Data Driven Real Estate Acquisitions Yield the Best ROI (LA 999)

Data Driven Real Estate Acquisitions Yield the Best ROI (LA 999)

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 data driven real estate acquisitions and how they yield the best RIO.

Jill DeWit:                            This good, this is important. I’m glad we’re talking about this. There’s lots of other ways to do this, but there’s … the whole point for me is if you can’t get onboard with data, you’re gonna be left behind, it doesn’t really matter what you’re doing, you’re gonna be left behind.

Steven Butala:                   Somebody asked me recently, hey give me the elevator pitch on what you guys do, I don’t understand it. Jill and I were looking at a boat.

Jill DeWit:                            Yeah.

Steven Butala:                   And the broker said, what are you guys doing at night … and I said, we buy a lot land and we resell it. And he said, well give me the elevator pitch, I don’t understand. People ask this stuff. I’m sure, you’re all in land business, too, they ask you some version of this all the time.

Jill DeWit:                            Exactly.

Steven Butala:                   I said, we use data. I’m like everybody, to buy and sell property for less that it’s worth at that current moment. And a light bulb went off, and so I decided to make a show out of it.

Jill DeWit:                            Well I agree.

Steven Butala:                   Like everything. Before we get into it, let’s take a question posted by one our members on the landinvestors.com online community, it’s free.

Jill DeWit:                            Jacob asked, has anyone had trouble purchasing land in the Midwest region? It could just be my mailer or price, however I’ve had more success marketing and purchasing in the south west region, and was wondering what the issue might be. Good question.

Steven Butala:                   Great question. I have like a really simple answer, you go first.

Jill DeWit:                            All right. My answer is, no.

Steven Butala:                   No?

Jill DeWit:                            I’m sorry. Well, no, because as I’m looking at my inventory right now about, you know like Colorado and Texas property and other … in the Midwest parts, I’m not having … I have Ohio. So I don’t have issues, so … I’m …

Steven Butala:                   What Jacob means is this, in my opinion …

Jill DeWit:                            I’m guessing it’s a little bit of a pricing thing. Or … go ahead.

Steven Butala:                   If Jill and I are saying the same thing. What he’s saying is, I seem to have a lot better luck buying properties at 100 bucks an acre in the south west than I do in the Midwest, and he’s absolutely right.

Jill DeWit:                            That makes sense. Yeah, you do have to change your pricing. Like I was just looking at this Colorado property that we sold, we bought for like 6900 and sell for 36000.

Steven Butala:                   Mm-hmm (affirmative).

Jill DeWit:                            So … and it was fast.

Steven Butala:                   Colorado sells fast.

Jill DeWit:                            It does. I can’t remember the name of the county right now, but I was just looking at it. But, yeah, it’s not a $100 an acre transaction, it’s a much more expensive thing. So spend some time, I’m sure I’m you’re gonna say the same thing, spend some time and do all the stuff that you know how to do, looking for, you know what Steven says, looking for those areas where there’s consistence and you can kind of figure out some pricing.

Steven Butala:                   I’ll take it a step further, and this is like a lifestyle, life comment, and from the Midwest, so I can say this stuff, everything’s more difficult in the Midwest. Buying real estate’s more difficult, going to the DMV’s more difficult, going to the post office is more difficult. Going to the …

Jill DeWit:                            Relationships, maybe.

Steven Butala:                   Yep. Growing up in the Midwest is a lot more difficult than it is in the south west and on and on and on. So, why would buying land …

Jill DeWit:                            That’s funny.

Steven Butala:                   … be any different.

Jill DeWit:                            That’s hilarious. I hadn’t thought about that. So, based on what you just said, I’m mailing nothing but Hawaii, that’s all I’m doing. I’m doing Hawaii, let’s see … I’ll stick with … San Diego’s good. Let’s see, where are all the laid back people and the relaxed people. Those are the only markets I’m gonna work in from now on. Actually, this could be good. Maybe Puerto Rico, they seem pretty relaxed.

Steven Butala:                   I checked the data, they … Real Quest has data in Puerto Rico.

Jill DeWit:                            Yep. That would be cool.

Steven Butala:                   And Guam, I think.

