Acquisition Diversification is Part of Real Estate Investment (LA 1315)

Transcript:

Steven Butala:
Steve and Jill here.

Jill DeWit:
Good day.

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 and humid Southern California.

Steven Butala:
Today Jill and I talk about acquisition diversification is totally and completely part of your real estate investment scheme. Jill’s got an idea she just shared with me about what that diversification is all about and why it’s important. Give us a little prelude.

Jill DeWit:
Well, we talked about this, this topic came up yesterday when we were talking and I was just thinking about where we are in our career, and how good we’re getting at picking things and dropping things. Like if it doesn’t work out, let’s not do it. And what I mean by that is, focusing on business that you know something about, and everything that we do is real estate base, because even within real estate, you can have a lot of niches, which is what we’re doing and we’ll talk more about this, and having several niches helps me sleep really well at night because I don’t have all my eggs in one basket.
I’m not doing one specific property type, in one area, in one price range. And I know people do, a lot of people do that. They just hone in and that has worked. But for me, I just, like I said, I sleep so well because I have all these different things. I know that if one goes a little sideways, I got three other areas over here that’s going to take care of it.

Steven Butala:
That’s about it.

Jill DeWit:
Thank you.

Steven 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:
[Molle 00:01:45] wrote, “Good morning. I have a couple of deals under my belt, but finally ran into a little problem on my third deal in Arizona. I have a buyer ready to go, but the escrow found a false deed of trust with the seller.”

Steven Butala:
Did they?

Jill DeWit:
How is that?

Steven Butala:
Did they?

Jill DeWit:
How’s that possible?

Steven Butala:
Jill’s going to explain to us in a minute.

Jill DeWit:
And they-

Steven Butala:
The mistakes that escrow agents are capable of.

Jill DeWit:
They can do, yes. “And they might need to do a quiet title action and get the attorney involved. Given that this is my first time dealing with this, any advice on what I should do? Should I help pay for attorney’s fees or anything else to get the deal done? Is it going to take a lot more time, like months? Is it even worth it or should I back out? Any advice helps.” So I see … Do you want me to read-

Steven Butala:
No.

Jill DeWit:
Okay.

Steven Butala:
No. This is a hot topic on land investors. So what Jill’s referring to is just, I put in …

Jill DeWit:
Some of the comments.

Steven Butala:
Just the comments, just to get a feel for what the … It’s not necessarily my opinion, but it’s the opinion of other people on the forum. And just to give you a gauge, quiet title actions are amazingly profitable if you know what you’re doing, the same way that restoring a ’68 Camaro can be amazingly profitable if you know what you’re doing, I do not know what I’m doing in both of those situations. So, I stay away from it. Quiet title simply means this. There’s a piece of property somewhere, and somewhere along the chain of title, the ownership, how it was conveyed, is questioned. There’s a cloud in the title, so to speak. That’s the language in the industry.

Jill DeWit:
Can I say, it could be a spelling error. It could be something even that minor. I just want to throw that out there for people. That’s not like a catastrophic … It could be a missing deed, like from here to here, or just a spelling little thing. So, thank you.

Steven Butala:
And so, a quiet title action is meant to remedy that to the satisfaction that, Hey, you’re the new owner and you own it. People are probably not, probably within reason or in the eyes of law anyway, can come back and say, “You know what? I didn’t know there was oil under there. My grandfather owned that property and I have a will right here that says I’m supposed to get all of his stuff.”

Jill DeWit:
Right.

Steven Butala:
So it’s designed, and quite honestly, the laws that surround quiet titling are dated back to like homestead time. So you have to put an ad, literally, put an ad in the paper, announcing that, hey, if anybody’s got a claim to this, because people read the paper all the time these days.

Jill DeWit:
Right.

Steven Butala:
And so, quiet title actions, when you’re all done, says you’re the owner in the eyes of the law. And they almost always are associated with people who have passed away. So, there’s issues with that. There’s legal issues with that, especially in Arizona, where Mojave County is. What would I do here? I would walk away from this. Wouldn’t you? Or-

Jill DeWit:
Well, first of all, I would see what it is. Is it a quick little thing like a spelling error?

Steven Butala:
Well, I would … Okay, go ahead.

