Going Broke Land Investing or Not (LA 1350)
Going Broke Land Investing or Not (LA 1350)
Transcript:
Steven Butala:
Steve and Jill here.
Jill DeWit:
Howdy.
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 Southern California.
Steven Butala:
Today, Jill and I talk about going broke land investing or not, hopefully not. This came up because somebody directly emailed me and asked me, “Am I going to go broke doing this?” And I said, “I don’t know. Are you?” I mean, I can tell you… That’s what this episode is about. I can tell you exactly how to go broke or how not to go broke, hopefully. And what it takes like in your soul, and in your skillset, and in your attitude, and everything. Jill has got a lot of notes too, because I think a lot of it… Jill talks to a lot more, “I’m thinking about joining, but I’m not sure yet,” people.
Jill DeWit:
And this is one of their big concerns.
Steven Butala:
Yeah.
Jill DeWit:
And I tell them, here’s exactly what you do then, and you won’t go broke.
Steven Butala:
Excellent. I’m going to enjoy the show, just like you are, listener. 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:
Mike wrote, “I’ve seen a lot of talk and varying opinions on this. When would you remail the same acreage,” and he put in bold, “Same acreage in a county you’ve mailed before. Would it depend on days on market and activity in the county, since some places will have a quicker turnover and change of ownership. Remailing after two months, I guess you’d piss off a lot of people, and it would be too soon to get a significantly different response or change of ownership. There must be a sweet spot. Any thoughts?”
Steven Butala:
So this question is not addressed in our formal education program, so it comes up. In fact, it comes up every single live event. It just comes up a lot. And it’s a great question. And God, I hate when people answer questions like this, but I’m going to answer it like this. It’s up to you. But I can tell you what we do, and I can tell you what other people do, and both are successful. We never ever remail the same acreage county, maybe in our lifetime.
What we do is, if we mail a county in, let’s say, it doesn’t matter, Minnesota, some specific county in Minnesota, I usually mail between five and 10 acres to begin with, or some number like that, depending on how the number check comes out. There’s 5,000 properties in one county in Minnesota that are between one and five acres that don’t have any improvements on them. Okay, bang. I’m going to mail it. If we have success, then we’d mail five to 10 acres. If we have success with that, then we mail 10 to 20 acres or whatever.
I cannot think of a single time in my entire career where I went back two months later because I had a bunch of success and remailed the same thing. So every time I get questions like this, this is what I ask myself. Why would you do that? And I bet you a dollar the answer is this. Because I don’t want to buy any more data. I don’t want to spend any more money.
Jill DeWit:
That’s what you think is going on? Oh, that’s interesting. Got it.
Steven Butala:
I already scrubbed all this data. It’s already all in place. I’m happy with it. I got a good response on it. I’m just going to do it again. I want to skip that whole part of my life and just send it back to O2O, or maybe just call O2O and say, “Hey, can you just mail the same thing again?”
Jill DeWit:
I’ve heard people doing this when they thought they priced it so wrong, and they want to come back with a new price, and they want to hit the same area. I can kind of wrap my head around that one. Maybe you came in and you offered too little, you offered $100 an acre, and you realize, “Oops, I should have been offering $500 an acre.” Something like that. And you’re like, “And this is such a good area. I really want to get something. I see my peers. I know that there’s something here. I really want to do this.” So that makes kind of sense.
But, like what Jack said, the reason he picked an area first of all, is because it passes red, yellow, green test. That’s what he was taught. Giving you the numbers and all that. I just like calling it that. I think that’s good. So it obviously passed that, and it’s green. And then, like Jack was saying, which is true, if we had success, I’m not going to hit them again and hit the same people again.
I’m like, “Oh boy, now I’m going to go back and get the up to one acre, or up to five acres. I’m going to see what juice is in there now. Oh, and by the way, now I know how the county works. I know how to get things done. I’ve made some friends, I’ve got a good title agent. I’m going to go for the bigger acreage. I’m going to hit the smaller acreage. I’m going to get the whole gamut now that I do.” That is what we go back and do if there’s some success. I think this is a waste of a stamp, and here’s why.
