Buyers are More Willing Than Ever to Sell (LA 1294)
Buyers are More Willing Than Ever to Sell (LA 1294)
Transcript:
Steven Jack Butala:
Steve and Jill here.
Jill Dewitt:
Hello.
Steven Jack 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, mid-California. We’re not in Southern California right now. If you’re watching, you can tell it’s not our normal background.
Steven Jack Butala:
San Francisco actually.
Jill Dewitt:
Yes. What would you call that? Mid? It’s not Northern.
Steven Jack Butala:
I would call it mid. I was just thinking that-
Jill Dewitt:
Well, technically they say they’re northern-
Steven Jack Butala:
You think it’s northern California, but it’s not.
Jill Dewitt:
Yeah.
Steven Jack Butala:
It’s right in the middle.
Jill Dewitt:
Exactly.
Steven Jack Butala:
Before we get into it… Oh, I’m sorry. Today Jill and I talk about how buyers are more willing than ever to sell. Yeah. That’s, really Steve? That sounds like you’re making that up. No, it’s just, it’s the environment that we’re in, the economic environment is dictating, it’s putting a little flair under the seller’s butt, but at the same time and I have to say I’ve never seen anything like this in my career at the same time, it’s buyers are willing to buy. So, that’s what’s so unique about this. You can always find really willing sellers based on the geography you go, but it seems like it applies to everything right now, for land I’m talking about, not necessarily houses and buyers are pretty willing to buy within a day’s drive of pretty large cities. 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 Dewitt:
Martin asks, “Does anyone have a certain criteria they look for when acquiring higher price properties? For instance, what do you look for in a county when you’re trying to buy higher priced properties with your blind offers? I currently buy myself mostly sub $40,000 properties, but would be nice to move up to 100,000 plus properties. Just not sure what to look for when researching those. Any ideas from someone who actively buys higher priced land?”
Steven Jack Butala:
So, yes. May I?
Jill Dewitt:
No. What am I going to say?
Steven Jack Butala:
If you’ve been through an education, I’m pretty sure Martin’s a member. He might not be, but anyway we all know that pricing, any type of real estate starts with what you’re going to sell it, the price you’re going to sell it for and then you back down from that based on where you think a logical gap is between what you’re going to buy it and what you’re going to sell it. So, if you think you can sell, very easily sell a property for $100,000, that’s a wholesale number, property’s worth let’s say 150, 130 and 100,000 is the number that you want to sell it for. You need to be buying that property for around 40 to 50,000 bucks to make it worth it. So, that’s the answer. So, if you’re having success buying sub $40,000 properties, doubling your money, making 20 and $30,000 on it hopefully, it’s the same exact thing.
You just move it up a notch for the $100,000 property. I will say this, there’s fewer of those properties. The more expensive those properties get, the numbers are fewer and you want to make darn sure that the property at that price range, you have an audience and the audience is going to have to have some money. So, they should be coming out of larger cities. So, this is exactly, what you’re describing is exactly what Jill and I are doing in our current mailers right now is we’re buying. We are moving up. This is one of the reasons I chose this question. We’re moving up this gap.
Jill Dewitt:
May I add?
Steven Jack Butala:
Of course.
Jill Dewitt:
As far as a certain criteria, am I looking for an attribute? Am I looking for now it’s commercial land? Am I looking for agricultural land? No, don’t even worry about it. It’s going to naturally happen as you start just digging a little bit for those higher price properties, like Steven was saying. So, when you go to a new area and you’re looking at things that are selling, so what’s going to happen is you’re going to be looking for things that are selling between 100, 120. It’s going to have some other attribute. It’s going to be closer in, it might be bigger property. It might have a vineyard next to it. It might be zoned where you can grow marijuana on it or something like that. There’s all kinds of things like that will naturally bring up the sales price of these properties and then you back into them like Steven said, but you don’t need to sit there and stare at your data and try to figure out what you need to do differently when you’re pulling the properties. It’s just, it’ll happen.
Steven Jack Butala:
Hey, it all comes down to starting with the sale price and then make… So, I’ll tell you what you don’t want to do. You don’t want to just say, “You know what? I’m going to go to the middle of Montana. I want to buy properties that I think, I know I can sell for 100,000 bucks or I know I can buy for 100 and sell it for 200.”
Here’s an example of three properties that happened with in over the last three years and they were on the market, each of them, for two years. So, that’s an okay business model if you want to turn your money every two years and really just have a lot of patience. So, as an investor, that doesn’t go hand in hand. If you’re going to increase the dollar size of these deals that you’re doing, which I think is a fantastic idea right now, make sure that you have historical data and existing data that supports the fact that you can sell it pretty quickly and not just data, you need to have… What Jill does is she goes in and talks to local people there, specifically real estate agents who are really smart about the market that you’re talking about and-
Jill Dewitt:
And find out what’s moving.
