Feels Like 2010 All Over Again (LA 1054)
Feels Like 2010 All Over Again (LA 1054)
Transcript:
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 Dewitt, broadcasting from sunny southern California.
Steven Butala: Today, Jill and I talk about how it feels like 2010 all over again.
Jill DeWit: I can’t wait to explain what’s going on and how … I got to tell you, it makes me so happy.
Steven Butala: Give us a little insight about what the show is, Jill.
Jill DeWit: Okay. Basically, we are hiring and building and growing, I should say, our land investment team. And to do that, it involves you and I getting pretty active in it again and showing our staff … This is what we do for Land Academy … but showing our staff, “Here’s how we do it. How we get the deals done. How the call should go.” And by doing that, we’re showing up at the office every day and doing the work right there with them.
Steven Butala: Exactly.
Jill DeWit: And I forgot how much fun this is.
Steven Butala: Me, too.
Jill DeWit: And I’m sitting there scratching my head, and I’m sure all of our staff is like, “Holy cow, these guys are good.” So I know we’ll [crosstalk 00:01:06]
Steven Butala: Oh, I’m sure they’re not saying that at all.
Jill DeWit: You don’t think-
Steven Butala: I think they’re saying, “The owners are in the office again, so that takes all the fun out of it for me.”
Jill DeWit: Well, the point is we know what we’re doing, and we’ll share more.
Steven Butala: Before we get into the topic, let’s take a question by one of our members in the LandInvestors.com online community. It’s free.
Jill DeWit: Leonard asks, “Hey, everyone. I sent out my first couple of mailers. I plan to soon have a couple parcels of land with an acquisition price of roughly $6,000 per property. I plan on closing with title. Question one, how much of a marketing budget should I estimate for the different purchase prices? The sales prices will likely be between 14,000 and $19,000. Would this justify listing on the MLS?” You want to answer that first?
Steven Butala: Yes.
Jill DeWit: Okay, let’s-
Steven Butala: Your marketing budget is a variable cost. That’s the good news. It’s not a fixed cost. So you can plan on simply spending your cost for the MLS. And potentially, because agents are constantly in the MLS, you might have to pay 3% on the buy side, so that’s what I would budget. Everywhere else should be just about free. I’ll tell you right now … Because I posted this question and read it before you did.
Jill DeWit: Mm-hmm (affirmative).
Steven Butala: Get your Facebook up and running and your Facebook groups going. We sell a lot of property in Facebook groups.
Jill DeWit: Exactly.
Steven Butala: So go ahead, Jill.
Jill DeWit: That purchase price, depending on the area, even if you just put one of your properties in the MLS, say that you have several in the area, it’ll drive them to your website, and you’ll get your point across if you have a couple.
Steven Butala: Yeah.
Jill DeWit: And you can do these flat late listings anywhere from … It’s typically $95 to $295 is what it’s going to cost.
Steven Butala: Or in the high end, maybe four.
Jill DeWit: So depending on the area. And I would do Broker Direct MLS.
Steven Butala: Mm-hmm (affirmative). Dot com.
Jill DeWit: That’s a great service. I would start there, and they outsource to a lot of people at a great, great flat rate price. Then, also, look at the list, too, because it syndicates all over the planet automatically. It’s going to put it on Zillow and Trulia, and things like that for you, so you’re not doing double work. It really does save you some time and money.
Steven Butala: So two real points at this price level, because by the way, this is our rural vacant land business model is five to 6,000 bucks acquisition price. Let’s say two to six. Close it with title, get a title insurance policy and post an MLS and everywhere else in the planet. Actually, later this week, we have a show called Creating Equity 101, and this is the model. So you’re right on the right path.
Jill DeWit: Exactly. Okay. Question two, “For craigslist listings, how many and how often do you post ads?” I’m curious what the members said, because this is a common topic, because it’s free, that a lot of our members do.
Steven Butala: There’s about 10 responses.
Jill DeWit: Yeah. There’s a lot of nuances to craigslist, because if you copy and paste, they don’t like that. You have to make it different. Then it’s always like, “What areas should I do? How far out should I go?” Because you could spend a lot of time, like too much time, trying to get it all over craigslist. So I wouldn’t want to spend too much … I’d give myself two hours and then call it.