Jill DeWit:
That’s my thing. If there’s a spelling error, and we can tell, hey, it was all trying to be right but somebody goofed it up, then I would push it through. I would hang in there with it. But if there’s like a missing deed in the middle there, we don’t know where it is, who it belongs to, and it can take months, no. I’m not interested,

Steven Butala:
False deeded trust, by the way, there’s a document somewhere.

Jill DeWit:
Right.

Steven Butala:
I want to see it. Just ask the escrow agent before you decide what to do, show me the false deed of trust and explain it to me. Did somebody falsely sign it? Was it not recorded properly?

Jill DeWit:
Right.

Steven Butala:
Maybe it could be very simple. I have a very, very, very, as my career goes on, question people’s motives and specifically escrow agent’s motives about why they’re not pushing a deal through because we have … The escrow agents that we do deals with, thanks to Jill and her team, are like a dream come true. They’re extremely motivated to get these deals done quickly and inexpensively. And if they’re not, Jill kicks him off the team. She kicks them out of our possibility of escrow agents. It’s like getting a ticket for jaywalking. You have to ask that cop some questions, like yeah, I know it’s illegal. I get it. But …

Jill DeWit:
Did you notice there were no cars within five miles of me? And you just happened to be sitting there drinking your coffee at this moment?

Steven Butala:
So, I think some escrow agents are sitting around pounding their chests saying, “You should pat me on the back. I saved you from this terrible real estate deal.” When in fact there’s no issues at all.

Jill DeWit:
I hate to say this, and I feel bad, but I’m sure this is going on right now. I know this is going on right now. Escrow agents are so overwhelmed because of the number of transactions that are happening right now, they are quickly kicking things to the curb that they can’t do.

Steven Butala:
Oh. So, they find a problem, can’t do the deal.

Jill DeWit:
Yeah. They’re moving on. I have another one. I happen to know … Actually, I can’t say this. I’ll tell you off the air. I just happen to know that escrow agents are reaching out to former escrow agents, and hiring them on the side to help do deals for them. Because they’re so overwhelmed.

Steven Butala:
Oh my gosh. Really?

Jill DeWit:
Mm-hmm (affirmative).

Steven Butala:
Is that going to be a problem for us? Welcome to our meeting.

Jill DeWit:
It will not be a problem for us.

Steven Butala:
Okay.

Jill DeWit:
It’s okay.

Steven Butala:
Jill has former escrow agents on her staff. And I think people, or former employers that are reaching out to them?

Jill DeWit:
Correct.

Steven Butala:
That’s terrible.

Jill DeWit:
It’s okay.

Steven Butala:
Because we have a great staff.

Jill DeWit:
Oh yeah, we do.

Steven Butala:
All right. Good. Today’s topic, acquisition diversification is part of real estate investment probably now more than ever, like a lot of the things that happened with the COVID. This is why you’re listening. Would you buy one stock and that’s it?

Jill DeWit:
Oh my goodness. No. Could you imagine? I have Apple, that’s it. I’m just going to sit here with my Apple. I don’t care. I’m going to ride the wave.

Steven Butala:
Then why you buy one piece of land and that’s it?

Jill DeWit:
Or one property type?

Steven Butala:
Or one primary residence and that’s it?

Jill DeWit:
Right. Yeah.

Steven Butala:
That’s not being a real estate investor.

Jill DeWit:
That’s a very good way to say it.

Steven Butala:
That’s not being a real estate investor. That’s being a homeowner.

Jill DeWit:
That’s true.

Steven Butala:
This isn’t called Home Ownership Academy. It’s also not called Failure Academy.

Jill DeWit:
Today we’re going to talk about canning. You know why that’s on my mind? I got to tell you, this is so funny. I get a plethora of emails, as do you. In one of the communities I’m in, because of the fact that we buy and sell land, is the prepping community, preppers. So, I get the preppers newsletter every month and it actually interests me. This is funny. And they’re talking about manual canning because what if I’m out there and we don’t have power, right? I need to manually can things. And then I learned about, I just thought this is the coolest thing, water bricks. Do you know about water bricks?

Steven Butala:
No. I mean, I don’t know what the definition … Go ahead.

