House Flips are the Next Logical Step (LA 989)
House Flips are the Next Logical Step (LA 989)
Transcript:
Steven Butala: Steve and Jill here.
Jill DeWit: Happy Memorial Day.
Steven Butala: Welcome to the Land Academy show, entertaining land investment talk. I’m Steven Jack Butala.
Jill DeWit: And I’m Jill DeWitt broadcasting from sunny Southern California.
Steven Butala: Today Jill and I talk about how house flips are the next logical step.
Jill DeWit: They are. Some people are just … they took our concepts, started to apply it to other property types, which is great and figure it out and that is the way it should be, right?
Steven Butala: Do you think house flips are easier or harder?
Jill DeWit: Over all, completing the transaction, easier.
Steven Butala: That’s what I think.
Jill DeWit: When agents get involved, harder.
Steven Butala: I don’t know I’m trying to make a good analogy and a good example. It’s like when you do a bunch of land deals, land deals are great. House deals are just a such of wealth … Well that’s the title. A logical stop. I think they’re so much easier for a lot of reasons, but you’ve got to do them right. Just like everything else.
Jill DeWit: Exactly.
Steven Butala: Before we get into though. Let’s take a question posted by one of our members. On a landinvestors.com online community. It’s free and I should say this. We also have a House Academy by the time this airs. A House Academy forum.
Jill DeWit: We do.
Steven Butala: And we’re about to launch a new House Academy show.
Jill DeWit: We do. True. All right. Alex says, “Morning everyone. Mailed three different counties in my first mailer and it did not go so well. Hudspeth county, Texas is probably the worst county to deal with. They don’t even have the properties recorded on a map. I’ve had a ton of people call and mail back purchase agreements for less than $100 per acre, but I can’t find any info on any of them.
Jill DeWit: One guy texted me pictures of his deed and plot information, but the coordinates are in relation to the other plots in the same subdivision. No one knows where the subdivisions are. I asked county how they figured out what the taxes for the parcels are if they don’t know where they are? And they said, “We have no idea. LOL.” If they could get those properties all recorded, some on there could make a killing.
Jill DeWit: I got nothing but hate calls from another county, but I think it was my fault on the pricing. The third county, I’ve gotten calls back, but people want way too much. I’m four grand in the whole, but I think of it as a pricey education. I know I’ll make something happen on the next mailer and hope I do. Anyone else get whacked on their first time out?”
Jill DeWit: I watched you and there were like several responses.
Steven Butala: There are probably at least ten responses to this in the forum from some more senior members.
Jill DeWit: Yeah.
Steven Butala: I’m about to give my response too.
Jill DeWit: It’s kind of funny.
Steven Butala: Go ahead, Jill.
Jill DeWit: One of our members in particular wrote this. He said … and it was Kevin. Kevin said, “Hey Alex, it’s too early to shut the door on these counties.”
Steven Butala: Exactly.
Jill DeWit: “You’re getting their early responders, the most motivated and desperate sellers. Just wait.”
Steven Butala: Exactly.
Jill DeWit: So, yeah. That’s kind of funny. That’s one of the things we talk about that I don’t know if Alex did. When you pick a county, one of your due diligence items should be, “How is that county?” Especially if you’re brand new. If you don’t know the area, you want to be able to get a county that has good maps online. You can get them on the phone. It’s all in ParcelFact. It’s really easy to get copies of the vesting deeds in Realquest Pro and Title Pro. That should be part of your due diligence before you go, “Yep, this is a county to mail.” What else do you want to add?
Steven Butala: Hudspeth county, Texas … Hudspeth county, Texas is the most south westernly county I think. There might be one more. I think it’s Culberson. Is the single worst county in this country to send mail to. It’s not because there isn’t cheap property, because there’s tons of cheap property. Just like he found out.
Jill DeWit: Right.
Steven Butala: It’s very difficult to find it. Tremendous number of properties there. Have no access at all. I don’t know who went and subdivided that in the ’50s or ’60s or ’70s. The county itself … Everybody’s part time there. There’s the sherif, who’s also the assessor. That’s not a fact, but it’s some version of that. There are a lot of counties in Texas that are like that, which makes Texas cool.
