Keeping Your Mind Open to New Ways to Buy Land (LA 1108)
Keeping Your Mind Open to New Ways to Buy Land (LA 1108)
Transcript:
Steven Jack B.: Steve and Jill here.
Jill DeWit: Hi.
Steven Jack B.: Welcome to the Land Academy Show, entertaining land investment talk. I’m Steven Jack Butala.
Jill DeWit: I’m Jill DeWit broadcasting from sunny Southern California.
Steven Jack B.: Today, Jill and I talk about keeping an open mind to new ways to buy land. Jill pointed out to me that that’s not really a complete sentence.
Jill DeWit: I know. It’s just like I’m a little confused.
Steven Jack B.: So here’s the gist of it.
Jill DeWit: Well, wait a minute. Do you mean don’t do direct mail?
Steven Jack B.: No.
Jill DeWit: Oh, okay. Scared me for a second there.
Steven Jack B.: That’s what tomorrow’s topic is.
Jill DeWit: Uh-oh, okay.
Steven Jack B.: No. Direct mail should at least for the next many years be part of how you establish deal flow if not the only part.
Jill DeWit: Exactly.
Steven Jack B.: This topic today is all about keeping your mind open toward new ways of actually buying land, and the way that this business model may snake its way into whatever you do next.
Jill DeWit: Evolve.
Steven Jack B.: Yeah evolve is great, organically grow. A great example is the interview with Jill yesterday about what we’re doing in Los Angeles. That’s not something I ever thought that I would’ve thought about even six months ago that we would be involved in. So I don’t want to talk about that here too much because it’s off topic, so please listen to yesterday’s show. Before we get into it, let’s take a question posted by one of the members, one of our members on landinvestors.com online community. It’s free.
Jill DeWit: If you’re not watching, it’s kind of funny because Steven looked at me, and I just had this blank look on my face like “I got nothing.”
Steven Jack B.: What that means is if you’re married, you know how this goes. What this means is your spouse has a million looks, and you could fill volumes with just what one look is versus the next look. A person off the street’s not going to know that the looks are any different, but after you spend a certain amount of time, so the look that Jill just gave me was-
Jill DeWit: Oh this is good.
Steven Jack B.: “I’m not so sure this episode is organized as well as it could be, and I expect you to take the lead, Steve. Tee it all up, ask me a couple of questions in the middle, and then bring it back down and close. It’s your episode, Steve.” Tell me I’m wrong about any of that.
Jill DeWit: No it’s verbatim what was in my head. The notes I wrote down before the show do not apply.
Steven Jack B.: She crossed them out.
Jill DeWit: I did.
Steven Jack B.: She crossed out all of her notes, right?
Jill DeWit: I sat down, and I looked, and I said, “This is not what I thought we’re talking about.” So it’s your show man.
Steven Jack B.: All right, so it’ll be the Steve Show today.
Jill DeWit: It will.
Steven Jack B.: You know what? I can handle it.
Jill DeWit: Yes you can. All right, Carly S. wrote, oh it says not a member FYI. Let’s see how the question goes if we can tell anyway.
Steven Jack B.: That’s why I wrote it in there.
Jill DeWit: Oh, “I’m buying three lots for $10,000 hoping to sell them for around $15,000 each,” love it. “The title insurance company’s asking how much I want to share each parcel for. My first time doing this with title insurance, started in March. I bought and sold seven parcels so far. Any guidance is appreciated.”
Steven Jack B.: That’s great.
Jill DeWit: I do not think it even matters. I would tell them divide them by three. Put $333,000 insurance, 300 [inaudible 00:03:27] 3000 whatever. That part is really not important. What’s important is the title insurance itself showing it was transferred correctly, that kind of thing weighs more, uh-oh.
Steven Jack B.: All title insurance companies have a minimum insurance amount. This is really, really important to them. Like Jill just so eloquently just said, we don’t care at all-
Jill DeWit: Right.
Steven Jack B.: … because 99% of the time, their minimum threshold for First American is about 80 or $90,000. That’s the cheapest that … That’s what the insurance policy is for. We’re buying these properties for five grand sometimes, and paying out one or $2,000 to get the deal closed worst case. So the title insurance amount, there’s two rookies here, I think the title insurance agency rookie, and I think that Carly, no offense, I’m glad you started in March and you’re killing it. This is a very, very intelligent question or I would not have put it in here. You just, I think your answer to this question is for you or anybody who runs into this, it’s the minimum amount that you require. If you want to sound super intelligent, say, “Hey, I know that what I’m buying here is way cheaper than your minimum, that’s okay. I’ll pay for the insurance. I get it. You’re an insurance company.”
Jill DeWit: So it depends on the company. Right now, I’m doing some little deals in New Mexico, and if you look at the title insurance policy, it’s $175 or whatever it is-
Steven Jack B.: It’s cheap, super cheap.
Jill DeWit: … and it’s the exact amount of the deal, which is 5,400-
Steven Jack B.: Really?