Jill DeWit:
I didn’t even know this was a thing.

Steven Butala:
I didn’t even know canning was not manual. How else would you do it?

Jill DeWit:
Well, you could have a machine that does it for you, make it a lot easier to do that. Put the lid on, I think, and every … But these water bricks are cool. That it’s bricks that you could use to build a wall or all kinds of things, and there filled with water, and it serves two purposes. One, they’re flipping heavy. And then B, you have a emergency supply water.

Steven Butala:
None of this is crazy.

Jill DeWit:
I know. That’s what I’m saying. I’m reading up on the latest and greatest solar solutions.

Steven Butala:
Good meeting, Jill.

Jill DeWit:
Thank you.

Steven Butala:
You know, I’ve often thought about-

Jill DeWit:
I’m going to be ready. Someday, if we need to be really, really off the grid, I will make sure as a family we are ready.

Steven Butala:
You’re the girl for me.

Jill DeWit:
You got the water thing down. You’ve got the distilling thing down. I’m working on the water bricks and canning.

Steven Butala:
It’d be fun. I’ve often wondered if … We just do not have time to do this, but I’ve … And I’ve talked about this with other members. I’m like, “Let’s get together with all these …” Because we can provide the land.

Jill DeWit:
Right.

Steven Butala:
We know how to buy near-free land, if not free.

Jill DeWit:
It’s true.

Steven Butala:
And so, if we got together and got with all the suppliers of the stuff for, not so much preppers, but just living off the grid.

Jill DeWit:
Right.

Steven Butala:
And built a house and filmed it. How cool would that be?

Jill DeWit:
Be really cool.

Steven Butala:
We were the sponsors.

Jill DeWit:
Yep. Remember the community in Canad?

Steven Butala:
It didn’t take long to get off this topic. Go ahead.

Jill DeWit:
Totally. Because we’ll cover it in a second. Kind of already did. But that community in Canada that was living on an island completely on their own. And one person did one thing, one person … They’re like six families.

Steven Butala:
Yeah. Barter.

Jill DeWit:
What’s that?

Steven Butala:
Barter, it’s called barter.

Jill DeWit:
Yeah, yeah, yeah. But I thought that was the coolest thing. They’re out there loving life, having a good time and taking care of each other. One grew the food, one did the water, one probably did the alcohol. It was beautiful. I love it. All right. So, back to the topic.

Steven Butala:
It’s called kibbutz.

Jill DeWit:
Is it for real?

Steven Butala:
Yeah. It was happening in the ’60s and ’70s.

Jill DeWit:
It’s cool. Yeah. I think it was like on a TV show years ago that we watched this. But so, the whole thing about this show to me was I was thinking about us the other day as we were in line, and just going to a store as a matter of fact. And won’t go there. But I was thinking about how great it is, because you were … As we were in line and we had a few minutes, we were talking, you brought up a new niche within a niche that we’re developing. And I’m like, “Oh.” That you’re developing, that basically telling me about. And I’m like, “Oh, that’s so good.” And I just took a step back and I thought-

Steven Butala:
What was it?

Jill DeWit:
It was a niche within the mobile home parks community.

Steven Butala:
Okay.

Jill DeWit:
It was a niche of mobile home real estate, basically. And I took a step back and I’m thinking, “How great is this? We’ve got land conquered obviously, and houses. And we know what we’re good at with houses, and what we’re not good at.” You’re really taking the mobile home thing to a new level. And there’s a fourth one I can’t think about right now, but I just thought, “God, how great is this?” I’ve always slept really well because we’re so much not … We’re not finance people, we’re cash people. So, I never have to worry about anybody knocking on my door that I missed a payment. I own something and I just sell it. But I sleep also well now because of all the different lines and things that we’ve developed, that-

Steven Butala:
I do too.

Jill DeWit:
… if one of them wasn’t working out in any way, we have six others.

