These are Tough Times. Here’s Our Response (LA 1281)
These are Tough Times. Here’s Our Response (LA 1281)
Transcript:
Jack Butala:
Steve and Jill here.
Jill DeWit:
Hello.
Jack Butala:
Welcome to the Land Academy Show, entertaining land investment talk. I’m Steven Jack Butala.
Jill DeWit:
And I’m Jill Dewitt, broadcasting from sunny Southern California.
Jack Butala:
Today, Jill and I talk about how these are tough times and here’s our response about what to do. As promised yesterday, Jill and I are going to share a little anecdote in the beginning about how we’ve handled this kind of thing in the past and, actually, how our families have handled it in the past to very positive outcome.
Jill DeWit:
Ready?
Jack Butala:
Before we get into it, let’s take a question-
Jill DeWit:
Oh, I thought you meant the beginning right now.
Jack Butala:
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:
I got confused. I thought you meant the beginning, beginning, not the beginning, beginning.
Jack Butala:
If you’re confused on this side of the camera, imagine with the listeners and watchers are going through.
Jill DeWit:
I can imagine. Jessica wrote, “Hi, I’m looking at a new county where the days on market are okay-ish. They average out to about 103 and there are no low acre property listings on the land sites. The smallest I can find for sale is 30 acres, but on Zillow, there are many listings in the low acres, like, 17 of them between 2.1 acres and 11 and a half acres, almost all with long days on markets in the hundreds plus. So I guess my question…” She wrote that, I guess, she’s looking for a response.
Jack Butala:
Yeah. She’s, “So, what do I do?” So to me, this is a data question.
Jill DeWit:
Do I move on or do I do it?
Jack Butala:
Yeah. This is a data question and here’s the thing. This is actually somewhat of the meat of the show here, from a real estate standpoint. The land sites like LandWatch, Land and Farm, land.com, I guess CoStar owns a lot of these now, their customer is a guy with the cowboy hat who really is into that lifestyle. And it’s typically not on those land sites, the guy who builds houses or apartments, not a developer or commercial real estate person. And it’s generally not a person who just… it’s generally not our customer. People who list on those sites are our colleagues.
Jack Butala:
Now you take a place like Zillow. Zillow’s got an IDX feed from all the MLSs, or most of them. And they also allow people to just post property. And so, Zillow is a true high-bred or a true, let’s call it a mishmash slash, I don’t know… It’s just real. It’s raw. So, you can get some great data out of there. The cowboy hat people generally don’t want to horse around with a quarter acre property.
Jack Butala:
So, Jessica, this is a fantastic diamond-in-the-rough type question, because I love that you’re going out and trying to figure out what the days on market are anyway, just to see whether or not you should send mail there. You’re hugely ahead of the curve for most investors just by looking at that.
Jack Butala:
But I think the smaller properties are real important because if you see a super, super, super, super cheap, small Anchorage property, that’s kind of a red flag for me. If you see properties all over the county that you’re looking at listed for 3, 4 or $500, it really devalues the larger acreage property in my opinion, most of the time.
Jack Butala:
So here’s my answer. Use Zillow, as much as you can. Crosscheck it against the other sites like you’re doing, but also throw in realtor.com and redfin.com, which are MLS real estate agent listed properties only. And when you take a look at all that data, line it up in a spreadsheet, don’t spend a ton of time on this, but just generally test it for reason, you’re going to get the real picture. And then, if you’ve got a DOM for raw land at about 100 days, you’re good.
Jill DeWit:
At a hundred?
Jack Butala:
Yeah.
Jill DeWit:
But way long. You don’t want 300.
Jack Butala:
Yeah, 100’s the top. 100’s the top.
Jill DeWit:
I don’t even like 100, I mean, I got to say.
Jack Butala:
100 is tough too.
Jill DeWit:
When I’m looking at stuff, I don’t even want 100.
Jack Butala:
For land, it’s real tough, Jill.
Jill DeWit:
I know.
Jack Butala:
For houses, I get it.
Jill DeWit:
Right. But then because I’m looking at both too. I want houses moving and land healthy. That’s what I want.
Jack Butala:
And then to add to it, what you really want to look at, since you’re bright enough to understand this, all of it. You want to look at how many properties are for sale. So if there’s a ton of properties for sale, that’s another red flag. Great question.
Jill DeWit:
Cool.
Jack Butala:
Today’s topic. These are tough times. Here’s our response about how to handle it. This is the meat of the show.