Steven Butala:
I do too, Jill.
Jill DeWit:
The right people will save your letter. They’re either going to call… Even the people, I’m sure, that cussed me out save my letter.
Steven Butala:
I agree.
Jill DeWit:
I’m sure of it. In the back of their head, they’re like, “Got that off my chest. And by the way, now I know they’re a real person. I heard her say before I slammed the phone down, ‘Hey, let me know if you change your mind,’ something like that. I might. Or even if I don’t like this price, there might be a rainy day where I need this price or I’m going to call on this. It’s just a good thing to have.”
And we have proof of that, 20 something years later, that they do save letters, they do call back over 10 years later. We all think that these expiration dates are meaningful. No they’re not. It’s invoking something for the initial wave, but the right person is going to save it and call you back and go, “I know it expired four years ago/however. Do you still want my property?” So don’t waste the money, is what I have to say.
Steven Butala:
I agree with that completely. Here’s a couple of points. Number one, there are people in our group that mail a county, usually it’s very close to them where they live, have some success with it, start talking to people, talking to county, do some deals, and they never ever leave. They might go one county over, and they spend their entire, and this is a good thing, not a bad thing, entire real estate career working all different product types in that county because they know everybody. And they just get to be known as a person that goes in and buys and sells real estate, houses, land, commercial property, whatever.
And they’re solving problems for people. They’re changing paper subdivisions, or subdivisions that have been defunked or never got off the ground, and making them work. So they’re really in the community and doing it. So, that’s a great example of I’m sure that those people remail the same thing all the time. And they have all the answers when people call and say, “What the hell?” They have an answer that’s like, “Well, I am going to solve this problem for you, and this is what the price is.” So there’s exceptions.
My second point is we live on right on the Pacific Ocean in Los Angeles County. And so, we know a lot of people that live in these houses right on the water. And I was at a party recently, and a guy said to me, “I’ve had five offers on my house in the last… I’ve lived here for 20 years, and I have five offers on my house. And I have them in a file.” He just said this. He doesn’t know what we do for a living at all. And so, “Just in case, I have these five offers if I need to sell.” So, that’s how this works. They keep these offers forever. Jill is right.
Jill DeWit:
They do. You mentioned the guy working the same county and things like that. If it were me, I would remail if there was a triggering event. Where we live in Los Angeles County, the county is famous for rezoning things and not telling people or making a big deal about it. And unless you’re in the industry, you don’t know that… Someone like this old guy, he’s lived there 20 years, he may not know that now his house is rezoned to handle four units. So that would be, say I sent him an offer years ago, now I’m really interested because now it’s four units. I’m interested for a different reason. And I would actually even put it in my letter.
Steven Butala:
That’s a great point.
Jill DeWit:
“Hey, the reason I’m reaching out to you is there has actually been a change.” And maybe I don’t… I don’t know. I have to think about that one. I don’t want to say too much, but-
Steven Butala:
County just passed, a great example of that is LA County specifically just passed, I think it’s all of California passed, it passed this rule about ADUs, auxiliary dwelling unit, to address affordable housing and cramming more people into the county. But that’s a topic for a different show.
Jill DeWit:
Don’t get me started.
Steven Butala:
So if you own a house, and it’s X amount of square feet, and the lot is Y amount of square feet, you can put essentially a tiny house on it, like a modular house, drop it in with a crane, and either rent it out, or your mother-in-law can live there, or whatever, without a lot of red tape, from what I understand. I haven’t seen any pop up for some reason, but legislators, a bunch of lawyers in the county building got together and said, “We’re going to solve this. Hey, we’ve never done a real estate deal in our lives. I don’t actually really know what real estate is, but we are going to, as legislators and smart lawyers, solve this housing crisis by making some laws and rules, and I’m going to go to sleep as a lawyer feeling great about myself because I saved the world. I saved the world from imploding on itself. I didn’t make people more independent. I didn’t give you more independence and freedom. I made more rules for you to follow, because I’m saving you from yourself.”
