Funding Member Deals from Our Personal Checking Account (LA 1173)
Steve Butala: Steve and Jill here.
Jill Dewitt: Hello.
Steve Butala: Welcome to The Land Academy Show, entertaining land investment talk. I’m Steven Jack Butala.
Jill Dewitt: and I’m Jill Dewitt, broadcasting from sunny Southern California.
Steve Butala: Today Jill and I talk about funding member deals from our own personal checking account. As I said yesterday, this is true, we, Jill and I have, there’s no smoke and mirrors here. When we decided to do a deal, funny deal, and Jill’s going to talk all about it today, it’s comes out of our personal account. That’s how much we believe in the deal and the person that we’re doing the deal with. Before we get into it though, let’s take a question posted by one of our members on the landinvestors.com online community. It’s free.
Jill Dewitt: Charlie asks, “I have a chance to buy a lot as a very small set of buyers. I have one guy that normally buys everything with almost no research into the properties other than a brief title check. He doesn’t care about access or attributes. My dilemma is that this new property is 100-plus acres and him and I are normally dealing in the five to 10 acre range. So how do I ask if he wants a property that I don’t own yet because if he’s not interested then I’ll pass on it as well? Thanks.”
Steve Butala: This is a great question and it’s one that I think is pertinent to anybody that’s been in this business for more than six months. We all find people we’d love to sell property to and there was a time in my career, not so much anymore, where I was only working with one or two, on some cases just one buyer. If it didn’t fit the Mark, I just moved on. This was long before a Jill or Land Academy. So I understand this point in your career where you are, and my advice would be to you if you’ve done a bunch of deals with this person, just lay it on him. See if he says yes or no.
Steve Butala: I’m not sure I would pass on it if it’s a great deal, especially because this group exists that we’re in, so if it’s a good deal, I would get it into landtank.com or get it onto at least landinvestors.com and say, “Hey, this deal doesn’t work for me. It might work for you guys. Let’s partner it, but I don’t want to put any money in,” or, “Hey, why don’t you throw me 1000 bucks if you believe in the deal? I’ll turn it all over to you.” But don’t let it go to waste.
Jill Dewitt: Mm-hmm (affirmative). I agree and I too, even since we’ve been working together, I’ve had buyers that I really knew. I knew right away when we’re buying them. I know who’s going to buy this one. I know who’s going to buy that one and who’s going to buy this one. I love those relationships because it’s such an easy conversation. I just send him, “Hey, I just got these this week. You want them?” He’ll say, “One, two and five. Yep. Done.” That’s all we talk about. He knows where to wire the money. I watch it pop in. I know how he likes the deed done, I just do it. That’s the extent of it. It’s one email to him, one email back, and then the deal is done. So these are great. I agree with you, when you said a very small set of buyers, to me what I’m hearing Charlie say is it’s a small buyer’s pool or just unique person who’s going to want 100 acres.
Jill Dewitt: I agree. And then price point, just like with any real estate, there’s a price point where you get a lot of people, maybe what the middle-class can afford, let’s just say, that kind of a thing. I’m sure it applies to cars. It applies to everything. It applies to jewelry, everything.
Steve Butala: Food.
Jill Dewitt: Food, restaurants. There’s a sweet spot there. Then it’s also, you have a spot with a size of the properties. Some people will look at one acre and go, “Oh, that’s too big.” There’s a lot of people that five to 10 acres. What we found, south of 10 acres, people can swallow that. Five acres, you could stand there and walk it and see it, but 100 acres, it’s going to take you a little while to go out and drive it and see it and explore it.
Jill Dewitt: So there’s a smaller pool and then people freak out a little bit too if you’re not like this guy who’s only doing five, 10 acres, they might have in their head how am I going to handle all this? How am I going to care for all this or whatever. They dream up things. So when he talks about the buyers, I guess that’s where I was going. I can see that. I can see a little hesitation/however, if it’s priced right and you market it right, there are buyers out there if it is that good of a deal. Even if this one person doesn’t want it, I agree with Steven, don’t let it go to waste. Depending on the price, if you don’t have the cash for it, but you know it’s that great, like Steven said, we will fund it. Now, there’s two ways too by the way.
