lines in a spreadsheet and making sense of which properties based on the data that you have, assessor driven data. It makes sense to purchase and then resell for more.
Jill Dewitt: Right. I personally think this … My last part on this is-
Steven Butala: It doesn’t have to be your last. I like this topic. This frustrates me.
Jill Dewitt: I find it’s easier too when the data and the numbers are staring at you, you don’t have to feel the decision or go with your gut or guess what you think the market’s gonna do. What?
Steven Butala: You don’t have to be emotional.
Jill Dewitt: Exactly.
Steven Butala: You don’t have to guess.
Jill Dewitt: It’s like I know exactly what I should do, where I should send it, what I should offer, and just sit back and let it ride.
Steven Butala: There’s no such thing as luck. Trust me.
Jill Dewitt: Too bad dating wasn’t that way.
Steven Butala: There’s just no such thing. Too bad for you. It was great for me.
Jill Dewitt: I was in a spreadsheet. We all know that. All right, moving on.
Steven Butala: Today’s topic, wholesale versus improvement equity. This is the meat of the show.
Jill Dewitt: I have something to say when you tell me it’s ready.
Steven Butala: What the hell are you talking about, Steve? No, good ahead. Start it off.
Jill Dewitt: Here is my take on this whole show, wholesale versus improvement equity. Let me paint the picture for ya. What I can do in 45 days as a wholesaler versus what I’ve done in 45 days being a flipper. So, 45 days-
Steven Butala: Flipper’s a tough word.
Jill Dewitt: Okay, being a rehab-er.
Steven Butala: Yeah. Yeah, yeah.
Jill Dewitt: There we go, rehab-er. 45 days in my air conditioned office, or heated, depending on the weather. What I can do as far as getting offers out, reviewing transactions, buying property, posting it for sale, selling it, having it done. The amount of money that I could get in our bank account … Let’s just say I start with, because I’m a rehab-er. I start with $200000 because I need to buy a property. That’s not in California obviously. So, I have $200000 to invest as a wholesaler. Do you know what I could do with that money? I could do three, four, five more times that money in 45 days. Period. Sitting back with my feet on my desk, not working that hard. Now, as a-
Steven Butala: Well, tomorrow the name of the show is 90 days wholesale versus rehab.
Jill Dewitt: I did not know that.
Steven Butala: So you can do the whole show now if you want, and I’ll just switch the titles. It’s a lot of work for me and a lot of stuff that I have to flip around, but it’s up to you.
Jill Dewitt: I’ll be quiet then. Well let’s just say I painted the picture and I’ll talk about it more tomorrow.
Steven Butala: Perfect. Oh my god, that’s perfect. Thank you.
Jill Dewitt: You’re welcome.
Steven Butala: Perfect segue.
Jill Dewitt: Now it’s all you. I got nothing. I’m just kidding.
Steven Butala: The point of this show is to explain the difference. Every probably few months, we talk about this topic, but it’s really important to digest. There are exactly two ways to create equity in anything, not just real estate. Let’s say it’s a car. Let’s say it’s an old car. You find an old car in a barn. The car is worth 10 grand. All cleaned up, it’s worth 100. These are real numbers. I can buy it for five and resell it for 10 to somebody who’s gonna make 90, or generate $100000 sale price at one of these high end auctions.
Jill Dewitt: Because they’re gonna put the work in.
Steven Butala: They’re gonna clean it all up, strip it right down to the frame.
Jill Dewitt: Exactly.
Steven Butala: They’re gonna sandblast the frame, seal it.
Jill Dewitt: It’s gonna take them six months.
Steven Butala: They’re gonna put all kinds of love into it. They’re gonna put 40000, 50000 bucks into it and sell it for 100 grand at an auction. Pat themselves on the back. Maybe even do a television show about it.
Jill Dewitt: True.
Steven Butala: The same thing is true with real estate and the same thing is true with anything, and everything that you buy at a garage sale.
Jill Dewitt: It’s true.