Jill DeWit: … because these are deal funding, yep, yeah. It’ll say insured amount it’s exactly the purchase price, exactly. It doesn’t say insured amount 10,000, 50,000, 100,000. It doesn’t say that. It says the exact purchase price on all our HUD-1s. It’s a cool mom-and-pop-
Steven Jack B.: Oh [inaudible 00:05:19].
Jill DeWit: … agency that I’m working with, and they do it just, so that’s why I was saying divide it by three. They could put, and they are going to look at their chart, and every title company by the way has a chart for their fees that’s recorded with the state, if you will because we started to go down that path. But that’s a whole nother story. I don’t want to dredge that up. Anyway, so their private bottom number is $175 is the minimum, and that’s what you’re paying.
Steven Jack B.: Yeah, there’s a minimum.
Jill DeWit: But that, but then so that’s just for that one part. Then if you look, and you’ll know if you haven’t done this yet, I still do this, everyone, I still read line, by line, by line, by line, the HUD-1s, and I find stuff. Even just yesterday, I told Amy, last time I checked-
Steven Jack B.: Amy’s Jill’s sister.
Jill DeWit: … yes, “I’m buying this property” right. The documents were emailed to the seller and emailed to me the buyer, we each printed them out, are signing them and sending them back in on our own dime. Well shucks, I found a $90 courier fee. Why am I paying a $90 courier fee? Courier for what? So anyway, we’re going to get that out. It’s silly, but I go through the dumb thing-
Steven Jack B.: That’s a-
Jill DeWit: … and make sure it’s right.
Steven Jack B.: … huge profit center for them.
Jill DeWit: Oh totally, and it just, and I don’t think they mean to do that most of the time. I just think they’re like, “Oh yeah.” You just point out to them, they’re like, “Oops, sorry. Oops, sorry. Yeah, I don’t need that, don’t need that, don’t need that.”
Steven Jack B.: You know there’s a bigger, bigger point here at work, and it’s I alluded to it earlier this week. Jill did actually did on the first on Monday show, or maybe it didn’t air on Monday, the show is called the Three Things that it takes to Succeed at this to be a land investor, I’m paraphrasing, and number three was doing the work, a commitment to do the work. This is what we’re talking about. This is the stuff that you need to do. You can’t just gloss over a HUD-1 and sign it and send it back.
Jill DeWit: Yeah look at it.
Steven Jack B.: Either you or a very diligent, detail oriented person that works for you needs to look at this stuff. That’s for the rest of your life.
Jill DeWit: It’s true.
Steven Jack B.: This is, gosh, I don’t know.
Jill DeWit: Pay attention.
Steven Jack B.: How many deals that we’ve done?
Jill DeWit: Right?
Steven Jack B.: How many deals have we done? I mean, I’m trying to think. Every HUD-1s got some issue with it-
Jill DeWit: Oh my yes.
Steven Jack B.: … every single one. You never get one and say, “Wow, this is a work of art. I’m going to sign this and send it back.”
Jill DeWit: Exactly. The best part is too the same company what the heck? On one page, they spelled my last name wrong. The other page, they put the company wrong. I’m like, “Really? Really? All right, how does this get to me,” but it does so anyway.
Steven Jack B.: It’s a lot of details and all this, and a lot of work, and a lot of commitment-
Jill DeWit: Exactly.
Steven Jack B.: … and it’s incredibly profitable. There’s a reason we live on the ocean in Southern California.
Jill DeWit: Exactly.
Steven Jack B.: It doesn’t mean, I didn’t move in here that day and say, “You know what? I don’t have to look at a HUD-1 anymore”-
Jill DeWit: [inaudible 00:08:13].
Steven Jack B.: … pat myself on the back.
Jill DeWit: Nope. Now I’m really looking at them.
Steven Jack B.: Yeah, yeah because I want to stay here.
Jill DeWit: Exactly. Yeah.
Steven Jack B.: Today’s topic, Keeping Your Mind Open to New Ways to Buy Land. This is the meat of the show. Jill’s confused by the title. I’ll clarify.
Jill DeWit: If I’m confused, you are probably also.
Steven Jack B.: All these new things come across, if you’re successful at this, or a lot of you are successful at this, there are things that are going to come across your field of vision that make a lot of sense like when you develop, or if you’ve developed the skill of utilizing a database, pulling data out of it, scrubbing it and sending an offer out regardless of the product that you buy, land, houses, or apartments, or whatever, people are going to come to you and say, “The stuff what you understand I don’t necessarily understand it, but what I can bring to the table is let’s say installing mobile homes,” or they’ll say something like, “I’ve been a mobile home installer for” … I just had this conversation yesterday. “I’ve been a mobile home installer for 25 years. I’ve never really been able to make money at it as a developer because I can’t find any cheap land in the MLS.”
