Simplify Your Acquisition Process (LA 1367)
Simplify Your Acquisition Process (LA 1367)
Transcript:
Steven J Butala:
Steve and Jill here.
Jill K DeWit:
Hello.
Steven J Butala:
Welcome to the Land Academy Show, entertaining land investment talk. I’m Steven Jack Butala.
Jill K DeWit:
And I’m Jill DeWit, broadcasting from sunny Southern California
Steven J Butala:
Today jill and I talk about simplifying your acquisition process. You know, Jill, this is one of those topics where it’s like you just have to follow this kind of real simple process. I think it’s simple. It’s not simple. It’s 10 steps. It’s not like… I think that real estate investment is got this… It’s almost like fishing in this. I just don’t see it that way. I see it as just you do X, you’re going to get results.
Jill K DeWit:
How do you see it as fishing? Some people set it up like that?
Steven J Butala:
Well, I think that if you look at it like… I think most people look at it like raising a child, there’s so many variables and so much stuff you have to do and you have to give it constant attention. And if it’s not going the way that you want it to go, you got to get back on track. And it’s this big, huge thing. And I don’t see real estate investment like that at all. I think before data, before the prevalence of data, it was a lot like that.
Jill K DeWit:
Maybe.
Steven J Butala:
It was sort of like let’s see what happens.
Jill K DeWit:
Maybe because before data, it was harder to… You know what? Even before data though, there were ways to find out properties that are coming available, like read the obituaries. I hate to say it. There’s things like that you could do back then. Didn’t necessarily have to be word of mouth.
Steven J Butala:
Well, that was using data.
Jill K DeWit:
That’s what I’m saying.
Steven J Butala:
It was a crude way of data.
Jill K DeWit:
Yup. What’s so funny?
Steven J Butala:
I don’t know. Obituaries got into it, but I like it.
Jill K DeWit:
Just came to my head. How would I, if I had no way of knowing what’s going to come available on our block, not kidding, I’d get out the paper, I’d… Like 1972, let’s just say it is 1972. I’d be reading the obituaries and I’d be figuring out, “Oh, it looks like Mrs. Smith is probably going to move.”
Steven J Butala:
Oh my God, let’s talk about this. If there was no data. I can give you a personal story. When my sister and I left the house and went to college, my mom had her sights set on moving out of the big house, that house that we were raised in, and buying a small house for cash. And she had three blocks in the town that I grew up in picked out. And she went with a sticky note on all the houses that she wanted. Do you know… Did I ever tell you this story?
Jill K DeWit:
I do know this story. Yup.
Steven J Butala:
And she wrote a sticky note, stuck it on the door and bought a house. And so in the first live event that we did a few years ago, I ran a video with this guy. This is again, before huge amounts of data was available. This guy was a licensed real estate agent and he took the time to fill out-
Jill K DeWit:
Full on purchased the contracts.
Steven J Butala:
To fill out the real estate agent licensed contract, filled it all out with a price in there and everything. And I identified a one square mile of properties that he believed were you could buy for cheaper and sell for more. And dropped in everybody’s mail slot.
Jill K DeWit:
Yep. I remember that.
Steven J Butala:
And bought a ton of properties and retired and resold them. Some of them he kept for… So yeah, there’s always a way to do this.
Jill K DeWit:
Correct.
Steven J Butala:
I don’t even think that’s speculation.
Jill K DeWit:
Right.
Steven J Butala:
So I guess I wonder where the disconnect is for anyone who wants to buy undervalued property. That’s my big picture question.
Jill K DeWit:
Do you know what I think some of it is? It’s maybe not being ready for it. Like you have to give an offer and be ready for it. You can’t just put your pinky in and test the water. You got to act on it. Because if you start this process someone’s going to say, “I do want to sell,” and you got to be ready to do it. That’s my point.
