How to Choose a Market to Send Blind Offers (LA 1269)
| How to Choose a Market to Send Blind Offers (LA 1269) |
Steven Butala:
Steve and Jill here,
Jill DeWit:
Hello.
Steven Butala:
Welcome to the Land Academy Show, entertaining land investment talk. I’m Steven Jack Butala
Jill DeWit:
And I’m Jill DeWit broadcasting from sunny Southern California.
Steven Butala:
Today Jill and I talk about how to choose a market to send blind offers. Oh my God. Both of you.
Jill DeWit:
Haven’t we talked about this before?
Steven Butala:
How many times can you talk about the same topic in five years of a daily show? Well it turns out, I agree with you,
Jill DeWit:
But it comes up.
Steven Butala:
That’s why we’re responding to demand.
Jill DeWit:
It still comes up, people are like wait, can we run through that again?
Steven Butala:
Yeah.
Jill DeWit:
Has anything changed? What am I missing?
Steven Butala:
And you know what? It turns out some stuff has changed.
Jill DeWit:
How do I do this? I got a good one. We can help.
Steven Butala:
Technology has changed. There’s a lot of new available tools out there and we’ll talk all about it. What hasn’t changed is there’s no easy button, which is why there’s a few of us getting crazy wealthy at this, and then the rest of the people don’t even know about Land Academy in the world. That’s why you’re listening. 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:
Charlie asked, so I had a buyer pay the down payment on our website, fill out a form for the deed info, and then they disappeared. We talked through texts one time and I sent the contract and the deed because it was sold over [inaudible 00:01:26] with contract for deed, excuse me, it was sold on terms. And now I can’t get ahold of them. She never signed, never returned the contract back to me. What do I do now? The contract lays out default clearly, but technically she never signed it. I think I’m going to keep trying until Friday to reach them and make sure I have everything documented and then re-list the property with the expectation that I’ll just refund them if they ever return my calls. Any thoughts? That’s kind of what I would do.
Steven Butala:
Well, I’ll tell you, you’re kind of stumping me here because this has never happened to us, not. This happens all the time. Jill and I over the last year, maybe two years actually now, maybe two and a half or three, have gone a hundred percent to cash sales. So, selling property on terms, we buy a piece of property for cash and you sell it on terms, $500 sound, $200 a month for five years and then you own it. Like a car. It’s very popular among other groups in the land education environment out there. Or maybe it’s not, I don’t know. I don’t keep up with them.
Steven Butala:
But it takes a whole different skillset than what I believe, Jill and I are really good at. We’re good at data. We’re good at sending out blind offers, buying property real cheap and reselling it very quickly for cash for more. This business of the customer service and the maintenance of servicing alone and the stuff that goes on with it, we learned pretty early in our operation together that we don’t want to do that.
Jill DeWit:
It’s a lot of work. Lot of people package this up like, oh, it’s passive income, is what they. Because you set it up once-
Steven Butala:
There’s nothing passive about it.
Jill DeWit:
You get them on auto pay, and it’s all beautiful and sunny and everybody pays and they don’t have to do anything. And that’s the whole point. It’s not passive. It’s just like the situation, there’s a little bit of work sometimes. And this person managing, this situation is actually easy. So let me cover real quick. What you’re doing Charlie’s exactly what I would do. They went dark. I leave them voicemails. I text mail. I email. I cover all the bases. I tried. And then I put the money aside knowing if they come back, I’m going to say you went dark, here’s your money back and we’re all cool. Obviously something happened and most likely they might just go dark and you might get to keep the money. Who knows what happened?
Jill DeWit:
But the other side is, normally what happens is they make the deposit, they sign the agreement and they might be paying happily for six months and then go dark. Now you’re really in a pickle like shucks, they’ve been paying, now they’ve taken some ownership of the property. Now I’m doing it, it’s more and they’ve signed stuff, you’ve signed stuff. Now it’s even a lot more work. And it’s tough. Like Steven said, we just choose not to do. A couple of reasons, this is one, this is the main one.
Jill DeWit:
And then number two, I’d rather have the cash upfront. Even if it’s less, we all know this is another reason why people do terms is because they can get a bigger chunk. I might do cash for $15,000 on a property sale or terms for $25,000. That’s what people do and why it seems attractive too. And if it goes perfect, great, you got 10 more thousand dollars out of it. But you know, it’s spread out over time also. I’d rather have the $15,000 right now today and put that to work on another property.
Steven Butala:
And this is a classic case of, I am sure you are right. I’m sure that the person’s out of compliance with the contract and that-
Jill DeWit:
There is no contract.
Steven Butala:
Oh, she didn’t sign it.
Jill DeWit:
Nobody signed anything.
Steven Butala:
So I’ll tell you what, you really need to refund the money. And I would get really, really, really… I wouldn’t wait for her to contact you and say, refund my money. I would proactively just give-
Jill DeWit:
That’s a good idea.
