How Much Should I Diversify Land Acquisition Types (LA 990)
How Much Should I Diversify Land Acquisition Types (LA 990)
Transcript:
Steven Butala: Steve and Jill here.
Jill DeWit: Hello.
Steven Butala: Welcome to the Land Academy Show, entertaining land investment talk. I’m Steven Jack Butala …
Jill DeWit: And I’m Jill DeWit, broadcasting from sunny Southern California.
Steven Butala: Today, Jill and I talk about how much should I diversify my land acquisition types, one of my favorite topics when I-
Jill DeWit: I know. I have a bunch of notes here.
Steven Butala: Awesome.
Jill DeWit: This is going to be a good show.
Steven Butala: Before we get into it … I started in commercial real estate, so I didn’t start in land. We still do deals in that space.
Jill DeWit: Mm-hmm (affirmative).
Steven Butala: Before we get into it though, let’s take a question posted by one of our members on the landInvestors.com online community. It’s free.
Jill DeWit: What you’re saying is we walk the walk. We don’t just talk the talk. Right?
Steven Butala: What does that mean?
Jill DeWit: That means that we say diversify, and we diversify. That’s the point.
Steven Butala: I don’t think there’s much that we talk about … I don’t think there’s much theory in any of these Land Academy, House Academy or any of it. I think it’s all proven.
Jill DeWit: Oh yeah. Yes. We’ve been there, done that.
Steven Butala: We talk about attitude and some other stuff once in a while, and get a little bit nebulous, but the fact is, this is what we do.
Jill DeWit: Sorry, I have a hair right in my eye here, so we’ll find it. All right, Jason says, “Good afternoon. I need to find a real estate attorney to draw up an affidavit of heirship. The attorney needs to be in Orange County, California, probably in or near the Irvine area. If anyone knows of a good inexpensive lawyer they can recommend, please let me know. Thanks in advance.”
Jill DeWit: You know what’s really cool about this? I said see stuff like this on Facebook all the time too. I’m glad people know to reach out and ask.
Jill DeWit: All right. One of our members, [Steven 00:01:41] F says, “Hey, Jason. I use an attorney out of Riverside. I gave her a call, and she said she’d be happy to speak with you regarding your request. Riverside is the next county over, and she can do work in Irvine. Here’s her cell number. Here’s her name.”
Steven Butala: Her name is [Ricky Rivera 00:00:01:56].
Jill DeWit: Oversharing.
Steven Butala: Her cell number is (951)719-5149. I included all this, I personally included it in the script today, because that’s what Land Investors is.
Jill DeWit: Yeah.
Steven Butala: That’s what we do here. We help each other. It’s not just access to the data. It’s not just education. It’s not just advice on a show, or on and on and on, the stuff that goes on.
Jill DeWit: Right.
Steven Butala: In fact, I’m actually going to call this person too, because adverse possession property … What this person is asking is … What happened here is this … I’m reading between the lines and it’s a generalization, but I really think it can help listeners.
Steven Butala: When you send out a bunch of mail, there’s a lot of people that contact you that say, “I would love to sell you my property,” whether it’s a house or a piece of land, “but it’s in my dad’s name. He passed away two years ago, and I’ve been paying the taxes, and I don’t know. Every once in a while, we talk about it, my wife and I talk about it, and I don’t know what to do.”
Steven Butala: Undoing that, it’s called adverse possession in a lot of cases, in the case of California, you can file an affidavit and several other steps, and get it into the sibling or the heir’s name, but in some states, like Arizona is one of them and Colorado, it’s tough. You have to go through a court procedure, adverse possession court procedure. You can, as a land investor, or house and real estate investor, create a whole business model around this. Everybody’s here to help. That’s my point.
Jill DeWit: Exactly. Thank you.
Steven Butala: This topic, “How much should I diversify my land acquisition types?” This is the meat of the show.
Jill DeWit: Would you like me to go first? I have a list.
Steven Butala: Yes, please, because you have a lot of notes.
Jill DeWit: The big picture is you don’t want people to come to your website, your land selling website, and find a hundred of the same thing. How boring is that? It’s hard for them to sift through and figure out the one they want. You want to have your sales ongoing and fluid, and someone checking out on Tuesday for this property, and someone checking out on Wednesday for that property, and people driving out for the weekend to look at this property. You want your sales and everything just to keep moving.
Jill DeWit: The best way to do this is to diversify, and have a bunch of different types. What do I mean by diversify? Well, a couple of things are like acreage. Have some half acre properties. Have some 10 acre properties. Have some 40 acre properties. Have a bunch of different sizes. Think about location, maybe not all in the same county.