Steven Butala: You can’t post a duplicate ad on craigslist, period.
Jill DeWit: Right.
Steven Butala: And I’ll tell you what we do with success is if the property’s close to Los Angeles, but it out rural Los Angeles area, post in the L.A. craigslist. So post in the largest city that’s close, and make it kind of like a camping/recreational/scenario.
Jill DeWit: Vacation. Then, again, you don’t have to do all of your properties. Say you have six of them and generally they’re similar, just do one of them and drive them to your website. And on your website they’ll see, “Oh, there’s more. This one has these trees, and this one has this view,” kind of thing, and that’ll do it.
Steven Butala: Jill and I are working on a new product, that will be released in 2020, called Listing Gopher. It’s an old company that we’re dusting off to take this out of your life, so our staff … We post our properties every day. You would use our staff for a fixed fee to post it everywhere.
Jill DeWit: Mm-hmm (affirmative). Love it.
Steven Butala: And now everybody’s going to wait.
Jill DeWit: Yeah, don’t wait.
Steven Butala: Every time I announce this, they’re like, “Oh, really? I don’t have to post. I’ll just wait till they do it.”
Jill DeWit: I know. “Well, I’m not going to post. I’m going to sit on these properties for four months.” No, don’t do that. [inaudible 00:05:33] Because it could be a little while.
Steven Butala: Today’s topic, It Feels Like 2010 All Over Again. This is the meat of the show.
Steven Butala: Jill and I, yesterday, sat together in Jill’s office while I generated real estate deals for her, and she was on the phone all day doing real estate deals. And I estimated, in that one day … It didn’t all happen in the same day … that we created and now are realizing close to $200,000 in equity in one day.
Jill DeWit: Mm-hmm (affirmative). It was amazing.
Steven Butala: You know what? We had a blast. So how this change came about is this. We were dramatically ramping up our land acquisition program. We’ve been spending a lot of time on ParcelFact, and Offers 2 Owners, and making the changes in the growth, and Land Academy itself and House Academy, the changes … So while we never stopped buying and selling land, we’re really, really ramping up our effort now for a bunch of reasons. And we’re hiring three people, actually, to help us. But we just decided to kick it old school and sit in an office and see what … And we’re going to do it right after this. I had a blast.
Jill DeWit: It was so much fun. I was like old school, “My phone’s ringing here it comes,” while you’re sitting in one corner. You’re like, “Look at this house I can buy for $150,” if that. It might [inaudible 00:06:51] it was less. You’re just sitting over there taking what you usually do, sitting there-
Steven Butala: There’s three components to our core land operation. Number one, obviously, sending mailers out, which we never stopped doing. We started doing that in the early 2000s, and we get calls every day from those old mailers plus new ones we just sent out. Number two, adverse possession sort of like for tax lien foreclosure, which is a … We don’t talk about it very much, because it’s very complicated and once you’ve done a couple thousand deals, it’s probably for you. But I wouldn’t start there at all. Then number three is just quite simply back tax deed properties.
Steven Butala: So if I had to place a percentage on where we’d buy property as a percentage in those three, I would say like 90% from mailers, 10% from tax … Well, probably eight 8% from tax deeds and 2% from tax liens. The tax things that we foreclose on, though, are massively profitable. I mean, crazy. And Jill’s referring to this house. It’s a tax deed scenario in a central state in the country. So it takes a lot of work, a lot of legal stuff that goes on with all this lien research and all of it. So it’s a blast.
Jill DeWit: We just had so much fun.
Steven Butala: Yeah.
Jill DeWit: It was so funny, because we’re sitting there just like old school. It was reminding … It’s like, “Remember when we were at this house, and you were here, and I was there, and you’re just answering the phone like you used to do?” And I’m like, “Yep, that’s exactly what this feels like.” And it was so much fun. I love talking to these sellers, so that’s [inaudible 00:08:25] all day long.
Jill DeWit: It started at like … I mean before 6:00 AM my phone started ringing, because we just had another mailer hit. And I said, “You know what? I’m going to jump in and take these calls.” So I forwarded the phone number to my phone for a little while and said, “I want to get a handle on this and see what’s going on, and see what maybe changes we need to make, or maybe beef up our hiring, or just see what the sellers are like right now.” And nothing’s changed, and it was so fun. What was funny, too, is I am sure that there were a few people that were calling not happy, but not one of them got mad at me, because they couldn’t get mad.
