What are Land Brokers Really Worth 10%? Really? (LA 1258)

What are Land Brokers Really Worth 10%? Really? (LA 1258)

Transcript:

Steven Butala:
Oh here, Steve and Jill here.

Jill DeWit:
Hello. [crosstalk 00:00:04]

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

Jill DeWit:
And, Jill Dewitt, broadcasting from sunny Southern California.

Steven Butala:
Today, Jill and I talk about what are land brokers really worth? 10%? Really? 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:
Molly wrote, I am still new and I have a few lots on the market, and I’m getting the question on these lots if they have water and septic. So what is the best way to find out this information and what are other things to know about the properties other than topography access and comps? My first question is, when you bought the property, did you not cover this? As I’m going into buy a property, I kind of have all the answers. I need to know that as part of my acquisition. So as I’m finding that out, I get it ready for my posting, every time I’m buying it. But to more specifically answer the question, let’s just say you inherit, who knows, whatever. However, you got these lots, the first thing I would do is call the county. I also research, too, similar lots in the area and see other people’s information that they have collected. You look like you have something to say.

Steven Butala:
It’s not so much that I have something to say. I’m just kind of waiting to answer the question, how I would answer it.

Jill DeWit:
Excuse me.

Steven Butala:
What I do on every single first step of every single thing that I research, whether it’s buying a new company, starting a new company, or researching a market that I go into, I would go look at other successful people who have done it already. I would start with LandPin. I would go then, not so much to the MLS, but maybe Land and Farm, and I would look at, especially one of the values of being in this group, is you can look at successful people already doing it, which is really what this is all about.

Jill DeWit:
Your peers are members.

Steven Butala:
Yeah. And I would go look at the sites. I would look at 10 or 20 people’s, the way they’re doing it on their own sites. Start at LandPin because that’s our site or LandStay, that’s going to address all these issues. And, that posting template that we use didn’t happen on accident. It’s a result of 25 years of posting property incorrectly. And I’d like to think now it’s correct. So, there will be some day when you don’t get any questions on any property and people just buy it and call it, because you answered all the questions. So, that’s the way to start everything, is to go look at people who are already successfully doing it.

Jill DeWit:
And you’ll dig and you’ll find it. Sometimes in Neighbor Scoop when you’re looking at some of the information, you might find some information in there. Not every county puts it in there accurately, or just even lists it, but sometimes they do. So, you’ll get good, especially when you start learning areas. It’s so funny, this question threw me for a second, because I thought, guy, I haven’t thought about that one for so long because I’m so good at the areas that I’m in, I know them so well, I kind of already know. And I already kind of know based on what I’m looking at, too.

Jill DeWit:
For example, I already know based on experience when I’m looking at a property and it’s a paved road, there’s a house on each side, pretty sure right there at the lot line, there’s going to be power and water and things like that. Guess what? And for a lot of these, we do this all the time on our weekly member calls, we’ll zoom in and we can know what the utility boxes look like. From Google Earth street view, we can see it. I can see the power lines. I know what’s going on. So I know what’s possible. And so that’s again why it threw me. It’s just experience. I’m like, I hadn’t thought about how did I do it how many years ago?

Steven Butala:
Because we resell a lot of times to other wholesalers, I’m a huge fan of saying, “You know what? I don’t know. I don’t know if there’s water or septic. That’s why it’s so cheap.” So, if you have a posting, a land posting that says water, colon, I don’t know, septic, colon, not sure, call the county. Everything else about the property, I don’t really know. I’m in an air conditioned office somewhere in the Southwest, enjoying my life buying and selling land. And the reason it’s so cheap is because I don’t look into stuff like this.

Steven Butala:
You should find out. Maybe you can buy this for way cheaper than it’s actually worth, because it’s got all these utilities or maybe not. Either way, if you have more questions about it after that sentence, you’re probably not a buyer.

Jill DeWit:
Or not one that wants to buy from me. It’s all good.

Steven Butala:
There’s a lot of different ways to look at it. I truly believe in my soul, the value that we add, Jill and I, is in the acquisition and the acquisition price and the actual presentation online. It’s not all these other value added, “Oh my gosh, it’s got septic. There used to be whatever.” Those are all stories and-

Jill DeWit:
Yeah, let’s meet out there and we’ll walk it together.

Steven Butala:
I mean, all that does is attract people, just tire kickers.

Jill DeWit:
Which, by the way, that ties into this whole show, by the way, because we’re not going to walk it together, but my broker will. [crosstalk 00:05:26]

Steven Butala:
Oh yeah. Perfect. Hey stop it. What are land brokers really worth? 10%? really? This is the meat of the show.

Jill DeWit:
Segue, segue. Grab the segue.

Steven Butala:
Go ahead.

Jill DeWit:
Oh, okay.

Steven Butala:
What’s a good broker do, Jill? Want me to interview you? I will.

Jill DeWit:
Oh yeah.

Steven Butala:
All right.

Jill DeWit:
Okay.

Steven Butala:
Because I know you’re very successfully using-

Jill DeWit:
Bring it.

Steven Butala:
… land brokers right now.