Jack Butala:
This morning, Jill and I are having coffee in our pajamas and it’s Thursday, so we record all these shows. So it’s a big… Thursday’s a long workday for us. So we spend some time early in the day planning it out so that we can, with hope, pull it off.
Jack Butala:
And so we were writing some topics for today and we were talking about what’s going on in the world. And I said that I started talking about Detroit and I said, it’s ingrained in my soul. So I was born in the mid-sixties. It’s ingrained in my soul. my extended family on both sides all were car company people. They both came from different places in the country. And immediately before that, different places in the world as immigrants to work for the car companies, and they all wanted to be in Detroit because Detroit, back in the early part of the 20th century, was an amazing Mecca for progress and business and very, very prosperous.
Jack Butala:
And then in the sixties happened the ’68 riots, and then the seventies happened and it permanently went away, and I was a very young child watching this. And the effect on me that it had consciously and subconsciously is that when we’re in tough times like this, it doesn’t recover. To which Jill said, what’s your story?
Jill DeWit:
Wait, about my family? You didn’t finish what happened. Did they stay?
Jack Butala:
They never recovered. They never recovered.
Jill DeWit:
But could you take it a step further?
Jack Butala:
Sure. I’ll finish it then. I know what you mean.
Jill DeWit:
Right. Yeah.
Jack Butala:
It never recovered. To this day, it hasn’t recovered and never well.
Jill DeWit:
And what is your family? How did my family and what did they do?
Jack Butala:
My family did nothing. They did nothing. They all could have left. They could have very easily said, “You know, this isn’t working any longer.” There’s a million things that could have done versus what they did, which is just stay.
Jill DeWit:
Mm-hmm (affirmative). So here’s my story, what we were talking about. It started because I was talking about our neighbors and [inaudible 00:06:47] what else were we talking about. Why I never worry about us? This really goes, even, goes back to that. Why do I not worry about us? He asked me in the kitchen. He’s like, “Did you worry back when we were starting Land Academy? That it would… What if it didn’t work out?” I’m like, “No, I never did.” And it wasn’t about us. It wasn’t, I shouldn’t say, it wasn’t so much about Land Academy. It was more about us, because I know that we have proven it. I said, and we’ve looked at other business models, completely different business models. And I know that if we put our heads down and went all in, we would be successful. It’s us, not necessarily a what-it-is kind of thing. We just know how to overcome and how to push through things.
Jill DeWit:
And I thought, okay, where did this come from? I’m like, well, I kind of watched it from my dad. I watched my dad. He left. I mean, I wasn’t born yet, obviously, but he left, 18, 19 years old, left Grand Rapids, Michigan, moved to California, never went back. He knew that there was more than what he could get out of Grand Rapids. My mom… It was interesting too, also at 18, left Tulsa, Oklahoma, came to California, never moved back, knew she was going to dig in and make a life here. So what happened? So my dad became a firefighter for awhile. He was an insurance guy for a while. And then he really found out he loved flying. So he did that, what he ended up taking that one to the end.
Jill DeWit:
And then there were other careers I’d actually consider during that too. And he had the drive and the determination and whatever he put his mind to… Once he found the passion, he did it. So for us, we found the passion.
Jill DeWit:
And so, for me, this is about, I know it’s tough times. This is what we did, whatever it is, have that passion and you will get through it. And I’m watching our members do that. I’m watching a lot of people and it happened before this. We have story, after story, after story of members over the last five years. This is year five this month, for us, by the way. Yay. But have said, “Uh-oh, I lost my job.” And then they went all in on Land Academy. And then, when the opportunity came back, as they’re doing Land Academy, putting food on the table and figuring this all out, they’ve had opportunities to go back and either go back to their former employment, the layoff was over, or they found another job and they kind of went, “I don’t want to go back now. Now I’ve figured it out.”
Jill DeWit:
So that’s the point I’m trying to make here. Does that tie into your story?
Jack Butala:
Yeah. Whatever comes up in front of your face, that you think is an obstacle you can overcome.
Jill DeWit:
Right.
Jack Butala:
You can adapt and overcome. And it might take years. It might take an incredible amount of effort. It might take you having to move into some type of… sell your house and move into an apartment building for a while with your family and kind of eat some crow with your tail between your legs. But if you have the right attitude, you’ll get through it and come back out the other side better than when you started. And it takes a lot of soul-searching and a lot of moxie to get through stuff like that. Jill and I have both have a lot of experience separately and collectively now, adjusting to these markets with a lot of success. It wasn’t successful in the beginning. Jill and I had to restart everything twice in our careers and both times it worked.
