Thin Line Between Insulting a Seller and Pricing to Buy (LA 1295)
Thin Line Between Insulting a Seller and Pricing to Buy (LA 1295)
Transcript:
Steve:
Steve and Jill here.
Jill:
Howdy.
Steve:
Welcome to Land Academy Show, entertaining land investment talk. I’m Steven Jack Butala.
Jill:
And I’m Jill DeWit, broadcasting from sunny northern California.
Steve:
Today, Jill and I talk about the line between insulting a seller and actually buying a piece of property. This is a topic that’s very fresh in how we’re buying and selling land, and it’s something that we all deal with. It’s one of the top five-
Jill:
It happens.
Steve:
-or eight questions that we get from new people or really even experienced real estate people, like, “What do you mean you send offers out for 20% of what the property’s actually worth?”
Jill:
Exactly.
Steve:
How do you deal with that? There truly is a line between… There’s a thin line between offering $25 for a piece of property, which I personally think is ridiculous. Some people do it with success.
Jill:
Right.
Steve:
We’ll talk about all that.
Jill:
Thank you.
Steve:
Before we get into it, though, let’s take a question posted by one of our members on the LandAcademy.com online community, it’s free.
Jill:
I would like to add on the LandInvestors.com online community, it’s free.
Steve:
Oh, yes. You’ll get there.
Jill:
It’s okay.
Steve:
You’ll get there both ways.
Jill:
That’s true. Lucas wrote, “Hi, everyone. Lucas here from Greenville, South Carolina. For some reason, I’m extremely nervous and excited at the same time. After reading the book-”
Steve:
Are you crying? Crying on the inside.
Jill:
That’s daily. That’s kind of how I wake up, nervous and excited. You’re not alone, Lucas.
Steve:
Crying on the inside and laughing on the outside. That’s how I wake up.
Jill:
“That’s right. After reading your ebook, listening to the podcasts and watching YouTube interviews, I have become convinced that I want to do this and I could be good at this. I love data.
Steve:
Excellent.
Jill:
“I’m part of a manufacturing engineering group, and my colleagues call me the data guy because I so enjoy statistics and deep diving into the metrics.” This is all really good.
Steve:
Excellent.
Jill:
“And I love land. This is good. I have a dream of starting a homestead with my wife and children someday, so for the last several years, I’ve been scouring GIS maps and Google Earth, trying to find a hidden gem for our homestead. I have long believed that there are incredible deals out there, just waiting to be found, and I couldn’t process the data in a way that was efficient. After spending hours examining attributes of parcels in numerous states, I just couldn’t figure out how to get the truly amazing deal. When I saw this community, it was like a lightning bolt turning on. It hadn’t even occurred to me that this could be a potential business. I have been focused on upstate South Carolina, western North Carolina, upstate New York and all of Vermont, my home state.
Steve:
Excellent. Vermont’s a great choice.
Jill:
“Someday, I want to leave properties for my children, and I want them to have business savvy. I feel like I have a knack for this stuff. I just need some direction. My biggest challenge will be managing this endeavor with the time constraints of my full-time job and my life as a parent. I’m so determined, though. If I can make some success with my initial mailer and my first purchase, I know there’ll be enough momentum to really change my career. I’m looking forward to meeting some of you and collaborating and sharing ideas. Thank you, Steve and Jill.” Awww, that’s so cool.
Steve:
I’m going to turn this over to you right now, just the initial part of it, anyway, because I know that you talked to people constantly in the exact same boat.
Jill:
There’s no question. I’m looking to see. He’s just kind of sharing his experiences, right?
Steve:
Mm-hmm (affirmative).
Jill:
Am I missing something?
Steve:
I think he joined.
Jill:
I just read the beautiful story Lucas wrote, and I’m like, “Am I missing anything?”
Steve:
What’s your advice for him?