Jill DeWit:
Right. And who says road diet is a bad thing? Why is road diet a bad thing?
Steven Butala:
What’s road diet?
Jill DeWit:
Road diet.
Steven Butala:
Oh, road diet.
Jill DeWit:
Road diets. I’m like, “Do we want to go…” I can go for hours on this topic, especially because where we live.
Steven Butala:
What’s road diet?
Jill DeWit:
It’s where they’re talking about changing the traffic so we can have more sidewalk and street stuff, which I am for, but I’d rather see restaurants using how they were originally intended.
Steven Butala:
Yeah. Where you walk in and sit down and eat.
Jill DeWit:
That would be nice. That’s all I’m going to say. We can’t possibly do that. So we know a lot of you still have to commute. Too bad. We’re giving you less lanes now. What? Anyway, sorry.
Steven Butala:
I think we’re still on the question.
Jill DeWit:
We are. Sorry.
Steven Butala:
Today’s topic, going broke land investing or not. This is the meat of the show.
Jill DeWit:
All we have done so far is confirmed everyone who is listening who is not in the State of California that you’re grateful that you’re not in the State of California.
Steven Butala:
You’re good. This doesn’t apply to you.
Jill DeWit:
Exactly. So congratulations.
Steven Butala:
You did it.
Jill DeWit:
You’re right. We are wrong.
Steven Butala:
You’re completely right.
Jill DeWit:
We are the idiots.
Steven Butala:
Carry on. We will-
Jill DeWit:
And we’re going to be joining you.
Steven Butala:
Yes. We will be adjusting shortly.
Jill DeWit:
You watch. Beach? I’m over it.
Steven Butala:
Rant is over. Mic drop. Actually not mic drop. If it was a mic drop, we would have solved it. But no, it just gets worse.
Jill DeWit:
No, we’re leaving.
Steven Butala:
Yes we are.
Jill DeWit:
Okay. From one of the many.
Steven Butala:
Going broke land investing or not. So this also came from another member and people reaching out to me say flat out, people with a little bit of sense of humor and some flair say, “You know what? I want to do this. Am I going to go broke or not?” To which Jill says…
Jill DeWit:
This comes up all the time. And I get it. “I only have X amount to invest. I saved up $10,000, Jill. I did exactly what you guys talked about. I don’t want to lose my $10,000. What’s the smart way to do this?” Well, number one, say you have this money, you saved up 10,000 bucks, here’s what I want you to do. I do not want you to buy one $10,000 property. Why have all your eggs in one basket?
Steven Butala:
I don’t want you to use your own money.
Jill DeWit:
Well I was going to get to that. That’s one of my things, too.
Steven Butala:
Oh, should I just let you go?
Jill DeWit:
That would be good.
Steven Butala:
Okay. This is the Jill show, everyone. Welcome to my life. My life be called The Jill Show. And I’m the audience.
Jill DeWit:
If I don’t cover anything that’s important, please jump in at the end. So the first one is, you saved up $10,000, you want to control the asset. You don’t want to get to learn partnerships. You don’t want to learn any of that. You’re trying to find out for yourself, as would I, if this is really for you. We all know it works. We got that down. But is this really for you? Are you cut out to do this? So what I would rather you do is buy 10 $1,000 properties. Because that way, if one goes sideways, one has something weird, one you’re like, “I paid too much. I thought I had access,” or something goes wrong, don’t worry about it. The other nine will pay for that one and then some. I promise.
Steven Butala:
Diversification.