Jill DeWit:
It’s true. It makes me think of like, we moved into this townhouse we paid full cash. We were going to flip it but we ended up really liking it. And then, at the time, it’s like, we’re regrouping anyway. And it was small and it was fine. You know what? I grew up in a house that was 1100 square feet. My parents rented it for about 18 years. Actually, excuse me, 13 years. It was $600 a month, here in Orange County, California. And we didn’t think twice about it. That was their way of regrouping and building and getting money going, figuring stuff out until they could then buy a house. And then it just, gosh, it went up from there. They did it right. There’s nothing wrong with that, too. I’m sure there’s a lot of people right now that you’re in tough times and guess what? Maybe you have to regroup.
Jill DeWit:
Maybe you do need to move. Maybe you’re going to have to rent something and cut your expenses way down while you work on something, whether it’s this or something else and get back on track. And there’s nothing wrong with that. And I argue, I know a lot of people, cause I know I have a lot of friends that are afraid to do that to the kids. “Oh, we can’t move the kids. We can’t leave the school.”
Jack Butala:
Yes, there’s always something like that.
Jill DeWit:
“We can’t do this because of the kids, the kids, the kids,” or whatever. I’m like, you know what? I would argue that teaching your kids like my parents taught me. To do what it takes.
Jack Butala:
Well, my parents didn’t. My parents did not.
Jill DeWit:
Yeah, but you knew it because you did it with us. You knew how to do it.
Jack Butala:
I mean, I left Detroit as fast as I could.
Jill DeWit:
Yeah. And teaching your kids that you need to make sacrifices sometimes to get ahead is good. Like, this is what I’ve started to say earlier. We were talking about our neighbors. We have some neighbors that, through their whole high school years, these kids lived a couple of years in San Francisco, then they lived five years in Dallas, and now they moved here, and we’re talking move these kids like at the end of their senior year of high school. The daughter had finish high school here, but I’m like, what a great example, because everywhere they’ve gone, it’s gotten better and better financially for their family. They take it. It’s all been moves up and they’re teaching these kids, you just do what you have to, and these kids are learning to make new friends, and it’s all been positive.
Jack Butala:
So we’re in tough times.
Jill DeWit:
Mm-hmm (affirmative).
Jack Butala:
You absolutely can get over it. I tend to look at everything from a data factual standpoint and I’ve recently drawn… I did this several times in my life. You’d take a piece of paper. You draw a line down the center and you figure out what business model can work best for you based on what you enjoy, based on what you’re good at or, in the worst of times, which is maybe right now for you, what you can put up with and what you can’t put up with.
Jill DeWit:
Right.
Jack Butala:
And I’ll tell you, the whole world is at home on the internet trying to figure this out.
Jill DeWit:
Right.
Jack Butala:
But we’ve been on the internet doing this stuff since there was the internet. So there’s a lot of positive things, and a lot of things that we’ve built in over the other recessions that Jill and I have been through collectively and individually, that really worked for this business model. And we’re lucky.
Jill DeWit:
Yeah.
Jack Butala:
And we do have some companies that are not going well at all. We’re fortunate, very, very fortunate to have other ones that are doing okay.
Jill DeWit:
Exactly.
Jack Butala:
Like, [inaudible 00:13:35]. And there’s nothing better than buying and selling land.
Jill DeWit:
That’s true.
Jack Butala:
So we’ve, we’ve quadrupled, maybe quintupled that since this started.
Jill DeWit:
It’s true.
Jack Butala:
We’re gearing up to do it even higher.
Jill DeWit:
Exactly.
Jack Butala:
So the short way of saying it, you just got to adapt and overcome and it’s going to suck.
Jill DeWit:
Happy you could join us today. You can find us Monday through Friday, right here on the Land Academy Show.
Jack Butala:
Tomorrow, the episode on the Land Academy Show is called ‘How to Use Free Data to Price your Mailer’. You are not alone in your real estate ambition.
Jill DeWit:
Free?
Jack Butala:
It’s free.
Jill DeWit:
Free? Refunds? Sorry. The Land Academy Show remains commercial-free for you, our loyal listener. So wherever you’re watching, wherever you are listening, please subscribe and rate us there. We are Steve and Jill.
Jack Butala:
Information.
Jill DeWit:
And inspiration.
Jack Butala:
To buy undervalued property.
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