Jill DeWit:
Okay. Ask me questions.

Steven Butala:
So, I send out a bunch of mail and probably start coming back. If you have a land broker that you have already established in the area that you like, what do you do at that point?

Jill DeWit:
Oh, that I’ve already been working with him?

Steven Butala:
Yeah.

Jill DeWit:
Oh, I just email him six properties and say, “What do you think?” Literally state-

Steven Butala:
Give us a lot of detail.

Jill DeWit:
Well, that’s kind of okay, well-

Steven Butala:
How’s he going to answer the question so that you want to buy it or don’t.

Jill DeWit:
Let me get… okay. Here’s the relationship I have now, then I want to give the backstory so they know how to get here. Okay. So the relationship I have now, is I email him state and county APN and he writes back with, “Love it. I think this one’s great. Here’s what I found. This one’s great. The whole property is beautiful. I think we should list it for this. We can sell it for this. We should list it for 65,000, like the price, sell it for 55,000 in 30 days.”

Jill DeWit:
This next property, “Eh, really hard to get to it. It’s not big enough that we can really do. It looks like, you think it’s a hunting property, but it’s not. Here’s the reason why it’s not that great. It would be a long time to sell.” Done. And then so on, is that answering your questions?

Steven Butala:
Yeah.

Jill DeWit:
This is what we do. And then, and he’s even good like, “This one’s a little too far from me. I don’t drive that far, but I’ve done… I’ve worked with this guy. He’s also in my organization, whatever. I got a guy for you and he’ll get out there.” Perfect.

Steven Butala:
What don’t you want him to say?

Jill DeWit:
Oh, what I don’t want him to say? And this is, well, this is an established relationship. Can we back up to how I picked him?

Steven Butala:
Sure.

Jill DeWit:
Okay. So this is how I pick a guy, too. And how you should pick a guy, is you need to be able to call a broker. And this is how I use them, too. This guy I have an established relationship, but say I don’t have an established relationship. It’s just like you. You’re looking at this area. You don’t know it very well. You need someone who has eyes on it and they know what’s going on in the area. This is how you pick a guy. “Hey, how are you? My name’s Jill. I’ve got this contract I’m just about to close on. I just want to get an expert opinion on what you think is possible and if I should pull the trigger.” That’s all they need to know. Here’s the state. Here’s the county. And, what do you think? Within usually 24 to 48 hours, he’s going to get back to you and say, or he’s going to, first of all, he’s going to tell you right away.

Jill DeWit:
“I totally know that area. I’m actually going to be in the area tomorrow. I will get back to you tomorrow night. Let me call you.” Done. The wrong guy’s going to just kind of shoot from the hip and say, “Oh yeah. Oh, that sounds great. That’s beautiful. I don’t know, what do you want to list it for?” “A hundred?” “Sure. Why not? Let’s go for it.” You know, kind of thing.

Steven Butala:
Can’t stand that either.

Jill DeWit:
Right? They don’t know the area. They just want to get a listing. They just want to put it up for whatever price I dream up. That’s not the guy I want, who says, “Yeah, let’s go for it. Sure, we can make that happen.” No, you can’t. The right guy, and the guy I pick, always pick, is going to go, “Okay, here’s what’s really going on in this area. This area is hot. This area is not hot. I like this area. I just sold three of them over here. I’m still flipping busy. I’m going to be there on Tuesday. I’m doing this tomorrow and this tomorrow,” whatever it is and really give you real answers.

Steven Butala:
That’s what you want.

Jill DeWit:
And then they really do know the area. They really go drive the area. And by the way, before I even pick them, let me back up here. I just had a consulting call with a guy the other day. And I said, “Here’s what I want you to do. Go on Realtor, right, from whatever, click the land category. I want you to find a broker in there who has a lot of postings.” They look good by the way, there’s more than two pictures. And one of them’s not just a plat map, like one picture from the street and a plat map. It’s not what I want. I want a guy that has really good pictures. And he really cares about the property. Maybe he does drone footage, hires those guys. The other thing is he’s got a couple under contract, so I know he’s actually doing things and moving property in the area. That’s the guy you call. What other questions do you want to ask me?

Steven Butala:
So change gears for a second. Do you need any of that info? When you’re looking at a house acquisition, do you need any of that information from a broker? The answer is no. You know what the house is worth with the possible exception of some of the stuff that goes on inside the house and the actual physical plant, which the inspector is going to tell you anyway. That’s why residential real estate agents suck so much, because they just don’t really provide any information. There’s no circumstance-

Jill DeWit:
That’s true.

Steven Butala:
… that I have ever-

Jill DeWit:
That’s true.

Steven Butala:
… sat down with a residential real estate agent and learned something about the market. [crosstalk 00:10:46]

Jill DeWit:
They’ve never told me anything that I don’t already know.

Steven Butala:
Nothing.

Jill DeWit:
And I hate it when they sit there and try to talk to me like that, like I don’t already know.

Steven Butala:
Yeah. And it’s not anything you can’t learn about the market in 15 or 20 minutes on the internet.

Jill DeWit:
Right.

