Member JT Olmstead Shares Land Academy Success (1021)
Member JT Olmstead Shares Land Academy Success (1021)
Transcript:
Steven Butala: Steve Butala here, welcome to the Land Academy Show. Today we have JT Olmstead, a long time member, I think, JT, right? At least two years?
JT Olmstead: Sorry, I think probably a year or so, actually.
Steven Butala: A fellow Arizonian, right?
JT Olmstead: I am, yeah. Phoenix.
Steven Butala: Awesome, man.
Steven Butala: Just before the show you were saying you just took off for about a month, and you’ve got just a crap load of stuff to do because you just got back.
JT Olmstead: Yeah, that’s exactly right. Got to catch up on all of it.
Steven Butala: Tell us where you were, and what you were working on? More importantly, after that, tell us … It makes us all feel better when really successful members go through pain, so I want to hear your pain today.
JT Olmstead: Yeah, I’ll deliver on that.
JT Olmstead: I like to take vacation. I think the thing that attracted me to Land initially was the fact that you can do it on your own schedule and on your own time. That really … I took advantage of that, took the last four weeks off. Took some family travels, went international and domestic.
Steven Butala: So, you said Oregon and London?
JT Olmstead: Yeah, yeah, exactly. Yup. A nice mix of personal and business, just good to get out, reset your mindset before you get back to the grind.
Steven Butala: Awesome, man. What are you working on land wise or house wise?
JT Olmstead: Yeah, on the land front, right now a mix of things, actually. I’m spending a lot of time vetting other people’s deals, I’ve got a couple of deals I’m funding for other people right now.
Steven Butala: Great.
JT Olmstead: Working on funding different deals for myself, and bringing outside investors as well, so a mix of stuff we’re approaching.
Steven Butala: You know, that’s fantastic. I didn’t actually realize that. I love that you’re doing that.
Steven Butala: We run out of money, literally, every month funding other people’s deals for what we’ve allocated. I wonder if there’s a way we could make some money together on the funding side, because we get more deals in than I know what to do with.
JT Olmstead: Yeah, honestly that’s the thing I love about land is the fact that there’s so many opportunities going around, you’ve just got to find the right way to either partner them or find a way to keep those deals moving. Yeah, I’m definitely actively looking for people to fund at the moment. [Land Tank 00:02:06] has been a fantastic tool for that.
Steven Butala: Okay, great. You are using LandTank.com as an inflow, or a source of inflow, anyway?
JT Olmstead: Yeah, yeah. Some of my deals … I just funded one this morning, actually, right off Land Tank, so Land Tank has been good. Just the community, in general.
Steven Butala: Great. We’re going to release House Tank here in about 60 days. It’s being developed right now. It’s the same kind of thing for houses, and it’s the same financial structure. We review a deal, we decide to fund it 100% on loan to value plus closing costs as a 50% partner. We haven’t done as house deal on our own yet, but we’ve got a lot of financial backing to do it. I don’t know, is that something you want to dabble in?
JT Olmstead: Yeah, houses are an interesting option. I love the fact the buyer pool is so much bigger, and the turns are a lot quicker. They’re also a much higher price point, right?
Steven Butala: Yeah.
JT Olmstead: My typical land deal is something between 15 and 35 on the funding side, whereas we’re talking houses, it’s a much bigger price point to roll in.
Steven Butala: Yeah. A typical house deal for us is buy it for 250, mark it up 50 thousand-ish, so sell it for 300 without any renovations at all. You’ve got a gross margin of 50 thousand bucks to split with whoever. You’ve got to pay your finance guy, which usually is not that much, and then split whatever’s left with the manager, we call them managers, who bring us the deal. It can be, dollar wise, lucrative but it’s a bit more cash intensive.
Steven Butala: Saying that, from a funding standpoint, what’s your favorite land deal, or do you have one yet?
JT Olmstead: I would say my favorite land deal right now is probably the higher acreage, a couple thousand dollars and acre properties. I like to find something along those lines where the buyer pool is not just going to be someone who wants to build, or just someone who purely wants recreation, but it’s got a couple of different avenues it could take depending on who wants to do whatever with the property.
Steven Butala: So, [info lot 00:04:04] or acreage, what do you say?
JT Olmstead: Right now, I’m camp acreage, if you want to put it that way.
Steven Butala: Okay.
JT Olmstead: I’ve definitely done both, but I think the info lots can be super interesting and move very quickly, too, but there’s just a lot more red tape to cut through in the beginning. If you get that right, and you handle the market, focus in, then you can flip stuff really fast.
Steven Butala: You know, we have a minimum dollar amount for every deal that we do, or that we’re involved in that we need to net personally for us to work on it. It keeps going up. Right now, it’s around $20 thousand bucks. It wasn’t that long ago that it was about $10 thousand.
