How to Set Real Estate Investing Financial Goals (LA 1007)

How to Set Real Estate Investing Financial Goals (LA 1007)


Steven Butala:                   Steve and Jill here.

Jill DeWit:                            Good day.

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 to set real estate investing financial goals. I just said, right before we started the show, is ironic as this is, because there’s the word financial in the title, this is way more spiritual and way more inspirational than it is technical.

Jill DeWit:                            I’m proud of you, Steven.

Steven Butala:                   Wow. I just heard my mom talk to me there. I just heard my mom from the other side.

Jill DeWit:                            You finally get it.

Steven Butala:                   I made a potty. “I’m proud of you, Steven.”

Jill DeWit:                            That’s awesome. “Next time get it in here. That’s right. Aim for the Cheerio, sweetie.”

Steven Butala:                   Aim for the Cheerio, really? Is that how you do it?

Jill DeWit:                            Yeah. When you’re teaching a little boy to pee, you throw Cheerios in the toilet. Then he can sink the Cheerios.

Steven Butala:                   I didn’t know that. I just let the kids figure it out themselves. No aiming.

Jill DeWit:                            That’s hilarious. Yeah. I did, too. It’s more fun.

Steven Butala:                   Pretty much let the kids just raise themselves.

Jill DeWit:                            Excuse me. As a man, it’s it more fun when it’s target practice?

Steven Butala:                   I have no …

Jill DeWit:                            All right.

Steven Butala:                   That kind of thing stopped being fun a long time ago for me. If I want to have some fun, doesn’t involve that.

Jill DeWit:                            Okay. Anyway. I am proud of you for not only picking, but entertaining this conversation. I know we have some good stuff to say.

Steven Butala:                   Before we get into it, let’s take a question posted by one of our members in the online community. It’s free. I have to say it, Jill. This is a very lengthy question. It’s a very lengthy question and a story unfolds. It has a beautiful and happy ending, so feel free to paraphrase, but it’s lengthy.

Jill DeWit:                            All right. I won’t give up.

Steven Butala:                   And I’ll help you.

Jill DeWit:                            Okay. Hi, Abby. Abby wrote this. Abby asks, “Hi, guys. I wanted to send a neighbor letter to all the neighbors in a one-mile radius for a property that I want to sell in a not so rural area, kind of infill lots. Does anyone have a template I can use? Ideally, I want the neighbors to make me an offer, and then I pick the highest bidder.”

Jill DeWit:                            One of our members already wrote in and said, “Kevin …” This is so fun, too. Any time you want, just go on our online community. You can easily keyword search and find these conversations. Put in like, “Neighbor letter,” and it’ll pop up, and you can read it. Because I’m sure since we recorded this, there’s probably six more responses in there.

Jill DeWit:                            But Kevin wrote, “Abby, I’ve had a great success with neighbor letters in non-rural areas. I don’t ask them to bid. I tell them that I have purchased this property and plan to sell it for the wholesale price of X.”

Steven Butala:                   X.

Jill DeWit:                            “Please contact me if you’re interested in purchasing the property.” I include the APN, the legal description, color map with the parcel outlined on the map. I keep it all on one page, including the map image. If you can offer a nice lot for 50 to 60% of the comps, this will work.

Steven Butala:                   Private message.

Jill DeWit:                            “Private message your email address, and I will send you one of my neighbor letters.” That’s so nice.

Jill DeWit:                            Then one of our other members, Jake, chimed in. “I’m wondering if you were to put the retail/market price of the parcel and then say you’re willing to take less than this price, ‘Make an offer.’ They would maybe offer more than if you would have asked. And they also know they’re getting a deal, because they’re offering their price under what you think is the market value.”

Steven Butala:                   Under market price.

Jill DeWit:                            Right. Then Abby replied … Is this the last thing?

Steven Butala:                   No.