Steven Butala: I noticed that, too. [crosstalk 00:09:06] get mad at you. I can’t even get mad at you, Jill.
Jill DeWit: It was so funny. I really did have this lady laughing. We’re like, “So if I added a few zeros, we would have been okay?” She’s like laughing. She’s like, “Yeah, that might have worked.” And it’s just because, you know … Well a couple of things. They still happen. Now and then, you get assessor data that’s off. It may not be us. And I told her, I said, “The assessor’s only as good as the person that input the information, that data.” And they are real people that input those numbers, so sometimes they’re off. Then we just adjust and move on.
Jill DeWit: It was just so much fun. Then, gosh, I had this lady … Remember it was two properties that she started … Oh, she wanted 13,000 and 13,000 became 2,500. Actually, I told her my highest and best was 2,000 but she actually kind of wore me down, and I said, “All right. I’ll do 2,500,” but that was it.
Steven Butala: Last week we did a show called When To Negotiate With A Seller. Never.
Jill DeWit: Right. Exactly.
Steven Butala: Now we’re just breaking her own rules.
Jill DeWit: No, but I was happy with that. I knew what my number was, and that was it. And then she keeps trying to get me up, and I just said, “No, I’m sorry. That’s my highest and best, and that’s it. You just have to walk away.”
Steven Butala: It’s not hard to get to $100,000 of equity when you’re buying property for two or $3,000 that’s worth 20.
Jill DeWit: Right.
Steven Butala: It only takes a few inbound phone calls to you with the right sellers.
Jill DeWit: Right. Yeah. Then we found one guy … I mean I, it was almost like a little too good to be true yesterday. I’m like, “Is there a full moon or what?” But I got just the perfect mix of calls, including this one other investor who we just hit him at the right time, and I think he’s got like 500,000 acres that he’s ready to start moving.
Steven Butala: And it’s all subdivided and re-platted.
Jill DeWit: It is.
Steven Butala: So it’s like that’s a dream come true for me. When you can buy a 640-acre property that’s all cut up into acre-and-a-quarter properties with roads, and it’s all platted out with separate APNs. And he’s into it for the large acreage dollar amount, and we’re going to … He makes a ton of dough. We make a ton of dough, and then the people that buy it from us are going to make the most.
Jill DeWit: Exactly.
Steven Butala: I’ll say this on the air, if you are a paralegal or if you are very familiar with adverse possession, and you’d like to work with me personally, send me your resume directly … I’m not going to burden our staff or you with this, since it’s just my brainchild here … At Jack@LandAcademy, and we’ll talk.
Jill DeWit: Thank you. That’s awesome.
Steven Butala: If you’re brand new, please don’t send me anything. We have a lot of deals to do, and I think we can make some dough together.
Jill DeWit: Oh, my gosh.
Steven Butala: I hate be that direct. “If you’re brand new …” Hey, we were all there. We are all brand new at one point. You just got to get a few deals under your belt.
Jill DeWit: This was just fun. And I told my team, too. I said, “Please feel free to share these calls on the planet.” We do it in our program, and I could even play some on here. Maybe we’ll do a podcast where we just replay some of my calls, so that they could hear them.
Steven Butala: I think that’d be great.
Jill DeWit: Because it was so darn funny. I was really having a good time. You get the cranky old man, and you get them laughing or you get … Oh, I had one today. Want to hear this one today?
Steven Butala: Yeah. I’m going to write this … Can I have that pad?
Jill DeWit: Yeah, yeah.
Steven Butala: I’m going to write that down, because I really think running some of these calls would be great.
Jill DeWit: That would be fun. Playing them.
Jill DeWit: I had a guy today. He’s calling because he has this clearly agricultural land that is absolutely assessed for, I mean, 1% of its real value. Not kidding. So his call was, “Are you calling with your offer to buy the porta potties?” And he has this accent, so I took me a few minutes. And I will happily share that call, because it was the funniest thing. He’s like, “Because your offer price will cover the porta potties on my property. Not at all the property,” so it was hilarious. He went on to tell me he’s a very important man.
Steven Butala: He told you that?
