Deals Dont Close Themselves (LA 1057)
Deals Dont Close Themselves (LA 1057)
Transcript:
Speaker 1: Steve and Jill here.
Jill DeWit: Guten tag.
Steven Butala: Welcome. You look up different ways to say hello?
Jill DeWit: I only know about four in case you haven’t noticed.
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 deals don’t close themselves.
Jill DeWit: Oh, I wish they did. And it’s funny how many people think that once you just get the ball rolling it’s just going to happen. Yeah, yeah right.
Steven Butala: Jill and I have actively chosen, we can choose what to work on. We’re at that point in our career. We can choose to develop new websites that we can sell to private equity companies, which we’re doing. We can choose to work on real estate deals, which we’re doing. What we’ve actively chosen for the next few months, to sit in an office together, for better, for worse. And I create and generate real estate transactions and Jill does them. And what I’ve learned, and then thus the title of this show, is how much freaking work goes into purchasing a piece of property. Just on the phone and there’s a lot of time and a lot of manipulation and just a lot of stuff to do to get somebody to sign, to get a deal done. Let’s just put it that way and we’ll talk all about it.
Steven Butala: Before we get into it. Let’s take a question posted by one of our members on the landinvestors.com online community. It’s free.
Jill DeWit: Daniel shares. “Hi everyone. I know that the majority of the people in this community sell land for cash and I usually do as well. However, I have a piece of land in Utah that I’d like to sell on terms. I’m hoping that someone can share a good template for a land contract that they’re using. Cheers, Daniel.” Well, that’s probably in chapter eight, nine. I don’t know.
Steven Butala: Yeah, there’s-
Jill DeWit: We have one in there.
Steven Butala: Yeah, in the cash flow … The original program, Cash Flow from Land program. There’s contracts.
Jill DeWit: Exactly.
Steven Butala: It’s all at the end. There’s a bunch of agreements and tools and a dictionary and all kinds of stuff. But I’ll tell you this, I’m glad you mentioned Utah because every state’s very, very different on this topic. And as people get more creative from how they invest in real estate, us included, there are more and more rules being developed state by state. So check Utah and they may say, I’m sure that they’re going to have a lot to say on how you sell a property on terms.
Steven Butala: For example, we used to do a lot of term sales in Arizona and California and they’re so dramatically different, and Colorado. Really dramatically different on how you’re supposed to sell property on terms. So step one is not so much a contract. Step one is to really pull the statutes and talk to some people who are already doing it successfully. Which is what you’re probably doing here and glad.
Jill DeWit: Thank you.
Steven Butala: Did he stop it? Deals don’t close themselves. This is the meat of the show.
Jill DeWit: You were talking to the intro, you heard … It was making me think of the call that I had with the sweet lady named [Mai 00:03:15] yesterday, who you heard about oh, six phone calls back and forth.
Steven Butala: Yeah.
Jill DeWit: “How about this?” “Okay, I’ll talk to my husband. I’ll call you back.” “And how about that?” “Okay, I’ll talk to my husband and call you back.” So sometimes it takes that. And then there’s those deals, it’s so funny. Sometimes there’s those deals that they call up and it’s one phone call and you’re sitting at your computer like … I have ParcelFact open all the time anyway. And they call in. I already know the area, I look at it, give them 30 seconds. I say, “Does that work for you? It works for me.” They say, “Yes, done. Send me the purchase agreement,” and here we go. That’s the perfect scenario.
Jill DeWit: Then we have the middle where there’s maybe a few phone calls back and forth, talking over with the family mixture. Nobody wants it kind of thing. Alright, now we’re ready to go. Then we have the ones like the one I just described, Mai, where it’s a bunch of phone calls back and forth. I guess she just had to feel it.
Steven Butala: It’s okay.
Jill DeWit: She needed to wrap her head around selling the property. She knew she wanted to. They had to be in agreement and you know, there we go.
Steven Butala: Yeah. Everybody’s different in general. They look to you then see how you want to do it.