Steven Butala: Do you operate that way?
JT Olmstead: Yeah, effectively. I’m looking for something, at a minimum, probably two, two and a half, on the flip side. I’m not interested in buying anything less than 10 or 15.
Steven Butala: Yeah, okay.
JT Olmstead: Anything below that point, it doesn’t start to make sense, especially because my expectation is title only for any closes.
Steven Butala: Right.
Steven Butala: JT, you have a finance background if I remember right? Or did you own a company before this and sold it? I don’t quite remember.
JT Olmstead: No, actually. I was IT before this. I’m a Network Engineer by trade.
Steven Butala: What’s your education background, and your work experience, if any?
JT Olmstead: Yeah, my work experience is pretty much exclusively in that IT realm. Education was something I just did along the side. By the time I finished my Bachelor’s degree I was already super into my career, making well into six figures. I was like, oh, yeah, I should probably get education, huh?
Steven Butala: Most of my best friends did exactly … It takes a special kind of person to get into your career first and say, wow, I probably should get a degree for this. I think it’s really … I’ve known several people like that, personally.
JT Olmstead: Yeah, I think it’s great, that way you don’t even have to pay for it. I kind of out-of-pocket cash, or had work reimburse some of my stuff, so it cost me almost nothing for my degree, as well.
Steven Butala: My Bachelor’s degree experience was more painful than I can describe. It’s so slow. Can you talk a little faster, please? I have a world to conquer. I’m 20 years old, and you’re killing me, you’re killing me, man.
JT Olmstead: Yeah.
Steven Butala: I need to move forward.
JT Olmstead: 100%. I approached my education like I approached land, and the other investment venture I do. It has to be efficient. I thought it would be the most efficient way to accomplish an education because I did not feel like grinding it out.
Steven Butala: So, are you an efficiency freak?
JT Olmstead: Yeah, I think you would say … I think my wife would probably say that, yeah. I’m super into everything being pretty efficient. There are certain things that don’t matter that much, and I think as the years go on, there’s more and more I just let slide, but by nature I definitely want things to be as efficient as they possibly can be.
Steven Butala: Yeah. You think that’s a male thing? I don’t know.
JT Olmstead: Yeah-
Steven Butala: I’ve seen some pretty efficient females, too, but every successful guy I know has got I call it efficiency syndrome.
JT Olmstead: Yeah, it does seem to be an affliction across the board, there.
Steven Butala: So, you mentioned right before the show that you’ve got a mailer to do today. Is that because it’s in your schedule, or is it overdue? How do you manage how much mail you send out?
JT Olmstead: Yeah, it’s interesting. I don’t really do much of a schedule. I probably should move to a more consistent schedule, but I just send them in blocks. I’ll send five to seven thousand mailers at a time.
JT Olmstead: I took the last few months with vacation and quitting my job in the last few months, I pulled the lever down for a bit. Now that I’m past that hump, I’m scaling it back up.
Steven Butala: I’m sure you’ve calculated what your yield percentages on these mailers, if you’re comfortable sharing?
JT Olmstead: Yeah, my mailers have … Honestly, my mailers have been all over the map.
JT Olmstead: Originally, at the very beginning of when I got into land, I actually started with postcards, and that was a different adventure. My yields were weird there. Since then, I’ve gone across the board, looking at everything from low cost, really rural vacant land all the way up to, I think my most expensive purchase was $100 thousand for a piece of property. I’ve just got, across the board, whether it’s rural or info lots.
JT Olmstead: It’s been hard for me to calculate a specific yield because I’ve been trying so many different markets and types over the last year.
Steven Butala: Mm-hmm (affirmative).
Steven Butala: Are you having trouble selling anything right now? Do you have any inventory you wish you’d get rid of?
JT Olmstead: I would say the only thing that’s causing me any consternation is a particular info lot I have that I didn’t catch all the details on. The buildability is a little tougher than I initially anticipated. I’ve got a ton of interest, it’s a fantastic piece, fantastic location, but I’m having a really hard time finding the right person to pull the trigger on it.
Steven Butala: I think I remember that deal. It’s like, from the webinar, from our weekly talk.
JT Olmstead: Yeah.
Steven Butala: It’s across the street from a church, and it’s got a viewability issue, right?
JT Olmstead: Exactly. It’s got a visibility problem where there’s a vision clearance because it’s right off of a main road. If the property didn’t have that vision clearance issue, I would have sold it for, probably, three or four times what I bought it for, within a couple of weeks. Because of that problem, now it’s been a couple of months, and I’ve had to cut the price to where I’m not going to make nearly as much money as I was hoping.
Steven Butala: Will you double your money?
JT Olmstead: I’m probably going to do 50 to 75% on the sale. Yeah, so still solid considering that I consider it a mistake, you know, in the long run, but if I can make 50% on my mistakes that’s a pretty good day.