Steven Butala: You have two choices when you’re sitting there staring at whatever you’re gonna put some money into. You can buy it for less than it’s worth today because you’re a good deal maker or you’re good at sending offers to owners out in the mail, or you’re finding somebody in a situation where they just need the money or they don’t want the asset anymore or they don’t want to pay the taxes. That’s the creating equity way, by buying it cheaper the wholesale way. Or you can do it the improvement way. You can buy it from somebody like us and put all that labor into it and the time and expense, which is fine, and resell it for more, and hopefully make a profit. Neither one is wrong. You want to have some really strong opinions about which way is more efficient, especially if you understand data and you have a head on your shoulders and you’re not really interested in working with your hands.
Jill Dewitt: Did you say that we’re different? I don’t think we’re different on that.
Steven Butala: No, we’re the exact same.
Jill Dewitt: Okay, thank you.
Steven Butala: Did I say different?
Jill Dewitt: Yeah. No we’re on the same page as this. Yeah, yeah.
Steven Butala: Yeah, like everybody, we tried it the other way. It’s just not for us.
Jill Dewitt: No. It was fun for a few minutes. Then I looked at the bank account and I said, “This stinks.”
Steven Butala: It was never fun for me. Never. You’re good at it.
Jill Dewitt: Thank you. It was fun to play.
Steven Butala: Or you can do both. There’s some people in our group that do both.
Jill Dewitt: Pay decorator.
Steven Butala: You can become a wholesaling guru and buy incredibly … We have people in our group that do this. Buy incredibly cheap property and improve it.
Jill Dewitt: Right.
Steven Butala: That’s a lot of work. You usually have to have a team for that.
Jill Dewitt: Right. You’ve got to have the team. Boy, that does not appeal to me, but we do have members like that and it’s really cool. They already own a contracting business or their brother owns a contracting business. So actually, that’s a good fit because then they have their buyers already lined up. All they’re really doing … So the person that’s with us, they’re finding the deals, feeding them to the family member who does the renovations. That makes sense.
Steven Butala: Can you imagine, if you’re a successful rehab-er listening to this, which you’re not, because rehab-ers don’t listen to this show because they’re not data people. Aerospace engineers listen to this show. Software engineers do. Commercial pilots listen to it. Imagine this. If you are a very successful rehab-er and at the click of a button when you’re done with the rehab, you get another project that comes in, and it’s probably 50% of what you’re used to paying. Imagine that.
Jill Dewitt: Ding ding. You’d be like, “Line them up.”
Steven Butala: You’re walking right into a property that, there’s $50000 worth of equity immediately. If you just sold it in its current state falling down, you’d make 50 grand. You know what would happen? I give that successful rehab-er three transactions and then they will become us. They will sit and say, “Wait a minute? Why am I doing all this work when all I have to do is just resell this immediately and then another one pops up magically?”
Jill Dewitt: Exactly. Let somebody else do it.
Steven Butala: And I sell it for 50000 more and I don’t have to do anything.
Jill Dewitt: Exactly.
Steven Butala: Can I sell my tools yet?
Jill Dewitt: Yep. It’s true. Isn’t that great? It’s just easier and faster and it’s the best thing on the planet.
Steven Butala: That’s the point of this show. Jill’s gonna run the numbers for us in the next show, or maybe it’s the show after that. I would love to run a 90 day test. See what a wholesaler can make in 90 and a rehab-er can make in 90 days.
Jill Dewitt: I’ll share some more then.
Steven Butala: I think it’s shocking the numbers that can go on.
Jill Dewitt: Yep.
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 when we talk about what every wholesaler does wrong.
Jill Dewitt: And we answer your questions posted on the online community, LandInvestors.com. It is free.
Steven Butala: You are not alone in your real estate ambition. I don’t know how many times I’ve said that.
Jill Dewitt: Wait. At least 920. Probably a lot more than that.
Steven Butala: I still like it. It still makes a lot of sense.
Jill Dewitt: I know, it does make sense. I really like that. It’s good. Well wherever you’re watching or wherever you’re listening, please rate us there. We are Steve and Jill.
Steven Butala: We are Steve and Jill. Information.
Jill Dewitt: And inspiration.
Steven Butala: To buy undervalued property.
If you have any questions or comments, please feel free to email me directly at steven@BuWit.com.
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