How Land Academy Works From Everywhere (LA 1126)

How Land Academy Works From Everywhere (LA 1126)


Steven Butala:                   Steve and Jill here.

Jill DeWitt:                          Hi.

Steven Butala:                   Welcome to the Land Academy Show, entertaining land investment talk. I’m Steven Butala.

Jill DeWitt:                          And I’m Jill DeWitt, broadcasting from sunny Southern California.

Steven Butala:                   Today Jill and I talk about how Land Academy works, from everywhere and anywhere I’m happy to report. Because that was one of the… You know, I honestly sat down as a real estate professional in the mid to late nineties and said in a huff and disgust, how can I solve this ridiculous, inefficient process of buying and selling real estate? I know it’s profitable. I know it’s within my skillset. Everybody’s running around like a chicken with their head cut off doing these real estate deals without any real organization and everybody’s unhappy. And so this is kind of what this is all about. For me, anyway. Jill probably has completely something else to say.

Steven Butala:                   Before we get into it, though, let’s take a question posted by one of our members on the online community. It’s free.

Jill DeWitt:                          Matt asks, I have a property under contract that is no doubt a residential deal. Buy for six, sell for 12, I think.

Steven Butala:                   Thousand.

Jill DeWitt:                          Buy for 6,000, sell for 12,000, I think. But it’s zoned commercial general, which doesn’t have any residential uses under the zoning except potentially mixed use with a plan development permit required. My general understanding of any deal as a residential lot is only made more valuable with commercial zoning. Before I pull the trigger on this, does anyone have any experience to say, yes, go ahead, go for it, or no, this could potentially be a problem.

Jill DeWitt:                          The property is in California. From the town zoning map, it looks like three residential properties to my right are supposed to be zoned commercial. So I imagine they don’t have any trouble zoning it back down to residential.

Jill DeWitt:                          I wonder if they changed the zoning since those houses were built. That’s my first thought. I’m wondering how urban that area is.

Steven Butala:                   When this happens, we jump up and down in our office. This is a very, very, very, very positive thing. I can’t think of any circumstance off the top of my head, although I’m sure there is a couple somewhere, where commercial zoning, not industrial, but commercial zoning, is as a negative thing when you’re buying a house. All it does is widen your choices for how you can sell it.

Steven Butala:                   You know, Jill and I, we have a couple of properties under contract that are zoned commercial, but they’re existing as single family residences. And it’s like when you really dig into what’s possible there on this lot, it’s insane. Sometimes you can build a ten unit apartment building. He says mixed used here.

Jill DeWitt:                          Mm-hmm (affirmative).

Steven Butala:                   Mixed use is great. A mixed use building is like there’s retail in the bottom, restaurants or whatever, convenience store, and then above it there’s apartments, maybe there’s office. Sometimes they are office condos. Maybe there’s residential condos. There’s a lot of options. So developers run around looking for this stuff.

Steven Butala:                   This is a very, very, very positive thing, Matt. In fact, my guess is if you did this deal, or do this deal, and it works the way I think it’s going to work, this might become your business model. We have people in our group who seek these transactions out.

Steven Butala:                   And then finally, my last comment here is there’s this concept of zoning down, and I referred to it a little bit. What you said was, well, maybe I can zone it back into a residential. You never want to do that, because then you’d have to get it into commercial, which is zoning up, which is incredibly difficult. It’s not so hard to zone down. It’s very difficult to zone up. So without getting into a tremendous amount of detail, you’ve found yourself in a pretty good spot here. I would move forward.

Jill DeWitt:                          I would too. And celebrate that and put that in your posting. That’s the whole point here is your buyer has so many options. What do you want to do? There’s houses here, so most likely you can make this happen. You want to go bigger, you’re ready for it.

Steven Butala:                   I’d put it in signal.

Jill DeWitt:                          Exactly.

Steven Butala:                   House for sale, zoned commercial, whatever it is, C-whatever, and watch how fast that happens.

Jill DeWitt:                          Correct.

Steven Butala:                   It’ll sell that day. I would put it on the MLS, and I would put it on LoopNet, by the way, which is where all the commercial real estate is. It’s the closest things we have to a commercial MLS.

Steven Butala:                   Today’s topic, how Land Academy works from everywhere and anywhere. This is the meat of the show.

Steven Butala:                   When I sat down in the mid-nineties and I was just more frustrated than, well, a lot of you are listening to this because you’re frustrated with how your real estate career is going, or want to get into it. I came off of one of the most complicated real estate transaction types ever known in this country. Longterm care. Buy a nursing home and resell it to a new owner who’s a chain or an operator or somebody who’s got an idea of what that asset can become.

