Scaling Your Real Estate Operation (LA 968)
Steven Butala: Steve and Jill here!
Jill DeWit: Happy day!
Steven Butala: Welcome to the Land Academy Show, welcome to Friday, entertaining land investment talk, I am Steven Jack Butala.
Jill DeWit: And I’m Jill DeWitt, broadcasting from sunny southern California.
Steven Butala: Today Jill and I talk about scaling your real estate operation.
Steven Butala: You know one of the things I wanna talk about too is what the difference is between scaling something and repeating something.
Jill DeWit: Okay.
Steven Butala: It’s a very misused term in my opinion. And whether or not something is scalable, is a question I ask myself before I start anything new.
Jill DeWit: Right
Steven Butala: Anything, because if it’s not scalable, and certainly if it’s not reputable, and I’ll give [inaudible 00:00:39] lots of examples, it’s honestly not worth your time. So there’s probably a lot of things that you can remove from your life that are not gonna ever amount to anything, because they’re scalable or reputable.
Steven Butala: Before I 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: I gotta tell you I was thrown there, ’cause I was waiting, like wait for it, wait for it, wait for it, there’s always like, you know I had a relationship like that, well then you can’t see my face. You always come in with, oh you know Steven was just moving my mic, so if you weren’t watching that’s what was happening there, so yeah. He was like moving it right in front of my face, well that’s not nice.
Steven Butala: The amount of stuff that I have to do as a producer, to circumvent Jill’s, and I say this lovingly –
Jill DeWit: I put it here purposefully!
Steven Butala: Jill’s behavior while we’re recording this show
Jill DeWit: Behavior! [crosstalk 00:01:34]
Steven Butala: I’m not gonna talk into the mic today
Jill DeWit: Behavior!
Steven Butala: I’m gonna laugh exceedingly loud today.
Jill DeWit: Behavior! Steven! All right, all right. Anyway, my point was I was waiting for you to come up with something and you did! Oh you don’t disappoint, you came up with some other little thing, to throw in there so thank you. Thank you very much. Okay, back to the question. Okay, Steven K asks, So I visited some lots I own and tried to use Google maps in offline mode, on an Android phone – this is funny.
Steven Butala: You know what, this is for you –
Jill DeWit: It’s good, wait – Tech support Jill!
Steven Butala: This is actually, this is, I know that you know the answer to this better than me.
Jill DeWit: Okay, so we’re out there on our Android phone – well there’s a problem there – we’re on offline mode, well there’s another problem! Sorry.
Steven Butala: I knew, this is a driving [inaudible 00:02:30] situation, I put this in here specifically, because I – and I didn’t tell you about it because I wanna hear your natural reaction.
Jill DeWit: All right, my first, okay wait this is gonna be good. It’s determined where the lot’s GPS coordinates were, and I was totally useless, it was totally useless as I did not have cell reception – really? I was under the impression the GPS function would work without a cell signal.
Steven Butala: Wait, wait, wait, wait, wait, stop right there.
Jill DeWit: Oh my goodness.
Steven Butala: Why, hold on? Why would a GPS system work if you don’t have a cell connection?
Jill DeWit: [inaudible 00:03:03] Satellites
Steven Butala: So you’re phones all set up to connect to a satellite?
Jill DeWit: Well you know –
Steven Butala: No, no stop.
Jill DeWit: It’s not, that’s the problem. But, okay, so anyway, it bounces off other things. So anyway, the first fatal flaw is why are you out there?
Steven Butala: I knew you were gonna do this with this topic, and whoever.
Jill DeWit: Why.
Steven Butala: We’re not
Jill DeWit: D’you go more than an hour –
Steven Butala: Whoever you are, whoever you are asking this question, we will answer it and all that, and we’re having some fun, it’s not at your expense but this is, we’re gonna get to the bottom of this.
Jill DeWit: This ties into the show we were just watching, so what were you using as an app? And are you suing a dedicated GPS device like a Garmin or TomTom to be able to do this? Also, was wondering about useful GPS apps that do not require monthly fee, as do not need to do this on a regular basis like my GPS coordinates or back [inaudible 00:03:55] navigator as examples of apps, as a phone, if a dedicated device is not a requirement thanks.