Jill DeWit:                            So I’m not gonna do New York, I’m not gonna do Boston. Let’s see, where is everybody kind of, where there’s yukky weather and hard to get around maybe, they may not be in the best mood, I’m not mailing there.

Steven Butala:                   So you’re nailing it.

Jill DeWit:                            So … Florida? Oh, Florida would be great …

Steven Butala:                   It’s just culture.

Jill DeWit:                            Key West. Key West all day long.

Steven Butala:                   There’s just, so the cultures are real different. For some reason everything has to be … start with an argument in the Midwest, and then till you prove yourself, and then everybody’s best friends.

Jill DeWit:                            That’s pretty funny actually when you think about, how about where the smartest people are, don’t mail there.

Steven Butala:                   Smartest?

Jill DeWit:                            Yeah.

Steven Butala:                   I’ll bite, like where are the smartest people? Because I have a lot to say about this.

Jill DeWit:                            I would say …

Steven Butala:                   You know what this is the Jack and Jill Show.

Jill DeWit:                            I would say like the major cities. LA, New York, San Francisco. I would maybe not …

Steven Butala:                   We’ve lost like 80% of our listeners.

Jill DeWit:                            No, wait a minute, they’re all members, they just don’t mail there.

Steven Butala:                   Jill, in all sense, we’re talking about, Jill and I are starting a show next month called the Jack and Jill Show, and it’s not about real estate at all. We just launched, by the way, this week the House Academy Show. So, we’re kind of separating what we talk about. And I think where smart people live is the perfect topic for the Jack and Jill Show.

Jill DeWit:                            Thank you very much. Because you might make different decisions about where you want to live.

Steven Butala:                   I mean since we moved to Los Angeles, I can safely say …

Jill DeWit:                            I know.

Steven Butala:                   … some of the smartest people I’ve ever worked with or ever known live here.

Jill DeWit:                            Isn’t that funny. Yeah.

Steven Butala:                   And that’s not what I thought I was gonna get into.

Jill DeWit:                            No. He thought it was gonna be a bunch hippies and nobody wears shoes.

Steven Butala:                   Yeah. That’s what I thought. And nobody cares about anything.

Jill DeWit:                            And everybody works an hour a day from the beach. Yeah, on their laptops or their phones.

Steven Butala:                   Yeah, and they’re all like falsely rich because their house, they bought their house for $60000 and it’s worth 6 million now.

Jill DeWit:                            Right.

Steven Butala:                   Which is not untrue.

Jill DeWit:                            Exactly. But, yeah, there’s some of those, but there’s a lot more people that really work hard to be here. Like us.

Steven Butala:                   Today’s topic … [crosstalk 00:05:53].

Jill DeWit:                            We were not that fortunate, sorry. I wish my parents would have held on to a house or two, but anyway, another topic.

Steven Butala:                   I just wrote a blog about … actually it’s a house driven thing, and it’s perfect partly to what you just said. My parents, the first real estate deal that I was old enough to remember and it was the house deal, of course.

Jill DeWit:                            Mm-hmm (affirmative).

Steven Butala:                   They bought the property for 13 grand, and sold it … we co-wrote this blog. Bought the property for 13000 bucks and sold it for 87. And we lived there for, I don’t know, eight years. And I remember saying this … I don’t remember saying it, I remember my parent reaction to me saying this. Well, why don’t we just buy all the houses on the block then?

Jill DeWit:                            Oh yeah.

Steven Butala:                   And here we are 50 years later, or whatever it is, 40 years later buying all the houses on the block.

Jill DeWit:                            Right.

Steven Butala:                   How did they respond? Oh, you don’t understand, Steve.

Jill DeWit:                            Yeah.

Steven Butala:                   Just sit there in the backseat without your seatbelt on.

Jill DeWit:                            Exactly.

Steven Butala:                   [inaudible 00:06:52] like data driven real estate acquisitions and how they yield the best ROI. This is the meat of the show.

Steven Butala:                   So we’re standing in this substantially large boat explaining to this broker who has got ADD like the rest of us, wants to know very quickly why we can afford a boat like this, and we buy and sell land. Oh, that’s great. Why are you guys any different, because other people do that. Well, it’s all data driven. And then it’s over. Oh, I understand.

Jill DeWit:                            No, they don’t.