Steven Butala:                   So not only are you selling a piece of real estate, you’re selling the business with it, and you need the federal government’s approval, the state government’s approval. You’re almost always working with a lender because it’s a multimillion dollar deal. If you’re an operator of these things, you don’t ever pay cash. Maybe somebody else does. So maybe one person’s buying it, one person’s leasing it. Now you’re introducing a lease into the situation, and it’s a longterm triple net lease. So on and on. There’s like 10 more things I can say about why these deals are complicated and they take a year.

Jill DeWitt:                          We’re already overwhelmed. It’s okay.

Steven Butala:                   They take a year to do, and they almost always die. Because after a year everybody changes their mind.

Steven Butala:                   So I sat there in frustration after successfully doing a chain of these things and making a fairly large fee, almost a million bucks in fee, which I earned by the way, and saying, what do I want to do with the rest of my life, or what do I want to do next, anyway? I know how to do these deals. I want to be an owner-investor. I hate the idea of being an agent and having my life controlled by a buyer and a seller and a lender and everything else. How can I make this simple? And I want to do it from the back of the yacht, because I expected to be successful at this. It was just really about what this topic’s about.

Steven Butala:                   So I came up with sending a blind offer to somebody who owns a piece of land that they’re never going to use, ever, for a very small amount of money just to see if they want to sell it. And I did. And it worked. And what is it? Almost 2020 now. We’re at 16,000 deals later. By November, 2019, the time we’re recording this, we will have done this month, we’ll buy well over 45 properties. I don’t know how many we’ll sell. At least probably not as many because we’re building up our inventory for next year. So this thing works. Right?

Jill DeWitt:                          I don’t want to make you sound old, but I just like to point out, do you realize it’s over 30 years you’ve been doing this?

Steven Butala:                   Wow.

Jill DeWitt:                          Talk about-

Steven Butala:                   Yeah, it is.

Jill DeWitt:                          Talk about… Yeah.

Steven Butala:                   It’s about that.

Jill DeWitt:                          I just did the math.

Steven Butala:                   It’s about 30.

Jill DeWitt:                          It’s over 30.

Steven Butala:                   It is 30.

Jill DeWitt:                          It is. It’s over 30.

Steven Butala:                   Next year it will be 30.

Jill DeWitt:                          Over 30. Because you just started in the ’90s.

Steven Butala:                   Well, 20 years in the 2000s, and then 10 year. I started in like 1992, ’91. That’s 30 years.

Jill DeWitt:                          That’s more than 30 years. Now we’re talking almost 40 years.

Steven Butala:                   All right, math whiz.

Jill DeWitt:                          Sorry. Is it more than 30 years? Wait, ’99, 2000 and… All right, anyway. It’s so hard. It’s a long time.

Steven Butala:                   Information and inspiration.

Jill DeWitt:                          Yeah. Math? No math. I’m just kidding. It’s a long time.

Steven Butala:                   No. Jill’s a pilot and a physicist.

Jill DeWitt:                          I could do a lot. I’m like maybe, all right.

Steven Butala:                   It’s just a show. The bright lights and the weather.

Jill DeWitt:                          He has a light in my face, I can’t do math. Just kidding.

Steven Butala:                   So to even make it better, I honed in on this after a while. I’m like, all right, now I don’t have to be in a location anymore, because as the time this all progressed, cell phones became into play. This is all before the internet that I started this. Then we’re plugging computers into phone lines and then eventually cable lines ,and now you have the computers on your phone. So it just got easier and easier and easier. And then there’s these data sets that you can access like a RealQuest and now DataTree, and it continues to get better. The connectivity continues to get better, and the ways to buy property continue to get better. Now we have everybody’s phone number.

Steven Butala:                   You know, it’s getting better and better. And the result of that is you can do this from anywhere. We have multiple members in multiple countries, in multiple continents, actually, successfully doing this. Jill and I just had a conference call with some people in Ireland that are successfully foreclosing on some property that they’ve identified as as a great deal. And they had a conference call to confirm that we think that’s a great deal, and I couldn’t have said better things. It’s a father-son team, and I love to see that.

Steven Butala:                   Go ahead.

Jill DeWitt:                          I love this. This is one of the things that when we got together and you proposed this business model to me to get involved in, I’m like, what do you mean we can do this from anywhere? It’s the greatest thing. All I need is a laptop. And if I do it all wrong, I can do stuff on my phone if I had to, by the way. But really all I need is a laptop and an internet connection. Because if I’m traveling, I can get to a printer and on a scanner. There’s Kinko’s, or a version of Kinko’s, everywhere. I can figure that out. I can go to-

Steven Butala:                   And in every hotel.