Steven Butala:
Here’s the thing. So, what we teach is this, and our successful members, or if you’re brand new, we teach a hub and a spoke kind of a model where you’re the hub, and you do everything yourself in the beginning. So you learn, you learn how to price a mailer. You learn how to get a mailer into the mail. You learn to field the calls, and on and on. And it all adds up to buy an inexpensive piece of property and selling it for more, from your desk. So, if you can do that successfully with land, and you’ve got some consistency to it, and you understand the mail, and you’re … I call it database driven deal flow. You’ve got a database full of land. We provide that. I think there’s about 12 steps. There are 12 steps and we teach it in the program. That’s interesting. It’s 12 steps. I never thought about that.

Jill DeWit:
That’s a little scary.

Steven Butala:
It’s a 12 step program.

Jill DeWit:
Nice. We need to start calling it that. Land Academy, the 12 step program that will make you money.

Steven Butala:
And it’ll help you keep your relationships.

Jill DeWit:
Exactly.

Steven Butala:
And out of prison.

Jill DeWit:
Right.

Steven Butala:
But so, you’ve got that mastered, why not just change the product type? So you can do it for land, which is the simplest form of real estate that I can dream them up. Then you do it for houses it’s even simpler from a pricing standpoint. A lot of reasons, I think houses are even more simple than land. If you have the right team. Then what’s stopping you from buying apartment buildings if you believe in apartment buildings?

Jill DeWit:
That’s maybe the other one we’re talking about.

Steven Butala:
Or mobile home parks, or mobile homes on land. And on, and on, and on. So, there’s a lot of people in our group that come out of the woodwork when we start talking about this stuff, especially on the Thursday call, Thursday, webinar that we have where they say something like, “Yeah, I got your … I signed up in 2017 and decided pretty quickly that rural land is not my thing, but I’m buying about 10 apartment buildings a year right now,” with the same methodology and the same data sets, By the way, the data sets are all the same. Within reason. Mobile homes are a little different. But so, diversifying your acquisitions should be part of this right now because all these sectors of real estate are experiencing the same volatility as houses and land are. So why wouldn’t you?

Jill DeWit:
I’m going to make this a little less serious for a minute. It’s serious. I think you’re very good at diversifying in your vehicles.

Steven Butala:
Yeah.

Jill DeWit:
Right?

Steven Butala:
Yes. Probably too well.

Jill DeWit:
You have race cars, and you have a 1974 bus.

Steven Butala:
So, here’s the problem. You’re absolutely right. When this COVID thing hits, things that aren’t necessary, or when recessions hit I should say, become like half price. And I don’t have a lot of self control.

Jill DeWit:
Let’s see. Let’s see-

Steven Butala:
We are out of space at our house.

Jill DeWit:
We’re going to play a game. Do you think that you diversify in these topics? We got land, yeah. Or property real estate investment? Yes. Cars? Yes. How about clothing?

Steven Butala:
No. No, I don’t think so at all. I never will.

Jill DeWit:
That’s true.

Steven Butala:
That’s your job.

Jill DeWit:
I know. Yeah. Oh, it’s an uphill battle there. Do you diversify in where you live? Your living situation.

Steven Butala:
No. And it should be way more diverse.

Jill DeWit:
Do you diversify parenting?

Steven Butala:
Yeah.

Jill DeWit:
Okay. Do you diversify in your choice of women?

Steven Butala:
I don’t have a choice. You better not have a-

Jill DeWit:
Wait, wait, wait, wait, wait. I meant past.

Steven Butala:
Having a portfolio-

Jill DeWit:
In the past.

Steven Butala:
… of women is not legal in this country.

Jill DeWit:
That’s not what I meant. In the past, did you date anything other than brunettes?

Steven Butala:
No.

Jill DeWit:
Oh, there we go. That’s where I always go with that.

Steven Butala:
Men pray to the efficiency god.

Jill DeWit:
Maybe … Wait a minute.

Steven Butala:
Men want stuff to be the same.

Jill DeWit:
Maybe this is all just male female.

Steven Butala:
Could be.

Jill DeWit:
The next one is, Jack, do you diversify in your diet and what you eat every day?

Steven Butala:
Well, I was going to ask you that. I was going to ask you that.

Jill DeWit:
Nope. And well, how about this? What’s your choice? Is your choice to have something new every day, or do you want the same thing every day?

Steven Butala:
We’re at 17 minutes in the show right now.

Jill DeWit:
I know. I’m going to wrap it up.