Jill DeWit: So yeah, so basically, you know what, we are limited with our cellphones, and to be honest with you, I’m gonna go out, we just talked about this recently, I am gonna go get a formal handheld – I used to have one, it was a clunky one for flying, GPS thing, and I wanna get a smaller handheld new device. For me personally, cause I wanna know what elevation I’m at, because our phones can’t handle all this stuff yet.
Steven Butala: Thank you. That’s the answer to the question. There’s not an app for everything, this whole generation believes there’s an app for everything – there’s not an app for everything. There’s stuff that requires professional equipment and reading the manual and chilling out about the whole thing, and if you’re gonna go out and buy and look at rural vacant land, you need to bring a bunch of water, a bunch of extra fuel, you need to do it in a four wheel drive vehicle and assume you’re gonna get stranded out there. You need a secondary means of communication whether it’s a citizen band radio, all kinds of stuff.
Jill DeWit: Or tell someone where you’re going, you know, there’s a reason why you follow a flight plan in case you don’t show up where you’re supposed to be, they know how you’re going.
Steven Butala: I don’t wanna sound like your father here but, you can’t just take a phone…
Jill DeWit: And expect.
Steven Butala: And expect to get GPS coordinates.
Jill DeWit: In rural vacant areas, yeah you are gonna be dead in the water there.
Steven Butala: Exactly! [crosstalk 00:05:19]
Jill DeWit: That’s true, but yeah I would get, I’m gonna do it too, I’m gonna put that on my shopping list here, I’m gonna get a good small one. Cause I wanna know, it’s kinda fun to have by the way, remember the one I had, we used to use it to check my speedometer – yeah I really am going, you know 62.
Steven Butala: Cell phones work on a cell tower basis, and they’re all based on the vast majority of the performance of a cell phone network is in urban areas. You know, it doesn’t make sense for a cell phone company to cover a rural vacant area. GPS goes straight to a satellite, to your device to a satellite so it’s theoretically… you can have reception everywhere but it’s prone to, whether, dramatically prone to whether in line of site, so if you’re in a cave it’s probably not gonna work as well as if you’re on top of the cave so. These are really basic things you gotta consider before you’re gonna look at land.
Jill DeWit: Can I say something too, even with these handheld devices, the paid versions, the paid subscriptions are better coverage. Here’s a good example, to tell you what your device can do versus a formal GPS, how many of you have been using ways and you’re on Google maps and you’re on the freeway not the [inaudible 00:06:41] road or whatever or the [inaudible 00:06:43] road not the freeway, and it’s telling you you need to be over here but you really are over here. It picks – you’re almost on the right road but it thinks you’re not, well there’s a reason why: It’s not the best equipment and not the best service is not picking up on that top-notch stuff, so that’s what’s going on.
Steven Butala: Stuff’s prone to fail.
Jill DeWit: Interesting, that’s funny.
Steven Butala: I would also recommend, getting a map. Yeah, I know I sound like a grandfather –
Jill DeWit: I would have it mapped out.
Steven Butala: Not your father, I would get, you know, if you’re buying property in Arizona you can get a whole street map that’s a book, you’re gonna pretty much basically know where you are hopefully.
Jill DeWit: California St Thomas guide, so, I would have mapped out my plan as a backup and then you would’ve known – Oh I should’ve made that left back there even though my phone just died. Cause otherwise you’re all, I can just imagine, this poor individual on the roof of his car like this trying to figure out where he is like, okay.
Steven Butala: I’ve seen it, all that stuff’s happened to me that’s why I know. I’ve gotten stuck out there without a winch, now we use a winch if we go out there, which we don’t anymore.
Jill DeWit: Right.
