Acquisition Attributes Need to be Communicated to Sales (LA 972)
Acquisition Attributes Need to be Communicated to Sales (LA 972)
Transcript:
Steven Butala: Steve and Jill here.
Jill DeWit: Buenos dias.
Steven Butala: That’s the most Spanish I’ve ever heard you say in my life!
Jill DeWit: Wait a minute. Wait, there’s a few other words that I know. I’m trying to think of them. Donde es banos? Uno mas. Cerveza. What else? Me llamo es Jill. What?
Steven Butala: Do you know how to say butter?
Jill DeWit: Mantequilla.
Steven Butala: How about butterfly?
Jill DeWit: I don’t know that one.
Steven Butala: Mariposa.
Jill DeWit: Okay.
Steven Butala: I don’t know. This became-
Jill DeWit: Like my butter one? I got that one.
Steven Butala: Every time we go to Mexico, I can get through it just because of high school Spanish. Just with nouns and verbs.
Jill DeWit: Right.
Steven Butala: And Jill thinks that there’s wizardry going on.
Jill DeWit: Yeah, I get the point across.
Steven Butala: I speak probably second grade Spanish, at best.
Jill DeWit: That’s great.
Steven Butala: Maybe. No, no. Probably. Whatever. Anyway.
Jill DeWit: Welcome to The Land Academy Show.
Steven Butala: Entertaining land investment talk.
Jill DeWit: Entertaining land investment talk.
Steven Butala: I’m Steven Jack Butala.
Jill DeWit: And I’m Jill DeWit, broadcasting from sunny southern California. Not anywhere else.
Steven Butala: Today, Jill and I talk about how acquisition attributes, they need to be communicated when you go to sell the property.
Jill DeWit: Yup.
Steven Butala: There’s all this cool stuff about the property. When you buy it, you’re like, “Oh my gosh. Look at this, this, this, this, this.” And then for some reason, a lot of people, they go to sell it and they’re like, “Here’s the property. It’s for sale.” Instead of all the stuff that excited you, that needs to excite the new person.
Jill DeWit: Yeah. That just described the whole show.
Steven Butala: Before we get into it though for real, let’s take a question posted by one of our members on the LandInvestors.com online community. It’s free.
Jill DeWit: My good friend Kathleen [Denotridge 00:01:39] asks, “I’m looking at a county to mail. All of the data in the red, yellow, green… ” Hold, please.
Steven Butala: Sorry.
Jill DeWit: You’re cool.
Steven Butala: This is my fault.
Jill DeWit: It’s okay.
Steven Butala: Technical difficulty.
Jill DeWit: We got this. It’s talking about…
Steven Butala: So, we’re going to read it again.
Jill DeWit: All right.
Steven Butala: Sorry, everyone.
Jill DeWit: Take two. My good friend Kathleen Denotridge said, “I’m looking at a county to mail. All the numbers look good on the red, yellow, green equity planner, including a reasonable for land days on market.” The red, yellow, green equity planner is a tool that we provide in a spreadsheet in Land Academy 2.0, infill lots. And in 1.0 for the other Land Academy.
Steven Butala: And in House Academy.
Jill DeWit: And in House Academy. So, great ways to look at things, and really help you pick a county and laser focus in. Okay. “When looking deeper at the days on market for land listings on Zillow and Redfin, the days on market for rural vacant land is crazy high. As the equity planner uses the Realtor.com days on market from all residential, including houses, the days on market is not necessarily going to be reflective of the actual days on market for land.”
Steven Butala: Exactly. So, remember that for the end. The days on market reflected in all of this analysis… The whole point to all this is, let’s get some good data, and decide where to send mail.
Jill DeWit: Right.
Steven Butala: Go ahead, Jill.
Jill DeWit: “I understand the questionable validity of the days on market for land, as Steve has indicated. However, when there’s such a huge difference between the Realtor days on market, and the Zillow and Redfin days on market, specific to land listings, is it still reasonable to use the Realtor.com data to guide a county choice for rural vacant land? If choosing to mail said county, would you figure out your pricing and then apply a general discount to your pricing, to accommodate for this possible discrepancy of days on market? If so, what type of discount? Five, 10, 20%?” I love this.