Jill DeWit: I know some of this is as you grow and you move on in your land career, it’s going to come with time. When you first sent out a mailer, you’re focused on one area and one size, and just understanding the process. This is when you’ve done some deals, you’ve got your feet wet, and now you’re ready to grow your business.
Jill DeWit: I want you to think about location. Do different states. Do different counties. Think about all of that where you could get into. Think about price. Have a variety of things. I think it’s awesome to have $1,000 sale properties and have $100,000 sale properties, and everything in between, on your website.
Jill DeWit: You want to think about usage. Think about maybe there are properties that you can acquire that are mobile friendly, or RV friendly. Those are huge things that people look for. Those often go really fast too, when you can find those properties. Think about infill lots, and something that someone can build upon. Have that in your inventory. These are all kinds of things I want you to think about as far as diversifying, all within just rural vacant land.
Steven Butala: If you had a picture perfect situation, Jill, how would it go? If you had an inventory of 20 properties what would should we have?
Jill DeWit: Okay. I would have 20 properties. I would have some for around $5,000 up to, let’s say 50, $60,000 for sale, first of all. I’d have some two acres, some five acres, some 10 acres. I’d have more smaller properties than I would bigger properties, but I’d have a sprinkling of maybe 20 and 40 acre properties in there.
Jill DeWit: I want to be appealing people to come to the site too. I’d have some that are maybe some Oklahoma treed beautiful lake property. Then I might have some infill lots in, I don’t know, Florida or something for somebody to buy, or Virginia, anything like that. I’d have some West Coast property and some East Coast property. I’m trying to think what else.
Jill DeWit: I would have some that are different purposes. I’d like to have some that are maybe commercial, or I can put a mobile on it, and I would advertise the heck out of it. This is just, “If you’re looking for a mobile friendly lot, this is for you.” “If you’re looking for camping and hunting, and getting lost in Texas, this is for you.” “Take your buddies out and hunt. This is for you.” That’s what I would have of my 20 is that. Is that enough? Descriptive enough?
Steven Butala: Yeah, absolutely, and I agree with you, but I think …
Jill DeWit: What would you do?
Steven Butala: My goal has always been, and forever will be, to never own a piece of real estate. You’re buying it and selling it so quickly that-
Jill DeWit: It’s true.
Steven Butala: … that you own it for … It’s a dual deed. Jill does this all the time, and Jill’s crew does this all the time. Send in two deeds. You bought the property, and you sold it. It’s not even recorded in your name yet, but you bought it, and you did the deal, and you got all the paperwork, the deed back and stuff. It’s not recorded yet, and you sold it. You send in a deed to record it in your name, and you send in a deed to record it into the buyer’s name-
Jill DeWit: Because it happens so fast. Yeah.
Steven Butala: … with a sticky note on it that says, “Hey, record this one first, please, Recorder.”
Jill DeWit: Yup.
Steven Butala: That’s always been my goal. I think that the most efficient way to do that is to work one area forever, or one state.
Jill DeWit: You think so, really?
Steven Butala: Yeah, I just had a … I’m not say … Jill’s way is a absolute … Jill’s way is how we do it.
Jill DeWit: Okay.
Steven Butala: But I just had a consulting call with somebody, and they’re from one state, and they said, “I’m doing a mailer in this state, this state, this state and this state, because that’s what you guys say,” and that’s what Jill just said. I think it’s a great idea, but I said, “Look. The state that you’re in, there’s no reason that you can’t just start and finish your whole land and house acquisition career in this one state.”
Jill DeWit: That’s true.
Steven Butala: There’s pros and cons to doing it both ways, but the pro to that is you’re going to establish a buyers list that just is going to beat the band.
Jill DeWit: It’s true. Well, here’s something to think about. You’re right. I hear you. I totally get when you find a hot area, and you know that area better than anybody else, and you have your inventory flying off the shelves in that area, you could hang out there for a long time and make a career out of it, like you’re saying.
Jill DeWit: If you’re not finding that, this is a good way to do that, of experimenting a little bit in different areas, and then maybe you’ll find that too.
Steven Butala: Yes. Or do both.
Jill DeWit: You could use some of my ideas to go out and go, “Oh my gosh. I had no idea. Every time I buy a 20 over in this county, and it’s a fishing property, it’s got some water attribute, they fly off the shelf. Well, that is my focus now.” Then when I run out, let’s just say I’m going to try one county over, this county over, but I’m going to stay there. It all makes sense.
Steven Butala: That’s right. The area almost chooses you versus you choosing the area.
Jill DeWit: Sure.
Steven Butala: If you send a mailer out to 20 different places, one or two of them is just going to pop.