Jill DeWit:                            Oh. Abby replied, “Yes. That’s what I ended up doing. They should be getting my mail delivered sometime this week or next week. I’m excited to see results of this experiment.” Abby responded a week later, “Neighbors are calling back to sell their property to me. LOL.”

Steven Butala:                   That’s my pointer.

Jill DeWit:                            [inaudible 00:04:22] hilarious.

Steven Butala:                   You can expect that. When you send these neighbor letters out to sell a piece of property, you’re going to probably, most likely, buy another piece of property.

Jill DeWit:                            You might drum up some more.

Steven Butala:                   Yeah.

Jill DeWit:                            Then another week passes, and Abby wrote in, “Well, I ended up buying the neighbor’s property, as well. I did, however, sell a couple of different properties to neighbors via those letters.” This is hilarious. She’s just got people on this site [inaudible 00:04:45]

Steven Butala:                   So it worked both ends. You bought more property, and you sold the properties that you had.

Jill DeWit:                            Yeah. “I’d say about 40% chance, in general, that immediate neighbors will buy it, based on my limited experience.”

Steven Butala:                   My experience is 50%.

Jill DeWit:                            Yeah.

Steven Butala:                   All three of these guys have it dead straight.

Jill DeWit:                            Yep.

Steven Butala:                   When you buy a piece of property, draw a circle. You can do this in any of our data products. It starts with ParcelFact by checking to see those immediate neighbors. Because if it’s a property that’s actually fairly usable and somebody is using the land next to it, like let’s say raising cattle or, I don’t know, horses or anything, or using the land, they’re going to want the adjacent property, especially if it’s undervalue.

Jill DeWit:                            Right.

Steven Butala:                   So ParcelFact is the place to start to see who owns these properties and to get them a letter. Then you go into these other data products we have and send everybody a letter.

Jill DeWit:                            Exactly.

Steven Butala:                   It costs pennies to sell a piece of property, and it never hits the market. It’s very, very efficient. We do it all the time. We do with houses, too.

Jill DeWit:                            Yep.

Steven Butala:                   Today’s topic, How To Set Real Estate Investment Financial Goals. This is the meat of the show.

Steven Butala:                   When you really philosophically take a few steps back and think about goals, think about the thought that Elon Musk had when he started Tesla. It has to start with waking up, pouring yourself a cup of coffee, and saying, “I need to start an electric car company, because gas cars are stupid, and they’re too expensive, and they’re inefficient.” Then he gets to thinking the next day, “Well, wait a second. I looked into it a little bit, spent an hour on the internet. It’s not that hard to … Electric cars, it should be really easy. They have way less parts, and on, and on, and on.”

Steven Butala:                   So the same thing happens when you set real estate investment goals. It doesn’t … I’ve done this incorrectly in my life, and I’ve done it correctly. You don’t want to, from an accounting standpoint … Get into a spreadsheet and make a date column. Then go to the far right of the spreadsheet and say, “I want to have $3 million by the time I’m XYZ years old.” Then fill in the columns of the sheet to the left until you get there. That’s part of this.

Steven Butala:                   But it all starts with something way more spiritual and personal than that, or the math doesn’t matter. You need to … Like one of our members, his approach to this, Joe Martin, was, “I’m going to make a million bucks, and I’m going to do it by this date. And here’s the time I’m going to get up in the morning.” He’s very, very emotional about it. Not emotional, scatterbrained, weirdo emotional. It’s very important to him, for some reason, to hit these goals, so he does. He tells himself every day, “Yep. I’m on track,” or, “Nope. I’m not on track.”

Steven Butala:                   I mean, I’m sure you have a lot to say [crosstalk 00:07:34]

Jill DeWit:                            No. I love what you’re saying. Everything … What I want to share here is nothing is crazy. It may sound crazy. Like when you really think about the … I like your Elon Musk example. You hadn’t shared that with me before, but I’m sure everybody around him thought he was nuts. Like, “You don’t know anything about this.” Or even not even that. Think about the whole space stuff he’s doing. “Come on. That’s not your thing.” Then, “Now we’re going to dig a tunnel under L.A.” “Really?” I mean, I’m sure all these goals, I know he got pushback, but he just said, “You know what? I’m going to figure this out.” That’s it. So none of this is crazy.