Jill DeWit: Right.
Steven Butala: And so on a couple shows ago, I think we talked about how Jill embraces these sellers and why they almost immediately within seconds, start down the path of trusting her. That’s really what this is all about. Establishing trust at the seller so that you can get the deal done in all the steps that it takes. And it’s really true, these deals don’t close themselves. Everybody’s got … When you first get into this business, everybody has preconceived notions about it. Usually from real estate deals that they’ve experienced or they watched their parents do that involved their primary residence. And my, and this is the nicest way I can say that, I mean we spent a lot of time undoing those perceptions.
Jill DeWit: So I think people hear, all they hear is, “Oh my parents bought for 400,000 and sold for 1.2.” So that’s what they walk around knowing. They don’t know what all went into that by the way.
Steven Butala: Exactly.
Jill DeWit: And then getting the deal done. And we’re guilty of that too. I mean, that’s what we talk about. Initially we will share, “I bought it for this and I sold it for that.” And we are really good at making things look easy. That’s part of it I think too.
Steven Butala: You know why? Because it is easy for us.
Jill DeWit: It’s true.
Steven Butala: Because we’ve done almost 16,000 transactions.
Jill DeWit: That’s true.
Steven Butala: And so what I have to remind myself sometimes of is that not everybody’s done 16,000 deals.
Jill DeWit: Exactly.
Steven Butala: Not everybody’s done five deals. So-
Jill DeWit: That’s why we’re here though.
Steven Butala: Exactly.
Jill DeWit: Because we can help. We can share, we’ve done it.
Steven Butala: Yeah.
Jill DeWit: Exactly. You were going to add something?
Steven Butala: No.
Jill DeWit: My thing is people think that, a couple of things about deals don’t close themselves. Number one, you have a deal. Everybody’s on the same page. You open Escrow, you think you can just sit back and let it happen. That could not be further from the truth. The times that … I would love to have one person call me, I don’t think I’ve ever experienced a perfect scenario where I did not have to reach out and push a deal along. I’ve never … Can you think of one?
Steven Butala: I can back in the day, because of the way that we rolled before you were here was very much unlike how we roll now. But since you’ve started, like there’s a house-
Jill DeWit: Well, am I the problem?
Steven Butala: No, no, no. I mean a perfect example of how a deal doesn’t close itself is the most recent Mesa, Arizona house deal we did.
Jill DeWit: Oh yeah.
Steven Butala: Where it just sat there on the MLS for quite some time. And then Jill got angry one day because-
Jill DeWit: I did.
Steven Butala: … the people who were managing the transaction I think just lacked a little bit of experience, they’re totally motivated, just lacked a little experience. And what it takes is this, going through every single call that’s been received on the property, call them back, seeing if they’re still interested, whether they’re a seller or a real estate agent in that case. And then trying to say, “What’s it going to take to get this deal done?”.
Jill DeWit: What’s it going to take? Are you in or are you out?
Steven Butala: And so people call it these land deals, [inaudible 00:07:19] in 20, 30, 40, 50 phone calls a day. And it’s all different version of the same thing. “What’s it going to take to get this deal done Mrs. Smith, what’s your point? What’s your press point? You want to get it done fast, because you want some cash, you want a little bit more money. I’m listening. I’m here. We’ll put something together as long as it works for both of us.”
Jill DeWit: Well, you have to decide too for yourself what’s your threshold, whether you’re on the buy side or the sell side. Like deals don’t close themselves, okay. Say on the buy side, I will have a certain number that I’m willing to spend and I won’t go above it. And I will walk away and I’ll put it out there and say, “This is my highest and best offer. If you’re interested, great. If you’re not, I wish you all the best.” And I just told this woman this yesterday, “I’m not going anywhere. If you wake up in a panic two, three days from now going, ‘I wish I would’ve taken that offer,’ call me. I’m going to be here, I’m not going anywhere.”.