Jill DeWit: Yeah.
Steven Butala: What I get from this and Alex please don’t take this personally, but I hear a lot of whining. This is an opportunity. It’s not-
Jill DeWit: It’s true.
Steven Butala: And you alluded to that.
Jill DeWit: That’s true.
Steven Butala: It might not … If you’re in Massachusetts, mailing Hudspeth county, it’s probably not an opportunity for you. If you’re two counties over from Texas and you can actually go there and sit down and figure out where these properties are and do the stuff that’s really required to make that county work, that’s what’s required in this business.
Jill DeWit: You’ll be the only one by the way.
Steven Butala: That’s right.
Jill DeWit: Yeah, you’ll have the …
Steven Butala: You will retire on the properties you buy and sell.
Jill DeWit: Yeah.
Steven Butala: In that county.
Jill DeWit: Exactly.
Steven Butala: So this is an opportunity. It’s not a negative thing.
Jill DeWit: Exactly.
Steven Butala: If you’re the kind of person who takes notes on this show, take this note. Hudspeth county is tough, if not impossible, unless you’re there. By the way, there’s no other counties. Like I’m not holding back. Hudspeth is the single, I think most difficult county.
Steven Butala: Number two. Take this down. If you think you can push a button and make a ton of money buying and selling real estate and it’s just a short track to buying a Ferrari, this is not for you.
Jill DeWit: Ding. Ding. There is no easy button.
Steven Butala: There’s no easy button.
Jill DeWit: That’s true, but there’s things you can do ahead of time to make it easier.
Steven Butala: Pricing.
Jill DeWit: Like I said, be ready.
Steven Butala: Pricing on a mailer is everything. Failed mailer … This concept of failed mailer happens to all of us. It hasn’t happened to me recently, but it still happens to me. And I’m what, 25 years into this?
Jill DeWit: Right.
Steven Butala: It’s because pricing didn’t work or I missed something in the pricing and that’s it.
Jill DeWit: But you always get a response. Like Kevin would say, too. Even our worst mailers, which we thought, how many years ago, right … New areas or something. Even our members that we talk about things come out of it. You are hitting people. Wait and see what happens. See what they come back with.
Steven Butala: When Jill and I started Land Academy in 2015 it was after decades of us separately in the real estate industry sending out, well not sending out in Jill’s case, but doing real estate deals.
Jill DeWit: Right.
Steven Butala: It was a struggle. For the first six months of starting Land Academy to actually … This is not a huge profit center for us by the way. It was a struggle for us to answer this question. Does this really work?
Jill DeWit: Land Academy is not a huge profit center.
Steven Butala: Land Academy is not … Oh buying and selling real estate-
Jill DeWit: Land.
Steven Butala: Real estate’s massive.
Jill DeWit: Yeah, that’s the profit center.
Steven Butala: Massive profit center. It was a struggle for six months for Land Academy itself to … People were just like. this is … “Who the hell are you guys? Come on.” Obviously it all … and here we are almost 2020. I haven’t had a question like this in a while. Like what do you mean I sent it all out and it didn’t work.
Jill DeWit: But it did. I don’t think Alex totally said that, too. I think Alex alluded, “All right, I missed that one. I missed this one.” You have to spend some time on it. I watched one person, too-
Steven Butala: You have to spend some time on it.
Jill DeWit: Who said, when you get the program first thing you should do, whether it’s Land Academy or House Academy or Infill lots, whatever it is. Watch the whole thing through. Digest it. All the way through in the beginning. I love this advice that someone had. It wasn’t my advice. It was one of our members.
Jill DeWit: Then they said, “Now go back and re-watch it and the second time you’re going to pick up on things. Now you’re going to start to get it. But you’re first going all the way through and understanding the whole transaction.” I think that’s brilliant. I would say, “Alex, you probably got all the way through. Maybe go back and spend some more time, too.”
