Quick Land Sale vs. Retail Price (LA 1300)
Quick Land Sale vs. Retail Price (LA 1300)
Transcript:
Steve:
Steve and Jill here.
Jill:
Hello.
Steve:
Welcome to the Land Academy Show.
Jill:
Oops.
Steve:
Entertaining land investment talk. I’m Steven Jack Butala.
Jill:
And I’m Jill DeWit, broadcasting from sunny Southern California.
Steve:
Today, Jill and I talk about a quick land sale versus retail price.
Jill:
Right.
Steve:
You want to explain that title? Because it’s kind of your title.
Jill:
Oh, is it? Okay. It’s kind of like, think about the kind of person you want to be. A quick land sale is for me, just how we operate. I used to say I’m a wholesaler, but that even gets confused. I don’t want people to … People have negative thoughts sometimes-
Steve:
Yeah, it became a negative term.
Jill:
It did, and it’s so silly because I think people see a wholesaler as someone who doesn’t acquire property, all they do is assign a-
Steve:
Get in the way.
Jill:
… property. Exactly. Assign it versus yeah, virtually get in the way. I am with you. And the way we do it, which is still wholesaling. People don’t, I don’t know why it got all garbled. We buy the property. I will seek out the property. I will buy the property. I will pay the full price for the property. We own it. We close escrow, it’s in our name. Now I’m going to turn around, mark it up and sell it. So I can choose to quickly double my money and get out or I can, Hm, I can mark it up and some people do this, they get a little greedy and they think about retail. Why would I sell a property, Jill, that I paid $20,000 for? Why would I sell it for $45,000 tomorrow when I can sit and wait and get seventy for it. Because that’s really what it’s worth. And my question is, why wouldn’t you?
I mean, do you really want to sit and babysit the property and talk to all the people who want to go drive on it and roll around on it and camp on it and love on it? Have a virtual thing of what their tiny home’s going to look like on it and see their family running through the field on it. Dream it up. And waste all that time. I’m kind of getting into the show, but that’s describing it and we’ll talk more.
Steve:
The undertone or between the lines here is, the ethics of what we do. That’s what I want to get into.
Jill:
Oh, really?
Steve:
Yeah, because I haven’t heard it recently, but I’ve heard people in the past, give me a hard time about what we do for a living. We haven’t brought this up.
Jill:
I haven’t heard this in a while. Okay, good we’ll talk about that.
Steve:
We haven’t brought this up in a long time, but I think it’s worth talking about.
Jill:
I love it.
Steve:
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:
Okay. Gina wrote, “Hello. My name is Gina. I’ve been doing land investing for a few years now and I guess I’m here to try and see if I can improve my workflow. I send out about 2000 letters a month, but I’d like to make that close to 5000.” Thank you, Kevin. One of our moderators. Yep.
Steve:
Thank you, Kevin, by the way from me.
Jill:
Yeah. “Any tips, tools tricks you use to scale? I currently work a full time job and simply don’t have the time to sort through all the sites and piece together that many records. 2000 sites would be my max without going crazy. Any help from experienced members, such as yourself, would be much appreciated.” Cool. So I’m wondering what sites she’s going through to piece together records. I’m thinking if she’s a member, you’re not piecing anything together, you’re just-
Steve:
She’s a member.
Jill:
Okay. So you should be using Real Quest Pro, having an idea before you go into there to download the data, you’ve spent a lot of time picking the areas, picking the County and getting it all from there. You’re holding back. Go.
Steve:
In the interest of education, I’m going to be very plain speaking here. I don’t see the difference between processing 2000 or 5000 at all. In fact, I don’t see the difference between processing 2000 records and 20,000. It’s the exact same process. I really hope you’re not individually pricing. I created this whole system back in the nineties, because it’s a very, very efficient and effective way to get thousands and thousands of thousands of letters out at a time. And if it took me, let’s just for sake of theory, if it took two hours to do 2000 letters and it took five hours to do 5,000 than it would take 50 hours to do 50,000 letters and that’s just not how this works. So my question, or I mean my comment here, Gina, is that, I’m happy to help you actually.
Jill:
We are.