Jill DeWit:
Number two, maybe not use your own money. That’s where I was going to get to that. So there are so many people, us included… And I’m about to make some changes to that too, it reminds me, I’m making a note here. I’m going to rewrite some stuff on our deal funding site, because I’m going to look at deal funding in a different way and provide even more options to you, who don’t want to use your own money, or don’t want to use all of your own money. Maybe you don’t feel that comfortable. You feel comfortable… We’ve all got $10,000 and you’re totally into it. You need another $10,000 to make this happen. All right, we can do that too. There’s all kinds of things we can do. And we have things like Land Tank. We have Land Academy Deal Funding. We can help you get this going.
And then number three, you’re concerned, you’re new, you’re not sure about this, you don’t want to blow your money. I want you to use your resources. Some people, I think they’re hell bent on going it alone. And I want you to lean on those of us. That’s why we’re here. That’s why our community is here. We helped our community, our community is helping each other. We’re all six months ahead of the new person and we’re happy to share.
I’m done being surprised. That’s who we are. We have an awesome group of people that work together. I want you to use your resources, I want you use your peers, and I want you to use our weekly member calls for the properties that you’re on the fence about. Please, not every property. Because there’s some that you’re going to open it up and go, “Ooh.” But not every property, but the ones you’re iffy about. And even if you don’t get a chance to do it on the member call, which is closed by the way, so you can feel safe sharing it, we do this all the time.
Also parts of Land Investors. Remember, when you’re signed in as a member, you’re in the pro area, that’s a closed environment. The public can’t see it. So you can use that as a safe space to go, “Gosh guys, I’ve done all my homework. I think I’ve got it. I just would love another pair of eyes.” And I promise someone will weigh in and say, “Yeah, God.” And probably what’s even going to be better is, this is usually how it goes with our group, someone’s going to weigh in and go, “Yeah, I just did that area. By the way, if you need a broker, call this guy, if you needed a title agent, call her.” That’s how it goes. Back to you, Jack.
Steven Butala:
I’m going to tell you a story, and it’s about Jill. About several months ago, I think it was during the COVID, all the women in our neighborhood that Jill is, she’s a part of this group of very professional and intelligent women, got together and decided that they were tired of hanging out with their men because they’re spending too much time. And they put together this plan, where once a month, they would throw a girl only party. They dress up. It’s a theme party. Last month, it was at our house and it was called Mexican… It was Margarita thing.
Jill DeWit:
It was Tequila, Tacos, and Togetherness. That’s what I called it.
Steven Butala:
And they hire two young bartenders that are required to wear their shirts.
Jill DeWit:
Not required.
Steven Butala:
Yeah, they are not. And then things happen, and then the men are all invited back around 11 o’clock when they’re theoretically done, when the women are done. So this is what happened at our house last time. I sit down at our downstairs bar, and of course, these young men haven’t gotten more attention from women their entire lives, so they’re not leaving. They’re off, done, off the clock, their shirts are still off. And now they’re sitting next to us at the bar instead of standing behind the bar. And me and one of my business partners are sitting there, and they’re asking us about real estate. It always ends this way. These young guys are asking the old guys about real estate, and this is what I said, because they had said, “I’m going to go broke doing this.”
And they don’t join Land Academy or anything. I don’t encourage them to do that. And this is what I said. “It is not about the real estate at all.” If you follow what I’m going to say here, you will not go broke. In fact, you’ll make a freaking fortune. Forget about the real estate. Forget it. It’s all about finding great deals. And so, that means learning data, learning data manipulation, sending out mail, having a bunch of offers come in. Maybe you have no intention of ever buying a piece of real estate. You don’t like real estate. You hate HGTV. You have to undo this in your head. We’re so conditioned forever, because we grow up in houses or apartment buildings or whatever. We watch our parents do these real estate deals. We’re just conditioned that, “Hey, it’s all about that piece of real estate. It’s about that house, or it’s about the piece of land. It has the five A’s or the four A’s.”