Jill DeWit: It’s true. Yeah. Very true.
Steven Butala: Both are good.
Jill DeWit: Maybe that’s it. Maybe the whole point [inaudible 00:09:59], so diversifying your land type is a way to find that area, find your niche, if you will, and you will …
Jill DeWit: Because we have people that their niche is large acreage in the Northwest. I think, I want to say, do they do Wyoming? I can’t even remember what states. They’re hitting Colorado, but they’re all about ranches is their thing.
Steven Butala: I wrote the title of the show. That’s really what I thought this show was going to be about, which I think is good though. That’s why there’s two people here.
Jill DeWit: Okay.
Steven Butala: Instead of just my antics. Can you list the product … Land as a real estate type, how many types of land are there in your head?
Jill DeWit: Oh my gosh.
Steven Butala: There’s rural vacant land. There’s infill lots.
Jill DeWit: There’s a lot. Right. Well, there’s recreational. You can do stuff with it. There’s land you can hunt on it. There’s land you can put an RV on it. There’s land you can’t put an RV on it.
Steven Butala: There’s mobile home property.
Jill DeWit: Right.
Steven Butala: There’s what I call movie star ranches.
Jill DeWit: Right.
Steven Butala: Which are really expensive, large properties in a relatively urban area.
Jill DeWit: There’s Ag, agricultural land.
Steven Butala: Yeah, keep going. This is great. This is really helpful, I think. Agricultural-
Jill DeWit: Yeah. We have people that do treed. There’s people that pick up land for logging purposes and the trees.
Steven Butala: Right.
Jill DeWit: We have people that pick up land to lease it out for cattle. That’s another thing. There’s so much out there.
Steven Butala: There’s property that is slated for development, like expansion development for large home builders. That’s usually agricultural conversion land. All these properties are priced very differently.
Jill DeWit: Isn’t that great? You know what? What we just properly shared is, everybody goes, “Oh, land,” like there’s all one type. There’s not. You could just be like we have, been doing land primarily for years and never get bored. You know what I mean?
Steven Butala: Every single time we drive out of an urban area, drive out of town, and this is how this whole thing started for me in the nineties, you get out there, and you’re looking around here like, “Who the hell owns all this property?”
Jill DeWit: Exactly.
Steven Butala: What percentage of these people don’t want it anymore?
Jill DeWit: Right.
Steven Butala: Over and over and over again, we proved that you just send some mail out.
Jill DeWit: Right.
Steven Butala: They’re going to sell it to you.
Jill DeWit: Exactly.
Steven Butala: You’re going to sell it for more or own it.
Jill DeWit: Right.
Steven Butala: I just read an article about … For some reason, it popped up in my Google feed, and I had to click on it. Every time that happens, I feel bad. I’m such a sucker for clicking on this and reading it.
Jill DeWit: That’s hilarious.
Steven Butala: I know I’m going to screw up. Google thinks that I’m a …
Jill DeWit: Oh yeah, what [crosstalk 00:12:47].
Steven Butala: Google thinks I’m a real estate agent, which I’m not. That I’ve been in the Coast Guard, which I’ve never … Just based on my search criteria.
Jill DeWit: It’s hilarious.
Steven Butala: And a bunch of other stuff.
Jill DeWit: I love it. What about throw helicopter pilot on there? What else have you got? Helicopter pilot and I drive a Humvee.
Steven Butala: Google’s very, very clear on my age, for some reason.
Jill DeWit: That’s a good one. I wonder what Google … Wait. You finish your thing.
Steven Butala: Anyway, there’s this article that popped up that said, “You’re not going to believe who the most wealthy presidents were.” They went through the top 20 or 30 most wealthy presidents, and about 90% of them, it was all because of real estate or real estate based businesses like plantations.
Jill DeWit: It always comes back to that. I swear, every time I’m looking at somebody, it comes back to real estate.
Steven Butala: It really does come back to … In dirt, actually, not housing or anything.
Jill DeWit: I don’t care who you are, the president of Proctor and Gamble, you dig in there, there’s real estate involved.
Steven Butala: That’s right.
Jill DeWit: It always comes back to that. Isn’t that funny?
Steven Butala: There’s some interesting stories in there, because Jill and I talk about this in the education, but when you really, really break it all down in here, this is not theory, this is reality.
Steven Butala: We bought, I bought a piece of property, an 80 acre property in the mid to late nineties, I talk about this in our education, for, I think it was, I don’t remember, I think it was somewhere between four and $8,000, and sold it. I doubled my money. That was the seed capital. Eventually, I didn’t put any more money in, and eventually made, we generate over 20 … It’s close to $30 million now on that one investment.