Steven Jack Butala:
Yeah.
Jill Dewitt:
That’s the point.
Steven Jack Butala:
It might be you already found gold at the $40,000 mark, doing that might just be… Jill and I over the years have had a ton of consulting calls with people where they say some version of, “Boy, I killed it at $40,000 rate in,” let’s say Iowa. I’m just picking a state and I moved on to Texas and increased it to a $100,000 and boy, I can’t get a deal done. You know what I say? Go back to Iowa. Go back to Iowa and do twice as many deals if you’ve got it figured out.
Jill Dewitt:
Exactly.
Steven Jack Butala:
You don’t want to mess with-
Jill Dewitt:
Not literally go back to Iowa.
Steven Jack Butala:
Yeah.
Jill Dewitt:
That would be funny.
Steven Jack Butala:
Today’s topic, buyers are more willing to sell than ever. This is the meat of the show.
Jill Dewitt:
This is partially a continuation of what I talked about on my Facebook Live last week, which was awesome. Everybody was so appreciative of our situation and what was going on. So-
Steven Jack Butala:
Tell us what our situation is, Jill-
Jill Dewitt:
Thank you and by the way, I want to say our equipment looks different. Our audio might be different. Things are a lot of different right now. So, we’ll just go with the word different. So, we’re working things out and we apologize if it’s not our usual standard and stuff. You could see I’m on my NFL headset. I’m about to call that last play that happened at the 23 yard line over there, is how I feel.
Steven Jack Butala:
That would be great. You’d be good at that, Jill.
Jill Dewitt:
I would be good at that. All right and they’re down at that 23, first in 10 everyone. So, anyway. Yeah, we got broken into. So, we’re on a trip. We’re out seeing property. We’re half seeing property, half getting the heck out of Dodge. Why not? It’s crazy where we live at the beach and not in a good way.
Steven Jack Butala:
The beach is crazy.
Jill Dewitt:
And it’s the normal crazy I can handle, but the COVID crazy and the weirdness going on, it’s getting a little much. So, we thought let’s go look at some property and then we thought hey and here’s where the trifecta is, our kid’s not going back to school. So, we can just take off. So, we did.
Steven Jack Butala:
And I’m fully aware we’re not the only one going through this.
Jill Dewitt:
This is true. Exactly and so, we take off on the road. Things are going great. Having a good time. Let our guard down a little bit. Big mistake. Boy, did we get our hands slapped. Car got broken into. Window broken, equipment stolen. When I say equipment, I mean three of our laptops. All three. So, here we are on new equipment, just making do and-
Steven Jack Butala:
I’ll tell you, if the person who broke into our car and got that equipment is interested in buying and selling land, they’re all set. Somehow though-
Jill Dewitt:
I’m pretty sure that’s not the case.
Steven Jack Butala:
I don’t think that’s the personality type-
Jill Dewitt:
They got all the data ready to go for our most recent mailer and I wish them well.
Steven Jack Butala:
And everything’s backed up. There’s no… It’s the 21st century. So, everything’s auto backed and we didn’t lose any data.
Jill Dewitt:
It’s funny.
Steven Jack Butala:
It was just, yeah. It was an inconvenience. That’s it and so, I have to reset everything.
Jill Dewitt:
A couple days of phone calls, police reports. Anyway, I don’t want to bore you or I don’t want to complain. So anyway, that’s what’s going on. So in the middle of all this, things don’t change. So, I did my Facebook. I did my Facebook Live from my phone. We got this. We winged it and here we are and one of the things that we talked about, I talked about last week was buyers are more willing than ever to sell and it’s so interesting because my Facebook topic was what’s different now in 2020 versus years ago? What changes are we making? One of things that we’re seeing is it’s more than ever people are… They act more quickly. Our mailers hit. People are more excited to get our mailers. They’re not sitting on them and putting them in a file quite as long as they normally do.
They might sleep on it for one night, but man, they’re reaching out a lot quicker. So, that is so interesting. I’m also getting a way better response and from smart people. It’s not just the people that like, “Oh, wow. I just inherited that. I just need a quick little bit of cash.” It’s really smart people that, “All right. I’m professional, you’re professional. I do want to sell. Let’s talk.” So, I even have to up my game a little bit. I’m not used to dealing with some of these very knowledgeable sellers and let me tell you, boy, are they teach me about the areas. That’s the funniest part too. You learn really quickly when you send out a mailer if you’re priced too high or too low in a certain part of a county because a smart people will come forward and let you know what it’s really worth in that area.