Steven J Butala:
I have Shark Tank on the brand right now because Joe and I just got back from Park City and we were watching a lot of Shark Tank episodes. Or listening to in my case because we drove there and it’s like a 10 hour drive. And so it’s funny to watch the Shark Tank panel react to the people that are in front of them and, like us, generally reacting to at different levels of people’s… where they are in their careers. So some people are brand new, just like the Shark Tank contestants. Some of them are brand new. Some of them have been in whatever they’re working on for five years. It’s not their first company.
They know what they’re doing and it’s like everybody’s… But still, the contestants have very wide variance of opinions about whether or not the person that’s in front of them actually knows what they’re doing or the company itself is viable in the future. And so there is an element of opinion that goes on, I think, with a lot of this, but for me, and that’s what this show is about, there’s a simple process that all of us kind of need to… And I guess even with Shark Tank valuations, nobody’s disagreeing about how to value a company on the show.
Jill K DeWit:
Correct. That’s true.
Steven J 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 K DeWit:
EA wrote, this is a little bit wordy, so bear with me here: does it make sense to mail a property that is owned by a person who resides on an enjoining parcel of land? In other words, are homeowners willing to sell separately parceled side yards and contiguous vacant lots that they own, or is it only an infrequent occurrence? The reason I ask is because across many different counties, roughly 20% to 35% of the property records I downloaded seem to be this type of parcel. I understand we shouldn’t care too much about mailer efficiency, but if these properties are significantly less likely to result in the deal, probably wouldn’t make sense to mail them. It’s pretty easy to use geocoding to get the coordinates of each given mailing address and calculate the distance to the given properties… Wait. Distance to the given coordinates of the situs property location. If deals of these kinds of properties don’t really happen, I’m inclined to scrub out the properties with mailing addresses say within 1,000, 2,000 feet of a situs location. Or do deals regularly happen on these kinds of parcels? You want to go first? You go first.
Steven J Butala:
Could this person make this any more complicated?
Jill K DeWit:
I know.
Steven J Butala:
There’s a reason that I chose to put this question in this topic today. EA, I’m going to pick on you for a little bit for the betterment of universe of land investors here. How much energy and intelligence and time that did it take for this person to even come up with this concept to ask and then write it?
Jill K DeWit:
I know.
Steven J Butala:
What have we said thousands of times on this show, in the education, what have we said? Send everybody an offer.
Jill K DeWit:
See what comes back.
Steven J Butala:
And about 1,500 of them are going to… One for 1500-ish, depending on a bunch of variables, are going to sign it and send it back and you’re going to buy the piece of real estate. Adjacent property and then situs address and geocoding?
Jill K DeWit:
I know.
Steven J Butala:
Is this person ever going to get an offer campaign in the mail? And why are they questioning Jill and I anyway? 16,000 deals we’ve done this way.
Jill K DeWit:
Are you okay?
Steven J Butala:
No, I have a lot to say about this. I think this is a disease. I think that it… Yeah. I am all for trying to think your way through something, but this whole topic today is about breaking this thing down into 10 steps. And this person isn’t out of the starting blocks and probably never will be.
Jill K DeWit:
Well, maybe they will. They’re very smart. We’re just here to tell you don’t go there. How’s that? Don’t go there.
Steven J Butala:
What’s the point to this? What is the whole point just to, other than making sure that everybody in this community knows how smart they are, what’s the point to pounding your face with a hammer so that you can save… What? 20 or 30%? He says, “20% or 30% of the records seem to be this type of adjacent parcel.” So great. You’re going to take a thousand unit dataset, after all this angst, scrub out 20%, 30% of it. So now you’ve a thousand units. You take it down to 700 or 800. And for what? To oat yourself on the back and say, “I made my mailer more efficient.” And to save what? A hundred dollars I think?
Jill K DeWit:
Well, let’s back up. What the question is do you think it makes a difference? And I’m here to tell you No.
Steven J Butala:
No. It doesn’t make a difference.
Jill K DeWit:
It doesn’t make a difference. I appreciate where you’re going.
