How to Buy Houses for Immediate Wholesale (LA 929)

How to Buy Houses for Immediate Wholesale (LA 929)

Transcript:

Steven Butala:                   Steve and Jill here.

Jill DeWit:                            Good morning.

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

Jill DeWit:                            And I am Jill DeWitt, broadcasting from sunny southern California.

Steven Butala:                   Today Jill and I talk about how to buy houses for immediate wholesale.

Jill DeWit:                            I realize I said morning when it’s really actually afternoon. I’ll wake up here. It’s one of those days.

Steven Butala:                   Why does it feel so early? Because it is.

Jill DeWit:                            What? Well, it’s not … It’s not that early. People would say, “What? What time? Are you guys think that’s early?” When really they’ve been up at the office since five. We’re kind of wimps.

Steven Butala:                   What happened to you this weekend that was fantastic? Or really bad?

Jill DeWit:                            This week?

Steven Butala:                   This weekend.

Jill DeWit:                            Oh, I went to Santa Barbara.

Steven Butala:                   I was with you.

Jill DeWit:                            Yeah, I know.

Steven Butala:                   And it was fantastic.

Jill DeWit:                            I thought you were gonna it say it was really bad, because we brought up … You know what, it was really fantastic, because we got to go to Santa Barbara. It was really bad because we had to take a kid.

Steven Butala:                   So good that our children don’t listen to this show.

Jill DeWit:                            Exactly. It’s okay.

Steven Butala:                   Yeah.

Jill DeWit:                            Yeah. It’s fine.

Steven Butala:                   He’s at that age.

Jill DeWit:                            And we need to vent about it.

Steven Butala:                   Yeah.

Jill DeWit:                            Makes me feel better.

Steven Butala:                   Publicly on the show.

Jill DeWit:                            Oh, yeah, totally.

Steven Butala:                   That’s why we have the show. To vent about our children.

Jill DeWit:                            Exactly.

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:                            Joe Chu asks, “I picked the counties I wanted to mail based on my personal for use preferences. I think to myself, it would be nice to spend the weekends there. So I mail there. Have you used the same logic?” I don’t think that’s crazy.

Steven Butala:                   I have used this logic, which we don’t talk … This is why I included this question. I’ve used this logic on every mailer I’ve ever done, ever. I put myself and that’s why I included it, so … And I say all through 1.0 and 2.0, test for reasoning, test for logic, and just make sure it makes sense to you. It’s almost like what you choose in the grocery store is … Some of it’s about price. Some of it’s about, yeah, I really want to taste it. Some of it’s about is it good for me? So you have to kind of feel your way through whether or not you want to send an area, send mailer in an area. But I will say this triggered something for me for some reason when I read it, because I’m never gonna mail an area just for financial reasons and that’s it. Because Jill and I buy and sell real estate all the time and we do it based on, yeah, this is a good deal. Sometimes, if the deal’s really right, I get this feeling like, you know, maybe we should keep this.

Jill DeWit:                            Yeah.

Steven Butala:                   This is such a good deal, financially, and it’s such a cool property. We never do.

Jill DeWit:                            What’s funny, that’s why I tell people don’t go there. Don’t go there. Hey, I just got my first three houses and they’re gonna close in escrow and then I’m going to drive out there. Stop. Don’t.

Steven Butala:                   Yeah.

Jill DeWit:                            ‘Cause if you fall in love with it, that’ll mess it up.

Steven Butala:                   Exactly.

Jill DeWit:                            You don’t want to fall in love with it.

Steven Butala:                   But at the same time, you do want to say … You want to have that thought.

Jill DeWit:                            Yeah.

Steven Butala:                   The best deals we do, I’m like, “Wow. If we kept this for 10 years, it’d be unbelievable.”

Jill DeWit:                            I have to ask a question here. So along that logic, you said that “I don’t mail anywhere where I would not see myself there.” Correct? So I just thought of something that’s really kind of funny. So we’ve mailed some very interesting areas for houses and like so how low would our expenses need to get to … Does that make sense?

Steven Butala:                   Monthly expenses?

Jill DeWit:                            Yeah. Let’s just say … ‘Cause we’ve mailed some areas that for houses that are really good hot markets, but I’m like I would never live there.

Steven Butala:                   Yeah, I mean, you and I historically for more than a decade now have had a difference of opinion about what a rational cost of living should be.

Jill DeWit:                            There we go. Okay. I’m like, ’cause I see it-

Steven Butala:                   Let me put it this way. Jill’s is here. Off the screen.