So, it’s funny and old and new mailers. Another thing too, buyers are just more willing. I’ve got a lot of people, it used to happen once, maybe a couple a month. Now it’s getting to be more like a couple of weeks or a couple of week where I have sellers from mailers from 2005, 2007 that are reaching out saying, “Hey, do you still want to buy this?” And it’s really, it’s a bummer on those as some of them are just too small for me that it’s not worth my time. The things that I’m doing now, 15 years later, it’s a little bit different than what I’m buying, but the point of this too is for me, this is a great time. People often say-
Steven Jack Butala:
That’s my point too-
Jill Dewitt:
Shucks, I mean, did I miss the boat? I should’ve joined Land Academy in 2015 when they launched this. That would have been the time and really get going. I’d be all that. I’d be into it. I’d have this much money, but it’s even easier and I don’t know if we have a show about this or not coming up this week about… Do we have a show this week about technical changes and data changes-
Steven Jack Butala:
And pricing and how you see things? Yeah.
Jill Dewitt:
Okay.
Steven Jack Butala:
It’s actually, it’s going to air on Thursday.
Jill Dewitt:
Okay. I’ll save it. So, there’s other changes that we have experienced. So, this whole week is looking back, I think, from pre-Land Academy and launch of Land Academy and now in 2020 and it’s not just COVID times. It’s just 2020. Things are easier, but the good news is and my final point of this whole topic is the bottom line is people need cash right now.
Steven Jack Butala:
That’s right.
Jill Dewitt:
Their stimulus things are not continuing. By the time this airs, we don’t know if it’s going to be extended or not, this extra $600 a week that people are getting. So, that may have been cut off and even before that, people were worried because their jobs had changed anyway and their lives had changed anyway and for good and bad. Bad meaning maybe they didn’t have a job and the kids don’t go to school, but the good news is hey, now I don’t have to live in this town and I don’t have to pay this horrible rent so I don’t have to deal with this commute kind of thing. Now I can make some different decisions.
Steven Jack Butala:
I agree with everything you’re saying, Jill and people do need money, but I’m going to leave you with this out on not only this episode, but probably several in the near future, think about how lucky we really are. I mean, people, their lives, we have friends that are very well off that their income streams or stream, singular, have been cut off and we-
Jill Dewitt:
Yeah, it’s sad.
Steven Jack Butala:
And everyone who’s in this business, we’ve been working from home for the last decade or we’ve been working at this on the side and we see the value of rural land. We have everything we need to do very well and now, on topic here, we have sellers and buyers that are more willing. It’s just a great environment for us to thrive and to really turn the volume up on this.
So, yeah. Somebody broke into our car. So what? Did it stop us from doing shows? Did it stop us from doing the Thursday call? No and it’s just that we responded to that the same way we respond to doing mail. Jill got on the phone with the insurance company. I went to Best Buy, replaced the equipment. Went to Enterprise, replaced the car and two or three hours later we were having dinner, sipping a cocktail laughing about it. It wasn’t funny at the time, but it’s just like this economy. I mean, it’s not funny at the time, but I’ll tell you, you have to be resilient and adapt and overcome. So, that’s really the deal.
Jill Dewitt:
That was perfect.
Steven Jack Butala:
Oh my God, Steve, you sound like my dad again.
Jill Dewitt:
I know. Happy you could join us today. Every day. Monday through Friday, you can find this right here on the Land Academy Show.
Steven Jack Butala:
Tomorrow the episode on the Land Academy Show is called the thin line between insulting a seller and pricing the property to actually buy it. You are not alone in your real estate ambition.
I hope you are enjoying the natural sounds of landscaping in San Francisco in our background here as much as Jill and I are-
Jill Dewitt:
Isn’t that nice? Got to love it-
Steven Jack Butala:
What’s next, Jill? What else can we overcome?
Jill Dewitt:
Oh my gosh. I don’t even want to know.
Steven Jack Butala:
Five years-
Jill Dewitt:
What is the universe going to throw at us next? I’m ready though.
Steven Jack Butala:
On Friday, we’re airing our fifth anniversary show and I’ll tell you, I never thought… Well, we’ll talk about it on Friday.
Jill Dewitt:
The Land Academy Show remains commercial free for you, our loyal listeners. So, wherever you are watching, wherever you’re listening, please subscribe and rate us there.
Steven Jack Butala:
We’re Steve and Jill.
Jill Dewitt:
We’re Steve and Jill.
Steven Jack Butala:
Information.
Jill Dewitt:
And inspiration.
Steven Jack Butala:
To buy undervalued property.
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