Steve:
There’s something disconnected. There’s some, it’s not a one, one straight line ratio of work to letters. In a very, very distant past, this topic has come up years ago, actually. And it was the same comment I just had now. You really need to make this efficient for yourself.
Jill:
Well, I think maybe Gina doesn’t even, hasn’t even thought that way. Such as, Oh, wait a minute. Instead of just doing 2000 at a time, I should be doing, if I want to do… Here’s my initial thoughts. Instead of doing two, you want to do 2000 a month, right? Or, 5000 a month now. You want to jump to that level and you’re busy. Why would you not spend one weekend, because you probably do it already on your 2000 unit, spend the same weekend, download, get ready for 20,000, like you just said, and then do 5000 a month and you’ve got the next four months mapped out.
Steve:
Maybe, it’s just occurred to me, maybe it’s not the getting the mail out that’s the tough deal. Maybe it’s answering the phone and stuff. Because that is a lot. That’s a bunch of time. We did a 20,000 unit mailer once and Joe went and hired an additional person. So if that’s the case, yeah, that’s real.
Jill:
Well. Okay. So what do you do if you want to do that much? Okay. So A, if you’re not using PATLive, you have somebody like PATLive or something going on to answer your phone. Make your life easier. You’ve gotten organized at this point. You’ve been doing this for what a year now? So you should have a good system. Okay. If you don’t have a good system, you need to quickly get yourself a good system, so you have a whole process.
Steve:
Yes.
Jill:
You could easily outsource some of the due diligence if you want to. You could have before… Here’s what I would recommend. The call comes in from PATLive. The main goal is getting that signed purchase agreement. Once you have that signed purchase agreement, hopefully the PATLive person is saying, “Hey, just send it in, sign it, send it in.” However you want to do it. You could have, right in between there, have a VA, virtual assistant, collecting all those, posting them where you want to in your CRM and adding in little things like looked up the back taxes, I looked up the zoning, I looked up the FEMA situation, I looked up the, whatever it is, whatever your checklist is. That would make you very efficient. When you do sit down, because you have a full time job. So every Tuesday night from four to six, you sit down and go through all of them, pick the ones you want to act on. A lot of that work’s done for you.
Steve:
In Land Academy, 1.0, which is the sequel to the cashflow from land program, I include a spreadsheet in there called the equity planner. And part of the equity planner addresses this directly. You should only be making decisions eventually. You do all the stuff, you do all these jobs in the beginning to learn. You’re in this for a few years now, Gina. You’ve done all these jobs. So what you’d need to be doing is replacing yourself and replacing, automating these tasks, just like Jill said, to the point where you’re just the decision maker and you’re deciding where you’re going to send mail. I prefer to do the data myself, the data in the mail myself, but everything else needs to be outsourced somehow, eventually, or you are going to go nuts.
Jill:
Yeah. Exactly. Good question.
Steve:
Yeah. The good news is you’re busy and it’s working and you’re sending out mail.
Jill:
Yeah.
Steve:
So that’s all very nice.
Jill:
You know what’s funny though, too, because Gina, you still have, I’m looking here, you still have a full time job, right? Yeah. So pretty soon, you’re probably going to have the discussion with yourself as we did and many of our other members have.
Steve:
Every single person’s done it.
Jill:
Had this discussion. Well, no, the discussion is a different discussion, which is how many, now I’m missing deals. How much is my full time job costing me?
Steve:
Yeah, that’s it.
Jill:
And we haven’t talked about this in a while too. When you start having those discussions with yourself, please prolong that. I want you to have a huge bank balance. I want you to feel overly confident that when you, if this is your plan, I want you to eventually when you leave your job, you say, wow, I could and should have done it a few months ago.
Steve:
Years.
Jill:
Then you know you did it at the right time.
Steve:
I left my job two years too late.
Jill:
There you go. And that’s good. You want to be able to say that, because you felt so secure about it for two years, you were burning the candle at both ends going nuts, but you knew it would pay for itself. You knew you were in a good spot.
Steve:
Today’s topic, quick land sales versus retail price. This is why you’re listening.
Jill:
That’s funny. We should do a show on that sometime too about, we haven’t talked about in a while about when’s the right time to leave? Who’s cut out for it? Because I’m here to tell you, even though you might be a one man machine and do it… What’s so funny?