Steven J Butala:
But let’s say it does. Let’s say your mailers now 20%-
Jill K DeWit:
But so what?
Steven J Butala:
… more efficient.
Jill K DeWit:
Hold on a moment.
Steven J Butala:
Who the hell cares?
Jill K DeWit:
But you’re still going to have that one old person who’s going to want to sell anyway.
Steven J Butala:
That’s what I’m saying.
Jill K DeWit:
The point is-
Steven J Butala:
We’re saying the same thing.
Jill K DeWit:
… don’t quit. It’s like assuming you know exactly what kind of property every person wants because you don’t. I’ve learned that. I would think, “Who would want this?” And, “Oh my gosh, it needs four wheel drive. What the heck?” This is way back when. What did Steven buy and give me to sell? What am I going to do with this? And then, lo and behold, there’s somebody for it. You just got it accurately portray what it is and get it in front of the right people and have it priced right and watch what happens. So this is it. I think you’re assuming something that you don’t know to be true. And I’m here to tell you, you got to get the mail out and you’re going to be pleasantly surprised. You know what we haven’t heard in a long, long time, thank goodness, is people that came in and it was an issue for a while, from somebody else, not us, to only mail back tax property that’s long gone.
Steven J Butala:
Why is that long gone?
Jill K DeWit:
It hasn’t come up because we’ve all proven it to be not an issue.
Steven J Butala:
Because we’ve had shows like this and episodes like this and seminars, full seminars, about why you should never only buy-
Jill K DeWit:
Back tax.
Steven J Butala:
… or just mail property with back taxes associated with that. And now it doesn’t come up.
Jill K DeWit:
Right. Because you’re missing all the valuable, good property that people are happily paying. So if you do this, this is my only thing and I’ll end on this for me, don’t do this because all you’re going to do, you’re scrubbing out the sweet couple who’ve been paying taxes on the lot behind them, that they need the cash now, they don’t want to move, they’re happy to sell that parcel. You can have it. There you go.
Steven J Butala:
Thousands and thousands of people, some of whom are Land Academy members or have been Land Academy members are just getting started or they’re so smart that they’ve left have learned how to effectively send mail out from us. Why would you question that? Here’s what you should do if you’re… and what I did in my career. You learn from all these people who are smarter and filthy stinking rich, and live at the beach, you learn from them. And then after you’ve learned from them and done a bunch of deals their way, you sit down with yourself and say, “You know what? That guy is smart and rich, but I’m a little bit better at data than he is. He might be better at real estate, but I’m a little bit better. So I’m going to apply some stuff over here, some new stuff, and just kind of see if it works and split test it and do it.” That’s what you do. But it just cracks me up. I’m not done with this at all.
Jill K DeWit:
I know you’re not.
Steven J Butala:
It cracks me up.
Jill K DeWit:
I’ll be over here.
Steven J Butala:
It cracks me up that people [crosstalk 00:11:30].
Jill K DeWit:
I’d be like, “I’m sorry. I tried to help.”
Steven J Butala:
A couple months ago, somebody… I put it in the show. Somebody thought it was a good idea in their mail campaign to put a headshot of themselves. Why? They thought it would increase their mail yield, I guess. Or they loved to look at pictures of themselves. I don’t know. Why the hell would you ever put a headshot of yourself in a mailer? So I just don’t get this. Today’s topic, simplify your acquisition process. This is why you’re listening. Simplify.
Jill K DeWit:
How you doing today?
Steven J Butala:
Simplify your acquisition process, not complicate it. You know, I could call it… You know what? Today’s topic, complicate your acquisition process and your life. This is the meat of the show.
Jill K DeWit:
Please tell, Steven. What’s really going on with you right now. How you feeling?
Steven J Butala:
I feel great.
Jill K DeWit:
Okay.
Steven J Butala:
I feel great.
Jill K DeWit:
I haven’t seen you this opinionated in quite some time. And I think we all got the point.