Jill DeWitt:                          Every hotel has a business center. I can make this work if I had to. And that’s the beauty of it. I know you did this for quite some time literally on the back of a boat with a good printer and a good scanner.

Steven Butala:                   Yep.

Jill DeWitt:                          And your laptop.

Steven Butala:                   For a decade.

Jill DeWitt:                          Exactly. I think that’s the greatest thing. And I was watching someone just the other day on social media celebrating like, I just did it. I just took a trip.

Steven Butala:                   Yeah.

Jill DeWitt:                          My business didn’t miss a beat. And I’m like, yay, isn’t that the greatest thing? It’s just a perk to what we do. You don’t have to do it, but if you need to, you can. It’s just so nice. And with your staff, so many of us in our business model have remote staff. We have VAs and other countries. PATLive was not next to us. We don’t talk. And maybe you outsource somebody doing your deeds, things like that. You can do online recording. There’s so much.

Steven Butala:                   When you really think about our business model with both houses and land, here’s the steps. You gather some data, you can do that from the back of a boat. You can do it wherever your laptop is at 24/7. You gather some data, identify a market where you think people want to sell property and people want to buy it, send the data out. All of this is outsourced, because you send the data straight to O2O and they put it all together for you and send it into the mail, the physical mail. You can do that from Japan or anywhere you want.

Steven Butala:                   People, eventually, after two weeks are going to respond to what you sent in the mail. They’re going to call somebody like PATLive, not you. PATLive is going to sort out which sellers are real and which ones aren’t and you’re going to get a list, an email list, every night. This person’s real. You’re going to wake up the next day, or whatever time zone is compliant for the seller, and you’re going to call him. You’re going to have a few days or a week of calling people, which is really what Jill deals with, or her staff now. And you’re going to put a deal together.

Steven Butala:                   When it’s together and signed, you’re going to send it to an escrow agent, which you can do from anywhere. And the escrow agent, while you manage them, will sell the deal, will close the deal. While that is happening, you’re setting it up for marketing, which you can do from anywhere, and you’re going to either get it on the MLS or go through social media or send it to one of your contacts that you’ve already established that’s going to renovate the property or the house.

Steven Butala:                   So just takes a bunch of organization and willpower and some discipline. There’s no reason to ever really go see an asset, especially with land.

Jill DeWitt:                          That’s the funny part I think people can’t wrap their head around. You don’t have to see it. And we do it with houses, too. But you don’t have to.

Steven Butala:                   So it’s just one of the probably 50 perks of this business model. So coming full circle here to wrap this up, I sat there in a huff trying to create the perfect real estate investment environment or business back in the ’90s. You know, I can go be a residential real estate agent. I can be a commercial real estate developer. There’s just a hundred different ways you can go. I could be a syndication person, raising capital for people that want to go do that other stuff and take a fee. I could be a hard money lender. I could be a bank lender. I could be a bank REO specialist. The list goes on and on and on.

Steven Butala:                   All of that involves having a boss. Or most of it, anyway. Using someone else’s money. Which is not that big of a deal if you do it correctly. But really it requires presence. All of it. With the exception of just being a true private investor, which is what this is. Then you pour on top of it the fact that you can start with 500 or a thousand bucks.

Steven Butala:                   So we’re kind of running out of time here, but I couldn’t come up with a better business model back then, and I still can’t come up with one now. We still always come back to no matter what we do, ParcelFact or these tech projects we have, or even Land Academy itself, we still always come back to buying and selling real estate.

Jill DeWitt:                          Yep.

Steven Butala:                   I guess that was the Steve Show.

Jill DeWitt:                          You did very well. It is. Thank you.

Jill DeWitt:                          Happy you could join us today. Remember every Monday, Wednesday, and Friday, we are right here on the Land Academy Show. Tuesdays and Thursdays, you can find us over on the House Academy Show.

Steven Butala:                   Tomorrow, the episode on the House Academy Show is how to price your house offer campaign. You are not alone in your real estate ambition. Super simple instructions tomorrow on how to price an offer campaign that will get the results as you want.

Jill DeWitt:                          The Land Academy Show remains commercial-free for you, our loyal listeners. So wherever you’re watching, wherever you are listening, please subscribe and rate us there.

Jill DeWitt:                          We are Steve and Jill.

Steven Butala:                   We are Steve and Jill.

Steven Butala:                   Information.

Jill DeWitt:                          And inspiration.

Steven Butala:                   To buy undervalued property.

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