5 Real Estate Results of Covid (LA 1378)

5 Real Estate Results of Covid (LA 1378)

Transcript:

Jack Butala:
Steve and Jill here.

Jill DeWit:
Hello.

Jack Butala:
Happy Friday.

Jill DeWit:
Thank you.

Jack Butala:
Welcome to the Land Academy Show, entertaining-

Jill DeWit:
Was that for me?

Jack Butala:
… land investment talk. I’m Steven Jack Butala.

Jill DeWit:
And I’m Jill DeWit, broadcasting from sunny southern California.

Jack Butala:
Today, Jill and I talk about five real estate results of the COVID.

Jill DeWit:
I have something funny I was just thinking about. Do you know, we just had rain like a week and a half ago. We had gone … So everyone, I’m sorry if you’re not in our state. Brace yourself. We had like 100-

Jack Butala:
Congratulations. You’re not in our state. That’s what I say.

Jill DeWit:
So thumbs up to that. If you’re not in our state, thumbs up. Your taxes rock. But as a side note, I was going to share that we had gone something stupid, like 180 days without any weather, if you can believe that. No rain. It’s kind of amazing when you think about like we haven’t had … So what was that March, February? I don’t even remember. But it was a pretty flipping long stretch of no rain. So when I say sunny southern California, I kind of mean it. As you can see behind us. Okay. Back to the question. Are we doing our question now?

Jack Butala:
Before we get into it and Jill gets too far into it, let’s take a question posted by one of our members on the landinvestors.com online community. It’s free.

Jill DeWit:
I hope I pronounce this correctly. I’m saying Amit. Amit wrote, “Hi, all. New to Land Academy and excited to be here. I’m working on my first mailer. The county that I’m working on has some cheap properties and some in a better scenic area that are a little more pricey. What creates an issue for me is to price the offers right.”

Jack Butala:
Welcome to Land Academy. Pricing, pricing, pricing.

Jill DeWit:
“I’m afraid if I go by the lowest values of Zillow and LandWatch, et cetera, this will only be applicable to one area of the county, and similar acreage in other areas of the county I probably won’t even get a response. Cannot use the subdivision column or zip code since there’s a lot of blank spaces, empty. Is there any tools to map APN to specific regions in bulk? Any other thoughts? Or price this better and just go for the lowest and see what happens?” So this is kind of all on your side of the sheet.

Jack Butala:
Amit, I’m happy to inform you that you are going to do fantastically well in this career. You’re brand new. You’re already looking at a county and the data that’s involved in the county. You probably don’t even know this about yourself. You’re probably frustrated as hell, like I am every single time I sit down. The first 10% of doing a mailer is brutal. The last 10% is like pat yourself on the back. But you’re asking all the right questions. You’re concerned about the variance in pricing in a given county, and you want to do something about it. And you reached out in Land Investors to the point where it made it on this show, because you care that much, and you’re using Land Academy the way that it’s intended. So, congratulations. So I’m going to answer your question. There’s generally four or five quadrants, I would say in most counties. I love to use Santa Barbara County as an example because it’s so different.
Santa Barbara County itself is made up of this mountain area. There’s a lot of property there. This core urban area where a lot of people from Los Angeles moved to. So there’s a lot of dirt, and houses are extremely expensive. And then there’s this desert area up in the Northeast. So my point is there’s very different or very separate parts that need to be priced differently. If you open DataTree, and you have a subscription as a member, and you type in some address or some APN that gets you to the county, and then you start searching through the map and you get to a certain altitude, let’s call it, all the APNs will start to populate. And so you’ll see, the APN scheme in California, I think it’s three digits first with a dash, then four, and then sometimes there’s trailing digits.
You will see the trend. You will see the northeastern quadrant starts with 104. The Southeastern quadrant starts with 202 and on and on and on. And you will start to see a pattern. So you need to do four, if you’re going to mail a whole county at one time, which I wouldn’t recommend. Pick a quadrant, find out where generally the first APN is and the last APN in that scheme of numbers and price it that way. And then go to the next quadrant. I use quadrant loosely. Sometimes it’s five. Sometimes it’s two. Sometimes it’s one. There’s certain places in, like Arizona is a good example, where there’s just like Navajo or Apache County, which I don’t recommend sending mail to at all. It’s all one price, except for the super urban areas. If you learn how to do this correctly, Amit and anybody else, you will win for the ever in pricing. It’s called APN pricing.

Jill DeWit:
Thank you very much, Steven. We’re happy to have you here on the show today.

Jack Butala:
It’s Friday. Jill’s all loopy.

Jill DeWit:
Yeah.