Jill DeWit: And then on the sell side, you’ve got to know what number you’re willing to go below, and set the expectation and make it reasonable. Don’t be greedy. And aggressively, like you’re saying, try to work with everyone. If you have a really good potential buyer, you make it happen. That makes sense. And the other thing I was even thinking when I think of deals don’t close themselves, I just thinking the whole transaction process, that part’s tricky. That’s kind of what I was alluding to. You can’t just throw it in an Escrow agent, sit back and let it happen. Because you look up and go, “Nobody’s doing anything. I thought we’re supposed to close yesterday. No one sent me anything.” That’s very common. You have to continually push these through the system.
Steven Butala: This is not a passive business. Passive income is this catch phrase apparently on the internet right now.
Jill DeWit: That’s true.
Steven Butala: And then now people are saying passive income through real estate. If you’re a landlord, you know how not passive that is. There’s no such thing as passive real estate. You’re kicking your heels back-
Jill DeWit: Yeah, [crosstalk 00:09:18].
Steven Butala: … and sitting down on a beach back there and counting your money. At no level is that ever going to happen.
Jill DeWit: I own 10 rental homes. No one’s ever been late and they never call me. You’ll never hear that.
Steven Butala: Or sometimes I hear people say, “Oh my, I have a management company, they handle all that stuff. I’m going to go to Tahiti.” No, you’re going to manage the management company.
Jill DeWit: That’s true.
Steven Butala: All the management company does is take the actual phone call when the stuff explodes.
Jill DeWit: Yeah.
Steven Butala: You’re ultimately going to-
Jill DeWit: Pay.
Steven Butala: You’re going to pay and you’re going to be involved.
Jill DeWit: Exactly.
Steven Butala: Or the business is going to die. I learned that the hard way. Long before Jill.
Jill DeWit: Yeah. Heaven forbid you get my credit card number and say don’t call me. I hate to see what would happen. Could you imagine.
Steven Butala: So I just want to be … Here’s my big picture point. This is very, very time consuming and extremely profitable if you do it right. So like I said earlier, we all have choices about what we can work on. I think it was yesterday, I said that.
Jill DeWit: That’s perfect.
Steven Butala: We have choices. You have a choice. You can buy and sell real estate for a living. You can work at a job or you can do both. Or you can buy and sell companies for a living, if this real estate business is too small for you. So we do all this stuff. Right now Jill and I are actively really cranking back up our rural vacant land acquisition and sales program. I mean, I would like to see us, we’re at about 250 grand a month now. I would like us by the end of the year get to a million. And what’s between 250 and a million? Three individuals. Three people that we need to hire that are superstars like Jill.
Jill DeWit: Thank you.
Steven Butala: We need young Jills.
Jill DeWit: Thank you. I’m on it.
Steven Butala: Because I could send out a million offers a minute.
Jill DeWit: I know you can.
Steven Butala: Hey, we know your time’s valuable. Thanks for spending with us today, or some of it anyway. Join us next time for an episode called One and a Quarter Acres Versus 40 Acres to Build Equity.
Jill DeWit: Love it. And we answer your questions, post it on our online community found at landinvestors.com, it is free.
Steven Butala: You are not alone in your real estate ambition.
Jill DeWit: I did not see when you wrote these titles, you have me intrigued. I can’t wait to hear what you’re going to talk about.
Steven Butala: You think bigger is better in land?
Jill DeWit: Not always.
Steven Butala: Not always.
Jill DeWit: Not always.
Steven Butala: Do you think consistency or inconsistency is better?
Jill DeWit: Consistency.
Steven Butala: Do you think throwing more money at it or less money at it is better?
Jill DeWit: Less. Am I okay?
Steven Butala: I think you’re batting a thousand here-
Jill DeWit: Okay, good.
Steven Butala: … and I think that there’s a huge misconception about how this all works when you build equity.
Jill DeWit: Well, I’m intrigued. Wherever you’re watching or wherever you’re 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.
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