Steve Butala: Oh yeah.
Jill Dewitt: Land Tank is available to you, number one. You could put it up there, let somebody just grab it from our group or two, we all remember last week when I did that face, maybe we don’t remember. I’ll tell you. Last week on Wednesday I did a Facebook Live event and at the same time as the live event, all you members, you got an email that went out with 76 kind of names I think it was on there of people with money. Their name, their phone number, their email addresses, the type of deals they want to do, how much they’re willing to spend per deal, how much they’ve got standing by overall and any special comments about how much work they’re willing to put in on the deal. So you got people.
Steve Butala: The bigger point here with Charlie is that he or she’s got this buyer and they’re having a rip roaring blast right now, but that’s going to end, and I’m going to sound like your father here for a minute. This person’s eggs are all in one basket and it will end. Let’s say it ends two years from now, they’re going to say to themselves, because I speak from experience here, “Man, I wish two years ago when everything was going great, I would have diversified a little bit and started working on these bigger properties and not relied solely on this one buyer to buy every single thing that I’m selling.” So it’s really easy to get complacent and lazy.
Jill Dewitt: That’s a great point.
Steve Butala: You don’t want to do that. I did that. It almost sunk the ship.
Jill Dewitt: Very good point.
Steve Butala: Twice. Today’s topic, funding member deals from our own personal checking account. This is the meat of the show.
Jill Dewitt: This surprised me, what you said. I didn’t know that people thought that, but now when I think about it, I’m surprised that I didn’t. What would they think? I don’t know because we never really clarified that, but yeah. Sorry. So can I back up and say what it is?
Steve Butala: Absolutely, because I prefaced this a little bit on yesterday’s show about people mistrusting money sources. Maybe you can review or whatever.
Jill Dewitt: Okay. What is Land Academy Deal Funding? If you go on our websites, if you go on Land Investors or Land Academy, you can find a link to Land Academy Deal Funding. What it is is a place for anyone, and you don’t even have to be a Land Academy member, to submit a deal for us to review for lending. All we ask is please do your homework. Don’t just throw it up there and say, “Hey, I’m not sure I’d even buy it. What do you think? Is it a good deal for anybody?” I don’t want that. I want it to be a deal that you’re going down the path, you’ve already done your due diligence, you have it locked down. You have a signed purchase agreement from the seller and all you’re looking for right now is the money. Like, “Shucks, this is such a good deal.
Jill Dewitt: I don’t have the money right now. We got to do this. Can you fund it for me?” Then that’s where Land Academy Deal Funding comes in. So you submit it, it gets to my team. There’s a few things that have to get done first and then it gets to me. Then we look at this and thumbs up, thumbs down. I’m either going to write you a check and close it with you kind of thing or I’m going to say, “Uh-oh, here’s what we all missed.” Now, do you want to jump in now?
Steve Butala: No, go ahead.
Jill Dewitt: Okay. All right. So the show is about, which I didn’t even realize that people may not know that it is our money. I’m not doing this with some syndication or group or even our advanced members. Nobody’s doing these deals. It’s me doing the deals. It really is our money. So when we started this in January, 2019, we started Land Academy Deal Funding, we dumped I don’t how much it was, a chunk of cash into a separate account and said this is our deal funding money. We have of course since paid it back and now it just keeps growing and it’s true. Steven’s like, “I don’t know about this.”
Jill Dewitt: In the beginning it was kind of funny but I’ll tell you now at a year later, I have a couple of numbers I was going to share. Yeah. I was going to share the average profit. The average profit on each deal right now is $29,492. Not bad.
Steve Butala: That’s amazing.