Steven Butala: When you do the math and buy property … Everybody understands houses, so let’s just use a house, for example. If you buy a house for $250,000, which is the national average, and you sell it for 300, you made 50 grand. You do it again, and you do it again, and you do it again, you’re going to make tens of millions of dollars.
Steven Butala: It’s truly amazing. The point is this. The more that you diversify these product types, the land types and housing, maybe condominiums or whatever makes sense to you, the more of those … I made 25. I made 50. I made 75. I made a 100 lines of revenue that you’re going to establish.
Jill DeWit: Are you also saying too, this is a way of diversifying risk? Not that there is a risk, but saying if you have a bunch of different property types, you’re always going to have something that is wanted.
Steven Butala: That’s right.
Jill DeWit: Okay.
Steven Butala: This applies to everything. Once you learn how to send mail out correctly and price correctly, you can buy strip malls. You can buy just about anything. Anything that’s data-driven, this applies to.
Jill DeWit: Exactly.
Steven Butala: You can get a good solid database of owners, and some associated data with it, like how much are the taxes, square footage?
Jill DeWit: How much equity they have in it.
Steven Butala: Yes, yes, exactly, Jill.
Jill DeWit: Mm-hmm (affirmative).
Steven Butala: That’s just getting better and better and better as we go on.
Jill DeWit: Exactly.
Steven Butala: Data sets, in this day and age, if you’re a data person, there’s never been a better time.
Jill DeWit: Yup. I agree. I’m sitting here thinking about what Google thinks about me.
Steven Butala: What do they think? What is some of the stuff that comes up?
Jill DeWit: Pops up. Well, makeup.
Steven Butala: Really?
Jill DeWit: Yeah.
Steven Butala: Does Google know you’re a woman?
Jill DeWit: I’m sure it does.
Steven Butala: Google’s super clear on my gender.
Jill DeWit: Yes, Google is very clear. Actually. Google knows what kind of makeup I wear. Google knows that I spend a lot of time in Pottery Barn right now, because I’m redoing the dining room. What else? Google knows that I have a sweet tooth, and that I traveled to New Orleans. Let’s see, what else does Google know? I think Google thinks I’m a little Martha-Stewart-like in my baking tastes. Let’s see. I hope Google thinks I’m 20.
Steven Butala: No. Google knows exactly my age, for some reason, exactly.
Jill DeWit: I think Google does think I’m 20, because here’s why, because stupid baby born in England, Prince Harry and What’s Her Face, that pop-
Steven Butala: Prince Harry and What’s Her Face.
Jill DeWit: Yeah.
Steven Butala: That’s the name of a show, Jill.
Jill DeWit: Who just had a baby. That’s constantly popping up in my-
Steven Butala: Why are you looking that stuff up?
Jill DeWit: I think it’s because of my British soap opera or something. I don’t know what it thinks.
Steven Butala: Prince Harry and What’s Her Face. If I could do a whole show, not an episode, on Prince Harry and What’s Her Face, I would do it.
Jill DeWit: Okay. We’ll save that. Okay.
Steven Butala: Wow. How fast is that? How easy is it for us to veer from real estate on the show?
Jill DeWit: Oh, it’s great. Some day, maybe we’ll have a show that’s not real estate based.
Steven Butala: I think that’d be fun.
Jill DeWit: I do too.
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 for the episode called Members Erin and Liz English Share Their Land Academy Success Stories.
Jill DeWit: That is awesome, and we answer your questions posted on our online communities. Pick one. There’s one at landInvestors.com and on houseAcademy.com. Go there, check them out. They’re both free.
Steven Butala: You’re not alone in your real estate ambition. That applies to all types of real estate.
Jill DeWit: Doesn’t it? Hey, I got something to say. If you haven’t already joined House Academy, get in there. That’s what this is. You can get in early now, start asking questions, making connections, learning more about House Academy.
Jill DeWit: I’ll tell you right now, as this airs, our Land Academy members had early access to House Academy, so they’re already reading and watching and viewing and learning all the steps in House Academy. If you want to get on the inside track, and learn more about it, get into the online community, House Academy. Again, it’s free. Just make an account, start hitting them up for questions, and then when it’s open to the public in a couple of weeks, you have a headstart.
Steven Butala: If you’re Prince Harry, congratulations on What’s Her Face.
Jill DeWit: And your baby, What’s Its Called. Wherever you’re watching, or wherever you’re listening, please subscribe and rate us there.
Steven Butala: We are Steve and Jill.
Jill DeWit: We are Steve and Jill.
Steven Butala: Information …
Jill DeWit: … and inspiration …
Steven Butala: … to buy undervalued property. Crack up, Jill.
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