Jill DeWit:                            Oh.

Steven Butala:                   Intentionally. And mine’s right about here. That’s where California falls.

Jill DeWit:                            Oh.

Steven Butala:                   Not mine. Not my way.

Jill DeWit:                            Last time I checked, you’re happy to be here. Am I wrong?

Steven Butala:                   Every time we have this conversation, that’s what you say.

Jill DeWit:                            Well.

Steven Butala:                   You say some version of that sentence.

Jill DeWit:                            Well, and in my defense, the other day, you were looking at properties all over the country and you brought up a place and I said, “All right. I guess we’re going there.”

Steven Butala:                   Right. So … I can see … I see the analytics on who watches and listens to this show every week.

Jill DeWit:                            Right.

Steven Butala:                   And I’m going to tell the truth about California. It’s everybody who has ever wondered about California, specifically southern California.

Jill DeWit:                            Here we go.

Steven Butala:                   First of all-

Jill DeWit:                            Here it comes.

Steven Butala:                   California, southern California and northern California might as well just be two states.

Jill DeWit:                            That’s true.

Steven Butala:                   Two different states.

Jill DeWit:                            That’s very true.

Steven Butala:                   They’re as different as Michigan and Florida or even let’s say New York City and Florida. That’s how different they are. I don’t think anybody can disagree with that. Even in California. So I’m talking about southern California now. It’s probably 10 times more expensive than you think from a real estate standpoint. Yet there’s still a dollar menu at McDonald’s. Electricity in this state is next to nothing.

Jill DeWit:                            It’s true.

Steven Butala:                   Electricity … Our electric bill-

Jill DeWit:                            Yeah.

Steven Butala:                   … for … You know, we don’t live in a slum area. Our electric bill is like $35 a month, which I don’t understand because in Arizona it’s like 1200. Food is incredibly inexpensive. Produce and stuff like that, because this is the supermarket of the world.

Jill DeWit:                            Right.

Steven Butala:                   Although everybody believes that it’s the center of country, like Iowa and Kentucky. I’m going to spend some time on this. It’s a little bit of a vent for me. You brought this up. I didn’t.

Jill DeWit:                            I did bring it up. That’s so … It’s my fault. I’m sorry. I’m going to apologize right now for the next 10 minutes.

Steven Butala:                   Gas per gallon, which is no big deal, ’cause gas per gallon, for your car-

Jill DeWit:                            Oh, yeah. That sucks.

Steven Butala:                   … is 3.50. I just read a national article right before we started the show that for the first time in a really long time, in nine states, gas has fallen below two dollars a gallon.

Jill DeWit:                            It’s up for us.

Steven Butala:                   We’re like 3.50, 3.75.

Jill DeWit:                            So everybody has electric cars but us. I refuse to do that.

Steven Butala:                   The whole world-

Jill DeWit:                            Actually, I would do it. But I like my car.

Steven Butala:                   … has this perception that-

Jill DeWit:                            Yeah.

Steven Butala:                   … there’s this kind of hippie kind of population here and it’s very, very liberal, which couldn’t be further from the truth. Some of the most conservative people I have ever met are in southern California. The GDP here-

Jill DeWit:                            You have a lot to say.

Steven Butala:                   Statewide GDP, gross domestic product, of California or its own country, right, forget … If it were it’s own country is eight or nine. So it would be the eighth or ninth largest economy in the world if it was its own country. So if that’s important to you, that’s good. Where we live, there’s all these towns around us that are like megaplexes for industry. Aerospace. All the aerospace companies are here. So everybody is enjoying this incredible W-2 income experience, let’s say, and then all the companies that feed into the large companies, it’s like Northrop …

Jill DeWit:                            Boeing.

Steven Butala:                   And Boeing and so all these sub-companies, sub-manufacturing companies, a lot of people own those companies that feed parts and services to that, so it’s like living in a train set. That’s what I think. I have a lot more to say about social stuff, so-

Jill DeWit:                            Do we need to keep going? I only, you know, Steven, I just asked ya-

Steven Butala:                   I grew up in Michigan. I had all these ideas about California and when I got here. All the movie stuff’s real. Like everything you’ve ever heard about … People are filming stuff right down the street from where we live right now.

Jill DeWit:                            Like right now.

Steven Butala:                   For all month. The whole month.

Jill DeWit:                            Yeah.