Steven Butala: So do i.
Jill DeWit: I love solving this. I love the whole way that she’s looking at it. Going, “Okay… ”
Steven Butala: Me, too.
Jill DeWit: “I see this county’s good because of this data here. Now I see because I’m doing rural vacant land, it’s not going to necessarily sell so fast, based on this data here. But overall, this is a good area. I feel it. I know it. Now I want to come in at it maybe a little bit hotter, and my pricing… Maybe what she’s asking, five, 10, 20% lower than I would in other areas, because of the longer days on market. Because I don’t want to be stuck with something. I want to flip it fast.”
Steven Butala: Here’s my answer to what she’s really asked. What she’s asking is this: Because there’s a longer days on market that she’s discovered on Zillow and Trulia, that are a little bit more… There’s more rogue land listings than there are on, let’s say the MLS and Realtor.com. Because of that, and she’s uncovered this, does it justify a cheaper asking price in a mailer? My answer is unequivocally no. What it does is tell you to move on to another county. Realtor.com and Redfin.com provide tremendous library of what seems like real-time or up to date data for all of what we do. It’s very heavily skewed towards houses, single-family residences, as all things are in real estate.
Jill DeWit: Because there’s the most.
Steven Butala: There’s only tiny little people involved in commercial real estate over here, tiny little people involved in land over here, and the rest of the planet, they think real estate, houses. It’s the same thing for them.
Jill DeWit: But isn’t volume for sure more higher?
Steven Butala: Yeah. Everybody’s got to have a place to live.
Jill DeWit: True.
Steven Butala: And I’m not disagreeing with any of that.
Jill DeWit: Right.
Steven Butala: What I’m saying is here’s the takeaway from all of this, and it’s the reason that I really included this question in this type of venue, this show. It’s very technical. This is usually the type of stuff we discuss on our Thursday call. When you have this data, this massive amount of data, the days on market for single-family residences in any given market is going to trickle down and/or up, depending on how you see it, to land and to commercial. What it’s telling you is everybody wants to live there, or the pricing is good. It’s a very, very solid indicator.
Steven Butala: In my 30 years of experience, if houses are selling well… Days on market’s low, everybody’s happy… then vacancy rates are going to be low for apartment buildings and office buildings and strip malls. Land is going to be selling quickly, because developers want to develop new stuff, and on and on and on. Houses are a direct… Not indirect, but direct… indicator of what goes on with land and other types of commercial real estate in a local market. Kathleen, thank you, because it’s these kinds of questions… She has a PhD, by the way.
Jill DeWit: Mm-hmm (affirmative).
Steven Butala: In something else. It’s these types of questions… You know, I talked to Kathleen. I talked to maybe five members in my whole life, before they started.
Jill DeWit: Oh, okay.
Steven Butala: Because you weren’t around, for whatever reason.
Jill DeWit: Okay.
Steven Butala: I remember I was on a motorcycle trip, and I pulled over in a Taco Bell and had like a two-hour conversation with her.
Jill DeWit: Cool.
Steven Butala: And it worked out great, because three years later, she’s here.
Jill DeWit: Yup. Would you chalk this up to taking a step back, and testing for reason? Because you even look at that. At least, you know what? It’s obviously tripping her radar, so she did that. She took a step back, and one solution was, “I offer less.”
Steven Butala: Yeah.
Jill DeWit: Your solution is, “Don’t go there.”
Steven Butala: Well, I’ve always struggled… To answer your question, no. I don’t think that this is a test for reason. I think this is a full-blown, let’s look at this-
Jill DeWit: There’s a problem.
Steven Butala: This is a full-blown, let’s really analyze where we’re pulling this data, and does it work or doesn’t it work?
Jill DeWit: Okay.