Steve:
I’ll tell you in a second.
Jill:
Okay.
Steve:
When’s the right time to leave?
Jill:
Yeah, it’s hard. It’s hard to be your own boss and some people are not cut out for that.
Steve:
Most people aren’t.
Jill:
Having a staff, having employees.
Steve:
Shocks me.
Jill:
Aww man, I got to think about payroll tax and setting up companies like ADP or stuff like ADP to pay employees and hiring and firing and the headaches there. So think hard about, and I think, like I said, we should do a show about it. Why are we going to think hard about, don’t want to do this by myself, because I know what I’m capable of and I don’t have to fire myself and I know what I need to make up and catch up on, versus now I got a team.
Steve:
I walk around this planet and this is incorrect, it’s not right. I walk around this planet assuming that there’s an inner entrepreneur in everyone and that they really don’t want to be at their job and they really just need, they’re one or two conversations away or podcast episodes away from just chucking it all and eating ramen noodles and becoming, owning their own business. I don’t care if it’s a convenience store or land and house investor, real estate investor, or mobile home parks or something. And I’m dead wrong. I think the vast majority of the planet just wants to be told what to do and-
Jill:
Have a nice paycheck they can count on.
Steve:
Have a paycheck, pay the rent, pay the mortgage and that’s about it.
Jill:
Take some vacations. Have a nice life. I thought that too. Isn’t that funny? So I have to catch myself there. Not everyone wants that.
Steve:
I don’t get that.
Jill:
I don’t know, well that’s okay. Anyway, what are we talking about? So we’re talking about, oh, quick land sale versus the retail. So I set that up. Do you want to-
Steve:
Sure. Just, I mean, look, this is the business we’re in. You buy property for $30,000 bucks, you sell it for $60,000. It’s really worth $90,000. Those numbers are probably the last eight deals we did are just like that. Last land deals anyway. For houses, it’s you buy out here, you buy them for a million sell them for a million one, a million two. And that’s what I call wholesaling. We just talked about it earlier. I guess it’s a lot of people just have… That’s my big question here. It’s not so much, should you be doing it that way? 30, 60 versus 30, 90, because we all know you shouldn’t do that. You should not, never, ever maximize. Everybody does this wrong. You should never maximize the price for a piece of real estate that you have. All right. You just, go ahead.
Jill:
Well, you can. Hold on a moment. We just choose not to. And you know what? You know the reason I call us a wholesaler, because I’m typically, because we’re really good at sourcing deals, whether it’s land or houses, period. We’ve got that. We’ve got that covered. So it’s kind of who I’m trying to market to. And I call us wholesalers, because I’m trying to market to another investor who’s then going to go do something great with it. Whether it be to put a strip mall on it or whether it’s going to be, they’re going to mark it up and make some money, either way. That’s why I call myself a wholesaler at the end of the day. And I love it, because I choose to work with those people, because it’s so much less work. They’re not going to ask me-
Steve:
They’re in the business.
Jill:
… Right. So it’s so great when I can send out an email, which is basically a spreadsheet with State, County APN and sales price. That’s it. Can you imagine how great. That’s the goal here. So think about this. That’s how much work I choose to do and how much I do, because I’m only getting double my money versus if I want to do the retail path, all right, here it comes. Now I’m going to go get pictures, going to get a drone, I’m going to do this, I’m going to do that. I maybe list it with an agent, depending on the price probably. And then the customer is going to be very different. If I’m smart, I have it listed with an agent because they’re dealing with the customer. Otherwise, I get to be the one dealing with the customer. It’s a whole lot of work. Do I get wholesale pricing? Do I get retail people come to me? Heck yeah. All day long. But I don’t change how I do it.
And I still tell these callers on the phone, look, here’s the deal, I priced it this way to move it quickly. I’m not going to show there with you, walk the property with you, hold your hand and make all these calls to the County for you. I’ve properly showed you in the posting everything I know about the property, which is X. Take it to the next level and you’re going to, and by the way, the right person sees that, gets it, and they win on the price.
Steve:
I only have one speed in my life and it’s a hundred miles an hour.
Jill:
That’s true.