Steven Butala:                   So while that’s really cool for the first eight hours-

Jill DeWit:                            Veronica Mars.

Steven Butala:                   … then it’s a problem for parking. There’s a lot of stuff that goes on. It attracts a lot of people.

Jill DeWit:                            It does.

Steven Butala:                   And the people that the movie industry attracts are not people like us. They’re not people like the people who listen to this show. They’re other people.

Jill DeWit:                            Wow.

Steven Butala:                   I’m like 5% of the way through this.

Jill DeWit:                            Why? I didn’t mean to get into all this. Do you really need to get this off today?

Steven Butala:                   So, I’ll cut to the chase.

Jill DeWit:                            Okay. All right.

Steven Butala:                   If you wanted to spend 10 times more on housing and enjoy exactly all the stuff that I just talked about, southern California is for you.

Jill DeWit:                            I would like a chance to give my rebuttal.

Steven Butala:                   Go.

Jill DeWit:                            Last … How many weeks, months did we go without rain? How great is it to get on your bike, Steven, and ride to the marina and get on your boat?

Steven Butala:                   It’s great.

Jill DeWit:                            And you can go fishing and go … And it’s whale-watching season right now.

Steven Butala:                   Right. Oh, that’s awesome.

Jill DeWit:                            There’s dolphin everywhere.

Steven Butala:                   The beach is right here.

Jill DeWit:                            The beach is right there. And especially where we live, the plus side is the parking is so awful our beach is not that crowded. So that part’s great. The people are smart. They work hard to afford-

Steven Butala:                   That’s true.

Jill DeWit:                            … what they have.

Steven Butala:                   That’s true.

Jill DeWit:                            I mean, you want to hang out with like-minded people, I mean, that’s one of the things about our whole community is like-minded people. We’re all investors doing stuff.

Steven Butala:                   That’s all true.

Jill DeWit:                            Thank you.

Steven Butala:                   If your mortgage is $1300 where you live, it’s gonna be 13,000 here and I’m not exaggerating.

Jill DeWit:                            That’s true.

Steven Butala:                   Maybe 25,000.

Jill DeWit:                            And you’re working-

Steven Butala:                   When you look at-

Jill DeWit:                            But you’re working-

Steven Butala:                   places like taxes.

Jill DeWit:                            … next to people and you’re kicking and you’re working your rear off, right, to afford it and so is the guy next to you, so you guys have a lot to talk about.

Steven Butala:                   So, and I will give Jill this, and this is actually really why I put up with this. The level of employees-

Jill DeWit:                            It’s true.

Steven Butala:                   We set up shop here, our one office here. The level of talent, the work talent pool, is dramatically higher than anywhere I’ve ever lived or worked.

Jill DeWit:                            That’s true.

Steven Butala:                   So this place attracts a lot of people for a lot of reasons, but we have the best crew right now. And they don’t listen to the show, either. I really, truly mean this.

Jill DeWit:                            I know. Thank you.

Steven Butala:                   The crew that we have right now is nothing short of phenomenal.

Jill DeWit:                            So agree.

Steven Butala:                   Hardworking. Good people. So you have to ask yourself this in anything in your life. Is it worth it?

Jill DeWit:                            Yeah. I’m in.

Steven Butala:                   I don’t know yet.

Jill DeWit:                            Oh.

Steven Butala:                   That’s the truth.

Jill DeWit:                            Okay.

Steven Butala:                   I’ll let you know in couple of years.

Jill DeWit:                            Can we get to the show? Shucks.

Steven Butala:                   Today’s topic. How to buy houses for immediate wholesale. This the immediate show. This is the meat of the show. Reluctantly, ’cause I’d love to sit here and rant about California.

Jill DeWit:                            Well, let’s do a whole … We can do a whole California show another time.

Steven Butala:                   All right.

Jill DeWit:                            Actually, that’d be kind of fun. We could talk about real estate, like pick parts of the country or pick states and do like a five part series or something. That’d be kind of fun.

Steven Butala:                   You know what we should do is-

Jill DeWit:                            And then we’ll save Texas for Friday and talk about it with Justin.

Steven Butala:                   Yeah, I think we should have a few people on … Some people on the show that talk about why they like to live in Texas-

Jill DeWit:                            Yeah.

Steven Butala:                   … or don’t like-

Jill DeWit:                            Like we’ll get-

Steven Butala:                   What’s good and bad about it.

Jill DeWit:                            Like we’ll get Joe Martin. Where he … is he Georgia?