Steven Butala: I’ve run out of gas and walked 10 miles to a rancher to gave me, you know, I had to pay 20 dollars for a couple gallons of gas which I had to siphon myself. If you’ve ever siphoned gas, you know, you get it in your lungs, you don’t know what you’re doing. I have story, after story, after story, I’ve stayed in truck – back of a truck stop bathroom. Honestly, all this – this is long before Jill, you know why? Because there’s no internet back then. And the cellphones that we had, even in an urban area were useless. [crosstalk 00:08:16]
Jill DeWit: We were just watching this show, okay, other side note: we were watching that show, what’s it called the Killing or something? On Netflix, a really cold series, it was done in 2010’s, so think about this everyone, this was not even 10 years ago so 9 years ago and I’m looking at them going, oh they have a flip phone, number one, and then they were trying to figure out where a person had been and they broke into their car and stole the GPS and like remember those? And they have the Garmin – the big ones, that looks like a tablet –
Steven Butala: On the dashboard.
Jill DeWit: Yeah and they took it off the person’s car because they could go back and see the last 10 addresses they had typed in. I’m like, I remember that. It seems like it was forever ago, but it was 9 years ago or less that we were still doing that.
Steven Butala: Imagine, 10 years from now.
Jill DeWit: Right? We’re gonna laugh at our phones and the stupid things on our phones.
Steven Butala: Our phones might have actual GPS hardware then. I don’t know.
Steven Butala: Hey again, we’re not picking on anybody here. It’s just, you just gotta be careful when you go out there. Jill’s a pilot so she’s all equipment out, you know I’ve been a [inaudible 00:09:19] my whole life so we’ve just, our garage is just packed full of equipment like this.
Jill DeWit: It’s true.
Steven Butala: Today’s topic: Scaling your real estate operation. This is the meat of the show.
Steven Butala: Let’s talk about the definition of scalability. And repeatability. If you write a book, or if you write a piece of software or an app, and you write it once, you can sell it 20 times, or 20 million times, or 200 million times; that’s scalable, all the work’s done upfront. If you write an app like Uber app, it’s scalable. You can just launch it in another country, it’s basically all there. Or if you write a book, same thing. You can sell 10 copies or 10 million copies, that’s truly scalable. The best example is software, think of windows, there’s a reason Bill Gates is the most wealthy person in the world. It was brilliant, it’s an operating system that everybody needs, it’s the operating system that Apple is based on. Boy I’m gonna get some emails on that cause some people say it’s the other way round.
Steven Butala: Anyway, repeatability is McDonalds. So I have a very successful restaurant, single location, if I put one in the next county over? Awesomely successful, let’s keep repeating it, let’s do it all over the world, same thing, stamp it out. Both of those business models are fantastic, here’s what’s a perfect example of what you never wanna do; and I talked about this in our first program, as an entrepreneur. I’m a salesman, and I bought a bunch of brooms from China – they’re shop brooms. I’m gonna go walk it around this industrial complex, everyone needs a broom to clean up after what they’re doing. I’m gonna sell some brooms – there’s 8 hours in a day, I’m gonna sell 20 maybe 30 brooms a month and I’m gonna keep doing it and I’m gonna keep walking around and you’ll never get anywhere.
Steven Butala: Here’s another good example, a medical doctor, there’s 8 hours in a day, you can only do 2 or 3 operations a week or some number like that depending on your specialization, or you can only see a certain number of patients in an 8 hour day, and that’s it. Or if you’re a high end restaurant, you only have a certain number of seats and if you turn ’em twice – turn the seats twice in a best case scenario, everyday, that’s just – the vast majority of business are not scalable and they’re not repeatable and you don’t wanna put yourself in that situation.
Jill DeWit: I love it. No I’m waiting for you, what’s next, I’m like uh huh, uh huh!
Steven Butala: So what do you do in your real estate business, real estate operation, to make sure you don’t fall in this trap? You make sure that instead of obsessing on the real estate itself – we talked about this yesterday, that, you put yourself in a system, you put yourself in a system: you create a system and you get people involved under you, or affiliated with you to do the stuff that you don’t wanna do or that’s time consuming and you do the stuff that matters, so that eventually you can do 100 deals a day. And we’ve done that. Maybe not 100 but darn close, back in the day. So it’s all about systems, and scaling and repeatability, and you wanna design it if you can, if you have the luxury – well you do because you’re involved in land academy, right from the beginning. You don’t wanna make all the mistakes that I did and sit there, saying Jesus I worked for 12 hours and I got half of one deal done, you don’t want that. And that’s all because I was on the phone too much, which is incredibly inefficient.