Steven Butala:
However they paid, I would just refund it.
Jill DeWit:
That’s a really good idea.
Steven Butala:
I don’t think that’s-
Jill DeWit:
Give them three notices. Look, if I don’t hear from you by X date, [inaudible 00:05:16] by the 15th or whatever you want to say, I like that exactly. I’m going to assume something happened and I’m going to give you your money back. And I wish you all the best.
Steven Butala:
Yeah, there is no contract. She didn’t sign it.
Jill DeWit:
Exactly. She just paid for something.
Steven Butala:
Yeah, man, let me be real clear on this. You got to refund it.
Jill DeWit:
You did the right thing too.
Steven Butala:
I don’t even know if I would do the three things. I would just say… You know what, maybe somebody’s is in the hospital.
Jill DeWit:
This is what I would do. I would say, look, I’m going to give you a certain amount of time. That’s the right thing. I think the right thing to do. If I don’t hear from you, I’m assuming you changed your mind and here’s your money back.
Steven Butala:
Yeah.
Jill DeWit:
And then everybody’s happy.
Steven Butala:
Today’s topic, how to choose a market to send blind offers. This is the meat of the show. So you’re staring at a map of the United States, looking at all that real estate, 150 million pieces of real estate. And you know, in the back of your head, in the front of your head, if you listen to our show a lot that a very predictable percentage, a number of people when they get your offer, they’re going to sign it to send it back.
Jill DeWit:
And you know right here, just kidding.
Steven Butala:
If you’re mailing real vacant land, it’s probably about for every thousand offers, somebody is going to, you’re going to get a deal out of it, ish. Thousand, maybe a little more, maybe a little less, depending on how experienced you are. So where do you send it? Well, it used to be, all the education that we talk about, we say look, there’s an art component to this and sort of an engineering component or a math component. And depending on who you are and how you do things, they’re mixed in together. Well, more and more, there are components going away. You can really look at data, look at who’s buying what, who’s clicking through and looking at things on certain websites where there’s properties posted. And your job is to really take a hard, hard look at what’s possible from a data’s perspective to choose sending out offers.
Steven Butala:
Here’s a kind of a checklist that I go down mentally. Number one, I’ve got eight counties let’s say that I’m looking at in a state, hopefully they’re close to you and you know, a little bit about it. And you can have a little bit of passion about it because that’s what really fuels this. Especially in land, not so much houses for me. Like man, if you’re brand new, I spent my summers up there, went with my family when I was young or some version of that. Number one, so that’s number one. Number two now, okay, great, there’s eight counties up there. What you want to do is really pit those counties and zip codes against each other, to see which one wins from a data standpoint.
Steven Butala:
And here’s some factors. How many people are looking at the property that’s already posted up there by other sellers on the internet? Well that’s great Steve, where do I get that data? That’s for you to figure out. It’s constantly changing. There’s tons of places. You can go to find click through data for existing property out there. You know, realtor.com. Redfin. Redfin allows you to download the property to a certain extent. So now you’ve got theoretically data on eight counties or zip codes. And you look at who’s looking at the property the most, and I can guarantee you that people that are looking at the property the most on the internet are the same people who are buying it. So you need to look at completed sales if you can get it. Of course you can get it. Okay. So good. I’ve got these eight counties. These two look like the most. There’s more completed sales here. There’s more click throughs here. Now I’m getting somewhere. I’m getting warmer.
Steven Butala:
Can I get the data? Can I even get the data on RealQuest, TitlePro or Data Tree? And sometimes the answer is no. And that is an easy button. You can find out really quickly if the data’s available. Next item, I forgot. I lost number count. Doesn’t matter. Next item is the County itself available to help me? Do they have maps? Does it take them a year to record a deed or 10 minutes to record a deed? Or can I even do it online? Some rural ones, it takes 13 seconds. Jill has a mental list of the more urban the County is, they’re usually in tune with electronic recording. Can I do a terms contract if that’s what you’re into? Some States don’t allow that. So this universe of 150 million, there’s 150 million pieces of property, [inaudible 00:09:44] ish in this country.
Steven Butala:
There’s 50 States. There’s about 3,444 counties. And there’s about 26,000 zip codes. Why do I bring these numbers up? Because this is a finite dataset. It looks infinite. You watch these shows on TV, HGTV, and it’s all these variables and all this stuff. It’s not. You’re here because hopefully you’re a data person or you’re partners with a data person. You’re a sales person and partners with the data person. So take a look at this finite dataset and make choices about where to send mail and what you want to get out of it.
Steven Butala:
Look at a typical transaction that you’re after. Right now, we’re buy for 25 or 30, sell for 80 or 90. That’s just the kind of the cycle of the career path that Jill and I have chosen. Not so long ago, it was a buy for a thousand sell for 4,000. And we’ve recently done deals for buy for 50, sell for 250, and we’re doing multimillion dollar deals now too. So those deals, if those deals are too big for your comfort zone, then don’t go to the counties where that’s likely. Go to a County where there’s a lot of for sale property for 40 or 50,000 bucks. You know, you can buy it for 20 or 30 or whatever the numbers are.