Jill:
Do it. He just has a good plan. Lucas, you’re here for the right reasons. You’ve done, you obviously have done some research here. You know how data-heavy we are. You’ve been digging and learning about properties and what’s out there and doing research on your own, going into this. Perfect, so it sounds like this is the missing piece. I’ve found these areas. I’m looking up properties. I know what this is about. I know what that’s about. The missing piece, it sounds like, which is, how do I buy them cheaper? How do I buy them, number one.
I was thinking about this, actually, this morning when I was getting ready. Some people, they may have a great area. They know what they want to spend. They don’t even just know the simple fact of how to get in touch with someone to make an offer to them. They don’t even know to, because you can’t. Buying rural, vacant land, you can’t walk up and put a sticky note on their door. You know what I mean? Some people don’t even know how to reach these sellers. How would I get their address? They don’t even know where to go to the county, how to get the information and do that. That’s a big thing.
Then even to take it a step further, great. Now I know how to go to the county and get their information. How do I do it in a big way, and how do I do it at the price that I want to spend? It sounds like we just put the missing pieces together for Lucas and for a lot of people in this situation. I love it. This is so good. I know a lot of people that just kind of accidentally fall into this. It sounds like you, Lucas, are like, “I just wanted to find this property for my family.” Then, “Oh, by the way, wait a minute. While I’m doing this, I could make some money off it. Why would I not? I’d be silly not to.” It’s so great, because I know many buyers that we’ve had that have bought properties, multiple properties in an area because they wanted to own them and then they would pick the one they want to eventually live on, build on, and maintain, and then sell the other ones for profit. Even just that little model is great.
Steve:
Lucas, you sound like me. I have a natural interest in land itself, and all it represents and its role throughout history. Maybe it’s unhealthy, quite honestly, to a point where it’s unhealthy. Just ask Jill.
Jill:
That’s just Steven. Steven just takes it to an unhealthy level. Let’s just call a spade a spade. It’s okay.
Steve:
I also love data, and I always have, statistics and stuff. I’m a former accountant, and all of that, but I’ll tell you. Here’s my advice to you, and obviously, anybody else. What I was missing for most of my career was Jill or somebody like Jill. I’m not interested in talking on the phone. I’m good at it. I can do it. I can pick up the phone and put on an act, and buy and sell. I did it very successfully without Jill. Then I met her, and we joined forces professionally, and it was almost overnight times four. My advice to you is, and I don’t think you have to do it right immediately, but we have a very, very robust, diverse community of people that are really interested in one or the other. They’re interested. They’re born salespeople like Jill and they love to talk on the phone and love to answer the phone and convince people to buy or sell. That’s just who she is, and make them feel good about it while it’s happening.
Then there’s, on our side, there’s data people all over the place. Later this week, we’re recording a show all about not fighting yourself. It’ll air, I think it might even be tomorrow. We’ll get more on that topic later, but I think we lose people. I know we do. I know we lose people in this industry because they’re on one side or the other. I don’t want that to happen. I want you to join forces in a partnership like Jill and I have, to be successful. That’s my advice to that. You’re way further ahead than a lot of people that I’ve seen that want to be in this business. Today’s- sorry. More?
Jill:
No, good.
Steve:
Today’s topic, the thin line between insulting a seller and pricing to buy. This is why you’re listening or it’s the meat of the show.
Jill:
Or you’re not alone in your real estate [inaudible 00:08:00]. We’ll just pick one of our several sayings here, because here’s what’s happening. We’re a little out of sorts because, a) we accidentally had to purchase new equipment and b)we’re sitting here in these chairs and trying to figure out, I don’t know where my arm goes because I’m not in my-
Steve:
Really? Oh, Jill, here.
Jill:
You’re so sweet. I’m like, “I don’t want where my arm goes. I don’t know what to do here. I’m trying to-”
Steve:
Tell me when it’s better.
Jill:
No, no. You’re fine. It’s okay.
Steve:
Is that better?
Jill:
Yeah, but you don’t need to be further away. I like you, and you smell good.