Steven J Butala:
All right. Good.
Jill K DeWit:
Okay.
Steven J Butala:
There’s about 10 steps to buying and selling real estate our way. It starts with choosing a place to send a mail campaign. I’m not going to go through the exact 10 steps. If you need the 10 steps go to support at landacademy.com. They’ll share them with you. It’s riddle… All of our education, I’ve been using the same 10 steps since the early ’90s. And so when you take those 10 steps, the first one is getting educated, which is what you’re doing by listening to this if you haven’t violently turned the knob off of however you’re listening this by this point in this episode. Congratulations, you’re actually going to learn something I hope. Get educated. The second step is find a place or pit zip codes or geographic areas against each other using the red, green, yellow test to see where you’re going to send mail. There’s a bunch of data pieces to that. And then get the mail out and step by step by step eventually the acquisition process ends, my part ends. The mail’s out there. And Jill takes over with the… dealing with the phone and purchasing and reselling the property.
So this seems to be… The data comes back to us or feedback comes back to us with members and non-members and either they’re like the greatest, “Oh my God, thank you. You changed my life. I’m moving on to buying huge properties and doing fantastic.” Or, “I don’t get it. And maybe we should send a mailer out and exclude 20% of the people who own adjacent property.” So here’s the point, the takeaway from this, it’s about a 10 step process. It can be 12 steps if you’re doing real specialized property, but it’s between 10 and 12 steps.
And each of those steps, if you take a day or two days or however long it takes you, a week, to kind of really get in there and figure it out and listen to what we say. You’re going to do great. You’re going to knock it out of the park. I can almost guarantee it. And the only reason I say almost is because legally I can’t sit here and say I guarantee you’ll be successful at it. That’s the only reason. But the vast, vast, vast majority of people who follow through on this don’t question it, don’t complicate it, take the 10 steps and blow them out. They’re going to do great.
Jill K DeWit:
I agree. A whole lot to add to this, I just… And it comes from… This topic to me reminds me of some people I see just like, not so much EA, but to some people like are going, “Should I…” When they’re doing their due diligence, they’re digging too deep like, “Should I get a perc test? Should I do this? Should I do that?” I’m like, “No, wait. Hold on a moment. Why are you complicating it? Why are you doing extra steps that you don’t need?” “Do I need to walk the property?” It’s just misinformation I think. I think people are… They read somewhere I should do all this stuff when you really don’t. And it’s not that you’re doing a disservice, it’s just stuff that’s not needed. And here’s my point of this too. I’m buying it very inexpensively and I’m selling it inexpensively and I’m passing the savings onto my buyer. If they want that next thing, if they want a perc test, they can go get it. It’s going to be cheaper if they do it than if I do it. Hands down.
And most of the time too, by the way, in normal real estate broker transactions, the buyer does perform a perc test and they do pay for that off themselves. That’s usually things on the buyer. Buyer to perform, buyer to verify all those things. So it’s not like I’m not doing my job. I don’t need to. And we even take it so far as you know… I mean, there’s just all kinds of things that I don’t do that… And like someone does a survey. I had a trucker one time say, “Look, can you get a survey on the property?” I said, “Sure. I can do that. It’s going to change the price a little bit. So let me tell you what what’s involved in this and who to call and you decide.” He goes, “Oh, you know what? I’ll take care of that.” Yeah. I thought you’d say that because if I do all the steps and the time and whatever, I just pass it on to you, and then you can decide if you even really want to do that, so…
Steven J Butala:
I guess my big picture philosophical question is why does certain people want to complicate stuff? They just seem to be that kind of people.