Trust me on this. If you’re brand new, all you got to do is find a great deal and call me, or somebody like me, or somebody in our group that’s loaded. There’s people in our group that can’t wait to get a phone call from somebody new who’s got a property under contract for $20,000 that is worth a hundred grand. That’s your only job. You don’t have to spend a dollar. You don’t have to have any money to do this, except for the mail. And you need to understand data. And it needs to not be real foreign to you. Because you’re not going to learn. You can’t join Land Academy and then learn about Excel. I’m just telling you. That is how you’re going to go broke.
You got to learn about Excel somewhere else, long before you… You have to come to Land Academy understanding data or having somebody on your team, like we have each other, that can generate great deals that no one’s found yet, which is real easy to do, and then find somebody like us to pay for it. So please, stop worrying about… If you’re at this position in your life, and a lot of people are, like, “Hey, I don’t get it yet. I need to be educated. I don’t like houses.” You’re going to do just great. It’s all about finding great deals.
Jill DeWit:
That’s it. That’s it.
Steven Butala:
And then communicating with people… That’s why Land Academy itself, the group, does so well. Because there’s people in this group that just are hanging by the phone or by the internet waiting for your deal. Are these two shirtless wonders going to go do this? I doubt it.
Jill DeWit:
We tip them well. They’re doing just fine. We make sure they get rent paid every month.
Steven Butala:
So with the next party, are you going to use the same two guys, or are you getting fresh meat?
Jill DeWit:
I don’t know. We’ll find out. We’ll see. It’s up to the next host to see what she’s doing. It’s awesome.
Steven Butala:
I’ve never seen multi-bajllionaire women have so much fun in my life.
Jill DeWit:
It was a good party. Yeah. We were heard down the beach. That’s what I heard. Later, the next day, someone said, “We heard you guys.” I’m like, “Oh, that was funny.” Happy you could join us today. Five days a week, you can find us right here on The Land Academy Show.
Steven Butala:
Tomorrow, the episode on The Land Academy Show is called Changing Your Offer Price After the Purchase Agreement is Signed, and Doing it With Confidence. You are not alone in your real estate ambition.
Jill DeWit:
Yeah, that was funny. So, I didn’t put it on the public public stuff, but if you’re in my friend group or your friends, it goes to my friends and then friends of friends, I think, so I got some funny comments. I put some pictures of the group that was at our little party, our little soiree. What was the point of that? I’m trying to remember. Just strong women getting together?
Steven Butala:
No. Jill only listens to sound bites. So no, my whole point was, even these young kids are asking us. And my point was, it’s not about the dirt. It’s not about the real estate. It’s about finding a great deal. You don’t need any money. There’s some people that never use their own money. I know people in commercial real estate that I grew up with, and I still keep in contact with that, that have never put a dollar of their own money into Class A buildings in their life. They just put the deals together. We know people in this community that put huge deals, multi-billion dollar deals, together, never put a dollar in.
Jill DeWit:
There’s nothing wrong with that.
Steven Butala:
No, there’s nothing. This phrase, “Other people’s money.” You know how people say that? I hate that. I hate it. Yeah. I don’t know why… They say it with sarcasm, like, “Ha ha ha. I got away with something.” This is a very real thing, and it’s a very healthy and great thing. And people with a ton of money don’t have the interest or the time to put deals together, but they’ll happily invest. Just don’t be a wacko about it. Don’t be sarcastic about it. Don’t abuse that phrase is what I’m saying.
Jill DeWit:
Thank you. Since we’re changing the ending here, if you love us, thank you. Please show it however you would like, Facebook, YouTube, Twitter. Give us a love. Give us a like. Subscribe. Whatever is great for you. And if you’re not in love with us, again, we’re sorry. This is time that is wasted from your day, and I don’t know what to say.
Steven Butala:
I’m not sorry.
Jill DeWit:
Okay.
Steven Butala:
You have control over what you listen to.
Jill DeWit:
That’s true. That’s true. We are Steve and Jill.
Steven Butala:
We are Steve and Jill. Information…
Jill DeWit:
… and inspiration…
Steven Butala:
… to buy undervalued property.
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