Steven Butala:                   He … we understood [crosstalk 00:07:24].

Jill DeWit:                            Oh, okay. Most people don’t, I usually use this to … I personally use data to stop the conversation.

Steven Butala:                   That’s what I mean.

Jill DeWit:                            Yeah, okay.

Steven Butala:                   That’s what happened.

Jill DeWit:                            Oh, okay, that …

Steven Butala:                   We were … you know.

Jill DeWit:                            But did he think he understood …

Steven Butala:                   Yeah.

Jill DeWit:                            Okay. He understood data but doesn’t really understand what’s going on.

Steven Butala:                   The people in our group, in our membership group, or any of our groups, and I think we’re doing a show about this tomorrow so I don’t want to talk about it too much, it clicks. What do you mean? So I don’t have to drive for dollars, I don’t have to guess anymore, I don’t have to send out postcards. I mean I have all the information about …

Jill DeWit:                            And just weeds through … thousands. No, we just send out the offers and let them come back.

Steven Butala:                   Exactly.

Jill DeWit:                            So …

Steven Butala:                   It’s all about the data. Everything’s about data.

Jill DeWit:                            That was my whole thing. For me, and this show it two parts. One is, whatever industry you’re in, I mean I was just thinking about this today. I’m always listening to business stuff in the car and you have to be looking at data. We were talking about this, I don’t are if you’re Pepsi, you brought up Facebook, I mean think about these companies … it doesn’t matter, or it could be a sunglass hut in the mall, and you need to be thinking about data.

Steven Butala:                   That’s right.

Jill DeWit:                            You could be selling cookies, you need to be thinking about data. Where are your customers coming from, do you have an online presence, and everything … So it’s not just us, but then … data’s important and then in our world you need to really use data to fine tune what you’re doing, probably as should everybody. You should be using data to fine tune your customers who buy your cookies, so accurately price your cookies to sell quickly. Period. It’s the same with us.

Steven Butala:                   Well said.

Jill DeWit:                            Thank you.

Steven Butala:                   If you’re a used car dealer and you’re reaching people, you should know exactly who lives within a mile of your used care dealership.

Jill DeWit:                            Right.

Steven Butala:                   And you should be touching them somehow and a schedule.

Jill DeWit:                            Right.

Steven Butala:                   The old school way is to … just to do a silly commercial that’s reaching all kinds of zip codes. But it’s so much more efficient now to just get onto Facebook or anything else and touch the people that are in a zip code where your car dealership is.

Jill DeWit:                            Right.

Steven Butala:                   Not necessarily about how cheap your cars are or great you are as a person, but just giving them information about … you know, why, let’s say Toyota for example has the highest value, retention value for used cars and why you tend to stock Toyotas because of that. So they might not buy a car you that day, but when their car blows up and they need one, it’s gonna be in there.

Jill DeWit:                            Right.

Steven Butala:                   So that’s all data driven stuff, that’s what we do.

Jill DeWit:                            Mm-hmm (affirmative). Exactly.

Steven Butala:                   We very microscopically and surgically send these offers out and in very predictable manner the stuff comes back. And it’s not just us, it’s hundreds, and now hundreds and hundreds and hundreds of our members are experiencing the same thing. I mean this has show 99 … 900 and 99.

Jill DeWit:                            999.

Steven Butala:                   We wouldn’t be around if this didn’t work.

Jill DeWit:                            Yeah.

Steven Butala:                   And Jill and I, I’ve been doing this since the 90s, Jill’s been doing it with me for than 10 years, so … 16000 deals. It’s the data piece that this works. Facebook is data driven, Amazon’s data driven. On the face of it we think Facebook is just this fun way to see what’s going on with the people we went to high school with. But it’s not.

Jill DeWit:                            Yeah.

Steven Butala:                   There’s a massive backend of Facebook, and if you own a business, which most of you do or you’re interested in that, that’s the whole key to getting your customers quickly.

Jill DeWit:                            Right. Exactly.

Steven Butala:                   And doing whatever … they’ll find you if you do it right, which is what we’re all about.