Jill DeWit:
That’s a good point because I’ve seen people do that. They try to go to counties that pass all the things that you just talked about, but they’re going for properties that they can afford and it’s a mess in that County. It doesn’t make sense. So you need to go for what is in demand for that area. The price that it’s at. The only thing that… Can I jump in here? This is hard for some.
Steven Butala:
I know. That’s why I wanted to do a show on it.
Jill DeWit:
And I am too. And that’s why I’m happy to talk about it. Some people it’s really hard, but if you just start with something, I like what you said, pick something you’re passionate about. That’s an easy one. And that gives you an idea like, Oh yeah, I know that’s an easy drive for these people. I know people like me, I used to live, still love this area. It’s a dreamy little whatever. And I keep hearing rumors that more people are wanting to live in that area now because of the situation, they don’t have to commute anymore. I’m going to look at that area. So that all makes sense. And I love too, that you touched on, this is a huge thing I see people getting hung up on, is the due diligence part.
Jill DeWit:
They pick this County, they do all this stuff and they don’t bother to check like, oh man, it’s not in NeighborScoop. They don’t realize until the offers are coming back that they can’t find the property. It’s not supported here. Good luck getting the County on the phone, like shucks. And they’re like, I need to move on because now it’s too hard. So that’s a good point too. And my only last point I was going to share was a lot of people go, okay, this is great. We hear you guys. I want to test an area. I think I got it. And where I hear and see them failing is testing with numbers that are too small. You cannot really test an area with 200 offers.
Steven Butala:
That’s absolutely right.
Jill DeWit:
So would you touch on that please.
Steven Butala:
Yeah, you should never. Especially if you’re new at this and I mean never. Send out an offer campaign. That’s less than 1500 units just to test it. Yeah, I don’t know if I’m doing this right. I’m going to send out 200 offers. I really, really don’t recommend that at all. Here’s the problem. There’s always somebody who has a fantastic experience like that and they’ve splattered all over landinvestors.com and everywhere else. And so you think, oh, I mean, we literally, Jill and I literally had a person in our live event who sent out three offers and did a real estate deal and made 80 grand.
Jill DeWit:
She bought like two properties off three letters.
Steven Butala:
So I’m telling you that that’s just like walking into a casino, pulling a slot machine handle and winning the first time and walking out.
Jill DeWit:
Right.
Steven Butala:
That’s the worst thing that can happen because you didn’t develop a system, you just got totally lucky. And then you expect some kind of crazy stuff like that to happen for the rest of your career. And it you’re going to be very disappointed.
Jill DeWit:
Right.
Steven Butala:
Trust me, trust us on this, right. 1500 units is going to get you a deal and you’re going to make some money and then you’re going to want to do it again. And then you want to say, well, if I send out 3000, I can get two deals like that. And then on and on and on, that’s how you build a career in this. And the other thing that I failed to mention is you really, really need to check in a County or a zip code how many properties are listed.
Steven Butala:
If there’s an exorbitant number of properties listed against how many properties are actually in that County or zip code as a percentage, that’s a big concern. If there are more than 1% of the property, if there’s a 10,000, a universe of 10,000 properties in a jurisdiction, let’s say it’s a County or a zip code. Land. And if it’s for houses, then it’s houses like kind property. And let’s say there’s a thousand for sale. That’s 10% of the universe of that area is for sale. Something’s wrong.
Jill DeWit:
Move on.
Steven Butala:
It’s very, very wrong. You want it to be on a hundred. You want it to be not a thousand, a hundred. So if there’s 10,000, you want 1%, and you want it to be cycling through it. This is what House Academy [inaudible 00:15:01]. The whole education process is all about looking at these statistics and saying there’s no real demand, or there’s a huge demand in zip code X against zip code Y. Can’t lose.
Jill DeWit:
Excellent. Happy you could join us today. Every Monday, Wednesday, and Friday, you’ll find this right here on the Land Academy show. Tuesdays and Thursdays, we are on the House Academy Show.
Steven Butala:
Tomorrow the episode on the House Academy Show is an interview with Land Academy, director, Erin. You are not alone in your real estate ambition. Sometimes it’s like teaching a college class. Sometimes it’s like-
Jill DeWit:
Horsing around.
Steven Butala:
laughing with my friends.
Jill DeWit:
Like a conversation. This is more like a class. I hope you took a lot of notes, but it’s important. And you got to set off on the right foot period.
Steven Butala:
Yeah.
Jill DeWit:
We want this all to be positive. That’s why we’re here. The Land Academy Show remains commercial free for you, our little listener. So wherever you’re watching, wherever you are listening, please subscribe and rate us there.
Steven Butala:
We are Steve and Jill. Information and inspiration 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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