Steve:
That’s this minute only. If you’re in a relationship, you know. That could all change in just a few tiny seconds.
Jill:
Yeah, then it’s going to be, this is the line. See this pillow? Don’t cross it. Just kidding.
Steve:
Loved you yesterday. You’re as annoying as hell today.
Jill:
This is clearly the beginning of our trick. We’re not sick of each other yet. That’s so funny. By the time you’re listening, fast forward one week. See if we’re still smiling.
Steve:
Yeah, see if there’s a show at all.
Jill:
Yeah, that’s right.
Steve:
A long time ago, when Jill and I were researching, “Should we do a podcast? I don’t know if we can do it.”
Jill:
Oh, my God.
Steve:
We were listening to couples podcasts. I always knew we could do the real estate part.
Jill:
It’s true.
Steve:
But can two people in a long-term relationship show up at the same time and do it? There’s a long, long history of people-
Jill:
Maintain.
Steve:
-who have done shows together that are now divorced.
Jill:
Yep.
Steve:
I’m like, “Let’s do some research,” and sure enough, if you go back and look at couples anything in podcasting, they all have about six shows.
Jill:
Yeah, it’s funny.
Steve:
And the last one is tragic. The last one’s like, “I don’t even think I ever want to talk to you again.”
Jill:
I don’t think they’re necessarily divorced, but I’ve seen shows come and go. That’s so true. I’m like, “What happened to all? That one fell off in 2018. They made it through ten episodes.”
Steve:
Some of them were good.
Jill:
Some of my favorite are the ones, there’s this guy in Orange County, a couple. I was listening to them when we were first starting our show, they were doing the same thing. I thought, “This is cute. Let’s see how we all do together.” They still do it. It’s not consistent. Excuse me. The show is still titled the same. It still continues. It’s not they. It’s him, and this is not consistent. The cute picture is of the couple on a beach, and they’re jumping in the air, if you know who they are.
Steve:
I know who you’re talking about. That show’s still around?
Jill:
He still does the show occasionally, but she’s long-gone, and I’ve seen her. They’re still married. They still talk. Everything is cool, but she’s like, “Yeah, not for me.” It’s cute because she, three years ago, she started to go off on a different tangent, like, “I kind of want a very spiritual thing.”
Steve:
Oh, my God.
Jill:
She was even seriously starting her own show. I was like, “This is cool. Good for you.” That lasted, I don’t know, a few months. Then that didn’t take off.
Steve:
Yeah, here’s the whole show. The spirituality of real estate investing.
Jill:
Could you imagine? I should do that.
Steve:
That’s the whole show. That’s a wrap on the entire series.
Jill:
That is the show. That is it.
Steve:
What would you talk about?
Jill:
I could talk about stuff.
Steve:
Go ahead.
Jill:
Why people make the decisions that they do, how to quickly talk to sellers and analyze if they’re real sellers or they’re just wasting your time, how to quickly get to the bottom of what is their bottom price.
Steve:
I would call that whole podcast, not just the episode, Jill’s Way to Make Money in Real Estate.
Jill:
Okay. We could all it that, too.
Steve:
I don’t think there’s anything spiritual about that. I’m not criticizing. I’m just saying.
Jill:
How about living?
Steve:
There’s no spirituality in this.
Jill:
Living and loving the land. Could you imagine?
Steve:
Love yourself.
Jill:
Wait, wait.
Steve:
Here’s the show title.
Jill:
Here’s the photo. The photo for the podcast would be me laying in a field, rolling around the land, just loving it, the Earth.
Steve:
Exactly. All the data people are throwing up in their mouth right now, including me.
Jill:
Exactly. Love the Earth. Give back. All right. Anyway, back to the show. The thin line between insulting sellers and pricing to buy. We never set out to do that, but we’ll call a spade a spade. We are sending seriously low offers for property. Now, it’s low based on what the current things are selling for today, but it’s not necessarily low for that person, so let me point out something. I’m often buying properties from people who have owned things for 30 years. Their parents bought it. They passed on. They got it. I go digging and looking. I’m like, “Wow, they paid $18,000 for it, and I’m offering them $30,000, so they are making some money here.” The whole point is because it’s worth $80,000 now. That’s the realistic thing. That’s part of the thin line here. Don’t go into this thinking you are insulting them.