Steven Butala:                   Yeah.

Jill DeWit:                            No.

Steven Butala:                   Yeah. Atlanta. Yeah.

Jill DeWit:                            Atlanta. Okay. So we can get Texas. Luke’s here with us. I don’t know where Kevin is.

Steven Butala:                   Luke’s from Michigan and he hates it here.

Jill DeWit:                            Okay. But his wife loves it.

Steven Butala:                   He doesn’t hate it here.

Jill DeWit:                            But his wife loves it.

Steven Butala:                   He loves it here-

Jill DeWit:                            And the horses.

Steven Butala:                   I love living here. I can’t stand how much it costs.

Jill DeWit:                            Okay. Chill. Please. Chill. This is turning into the wrong kind of a show. Save it. This is for you to go into your quiet space, Steven.

Steven Butala:                   You know how you … You just push your mate over the-

Jill DeWit:                            Yeah.

Steven Butala:                   That was Jill’s okay that’s-

Jill DeWit:                            Like drop it. Now we’ve had … It’s enough.

Steven Butala:                   I’m done.

Jill DeWit:                            Thank you. All right. Back to the show. So here’s my notes about how to buy houses for immediate resell.

Steven Butala:                   Excellent.

Jill DeWit:                            I have three steps.

Steven Butala:                   Excellent.

Jill DeWit:                            So I, unlike you, I’m trying to stay on topic.

Steven Butala:                   You know what?

Jill DeWit:                            And I actually showed up with notes.

Steven Butala:                   I’m going to start … I’m going to talk about cars next.

Jill DeWit:                            Oh, no.

Steven Butala:                   I sold the last-

Jill DeWit:                            Oh, no. No, no, no, no, no.

Steven Butala:                   … classic car of my-

Jill DeWit:                            Can we save that please?

Steven Butala:                   Okay. Yeah. All right sure.

Jill DeWit:                            I want to talk about the show. So here’s what I think about how to buy houses for immediate resell. And we’re talking houses. This is in preparation for House Academy which is in preparation for that new show. You heard it here. What I want to say is the first thing I would do is pick an area. Well, how do I do that? Well, there’s all these great steps that you can kind of figure out a little bit from our current programs, but sit tight. It’s gonna be all spelled out for you in our next program, House Academy, but involves downloading data. Red, yellow and greening areas based on a certain criteria. So that’s step one.

Jill DeWit:                            Step two to buying houses for immediate resell is line up the buyers. And that means calling, finding some builders, guys who are rehabbing, who ever you want to sell to. Find them. Have a conversation with them. Figure out what they want. You’ve already got the area. You know it’s a hot area. You got that. Now, again, our goal is immediate resell. So why got to find out the buyers. Line them up and see what they want. Not down to the last everything, but get a handful of them and get a real good feel for what they all want. They all want three twos, no baths, whatever it is. And they all love the zip code over here. You have five people that love this zip code. Ding ding. That’s now even better.

Jill DeWit:                            And then the last thing you do is send out the offers. Because as soon as they come back and you lock them in at your price. You know what they’re worth. You know how to do this. You will know how to do this after House Academy. If you’re on Land Academy, you know how to do this, right? And your buyers are standing by, waiting for you to call, and waiting for you to text and tell them, “Here it is, go look at it. Here’s the price.” That’s my steps.

Steven Butala:                   Well said. Here’s what’s different about wholesaling houses versus land, so this is show number, I don’t know, 900 and …

Jill DeWit:                            929.

Steven Butala:                   929.

Jill DeWit:                            I know that, too.

Steven Butala:                   Here’s what’s different. We’ve had 900 and twentyish shows about land, but we’re talking about houses right now. Why are these guys talking about houses? I thought the name of the show was Land Academy. Oh, the methodology that we apply to sending blind mailers out to purchase unwanted land applies to houses, but here’s how it’s different. There’s so much more data on the internet about people purchasing and selling houses for whatever reason. Probably because real estate gents are involved. I’m not sure.

Jill DeWit:                            Right.

Steven Butala:                   Or the values or different. Or there’s more money to be made. We don’t know. But there’s so much more urban data available, so it makes it easier for people like us and listeners like you to price, very accurately price the value of these mailers that you send out. So there’s all these algorithms that are involved. Zillow, Trulia, Realtor.com. There’s lots of them. When you collect all these algorithms and you take an average of them and you look at the price of an asset in a spreadsheet, let’s say there’s 10,000 assets that you have. It makes it very simple in a mechanical algorithmic way to price this accurately where it’s very difficult or harder, let’s just say, not unaccomplishable to do with land.