Steven Jack B.: Well then there’s me run into the bathroom jumping up and down and screaming because that’s like a multimillion dollar opportunity for me because that’s all I do is know how to buy cheap land. The person’s never going to learn. He’s a mobile home guy. The reason for this title, this incorrectly, incorrectly written title according to Jill is because people come to us, I’ve seen people just close their mind. It’s like, “Yeah, that’s not what I do. Have a good day.” So while I think it’s really important to stay on key and limit what you do for a living to make sure that you do it really well, and that you’re at the top of your game, I don’t want you to completely close your mind to the fact that there might be some guy that’s coming to you saying … I heard this from money guys all the time. “I have all this money and I just don’t know exactly what to do.” Jill’s looking at her watch now. Now she’s looking at her watch.
Jill DeWit: No.
Steven Jack B.: What’s after this?
Jill DeWit: Nothing. I have a meeting. You’re good.
Steven Jack B.: What time?
Jill DeWit: One o’clock. You’re fine.
Steven Jack B.: So my point is just keep an open mind to it.
Jill DeWit: I’m not trying to rush you.
Steven Jack B.: You’re just not interested in this at all.
Jill DeWit: Well I’m waiting for my part.
Steven Jack B.: Make your part.
Jill DeWit: Oh, okay. So this is just about okay new ways to buy land and-
Steven Jack B.: This is not new ways to buy land.
Jill DeWit: Oh okay.
Steven Jack B.: This is about keeping-
Jill DeWit: But that’s what’s going on.
Steven Jack B.: Keeping your mind open to new ways-
Jill DeWit: New business ideas?
Steven Jack B.: … to apply this talent that you’ve developed about mining databases, and there’s all kinds of uses for land. There’s people that want to develop-
Jill DeWit: Oh, oh, okay now I got you.
Steven Jack B.: … amusement products.
Jill DeWit: All right, all right, for example-
Steven Jack B.: There’s people that want to develop fast food restaurants or bank branches. There are people that want to develop mobile kitchens, and on, and on, and on. Land use is-
Jill DeWit: Parking lots.
Steven Jack B.: … only limited by your imagination. So as an entrepreneur or business person come across other people that do stuff regardless the environment-
Jill DeWit: All right.
Steven Jack B.: … you can take orders.
Jill DeWit: Let me back up. So this for you is about not just buying raw vacant land and selling it to a fisher, or a hunter, or a farmer, or someone wants to live off the grid. Now you’re like, “Let’s get strategic here, and be thinking about this stuff,” which to me, for me the best thing is I was part of my original, what I thought this was about, I was like, “I read my email. I see who’s looking for land and what they’re looking for and why.” So, and I know you do this. We read articles about other investors, and what’s going on around us and around the country, where things are growing and not growing, so that’s kind of what you’re talking about I guess, so being open to who needs property regardless of who they are, not the hunter or the farmer, the-
Steven Jack B.: User,-
Jill DeWit: Camper.
Steven Jack B.: … the off the grid guys that want vacant land.
Jill DeWit: … that wants cabin, and people that are doing whatever. It’s like it might be the developer next door, or it might be the guy who owns a chicken restaurant down the street-
Steven Jack B.: That’s it.
Jill DeWit: … and he’s expanding. You never know. Yeah, there’s people all around you-
Steven Jack B.: That’s my point.
Jill DeWit: … who need property. They need dirt, they need property. They need space for something. Well, and okay, you’re right. I would like to throw this back to you.
Steven Jack B.: Now she likes the topic.
Jill DeWit: Well, now I understand, so ding, ding, interesting fact. You have the tools, and the knowledge, and the resources to pick up any kind of property. What if it’s commercial? What if you’ve got storage center guy that there’s a guy in your REI meetup who’s jumping up and down with storage center things, and he’s got this. He knows how to do it. He knows how to build them. He knows how to grow them. He’s got the perfect cookie cutter model now, to put it. He just gosh, he just doesn’t know how to get the dirt. He’s calling real estate agents. He’s doing this. You need to take that guy aside and go, “Tell me what you need. I’ll go get it.”
Steven Jack B.: Yeah, exactly. This mobile home guy I was talking to is like, “I wish I had more work.” I’m like, “Why? Why? You want some work?” Exactly.
Jill DeWit: Yeah.
Steven Jack B.: All right?
Jill DeWit: That’s it.
Steven Jack B.: You good now? All right. Let’s get you out of here at one.
Jill DeWit: [inaudible 00:14:03].
Steven Jack B.: Join us next time for another episode called Adventures in Texting Land Owners. Hey, how’s that for a very concise title?
Jill DeWit: I like it. I know what it means, and we answer your questions posted on our online community at landinvestors.com. It is free.
Steven Jack B.: You are not alone in your real estate ambition.
Jill DeWit: You good?
Steven Jack B.: I’m good.
Jill DeWit: Okay. You know the Land Academy daily show remains commercial free for you, our loyal listener. So wherever you’re watching, or wherever you’re listening, please subscribe and rate us there. We are Steve and Jill.
Steven Jack B.: We are Steve and Jill. Information-
Jill DeWit: And inspiration-
Steven Jack B.: … to buy undervalued property.
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