Jill DeWit: He did. He’s a very important man, and that he could have it zoned however he wants. And I said, “Well, how is it zoned now?” “It doesn’t matter. I can get whatever I want.”
Steven Butala: Was he angry?
Jill DeWit: He wasn’t angry, but his price and my price were … He wanted to go retail. He was retail at $200,000 an acre. And I’m like, “Not exactly what I …” I said politely, “I can afford that, but that’s really not the property I’m looking for right now.”
Steven Butala: 200,000 an acre?
Jill DeWit: I know. It’s all agricultural, being farmed.
Steven Butala: Yeah, but ag land is four to 6,000 an acre in that area.
Jill DeWit: Well, he was also a little nuts and didn’t clearly want to sell. That’s like … You know what it is? It’s like you’ve build your dream property, I mean, even your dream car, whatever it is. You have your dream thing that you never going to part with, but someone comes along and pays you four times what it’s worth. You’ll go, “Okay. I guess I’ll sell.” That was his point. He’s like, “I don’t want to sell to you unless you made me an insane offer that I couldn’t say no.” And I’m like, “Yeah. That’s not my game here. Have a nice day.”
Steven Butala: Okay. Well, we need to get some of these calls that are … Especially the ones where they say yes. We need to roll them into the end of this show or another show, or something. I’ll figure it out.
Jill DeWit: Yep. It was so fun.
Steven Butala: Hey, we know your time is valuable. Thanks for spending some of it with us today, anyway. Join us in the next episode called Why Delinquent Tax Sellers Are Problematic. It’s because they’re dead.
Jill DeWit: Typically true, yes. And we answer your questions posted on our online community at LandInvestors.com. It is free.
Steven Butala: You are not alone in your real estate ambition.
Jill DeWit: Okay, so tell me more. Can you give me a little information about your job posting? I’m going to add it’s Jack@LandAacademy.com. What is the description?
Steven Butala: If you have … Go ahead.
Jill DeWit: What do you want?
Steven Butala: What I need is somebody to work with me very closely, preferably full-time.
Jill DeWit: L.A. area. Need to be in the L.A. area.
Steven Butala: Yeah. That’s my first choice. In the Los Angeles area to help me do research and implement adverse possession both in Arizona, Colorado, and California. And it’s a very statute-driven X, Y, Z. If you’re a paralegal, you already know how to file. It involves filing judicial foreclosure lawsuits based on tax liens that we purchase, and that’s the end of it.
Steven Butala: The beginning of it is getting huge, huge lists in place, and working with the Philippines to get the data that we need to make a real good decision about which properties to foreclose on and why. And it’s a very, very brainy, intense, sit-in-a-dark-room kind of position. But the good news is that you’re going to learn how to foreclose on property.
Jill DeWit: So you’re not looking-
Steven Butala: Like, you’ll be the best at it by the time we’re done. You’ll be the best at it in the country.
Jill DeWit: So you’re describing the perfect librarian, not a social butterfly.
Steven Butala: That’s exactly right.
Jill DeWit: You have to have horrible social skills, but you love just to be in it.
Steven Butala: Yes.
Jill DeWit: Okay. Got it.
Steven Butala: Yeah. You got really good grades in school-
Jill DeWit: And no friends.
Steven Butala: You probably had thick glasses like me. Yeah, no friends.
Jill DeWit: You have no friends.
Steven Butala: You love math to the point where there’s probably something wrong with you.
Jill DeWit: Got it. Now we all have a very good idea of what you’re looking for. Thank you.
Steven Butala: And you’re a paralegal.
Jill DeWit: Perfect.
Steven Butala: Or you’re a former escrow agent or both. Actually, both would be good.
Jill DeWit: Right. And everybody was mad at you, because you were closing deals too fast and making them look bad.
Steven Butala: Basically, you were like Bill Gates.
Jill DeWit: There we go.
Steven Butala: Very unpopular kid, but look where he is now.
Jill DeWit: Exactly. And we’ll get you there.
Jill DeWit: Wherever you’re watching or wherever you’re listening, please subscribe and rate us there. It does make a difference. We are Steve and Jill.
Steven Butala: We are Steve and Jill. Information …
Jill DeWit: … and inspiration …
Steven Butala: … to buy undervalued property.
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