Steven Butala:                   So it makes a strike percentage really appealing for people who are interested or haven’t thought about it, but oh, all of a sudden, they’re out thinking about selling their property because they got an offer from you. It sets you completely apart from everybody who’s ever sent mail out to buy wholesale houses. That’s how you do it. That’s how you win. If you go to Bigger Pockets and type in mailer … Better yet, type in failed mailer. There are people for years and years, right up ’til yesterday, that rant about a failed mailer and they almost always are using postcards. They’re not sending offers at all. They’re sending a postcards, “Hey, would you like to sell your house? Just give me a call.”

Jill DeWit:                            Right.

Steven Butala:                   So the people that are-

Jill DeWit:                            It’s not gonna yield the same results. You’re gonna get a bunch of crap.

Steven Butala:                   You’re listening to this show.

Jill DeWit:                            Yeah.

Steven Butala:                   You’re interested in doing this the right way. So that’s how you wholesale a house. That’s how you buy a house cheap. Jill just nailed it. The flip side of it is you’ve got to have all kinds of landlords, professional people in the industry, not Mom and Pop who want to raise their child in a house.

Jill DeWit:                            Right.

Steven Butala:                   Landlords. Developers.

Jill DeWit:                            Flippers.

Steven Butala:                   Rehabbers. And it’s really easy to find these people.

Jill DeWit:                            Developers.

Steven Butala:                   Long before you send the mailer. And have a conversation with them. Hey, do you like, what zip code, 85258? If you had a bunch of houses there priced at 320 grandish-

Jill DeWit:                            Yeah.

Steven Butala:                   Or whatever the equivalent of $122 a foot. Could you fund those? And they’re gonna all say something like this.

Jill DeWit:                            Right.

Steven Butala:                   “Oh. Are you kidding me? I could buy 10 of those right now. ”

Jill DeWit:                            Yep.

Steven Butala:                   Actually 325 a foot would be better.

Jill DeWit:                            Yep.

Steven Butala:                   Or 310 a foot or whatever the 110. So you’re not going in blind anymore.

Jill DeWit:                            Exactly.

Steven Butala:                   It’s really, really like cheating. It’s like if you were doing it on Wall Street it would be the equivalent of insider information. Go ahead.

Jill DeWit:                            No. That’s it.

Steven Butala:                   That’s all?

Jill DeWit:                            No.

Steven Butala:                   I thought you were going to say, “Oh, Steve, you’re crazy.”

Jill DeWit:                            No.

Steven Butala:                   “Oh, no, you missed the point here.”

Jill DeWit:                            No. It was beautiful. Silly.

Steven Butala:                   Well, you did it again. You spent another 15 minutes or so listening to The Land Academy Show. Join us next time where we talk about how to find a wholesale money partner fast.

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. Yeah. That was kind of a rant.

Jill DeWit:                            No, it was good. That was. That was like … Did you need to get that out?

Steven Butala:                   I guess.

Jill DeWit:                            Okay. Good. You make it sound like you hate where you live.

Steven Butala:                   I love where I live.

Jill DeWit:                            All right.

Steven Butala:                   I don’t like how much it costs.

Jill DeWit:                            Okay.

Steven Butala:                   So you know me.

Jill DeWit:                            Oh.

Steven Butala:                   It’s all linear thinking and analytical everything. I can’t leave anything alone.

Jill DeWit:                            I agree with that.

Steven Butala:                   I can’t just sit there and say, “Yeah, I’m totally happy about this.” And accept it.

Jill DeWit:                            I can and I live … You know what, I gotta tell you. This is … I’m glad you brought that up, ’cause I can and I do and I’m very happy and calm and not stressed out.

Steven Butala:                   That’s why you-

Jill DeWit:                            Or worried or-

Steven Butala:                   … reason that you’re a happy person and smile all the time.

Jill DeWit:                            Thank you.

Steven Butala:                   Me, not so much.

Jill DeWit:                            And you listener, try it. Wherever you are, try it. Don’t be stressed. It’s easier to just be relaxed and if you need to make some changes, make some changes, but don’t stress about that, too. Wherever you’re watching or wherever you’re listening, please rate us there.

Steve and Jill:                     We are Steve and Jill.

Steven Butala:                   Information.

Jill DeWit:                            And inspiration.

Steven Butala:                   To buy undervalued property.

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