Jill K DeWit:
Well, I think it goes back to, like you said they’re just… some people in other careers that they’re used to having 18 steps and you have to do all these silly, not silly, but all these things or it’s not right. And this doesn’t have to be that way. You’re buying a piece of property and you’re selling it. And you know what’s interesting too? I’m the kind of buyer that even if I walk into a house I’m… Say I’m buying a primary residence. I’m not going to say, “Call me when the carpet’s the color I want and the walls are the color I want. And I hate these windows and whatever it is.” I’m still going to look at the property as a big picture item. And I think that’s how I see land too. I know it is. So I don’t have any… There’s nothing that’s going to be a fatal flaw for me. And I don’t have to have a checklist of things.
So if I’m buying a primary residence, I’m going to… We just almost did it the other day. We were walking through about to, gosh, plop some money down on a vacation property. That was when the weather was nice. And then the weather changed. And one of us, not me said, “Hell no.” And so anyway, it was a dreamy, beautiful part of Utah. And we’re walking this… And I’m like, “I didn’t see any flaw, anything.” I’m like, “I went back.” You know why? Because we went back and I looked at it. What was the price per square foot? And where did it compare to the rest of the area? And what was going on in the area? And I’m like, “Done.” That’s what I needed. And were there problems? Sure. The garage situation wasn’t that great. And the slope wasn’t that great. Getting up there wasn’t that great. But I could get past all that because of the price, like I said. The economics worked. So I’m kind of getting off on a tangent here so you can pull me back in.
Steven J Butala:
I think it’s self-expression. I think that there are people that… I always come back to the classroom environment, whether it’s high school or college, but more college and high school. There’s always a few people in a class or one or two people in every single class that the instructor’s saying, “This is how you do it. And here’s a few case studies on how to do this one. And this is what happens over here. And this is what happened over here. And this is what we all learned. And that’s kind of the takeaway. And may or may not be on the test.” And there’s always somebody that says some version of, “Well, wait a minute. What if this could happen? And what if my hair was two inches longer? And what if I… Please pay attention to me. Pay attention to me.”
Jill K DeWit:
It’s almost like…
Steven J Butala:
“Pay attention to my way.”
Jill K DeWit:
You’re right.
Steven J Butala:
“There’s adjacent property over here that you’re missing. You’re missing it. Steve and Jill, you’re missing it.” No, I’m not. You’re missing it. It’s all a cry for help.
Jill K DeWit:
Sometimes there is a bit of a showoff-y thing. I understand. I was never that kid.
Steven J Butala:
No.
Jill K DeWit:
I’m like, “Can we be done now?” I’m in the back going, “Can somebody shut that guy up?”
Steven J Butala:
No, I was like, “Hey get out of here because I want to go play baseball, man. Let’s get out of this math class.”
Jill K DeWit:
“It’s almost lunchtime. Can we go. Shut that guy up. Somebody sit on him.”
Steven J Butala:
Plus this guy in the front of the class is 180 years old and he knows what he wants. I’m not going to argue with math. I’m not going to change math. I’m not going to change history.
Jill K DeWit:
Nope.
Steven J Butala:
I’m not going to change how we buy and sell real estate. After I master it, then maybe I’ll look at new datasets. We’re looking at new data sets all the time.
Jill K DeWit:
Yeah. Happy you could join us today. Monday through Friday, you can put us right here on the Land Academy Show.
Steven J Butala:
Tomorrow the episode on the Land Academy Show is called how to win at life. You are not alone in your real estate ambition. Here’s a hint.
Jill K DeWit:
I can’t wait to hear. I don’t know what you’re going to talk about here.
Steven J Butala:
It’s not make everything incredibly complicated and it’s not make everything complicated.
Jill K DeWit:
Love it. Thank you for tuning in. We hope you find our content valuable and we really appreciate your support. If you haven’t already, please get on over to our YouTube channel and hit the subscribe button.
Steven J Butala:
Your comments and suggestions help us to create the type of content you’re here for. Hitting the like button on your favorite episodes helps us support our channel’s algorithm engage your interest for future shows. We are Steve and Jill.
Jill K DeWit:
We are Steve and Jill.
Steven J Butala:
Information.
Jill K DeWit:
And inspiration
Steven J Butala:
To buy undervalued property.
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