Jill DeWit:                            You just have to … For the first thing, I think, and I watch other people doing this successfully, as well, you have to say it out loud. And you have to say it to somebody other than [crosstalk 00:08:22] by the way.

Steven Butala:                   Yeah. Or write it down.

Jill DeWit:                            It can’t be like a secret in your wallet, because then it’s like, “I can change it at any time.” Because if you keep it a secret from everybody and it’s hidden in your wallet on a little sticky note, that means you don’t really believe it yourself. Then you’re not going to be all in. You’ve got to really say it. You got to put it out there. And you’ve got to tell it to somebody else.

Steven Butala:                   Jill and I live in these little beach communities in Los Angeles. There’s a lot of very successful people, and we socialize a lot. Several of our friends come to us and say, “All right. What is it with you guys? Because you make this look easy. You have this show.”

Jill DeWit:                            It’s true.

Steven Butala:                   There’s a lot of, “What’s the deal?” Here’s the first question I ask every single one of them without exception, “Where do you see yourself in five years? What do you want to do?” Because that’s what they’re really asking us, “Can I do it, too?”

Jill DeWit:                            Right.

Steven Butala:                   Here’s some answers that I get. “Well, I never really thought about it.” That’s the popular answer. “Well, I hate my job, so I don’t want to be there.” Then they start working through it.

Jill DeWit:                            “It depends on how this year ends.”

Steven Butala:                   That.

Jill DeWit:                            It’s a lot of that I hear.

Steven Butala:                   Then we get some version of this, “Well, my kid’s going to be in school for two more years. Then I’d like to travel for a while. Then I’d like …” All right. I shut down already.

Jill DeWit:                            Exactly.

Steven Butala:                   But one of Jill’s friends, specifically, answered the question like this, and she’s a real estate agent. She’s not even an investor and has no plan to be. She said, “In five years, I see myself flying a jet around figuring out which properties to buy and sell on behalf of a handful of …” and she was very detailed about it.

Jill DeWit:                            Yeah.

Steven Butala:                   I just about fell out of my chair. You know what I responded and said? “You do not need us at all. You have this all figured out. And I’m happy for you, and I can’t wait to watch this whole thing unfold from afar.” That’s all it takes. That’s all it takes.

Jill DeWit:                            Exactly.

Steven Butala:                   She somehow, for some … And I’ll tell you what.

Jill DeWit:                            She’ll do it.

Steven Butala:                   All the conversations that I’ve ever had with her were all about kittens, and kids, and diaper changes, and stupid, stupid stuff that you would expect out of a young, blonde woman. But I’ll tell you what, now I’m like, “I can’t wait to see this.” You know who I’m talking about.

Jill DeWit:                            I do know who you’re talking about.

Steven Butala:                   Actually, she was the inspiration for me to write this title. Because spreadsheet’s not the answer to everything.

Jill DeWit:                            No.

Steven Butala:                   I used to think that until recently.

Jill DeWit:                            Do you still see the part of that? Because that’s what I wrote down, “My notes are nothing as crazy as saying it out loud.” Then I did put the SB way, which I kind of still don’t think is crazy is thinking about your goal, dividing it by months, and dividing it by deals or weeks.

Steven Butala:                   No. I think that’s a very logical response to, “I want to fly around a jet,” but that has to happen first.

Jill DeWit:                            Right.

Steven Butala:                   That inspirational, true soul-searching, look at yourself in the mirror with a cup of coffee for like 30 to 60 days every single morning saying, “This is what I want.”

Jill DeWit:                            Well, not only that. Well, you know what? With this thing with the spreadsheet and Steve’s with the coffee, you have to check in with yourself often, by the way, to make sure you are on that path. Because let’s just say you have this million dollar goal. If you find yourself, 90 days in, you’ve done nothing, now you need to reset. You’re not working towards that goal.