Think of this as, it’s just a sincere, legitimate cash offer. That’s it. I find it funny, too. When people call back, some people know. Some people don’t know what’s selling right now. Usually, honestly, usually they don’t know because that’s not what they’re looking on. Your offer didn’t come because they have it on the MLS. You’re sending out offers because you want to buy property. Your fingers are crossed that it’s not the MLS. 99% of the time, it’s not. They just get your offer and go, “Wow. Maybe I do want to sell this. This guy’s willing to pay me X?” They have no idea. Whether, do you mind if I just keep going?
Steve:
No. I want you to. It’s a nice break for me.
Jill:
Whether you’re insulting them or not, just be prepared. You might find someone going, “This is funny,” and you might find someone going, “Okay, this is good.” Just be ready for it either way. You’re not a bad person.
Steve:
This is Jill’s spiritual real estate investing.
Jill:
Yes, it is.
Steve:
You are not a bad person.
Jill:
You’re not a bad person.
Steve:
You’re a good person.
Jill:
I’ve had people tell me this on the phone. They’ve actually said it to me. What’s so funny?
Steve:
The whole spirituality thing just cracks me up.
Jill:
It’s in my notes. You’re not a bad person, and you can convey that.
Steve:
Oh, my God. It says that right in there.
Jill:
It says that. It’s true, because you know why? I’ve had people say that. They called up and they’re like, “You clearly missed a zero or three.” I’m talking to them. I’m like, “Tell me what’s going on. What did I miss?” They’re like, “Because of this, this, this and this, it’s worth X.” I’m like, “Okay, I hear you. Let’s get serious now. I’m not going to pay X. Let’s talk about more what I’m willing to pay and what you’re willing to accept.” When you talk to them, too, like normal people, it’ll calm the whole thing down.
Steve:
That’s right.
Jill:
I really had a lady the other day who is in commercial real estate tell me, “Look, I can tell you’re not a bad person. Because you’re not a bad person, I’m going to have this conversation with you,” and we continued on. In the end, we weren’t on the same page financially, but we left as friends. “I wish you well.” “I wish you well.” I’m like, “If anything changes, let me know.” She’s like, “You know what? If anything changes, I will.” It was great. We had a good conversation. That’s what I’m trying to, I wanted to get through here. You’re just trying to get the facts out. My last note is, “Just the facts, ma’am.” You just want to get out there, I’m not trying to insult you. I’m giving a good price. You tell them who you are lightly.
You don’t need to go into great detail about your business model. “I buy for this, and I mark it up. I double my money, and I try to get this.” They don’t want to hear all that and you don’t want to convey all that. Just, “This is my business, and this is the price that works for me, and if it works for you, too, great. If it doesn’t, I understand that. The price that I am coming out of the gate with is the price that I offered.” They don’t like that price, I will give them one shot, traditionally one shot to counter and say what their bottom number is. I offer $28,000 and their bottom might be $30,000. I might say, “I can work with that.” If I offer them $28,000 and their bottom’s $80,000, that’s not going to work for me. That means, too, they don’t really want to sell. They’re just trying to maximize something, because $80,000 to them is, “Yippee ki yay. Now I will sell.”
That’s the conversation you’re trying to figure out, too, quickly. You’re not here to provide them a lottery ticket. You’re here to solve a problem. If they’re lottery ticket people, you wish them well, and I hope you do win the lottery someday, and that’s great, but if you have a problem and a pinch and you’re looking to cash out right now and replace your car or get some income and food on the table for the next couple months, that’s what I’m here for. I’m going to turn your property into cash.