Jill Dewitt: That’s the average. Also too, I thought it was a really good statistic to share, I tracked the days from when it gets input, the day that you go in and submit the deal for us to do together, and we’re usually going through escrow on these deals. They’re bigger deals, that’s why you’re needing the money. So we’re going through escrow on the buy side and the sell side. So the average number of days to from when it gets input into our system that you fill out the contact form with your information to it is done, sold and you and I are counting the money is 56 days. That’s not bad.
Steve Butala: It’s truly amazing. That tells me the deals that we choose are great and that a certain percentage of the deals that are submitted are great.
Jill Dewitt: Mm-hmm (affirmative). There’s been times too, you know if you submit a deal to me, there’s times that I go, “Shucks, I’m not feeling this one,” but I got to tell you, it’s not that it may not be a great deal for somebody else. So there are some that just don’t sing to me at that moment or I don’t know the area that well or I’m not sure about it, but I’ll tell you too, “Okay, you need to know that this might’ve been overlooked. This is not a good deal.” And usually you’re like, “Thank you. Dodged that bullet,” or “I’m doing it,” or “It’s not that great for me.” And often it’s because maybe the numbers are too small.
Jill Dewitt: It’s a buy for 5,000, sell for 15. It’s hard for me to get excited about that. You can see my number, my profit’s around 30,000. That’s what I want to get out of it, and I want you to get that much out of it too by the way. So our margin is 60,000 that we’re splitting in here. That’s what I’m going for. That’s total. So I’ll tell you to put it on Land Tank. That’s how we have Land Tank. There are lot of people in our group that would love to give $5,000 and split $15,000 with you all day long. Also, with the investor funding list that I just put together for you and just went out in an email last week, hit up those people. What else do you want to share?
Steve Butala: Deal funding itself has been incredibly profitable for us and the people who submit the deals. It’s a 50/50 split. We don’t take points upfront. It’s 100%. It’s 100%, so if somebody brings a deal to us and we like it, they don’t get charged a dollar, not a single dollar. So it’s a pretty unique program. It’s one that we completely have self-funded and it’s proven now. So this isn’t a commercial for deal funding. My point is one of the reasons that we created Land Academy in its infancy was to create business partners for ourselves so we could all make money together because we truly believe the whole thing was founded on Jill and I’s belief that we’re better as a group than we would be just flying off on our own.
Steve Butala: This is a perfect indication that and we’re only 12 months in so if it’s rings true to form like the rest of the companies that we have and the entities that we have, I’m sure that we will make more than a million bucks next year or 2020, this year. So it’s a great program and everybody seems to win.
Jill Dewitt: Mm-hmm (affirmative). It is. Thanks. Happy you could join us today. Every Monday, Wednesday and Friday you’ll find us right here on The Land Academy Show. Tuesdays and Thursdays you can find us on The House Academy Show.
Steve Butala: Next week join us on The Land Academy Show for the episode called You Can Have It All, Just Not At The Same Time. You are not alone in your real estate ambition.
Jill Dewitt: I cannot wait to hear where that’s going to go.
Steve Butala: You know what this is an answer to?
Jill Dewitt: What’s that?
Steve Butala: It’s my canned answer to people who are having a tremendous amount of trouble with life getting in their way of being successful at this stuff. So I get that everybody’s at some point, most people have little kids or a job that sucks or too many bills or all of that. The answer is not to sit and say, “I can’t do this.” You can have it all. You can make this completely work. You’re just going to have to bite off smaller bites. It’s all in your soul and your will. That’s what that’s about.
Jill Dewitt: Super cool. Proud of you.
Steve Butala: Thank you.
Jill Dewitt: The Land Academy 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.
Steve Butala: We are Steve and Jill. Information.
Jill Dewitt: And inspiration.
Steve Butala: To buy undervalued property.
If you have any questions or comments, please feel free to email me directly at steven@BuWit.com.
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