Jill DeWit:                            Right. Exactly. And what we do, so it’s … the show’s about data driven decisions, or data driven real estate and getting the best ROI. No matter what kind of property you’re looking at, you need to have your hand on all that information that … it’s interesting to me that I talk to buyers and sellers who don’t know everything about their property that I know. Have you ever noticed that? And it shocks me. I go back and look, it’s funny but I’ll go back and look through the chain of title, I’ll go back and look through … I’m not happy looking at a property unless I know back 30, 40 years ago what they spend on it. I want to see this.

Steven Butala:                   I notice that.

Jill DeWit:                            Seriously. And it’s amazing to me, some brokers and agents and people in our world, they only know what’s its worth right now today, and that’s really all they care about. Why I’m even looking for the trends, I want to see where it’s going. Hey I want to see is there more property like this I can pick up somewhere, and make sure I’m pricing it right. It’s really good to see that. If this whole area that I’m buying property in, everybody’s owned it for about 20 years, and they all paid about a third of what it’s valued at today, I’m gonna come in hot and hit them hard. This is good information and that’s why we get good ROI. If you dig a little bit deeper and … like you say, test for reason, which I love, which for me means take a step back and really look at the big picture here, then you’re gonna do really well. Don’t just have blinders on and … you know.

Steven Butala:                   You know, I didn’t think about that until you said it now. You really do look at what they paid for it.

Jill DeWit:                            I do.

Steven Butala:                   And since recently, that’s never been important to me. All I’ve ever looked at is …

Jill DeWit:                            Isn’t that funny.

Steven Butala:                   I know I can sell this for X based on, that’s what I spend my time on. If I’m gonna buy this property for 12000 bucks and I know that easily wholesale 25000, I stop right there.

Jill DeWit:                            Right.

Steven Butala:                   I just make sure … well I make sure it has access and all that stuff, but …

Jill DeWit:                            Right.

Steven Butala:                   I don’t care what they paid for it at all. I hoped they paid a dollar for it.

Jill DeWit:                            Yeah. I look back because I know they’re making … because you know why, because I look at the seller, as for them it’s often a little bit emotional, depending on the seller, obviously, but sometimes it’s a little bit emotional. And if you know they’re gonna get out almost what they put into it, or close to, you know they’re gonna feel good about it. And that just helps me with going in and getting the deal done.

Steven Butala:                   This is just a glaring example to me of why you should be a partner with somebody.

Jill DeWit:                            Oh …

Steven Butala:                   Because another set of eyes on stuff, and then it just …

Jill DeWit:                            That’s true.

Steven Butala:                   You just don’t, you don’t have the propensity to make mistakes if someone else is look at it, and it then a share in the money.

Jill DeWit:                            Right. Thank you.

Steven Butala:                   It’s makes up for all the arguments that you get into.

Jill DeWit:                            Like this morning.

Steven Butala:                   That’s something for the Jack and Jill Show.

Jill DeWit:                            There with go.

Steven Butala:                   Hey, we know your times really valuable, thanks for spending it with us today. Join us in the next episode, called Episode 1000, the story of Land Academy.

Jill DeWit:                            1000 tomorrow. I can’t believe it.

Steven Butala:                   I can’t either.

Jill DeWit:                            And we answer your questions posted on our online community landinvestors.com. It is free.

Steven Butala:                   You are not alone in your real estate ambition.

Jill DeWit:                            I have something to share. Offers to owners is doing a huge special, and it’s only this week. FYI. Between now and Friday any offers to owners direct to mail orders over 500 bucks get 10% off. No limit into the number of mailers or orders that you place. So check it out, offerstoowners.com. I know, they didn’t earn that …

Steven Butala:                   10%.

Jill DeWit:                            I know. That’s …

Steven Butala:                   Yeah, they didn’t ask us.

Jill DeWit:                            No, they didn’t ask us. It’s all good.

Steven Butala:                   We’re gonna have a profit … we’re gonna be a nonprofit … 020 will be nonprofit this month.

Jill DeWit:                            Nonprofit this week.

Steven Butala:                   Oh, this week.

Jill DeWit:                            This week. Only for a week.

Steven Butala:                   Oh, it’s only one week. Okay.

Jill DeWit:                            Only for one week. Hang in there.

Steven Butala:                   I can live with that.

Jill DeWit:                            Okay. Wherever you’re watching and 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.

 

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