Jill DeWit: Not making decisions fast enough.
Steven Butala: I’m taking calls from potential sellers cause I just sent the mailer out, I’m taking calls from title agents, and pretty soon the day’s gone or the week’s gone or the month or the year is gone. You’re not handing your numbers in and you’re wondering why, this is a big topic for us at live events because people get stuck with this all the time because they’re good at it – they sent the mail out, they did a bunch of deals but they’re just not like – it always comes to light in this sentence: I love it, it works, I love doing it, but I can’t make enough money to quit my job. I can’t just get out of second gear. And it’s because of planning and delegation, so you wanna plan for scalability and manage your time really well and stop doing the stuff that doesn’t matter.
Jill DeWit: Thank you. This comes back to me as, if you understand this concept, you understand why driving for dollars is stupid. You have 8 hours in a day, and how many business cards in your hand? Really? You would do better if you did not drive for dollars and mailed out your business card to everybody in that zip code. That would be better than driving for dollars, totally serious.
Steven Butala: It takes the same amount of time, plus or minus 10 percent to send out 100 offers as it does 100 thousand offers. With predictable results, if you’re pricing it properly and you follow our whole thing. That’s scalable. And then managing that inbound of flow, you’re gonna get a tremendous amount of inflow, have somebody like Pat Live answer your phone – so now you’ve taken that off of your plate, have somebody analyze the deals and set them all up for your [inaudible 00:14:31] like a virtual assistant overseas, I’ve taken the due dilligence off your plate, so every morning if the world is perfect and you know what you’re doing – you’re waking up, you’re reviewing a bunch of deals because they got past the phone process, they got past the due diligence process – I’m oversimplifying but this is how it should work.
Jill DeWit: Exactly.
Steven Butala: And you’re gonna say yep, I wanna do this deal, this deal, this deal and I want all of these rest not be done – ah, here personal assistant, please complete these transactions.
Jill DeWit: Get em done.
Steven Butala: Let me know when you need funding, I’ll sign the stuff, or if you, like us, give them authority to sign it and then other people in your office are notaries and you got it all set up. That, is scalable.
Jill DeWit: Yep.
Steven Butala: And then you send out another 100 thousand.
Jill DeWit: Uh huh.
Steven Butala: Wow, Jill that’s not the sentence –
Jill DeWit: No, I don’t, this is kinda, your kinda thing, you know the shows that I come in and I’m like; I have a lot to say this is my topic, I know what I wanna get the point across, and this one is of yours and I’m just letting you go. So.
Steven Butala: Our operation, we handle a lot of different asset types in a pretty high volume and I have to say, it’s incredibly efficient. There’s a few things, we have a few assets we’ve owned too long and Jill and I know exactly what they are, and you know why? Because we didn’t listen to our own advice.
Jill DeWit: Yeah.
Steven Butala: We have a house we thought we could retail, instead of wholesale and we’ve owned it now for 4 months and it’s just – which is no big deal, because that’s about what goes on in that company.
Jill DeWit: We paid for it, it’s not like there’s a mortgage on it.
Steven Butala: But, we should’ve wholesaled it.
Jill DeWit: Yeah, and that’s okay.
Steven Butala: Those are the glitches you’ll find, its cause you don’t listen to your own advice.
Jill DeWit: Exactly.
Steven Butala: Well you’ve done it again, you spent another 15 minutes or so, listening to the Land Academy Show, join us next time, where Jill and I host another interesting episode.
Jill DeWit: Yeah we answer your questions, post it on our online community; LandInvestors.com, it is free.
Steven Butala: You are not alone in your real estate ambition.
Jill DeWit: Yeah, I didn’t have much to add.
Steven Butala: That’s good. I guess.
Jill DeWit: Yeah that’s good!
Steven Butala: It would’ve been awesome to know that before we started.
Jill DeWit: But you were going, I didn’t have a chance to get it in there. [inaudible 00:16:42]
Jill DeWit: Wherever you’re watching, wherever you’re listening, please subscribe and rate us.
Steven Butala: We’re Steve and Jill!
Jill DeWit: We’re Steve and Jill!
Steven Butala: Information –
Jill DeWit: 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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