Steven Butala: One of the people that responded to this too and we didn’t put it here in the script. They said, “You’re building a mailer system. I would call it a mailer juggernaut.” To send out one mailer and expect to do deals … That happens to all of us actually. There was somebody in our live event that sent out
Jill DeWit: Oh yeah.
Steven Butala: Three letters-
Jill DeWit: Three letters.
Steven Butala: And bought a property. Which I would never recommend, but that happened, so …
Jill DeWit: That’s hilarious.
Steven Butala: What you’re doing … What you need to do is send out x amount of … This is all throughout our education material. Send out x amount. It’s a system. It’s a whole system that just needs to be jammed forward and managed. A failed mailer on your first time out is not typical, but there’s reasons for that.
Jill DeWit: I don’t know if it is failed. Again, it’s not done.
Steven Butala: I wouldn’t even call it that.
Jill DeWit: No, it’s not failed. It’s just like I picked a county. I can’t find the properties. All right, got to spend a little more time or circle back around do it later.
Steven Butala: This is nice as I can be about this topic.
Jill DeWit: Yeah. It’s all right. I’m glad … The big thing is to Alex is, “Hey, thank you Alex. You’re not throwing your hands up and going all right, I can’t do this.”
Steven Butala: He kind of was.
Jill DeWit: No-
Steven Butala: That’s how I took it.
Jill DeWit: Oh you know I don’t take it that way. Because you know why? [crosstalk 00:09:21] Because the fact that he’s reaching out and asking for help. That’s why.
Steven Butala: What is his question there?
Jill DeWit: “What am I doing wrong? What is your experience? Am I right here? Am I wrong here? Gosh, this county …” The fact that he’s reaching out and not just going, “Forget it. I’m out and going dark.” That’s my whole thing. Alex is actually trying. He’s saying, “Here am I. Here’s my experience guys, please help me out here.” That was his last question.
Jill DeWit: Everybody else had this thing happen to them too. I’m sure people are going, “Oh yeah, this happened … well and try this or think about that.” Like you and I are saying too. “Hang in there. You’ll get it.”
Jill DeWit: Alex even said, “I’m must have priced stuff wrong.” Well maybe you did. So what. Let’s see what calls come back and you can recover on those calls. You overpriced, fine. You readjust and you say, “Hey, by the way, I realize I know I sent you … I’d buy this for a million and I really only meant a thousand.” Whatever it is, because have you looked at the property? Then if you go the other direction, which some people do really well with.
Jill DeWit: Sure they’re mad, but you quickly figure out that they do want to sell, just not your offer price and you guys … You go back and look at it again and go, “You know what, all right I see it. You’re right. I’ll add $2,000 if you still want to sell and I can close on Tuesday.” You think I’m kidding?
Steven Butala: No. I know you’re right. I’m just I’m trying to adjust.
Jill DeWit: You can recover from all of this.
Steven Butala: Trying to adjust my attitude to this. For some reason. There’s only been [crosstalk 00:10:45] I’m not. I’m not. There’s only been a few times where people have contacted us and said, “This doesn’t work and I wasted money.”
Jill DeWit: I don’t think that’s how it went. I really don’t. You know what, I’m willing to bet-
Steven Butala: You make your own decisions.
Jill DeWit: If Alex stays with it-
Steven Butala: You make your own decision on pricing.
Jill DeWit: From now he’s going to go-
Steven Butala: You make you’re own decisions on where to send mail and types of assets to send. You make your own decisions here. The fact is this. If this really, really works Jill and I make millions and millions of dollars doing this. In fact the vast majority of the people that actually actualize this education program and take it seriously, I can name names, make more money than we do.
Jill DeWit: I think Alex is going to be one of those people six months from now. Watch.
Steven Butala: Okay.
Jill DeWit: Uh-huh.
Steven Butala: I hope so.
Jill DeWit: Oh yeah.
Steven Butala: Today’s topic, house flips are the next logical step. This is the meat of the show. I’m done ranting.