Steven Butala: The answer is, it totally works. If you look at real days on market for land, it’s not beautiful. It’s very long. But it’s also not going to be meaningful, because the data set is too small. That’s really what’s going on. The data set for land parcels that are sold in any given market is going to be so small that it’s meaningless. You have to look at a data set that’s indicative of the real estate market, not specific to the land market, in my opinion. And I’ve tested this. Jill’s waiting for me to be done. You know, the best way to [crosstalk 00:08:01]-
Jill DeWit: This is one of your hot topics.
Steven Butala: It is.
Jill DeWit: Man.
Steven Butala: If you keep asking me questions, I’ll keep answering them.
Jill DeWit: Okay. It’s good.
Steven Butala: Today’s topic, acquisition attributes that need to be communicated during the sales process. This is the meat of the show. Go ahead, Jill.
Jill DeWit: I love this. It’s just like you described in the beginning. It’s what got you excited. It’s funny how we forget this. But when we, back in the day… You know, when you were doing it, I was doing it. Everybody’s done this. When you’re reviewing a property, there’s something you go, “Ahhh,” immediately. “Wow. Look at this.” We do it right now every week, when we do Would You Do This Deal with our members.
Steven Butala: Yeah. Exactly, Jill.
Jill DeWit: Every week on Thursday, part of our show, or part of our weekly member call, is Would You Do This Deal. We leave time for people to… They can give us the county and the state and the APN, and we’ll look it up. We say, “All right, what can you get it for?” We look at it with them, and then we look at comps in the area, what’s around. All the things that we need to do to see would we buy this property, you know? Then we ask other experienced members on the call, too, “What do you think about this?” It’s so much fun.
Jill DeWit: But often, right when you punch in that information, when you’re zeroing in on the property and you’re looking at it, you’re going, “Ahhh.” There’s a moment of wow. This whole show is about, you got to remember this moment of wow. Make some notes. Save those images. This is part of your engineering part here, because you’re spending some time doing your due diligence up front. It excited you. You see the value in it. You see the trees in it. You see what’s possible with this property. This is what you have to convey to your buyer, and you have to put this in your posting.
Steven Butala: The best way to do it is with a video.
Jill DeWit: Right. So many of us, we get all excited. We buy the property. Now, after… It’s seven days later by the time I got the notary to the seller, got the deed back, and now I’m posting it for sale. By then, I’ve moved on. I often forget what the excitement is, you know? You’ve got to save this stuff, make notes, and replay this, basically, in your posting, because you want that same person to find your property, and go, “Ahhh. Wow.”
Jill DeWit: You’re right. The videos are the best. Because when we’re zeroing in on the property, when we do… You don’t have to have a real drone. Especially if you’re starting out, you don’t have the money for it. You could do it with Google Earth Pro. They’re the equivalent of a drone, and flying in and seeing… [crosstalk 00:10:36]-
Steven Butala: [crosstalk 00:10:36] talked about it.
Jill DeWit: “Like here we are, coming in and zooming down the street. Wow, look how beautiful this is. Look at the lake. Oh my gosh, and look at this home next door. Look what’s possible. Oh, and look. They have horses. Look, here’s your power lines.” You know, these are all the things that we just talked about on… This is exactly what we do on Would You Do This Deal. You know, show the slope. Get down in there and show the elevation. Show, “Look, there’s a flat spot here for something, and a flat spot over here for something.” Everything that we looked at, you have to convey to your buyers.
Steven Butala: Yeah. If you’re excited about the property, they’re going to get excited.
Jill DeWit: Yup.
Steven Butala: You know, it’s a Sales 101 rule.
Jill DeWit: Right. And you have to try to remember. It’s hard sometimes, because you almost have to make yourself a little system. Remember. Like for us, in a spreadsheet. We always have notes. Well, here’s a thing. I’m doing this right now with deal funding. When I’m personally looking at properties to fund for Land Academy deal funding, I will make notes in there right away. Like, “Okay, did anybody check this? Did anybody check that? I love this. I love that.” I put it in there, and it jars my memory, too. When I go back, and I can easily go, “Gorgeous lakefront property. 500 yards of waterfront beach,” whatever it is. Then I can make sure everybody properly conveys that in the posting, as well.