Steven Butala:
Hours. In hours we couldn’t cover this topic.

Jill DeWit:
Okay.

Steven Butala:
Jill, you can’t ask Jill, and probably most spouses what they want to eat that night.

Jill DeWit:
There we go. I was asking about just you diversification.

Steven Butala:
If it were up to me, I would eat the same five things and that’s it. And take a multivitamin and be done.

Jill DeWit:
That’s what I’m saying.

Steven Butala:
And get through it as fast as possible.

Jill DeWit:
I know.

Steven Butala:
That’s not what Jill does.

Jill DeWit:
I know. Well, you want to ask me some questions about diversification?

Steven Butala:
Sure.

Jill DeWit:
In life?

Steven Butala:
Sure.

Jill DeWit:
I like this. Go.

Steven Butala:
Is your wardrobe diversified to your satisfactory?

Jill DeWit:
No woman’s wardrobe is satisfactory.

Steven Butala:
So it’s endless.

Jill DeWit:
True.

Steven Butala:
So, that defines diversification. Because my diversification and lust for in real estate will never met.

Jill DeWit:
There we go. I’m glad we had this talk.

Steven Butala:
Oh no. I’m not done yet.

Jill DeWit:
Okay. Go.

Steven Butala:
How about your jewelry collection?

Jill DeWit:
I’m pretty happy there. Isn’t that funny?

Steven Butala:
Really?

Jill DeWit:
Yeah, I really am.

Steven Butala:
Oh my God. You’re shocking me.

Jill DeWit:
Yeah.

Steven Butala:
How about watches? I think you have 50 watches, or something.

Jill DeWit:
Not 50. I have a couple more.

Steven Butala:
How about purses?

Jill DeWit:
You can never buy too many purses. It’s so hard though-

Steven Butala:
This is interesting. Don’t even go with the shoes, right?

Jill DeWit:
Yeah. Don’t even go there. It changes. See, because it changes. That’s interesting. All right, I’m done.

Steven Butala:
I’ll tell you, I don’t have enough real estate and that’s the truth. And we have a ton of real estate-

Jill DeWit:
I’m familiar with that.

Steven Butala:
… and a lot more coming in. And out.

Jill DeWit:
Who knows what we’re going to be talking about a year from now.

Steven Butala:
Yeah.

Jill DeWit:
I can’t even imagine. Happy you could join us today. Every Monday through Friday, you can find us right here on The Land Academy Show.

Steven Butala:
Tomorrow the episode on The Land Academy Show is called sticking to a calendar schedule and why it’s imperative. You are not alone in your real estate ambition. This show topic, albeit maybe not the most funny or fun, has come up recently more than any other topic for many, many people reaching out to me. And it’s just so important to have a schedule.

Jill DeWit:
Oh the schedule, sticking to a schedule. I thought you were still talking about diversification. I find the diversification-

Steven Butala:
Why is that so?

Jill DeWit:
… will keep coming up a lot because … And I see more and more people, because we have Land Academy and House Academy, and I’m watching several people now finally going, “Oh.” And making the jump from land to houses. What’s so funny?

Steven Butala:
You.

Jill DeWit:
Why?

Steven Butala:
Because you just didn’t … It’s fine.

Jill DeWit:
Oh, okay.

Steven Butala:
You’re just done with the show and you just moved on.

Jill DeWit:
No, I was still talking about the last show.

Steven Butala:
No, I know. You know what? I was done with the show, I was just moving on.

Jill DeWit:
Oh, I see what you’re saying. That would be his way of saying, “Cut. Cut.” Got it. Okay. Thank you for tuning in. Jack is done. We hope you find our content valuable and we appreciate your support. So, if you haven’t already, please get on over to our YouTube channel and hit the subscribe button

Steven Butala:
And your comments and suggestions help us create the type of content that you’re here for, hitting the like button helps to support our channel’s algorithm and gauge your interest for future shows. Maybe you liked this, maybe you didn’t. We don’t know. You know me, it’s all about the data.

Jill DeWit:
We’re Steve and Jill.

Steven Butala:
We’re Steve and Jill. Information-

Jill DeWit:
And inspiration …

Steven Butala:
To buy undervalued property.