Steve:
Let’s compare. Here’s what’s really going on, and I’ve been doing this since the ’90s, early ’90s, almost 16,000 deals. Let’s take a look at the three types of real estate that you can potentially buy for regular people like us. Commercial real estate, houses, SFRs and land. If you take five commercial buildings that are similar, let’s say they’re private buildings, and five separate owners and you say, “How much is your property worth?” They’re going to go back in their corner with a paper and a pencil and a calculator, and they’re going to come up with, there are several ways to approach valuing an asset like that. They’re going to,
I’ve tried this, actually, very similar prices. They’re in the business. They look at capitalization rates, replacement value, all kinds of stuff. They’re going to come up plus or minus probably 10% of each other. If you ask five people who have the same type of house, same square footage, in a subdivision, what their house is worth, they’re going to do the same thing. They’re going to go back in the corner, go on the same we do, Realtor.com, Zillow. They’re going to say, “$180,000, $190,000.” All three of them are going to say the same thing. You do it with land, they have no idea.
Jill:
It’s true.
Steve:
They have no idea what their property’s worth, and-
Jill:
Most of the time, yeah.
Steve:
Out of five people, two of them are going to say, “I hate that land. I got it from my mom.”
Jill:
I’ve never seen it.
Steve:
“I’ve never seen it. I’m never going to see it. Yeah, I want to sell it. Really? It’s worth $40,000 and you’re willing to offer $20,000? How about $25,000, because I just, thank you for calling. Thank you. I’d love to sell my property.” Should you offer them $500? No. That’s what this show’s about. That’s insulting, and that’s ridiculous. I’m telling you, as a very experienced- I sound like your father again.
Jill:
That’s funny. I didn’t know what the show was about.
Steve:
As an experienced, I’m telling you with all, learn from my experience.
Jill:
For your take.
Steve:
A material number of land owners can’t wait to get a check from you, even if it’s half of what it’s worth. That’s what this business model is all about. The talent lies in what Jill has in conveying that and making the people who know what their land is worth not live it, just calming them down and getting them out of your life. You hate, you either want to buy it. It’s just the facts. You either want to buy it or you don’t, and if you don’t, I get it. I have 15 more phone calls to do right now.
Jill:
I’d say to tie our two visions of the show together, I would say this. No matter what, your goal is not to insult someone. When you’re sending out offers and you’re pricing offers, please pick a realistic bottom number. I’ve seen people go, “Well, I’m going to come out at $83.00 for this property.” Don’t do that. Please. Like Steven just said-
Steve:
That’s not cool.
Jill:
Pick a realistic bottom number, and if it’s really too small of a property that doesn’t make sense anyway, take it out. Don’t be that guy. Happy you could join us today. Every day, Monday through Friday, you can find us right here on the Land Academy Show.
Steve:
Tomorrow, the episode on the Land Academy Show is called Success Lies Within Your Natural State. You are not alone in your real estate ambition.
Jill:
You know what’s funny? First I thought state as in California.
Steve:
Like Maine?
Jill:
Yeah, and you mean state as in your state of being. That sounds very spiritual. That should be on the Land Spiritual Show that we’re going to start.
Steve:
Yeah, let’s do that. No, tune in tomorrow for the Spirituality of Jill’s Inspiration.
Jill:
Yes. This’ll be very good tomorrow. We’ll do Spiritual Wednesday.
Steve:
Do a snow angel on your land.
Jill:
Oh, my gosh. The Land Academy Show remains commercial-free for you, our loyal listeners, so wherever you’re watching, wherever you’re listening, please subscribe and read us there. We’re Steve and Jill.
Steve:
We’re Steve and Jill, information-
Jill:
And inspiration-
Steve:
To buy undervalued property.
—————————————-
If you have any questions or comments, please feel free to email me directly at steven@BuWit.com.
The BuWit Family of Companies include:
I would like to think it’s entertaining and informative and in the end profitable.
And finally, don’t forget to subscribe to the show on Apple Podcasts.