Steve:
And retail itself, versus wholesale, there’s nothing calm about this. There’s nothing calm about what Jill and I do or laid back or chill. We go at this a hundred miles an hour. And it lends itself to doing more transactions for less profit margin versus a few transactions for tip top retail price.
Jill:
That’s true.
Steve:
And so we have a member in our advanced group and his wife beat cancer and so he changed his life. And so he refuses to do more than one transaction a month. He does exactly between 10 and 12 transactions every year and he nets a hundred thousand dollars on each deal. And he’s chill. And he makes a million bucks a year. I can’t do that.
Jill:
I could do one a month, I can do one a week. If I can do one a week-
Steve:
That’s what I think, Jill.
Jill:
I know that’s it.
Steve:
That’s why you’re my girl.
Jill:
I guess at the end of the day too, for me, this is, you decide how you want to do it.
Steve:
Yeah.
Jill:
We just choose to get out and like you said, I love it. I’m not here to maximize profit. I just want to get in, get out and make it an easy transaction. I also love it because my quick sale, I’m still selling it for under retail price. Everybody feels good about it. I feel good and they feel phenomenal, whoever my buyer is.
Steve:
Jill and I… I was explaining this to somebody last night. Jill and I are givers. We don’t have to do the Land Academy show. We don’t have to have Land Academy. We could just buy and sell land and we could, or houses, and sell them for retail and kind of high five each other after we maximize a price on each property, like the way a car dealer, a car salesman does. They’re all high fiving each other after they throw you the keys, because they made so much money.
Jill:
And you drive off the lot, they’re like, chump.
Steve:
Jill and I are exactly the opposite of that. We’re givers. I’m going to give away all the information. We do this show every day and we sell property for a lot less than it’s worth. And I feel great about it and I sleep really well. And so, we’re both very fortunately on the same page about it. And so that, I feel-
Jill:
Like everything. We’re on the same page about everything.
Steve:
That’s known as satire. Spousal satire.
Jill:
Yep.
Steve:
In fact, tomorrow-
Jill:
We’re on the same page about that too.
Steve:
Tomorrow the episode on the Land Academy Show is called, “Working With Your Spouse Without Tragedy.”
Jill:
Well, it was a good segue.
Steve:
You are not alone in your real estate ambition.
Jill:
I can’t believe we’re really going to cut it and call it there. That’s great. That’s awesome. I think we made our point. Tomorrow’s going to be really funny.
Steve:
There’s nothing wrong with retailing land or houses if that’s your whole thing. But I’ll tell you, and in fact, once in a while… Like, remember when we retailed that house in Arizona? What a mess.
Jill:
I didn’t plan to, it just happened. Because it was in-
Steve:
What a mess.
Jill:
… It was in a master planned community with an HOA and that’s just who those buyers were.
Steve:
And the house was in such good shape. Usually the houses we buy, they need to be remodeled and all that stuff. This one was all done.
Jill:
That’s true.
Steve:
And so like idiots, we’re like, we go against our own model. And we’re like, this house is worth-
Jill:
We got this.
Steve:
Yeah. And all these other houses right there, it’s a master plan community, the thing’s all done. We replaced, I think carpet and paint or something. And then, on the market it stayed for like a year.
Jill:
Yeah. Just dumb.
Steve:
Did we make a ton of… We made a hundred thousand dollars. We made a hundred grand in that deal.
Jill:
I know, but it took a while. That’s not our thing.
Steve:
My point is, the real variable in this, is not so much price, it’s time.
Jill:
Right.
Steve:
How many deals could we have done with that same amount of money?
Jill:
And energy.
Steve:
In a year. We should be doing, we could have done 10 deals and 10 wholesale deals and made half a million bucks instead of-
Jill:
Pick what you want to do.
Steve:
… It’s just not… I took full responsibility for those bad decisions.
Jill:
It’s all right. I don’t hold you responsible. It’s okay. There’s two of us. The Land Academy Show remains commercial free. Again, like we’re talking about, giving in free, for you, our loyal listeners. So wherever you’re watching, wherever you’re listening, please subscribe and rate us there. We are Steve and Jill-
Steve:
Information-
Jill:
… and inspiration.
Steve:
To buy undervalued property.
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