Jill DeWit: I was going to ask you, “How are you today? What’s happening?”
Steven Butala: There’s just a few topics. This is like a driving for dollars topic for me, Jill.
Jill DeWit: Okay.
Steven Butala: That topic just sends you to the moon.
Jill DeWit: Okay, now I get it. I’m like, why I don’t see it as bad. So, okay.
Steven Butala: You know what it taps into for me? Again, I’m not picking on you Alex, I’m not, because I’m sure Jill’s right. You’re going to be … You’re going to be great at this. It’s just you have to take personal responsibility for succeeding at this and everything else on the planet. You can’t just say, “Well, I didn’t get enough information.” or I …and again this is not about Alex specifically, “I’m not getting what I need in life.”
Jill DeWit: I’m sorry. You have a thing you got to get off your chest today.
Steven Butala: That concept sends me to the moon. If you’re not getting what you need, you need to go out and figure that out.
Jill DeWit: I understand.
Steven Butala: Because you’re not … Nobody’s doing something to you.
Jill DeWit: Is this directed at me?
Steven Butala: No.
Jill DeWit: Okay.
Steven Butala: No, it’s just like I don’t get it. You’re not this victim.
Jill DeWit: Is this something I said?
Steven Butala: No. I don’t get it. [crosstalk 00:12:55] This victim mentality is just silly.
Jill DeWit: Okay.
Steven Butala: Sent a mailer out and it didn’t work. No.
Jill DeWit: All right, house flips. Talk to me. Steven, new topic. New subject. Move on.
Steven Butala: This is why men and women have relationships together, because can you imagine … never mind.
Jill DeWit: Okay.
Steven Butala: Men and women compliment each other I think. Or let’s just not even men and women, but like life partners.
Jill DeWit: Yeah.
Steven Butala: Some people just go off track-
Jill DeWit: Could you imagine?
Steven Butala: Some just stay on track.
Jill DeWit: If I was totally like you and we would rant for an hour. Rant, rant, rant. I could just see it. I know. Another thing … All right, house flips. Next logical step. It’s so cool. So we started with Land Academy back in 2015. Our first program was just testing this all out. Cash flow from Land Show. Then here we are in 2019, they love it. Everybody loves it. We did 1.0. We have a refresh of that program, which is out there because the tools change.
Jill DeWit: Then Steven came up with infill lots, because that was like a baby step from doing land. Think about infill lots where people … Which an infill lot is something you can put a house on. It’s like maybe it’s in the middle of a subdivision. It’s a lot in between a couple of homes that for whatever reason nobody built on it yet. You get the infill lot. How to find them make sure it’s build able and what to do.
Jill DeWit: Well, then the next logical step really is house flips. That’s why we are here right now and I’ll talk about it in a minute here about … Well, you already alluded to it, House Academy’s coming. We are going to have a separate show about that, by the way. It’s going to be a whole different show. Because like Steven just said, there’s parts of those property types that are very different and some parts that are very easy. It’s the next step.
Steven Butala: Jill and I have been buying and selling houses or talking about it, in some form, since the day we met. This was way back in … It’s a lot of years. Many, many, many, years ago. More than a decade. We’re known for land, obviously. In the background we’ve been wholesaling houses and sometimes renovating them on occasion when it makes sense. Right up to yesterday we put an offer in a house in Santa Barbara.
Steven Butala: House flips as a land professional is a very logical step. It’s the same concept. It’s not going to end here. We are about to release … By the time this airs, we will have released House Academy itself. Like we said right at the beginning of the show. It’s so simple. The thing that’s missing, if there’s anything missing with house flip, is the opportunity to hit a home run.
Steven Butala: With houses you’re going to hit a lot of singles. You’re going to mark it up $25,000 bucks and sell it pretty quickly without ever really seeing it.
Jill DeWit: Right.
Steven Butala: There’s no real opportunity. With land it’s theoretical. We’ve done this. Bought a property for $5,000 bucks and sold it for $180.000. That’s a knock it out of the park situation in my book. It doesn’t happen with houses. But you get a real consistent amazing return if you work it.