Steven Butala:
So that’s the deal because there’s such a supply and demand relationship with houses that doesn’t exist with land. Land deals are created. You don’t just slap them up on the internet and they happen. And so that’s why there’s such a potential for people like us to hit home runs.

Jill DeWit:
Right.

Steven Butala:
And that’s why every single house deal that you ever do, with very few exceptions, is just a single, which is fine.

Jill DeWit:
Right.

Steven Butala:
Both have their place, singles and home runs and everything in between help you win games. So, a land broker is easily worth 10%, the right one.

Jill DeWit:
Totally. Let me go, I’m going to take us a step further, too. The right broker knows what will get financed, what will not get financed, will know, is it worth the trees on it? Is it not worth… he’ll know how to get a survey done fast and cheap. He’s got all these people in his back pocket. He has all those answers right away and can make it happen. Like my guy recently too. I have a new guy that we just started working with in a newer area. And, we were both guessing probably two to three weeks ago survey, based on what’s going on, how busy they are and it’s just business right now it’s triple what it normally is for this time of year. It’s fantastic. And he found me a guy that for, it was like a third of the cost and a third of the time.

Jill DeWit:
We were talking on Wednesday and we’re thinking it’s going to be two weeks. He got the guy out on Friday for a third of the cost. I’m like-

Steven Butala:
Geez.

Jill DeWit:
I’m not kidding.

Steven Butala:
What’s that worth-

Jill DeWit:
I know.

Steven Butala:
… when you really think about it? [crosstalk 00:12:36]

Jill DeWit:
So talk about burning your 10%. Geez.

Steven Butala:
That’s amazing. I didn’t even know that.

Jill DeWit:
Yeah. That’s really how it went. And, you guys will click, like we clicked. He left me a voicemail, it was in 30 days. He’s like, “Okay, call me, Jill. I have some good news.” And I knew when I called him, he’s like, “I got a guy, we got it. It’s done. They’re excited.” And he knew, I was going to say, “Yippee Ki Yay, yes,” to the offer. It’s great. So they are worth it. Just like everything, just like men, you might have to go through a few until you find the right one.

Steven Butala:
I’m going to let you have that comment without rebuttal.

Jill DeWit:
Thank you.

Steven Butala:
Because you’re not wrong.

Jill DeWit:
Thank you. And you’ll learn the red flags. You learn which are the crazy ones and who you connect with. Here’s the good news, so are they worth their 10%? Yeah. I don’t even think about it. It’s so funny because when you first start working with these brokers, you’re like, that’s a lot of mine to give up, but you realize the value that they bring to the table. You’re like, Oh, done, done. And like Steven said, here’s the reason why, because I’m buying a property, these land deals, I’m probably buying them for 20,000 and selling them for 85. So, does he earn his 10% with those numbers? Yeah. Can I afford to pay him out? Heck yeah.

Steven Butala:
Gladly.

Jill DeWit:
Thank you. Gladly. Gladly do it. And then once you have that person and you have that relationship, you are going to stay together.

Jill DeWit:
You’re a couple now. Like me and my brokers, and all I’m doing is, “What do you need? What do you want? I’ll go get it.” And, they are… you know what’s great too? He’s pushing me. I send them APS. He picks out the ones that are really good. And then he’s bugging me going, “Have you closed yet? Have you closed yet? Have you closed yet?”

Steven Butala:
Good.

Jill DeWit:
Seriously.

Steven Butala:
Oh, I love that.

Jill DeWit:
So that’s-

Steven Butala:
I’m serious.

Jill DeWit:
… that’s the relationship.

Steven Butala:
I’m not being satirical at all.

Jill DeWit:
… answer and that’s what’s going on.

Steven Butala:
That personality type, they don’t know how to lose.

Jill DeWit:
Nope. They love it. And he’s going to… so it’s perfect. So I think we answered the question.

Steven Butala:
I think so, too.

Jill DeWit:
Happy you could join us today. Every Monday, Wednesday, and Friday, you can find us right here on the Land Academy show, Tuesdays and Thursdays, we are on the House Academy show.

Steven Butala:
Next week, join us for another interesting episode on the Land Academy show. You are not alone in your real estate ambition. One week, Jill.

Jill DeWit:
Thank you.

Steven Butala:
Good shows.

Jill DeWit:
This is one of those shows that I like, I didn’t even write any notes. I’m like, this-

Steven Butala:
Because you’re so qualified to answer this.

Jill DeWit:
… so passionate about this situation. Thank you. And I know what I’m doing here. I love it. They just make my life… the right broker is going to make your life easier. And it’s the right man, too. You make my life easier and better. And I will pay you way more than 10%.

Steven Butala:
If that weren’t the case, we wouldn’t do this show together and laugh and stuff.

Jill DeWit:
Exactly.

Steven Butala:
[inaudible 00:15:43] both ways.

Jill DeWit:
Thank you. The Land Academy show remains commercial free for you, our loyal listeners. So wherever you’re watching, wherever you’re listening, please subscribe and rate us there.

Steve and Jill:
We are Steve and Jill.

Steven Butala:
Information-

Jill DeWit:
And inspiration-

Steven Butala:
… to buy undervalued property.

 

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