Steven Butala: Yeah, plus you won’t do it again.
JT Olmstead: That’s right. That’s 100% right.
Steven Butala: So, there’s a lot of people, especially on the land side of our business, not so much on the house side, that are dying for advice from somebody like you. Can you give us a few personality traits that you think work really well for you, and maybe some advice to a new person?
JT Olmstead: I think in land, and really in investing in general, I’ve found the most success in giving away everything I possibly can, effectively, as far as knowledge goes. I will go out of my way to meet people, talk to people, share whatever with people. I’ve had several people contact me and ask suggestions on, should I get into land, is it worth it? I’m happy to have a conversation with them, a lot of times because I love to just share that information.
JT Olmstead: I’ve found, over and over again, that yields super high ROIs. I think hoarding what you have, or trying to keep it back doesn’t really do anybody any favors.
Steven Butala: I couldn’t agree more. Obviously, that’s the whole Land Academy model, give away as much as you can until you just can’t afford to give it away. Then, do business with the people that are interested in it, in what you have to offer.
JT Olmstead: Yeah, 100%. It’s on of the reasons I’m drawn to you guys’ program, is I just love that ideology. If you give it away … It’s amazing if you’re willing to share everything how quickly it comes back fold.
Steven Butala: Yeah. That’s SaaS model marketing 101. Give it all away for free so that they like it enough so then they’ll pay for it.
JT Olmstead: Yeah, add value.
Steven Butala: That’s [inaudible 00:10:53] model, that’s all of our online tools that we offer members and non-members. That’s our whole model, then we see which one is most popular and make adjustments there.
JT Olmstead: Yeah, 100%.
Steven Butala: How about advice for new people?
JT Olmstead: I would say, for most new people, it really depends on your starting point. For the people I often interact with who are coming into land with, maybe, a few thousand dollars in pocket, if they can put some money aside, if you can put 10 or 20 thousand dollars aside, I find that this can be a fantastic opportunity to invest in the education, and then immediately go out and get a couple of strategic properties where you don’t have to make it super hard on yourself to tackle all the problems at once.
JT Olmstead: If you start with a property you buy with title, it’s a lot easier not to have to learn all of these things in a row, and you can start learning pieces of the puzzle, one by one, instead of trying to solve all the puzzle up front and just lay it all out.
JT Olmstead: I think a fantastic option if people can do that. If not, then obviously going for super rural vacant land is a good option as well, but it’s just a slightly different model.
Steven Butala: I mean, I think that’s great advice.
Steven Butala: What I hear you saying is, save some money. I think Jill’s famous for saying, “You’re not ready to get into this yet.”
Steven Butala: I think having $10 thousand bucks worth of acquisition money, once you learn how to do this, is a really good idea. Or, access to it from a partner, or using Land Tank, or something like that. Sacrificing acquisition quality because you don’t have the dough in your checking account is a super bad idea.
JT Olmstead: Yeah.
JT Olmstead: I think the statistics are clear that, in the long run, this model is ridiculously awesome, but there are statistical anomalies so putting everything on the line in this first mailer or first shot is probably not the way to go, and I wouldn’t recommend it for anyone. If you’re willing, like you said, to save some money, and put some aside, and realize that over the long term it’s going to be a good bet even if you have a couple hiccups along the way, then that’s the way to go.
JT Olmstead: I’ve had mailers, I sent out 5000 pieces of mail and got nothing.
Steven Butala: Wow.
JT Olmstead: No deals out of that.
JT Olmstead: It just happens sometimes. It’s kind of a disaster. You’re like, how did this … Maybe it’s your fault, maybe it’s something you missed, but that stuff happens. You’ve just got to be ready that occasionally you’re going to hit something. If that happens, that’s okay, you’ve just got to keep rolling because the model’s awesome.
Steven Butala: Yeah, exactly.
Steven Butala: Hey, how can listeners watch or get a hold of you?
JT Olmstead: You can definitely chat to me on Land Investors, I’m on the site there, feel free to connect to me there. I’m all over the Internet, to be honest, pretty much anywhere land’s happening, I’m usually there so reach out to me.
Steven Butala: Apparently, Land Tank, too.
JT Olmstead: Yup, yup, for sure there.
Steven Butala: JT Olmstead, great to talk to you today, great to talk to you as always. Thank you for contributing on LandInvestors.com, and on our advanced call. It’s always great to hear your experiences on our Wednesday advanced call, which I think is coming up here soon.
Steven Butala: Appreciate your participation and I wish you the best. I have a feeling you’re not going anywhere.
JT Olmstead: Absolutely. Thanks, it’s been great.
Steven Butala: Talk to you soon.
JT Olmstead: Thanks.
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