Jill DeWit: Exactly.
Steven Butala: I love flipping houses. Like Jill said earlier … Well like I said, “There’s a right way and a wrong way to do it.” If you involve the wrong people, like real estate agents … The right way is this. You send out a bunch of mail just like we always do. A very predictable number of people contact you and sign it or and or sign it. About every 2,500 to 3,000 letters you buy a house.
Jill DeWit: Right.
Steven Butala: If you accumulate a buyer’s data base before you send this mailer out or you manage the first few assets in a market, you have an open house and all this stuff. What we actually teach in the program. You’re going to make two or three phone calls to that list that you’ve put together and you’re going to sell the property really fast. To somebody who’s going to renovate it like on an HGTV.
Jill DeWit: Exactly.
Steven Butala: That’s kind of not what happens with land. With land, you get the asset and you make some decisions based on the actual asset.
Jill DeWit: Right.
Steven Butala: A house itself, they’re all the same.
Jill DeWit: What I love about the houses is the data going into it. It’s much easier and there’s much more available and accurate data thanks to the MLS, which we all have access to now by the way. To do your pricing, right and picking a county and knowing where you should come in price per square foot, where it’s not crazy, but you are going to get a response. That’s the stuff that we share and for me I love it, because like I said, it’s just easier. If you can understand and figure it out in land you can absolutely understand and figure it out in houses. If you want to do it. That’s the only question.
Steven Butala: Well said.
Jill DeWit: We have a lot of members that are very happy doing their land and they went on they’ve done bigger numbers. I think we have a show coming up this week about how to get over the fear of going for bigger dollar amounts.
Steven Butala: Bigger deals.
Jill DeWit: And bigger deals. So we’re going to talk more about that. Lot of members are just happy dong that. Like, “Hey, I added a zero. Now I’ve added two zeros. I’m happy. I do less deals per year, but they are bigger deals and it’s less work for me. I don’t need that house thing.” That’s fine. That’s fine, but it’s nice to diversify. That’s another show we have coming up.
Steven Butala: It’s very logical to add product types to land. Which is why it was very logical for us. The logical next step is to launch House Academy.
Jill DeWit: Yep.
Steven Butala: Well, I’ve done it again. You spent another 20 minutes or so listening to the Land Academy show. Join us next time for the episode called, how much should I diversify my land acquisition types?
Jill DeWit: And we answer your questions posted on our online community landinvestors.com. It’s free. Or go to houseacademy.com. There’s another free online community there for you, too.
Steven Butala: You are not alone in your real estate ambition.
Jill DeWit: All right. Speaking of which, I have to get this out real quick. There’s a thing going on that ends today. If you want to be a member of Land Academy there is a special that ends today, because it is Memorial Day. If you go in and the code is … If you go to landacadmey.com, click on join. When you get to the check out page, if you put in the coupon code HOT750, so HOT750
Steven Butala: That’s cool.
Jill DeWit: You like that? It takes off $750.00 plus you get a 1,000 free records of data.
Steven Butala: Wow.
Jill DeWit: Yep. Oh but wait, you don’t even know other pro … This is a promo we have going on.
Steven Butala: I’m the last one to know anything. I don’t need to know.
Jill DeWit: That’s okay. This will come to you or me.
Steven Butala: I buy the real estate.
Jill DeWit: I know.
Steven Butala: Everything else goes on here I don’t know about it.
Jill DeWit: You also get one free consulting call with either myself or Steven. Is that not cool? So HOT750. Check it out. Also, for Land Academy members it just happened the other day. They are the only ones that are getting early access right now in House Academy. FYI.
Jill DeWit: As we are airing this today on Memorial Day Monday, the general public cannot get House Academy. It is coming in a couple of weeks. Land Academy members do have access. They are getting it now. Super cool.
Steven Butala: Awesome.
Jill DeWit: Wherever you’re watching, wherever you’re listening, please subscribe and rate us there.
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