Steven Butala:                   You’re 100% right. In simplest terms, a million dollars divided by 12 is, I think, $80,000 a month. So if you’re 90 days in, you’re already in the hole. You need to extend the thing. Extend your deadline or double up on how much money you’re go to generate, equity.

Jill DeWit:                            Right.

Steven Butala:                   The smart thing to do is say, “Okay, great. A million dollars 12 months from today. I’m going to give myself 30 days to do research, get involved in whatever education if I need it, find the right tools to do it, and really set the stage for this stuff and test it. Test it for reason.”

Jill DeWit:                            Set my family up that I’m going to busy.

Steven Butala:                   Yeah. Make sure your bills are paid.

Jill DeWit:                            Get my head around how much time it’s going to take and be committed.

Steven Butala:                   For us, and this is not a commercial, but I’ll tell you we have built these tools that we have around this. If you want to make a million bucks, I can tell you in less than five minutes how many mailers you need to send out. This is all in our stuff. You need to send X amount of mailers out. You need to have somebody answer your phone, if it’s not yourself, if you have a job. You need … This is beyond the scope of this podcast, but there’s finite things that you need to do. But I’ll tell you what, none of it’s going to happen at all-

Jill DeWit:                            That comes later.

Steven Butala:                   … unless you do the coffee thing in the mirror, write down your goals, and talk about it with somebody.

Jill DeWit:                            Right. That’s it. That’s perfect.

Steven Butala:                   You know how I accomplish my goals in the end? You.

Jill DeWit:                            How’s that?

Steven Butala:                   Because I need somebody to bounce stuff off of. I can’t just sit by myself and do it all and do every single thing. I really do. It’s just the way … I’m not happy about it. Like every man thinks they can survive in the woods by themselves, you know? I’m old enough now to know that’s just … Maybe I could do it, but I don’t want to.

Jill DeWit:                            Thank you. You could.

Steven Butala:                   Plus I have a partner, not only in life, but handling half of the stuff that’s required to get there.

Jill DeWit:                            Thank you.

Steven Butala:                   And then somebody to share it with when it’s done. That’s a huge motivator for me.

Jill DeWit:                            I know.

Steven Butala:                   What am I going to do, just get all rich and sit out in the middle of the ocean by myself? No.

Jill DeWit:                            There are people that do that.

Steven Butala:                   Well, I know your time is valuable. Thanks for spending some of it with us today, anyway. Join us next time for an episode called, Fictional Real Estate Passive Income.

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

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

Jill DeWit:                            It’s funny how some of these philosophical talks are your longest. You have a lot … And it’s good. I’m saying that as a compliment.

Steven Butala:                   Yeah.

Jill DeWit:                            You have a lot to say, and that’s awesome.

Steven Butala:                   What harm is there in saying, “You know what? I’m going to put my heart and soul into this for 12 months,” whatever it is?

Jill DeWit:                            Exactly. Commit. Say it and commit.

Jill DeWit:                            Wherever you are watching or wherever you are listening, please subscribe and rate us there. We are Steve and Jill.

Steven Butala:                   We are Steve and Jill. Information …

Jill DeWit:                            … and inspiration …

Steven Butala:                   … to buy undervalued property.

Jill DeWit:                            Hey, I forgot one thing real quick.

Steven Butala:                   Oh, yeah. Yeah.

Jill DeWit:                            There happens to be a special going on right now if you go to Check it out. Thanks. That’s it.

Steven Butala:                   Did you intentionally just wait to the bitter end, or just-

Jill DeWit:                            No. I just had to get it in there, because I forgot.

Steven Butala:                   You know why? Because the staff gets mad.

Jill DeWit:                            Yep.

Steven Butala:                   They’re like, “We’re trying to hit our numbers, and you guys [crosstalk 00:15:00] even talk about this stuff.”

Jill DeWit:                            I slid it in there. Slid it in there.


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