Steven Butala: I like 500 yards of waterfront beach.
Jill DeWit: Wouldn’t’ that be [inaudible 00:12:05]? We could afford that. Just not right here. We can buy that, just not doing it right here.
Steven Butala: This reminds me of Jill and I went to a photo shoot. We had a photo shoot a while ago, and the woman that was doing Jill’s makeup said some version of this: “Oh, the property prices around here are getting so high. I just don’t know what our kids are going to do.”
Jill DeWit: Oh.
Steven Butala: I stopped, and I turned around and said this: “There’s a reason I don’t wear Versace every day. Because I can’t afford it.” She looked at me like I was the devil. Yeah, prices are almost exponentially increasing here, way more than anywhere else in the country that I know of, in southern California. And so, yeah. Kids are not going to be able to buy a house the way that we did.
Jill DeWit: Maybe not.
Steven Butala: That’s just how it is.
Jill DeWit: Right.
Steven Butala: That doesn’t mean it’s bad or good, or some government agency should get involved and artificially stick their arm in it and stop it, which I think is the definition of affordable housing.
Jill DeWit: Right.
Steven Butala: But that’s a topic for a different show.
Jill DeWit: Not one that we do together in this format. Maybe that’s a in the shower rant. Maybe that’s what that is. Speaking of which, you have an ocean view from your shower. We haven’t brought that up in a while.
Steven Butala: I know.
Jill DeWit: But anyway, we have an ocean view from our shower. So, did we cover that? Was that good?
Steven Butala: I think-
Jill DeWit: Gotta convey that. It’s really good.
Steven Butala: You’ve got to get excited about the property you’re buying, and convey it. Marketing is everything.
Jill DeWit: It’s true.
Steven Butala: Marketing is everything in this business. And online, you’re going to reach tons and tons of people. It’s never been easier to reach people who want to buy real estate from you. Never been cheaper and easier. Man, it’s just about free to convey what you’re excited about with these properties. I used to do a video back in the day on every single property. I would fly into it. I would say, “This is how you get to it,” and take everybody down this little road. “This is how close it is to the Grand Canyon,” or whatever it’s close to.
Jill DeWit: “Here’s Walmart. Here’s whatever.”
Steven Butala: “Let’s go to Walmart.” You fly over to the Walmart. It’s real easy in Google Earth Pro… Which is free, by the way… to plot points. You just click on it, it takes you there, and you talk about it.
Jill DeWit: Love it.
Steven Butala: If you go into YouTube, it’ll take you… The learning curve is maybe 10, 20 minutes on the whole thing.
Jill DeWit: Yeah.
Steven Butala: People loved it. It sold property. One of our members… Yesterday, we talked to Luke Smith. He’s got a whole show. That’s all he does. He puts a piece of property up on the screen, and he talks about it and flies in and out.
Jill DeWit: Exactly.
Steven Butala: Well, you’ve done it again. Spent another 15 or 20 minutes listening to The Land Academy Show. Join us next time, when Jill and I talk about childhood markers that lead to serial land investing.
Jill DeWit: This is going to be fun.
Steven Butala: Guess who wrote that description?
Jill DeWit: I know. And we answer your questions, posted on our online community at LandInvestors.com. It is free.
Steven Butala: You are not alone in your real estate ambition.
Jill DeWit: Yeah, that’s pretty funny. I wonder if we all had them. This will be fun. You and I will talk about them, and I know our people listening are going to go, “Yup, that was me. Yup, that was me.” It’s like, you know, if you’re a mechanic. Like if you’ve ever known a mechanic, and you talk to their mom, they used to take apart the blender. They took apart the toaster.
Steven Butala: Or an engineer. Yeah.
Jill DeWit: You know, there were some childhood markers that led to them. Like, “We knew they were going to do something with their hands.” They just, they couldn’t stand it.
Steven Butala: I’m going to save it for tomorrow, because I have a lot to say.
Jill DeWit: Okay, cool. Wherever you are listening or watching, please subscribe and rate us there. We are Steve and Jill.
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