Jack Butala:
APN pricing is the end all, be all when it comes to land, if you’re choosing county-based pricing, which a lot of us do. That’s one way. This has nothing to do with houses. In houses, we use something called smart pricing. It’s completely different. So this is only land and rural land. For urban land, we use the same thing, smart pricing, but this is APN-based pricing for very rural vacant land or recreational acreage. And if you do this right, it’s going to take you, even me, it takes me maybe a day, maybe eight hours to really sit down and break out those APNs and figure it all out.

Jill DeWit:
That’s good. I liked that you shared how long it takes, because people need to have a realistic expectation. So if you’re brand new, double it.

Jack Butala:
Yeah, two days.

Jill DeWit:
Seriously, two days. It’s what you’re doing on Saturday and what you’re doing on Sunday. And that’s okay. Tell your wife ahead of time if you prefer mayonnaise or mustard on your sandwich, which she probably already knows. I know exactly what kind of sandwich he likes. I’ll tell you right now. This person over here is a sourdough turkey, no cheese. Love the lettuce, love the tomato. Hate the mayonnaise, love the mustard. That’s your sandwich. Am I right?

Jack Butala:
Jill, you’re my girl.

Jill DeWit:
Thank you. So this is it. This is is how we do … This is my contribution to pricing weekends. When would you like your sandwich delivered?

Jack Butala:
I’ll tell you what. Because when that mailer goes out and a couple of weeks go by-

Jill DeWit:
Then it’s reversed.

Jack Butala:
… guess who’s making the sandwiches for who.

Jill DeWit:
That’s true. Then it’s like, “What do you want? I’ll have dinner ready? What time can you come to dinner?”

Jack Butala:
You know what Jill loves? When you go to Costco and you get those pre-made meals. Costco has like five pre-made meals that Jill just loves, the meatloaf-

Jill DeWit:
Because it’s so easy.

Jack Butala:
… mashed potatoes and meatloaf, where you put it in a little oven thing for about an hour. The stuffed peppers-

Jill DeWit:
Yeah, those are good.

Jack Butala:
… those are a huge hit everywhere.

Jill DeWit:
I like the salmon.

Jack Butala:
The pre-made chickens that you can get anywhere.

Jill DeWit:
Salmon’s good.

Jack Butala:
Steamed vegetables and broccoli with little Havarti cheese over it.

Jill DeWit:
Big salad. I’m a huge salad fan.

Jack Butala:
So, this is not gender specific who helps who here. It’s the roles we’ve assigned ourselves.

Jill DeWit:
That’s true. Yep. The kids know. Like, “Oh, we know exactly what’s going on. Dad’s in charge of dinner. We know why.”

Jack Butala:
And they know what they’re going to get.

Jill DeWit:
Yeah.

Jack Butala:
Today’s topic, five real estate results of COVID. This is the meat of the show. I lost my space.

Jill DeWit:
That’s okay. I have my five. How do you want to do this?

Jack Butala:
I’m going to set this all up and then I would like you to just read your five without explaining, and then I’ll read my five and I bet they’re crazy different, which I think is good.

Jill DeWit:
Okay, cool.

Jack Butala:
In March of 2020, this COVID thing hit. I personally was very public about saying, “You know what? The real estate world is going to end. Unemployment’s at 25%. We can’t sustain this. It’s an election year.” On and on and on. I could not have been more wrong. I was basing most of my information on the 2010, I’ll call it 2010 great recession, where Jill and I got brought to our knees from a professional standpoint and we were kept there for two or three years until we figured it all out. But real estate caused that recession back then, which is unlike what’s happening now. COVID caused this thing. What it did, and that’s what we’re going to talk about here, is separate us. It separated the haves and the have-nots from a real estate standpoint. And we’ll get into that. And that’s the setup. The real estate result of that is what we’re going to talk about here.

Jill DeWit:
Okay. So my five real estate results of COVID are one, people moving to bigger properties. Two, office space becoming obsolete.

Jack Butala:
That was my number two also.

Jill DeWit:
Okay. Three, restaurant and retail vacancies. I don’t think they’re coming back. Four, rent in cities lower, rent in suburbs higher. And five, you really can live anywhere and work remote for most jobs.

Jack Butala:
That’s my five too.

Jill DeWit:
Hilarious.

Jack Butala:
All right. Here’s my five. You don’t need to work where you used to work. What you’re going to do now as an end user for your primary residence is choose a school system. And so where there’s good schools, because these young people aren’t stupid and they don’t want their kids to be stupid either, are going to choose good school systems. So school systems are always important, always. Now twice as important.

Jill DeWit:
More than ever.

Jack Butala:
Look, my number one really is it’s created a have and a have-nots. Nobody could have predicted this COVID and then the response too. Nobody could have predicted that. The people that have careers, and our membership group are some of these people and so are we, where you can work from your home, 100% work from home and hit your numbers. That’s the haves. The people who need to go somewhere and unlock a door and walk in there and work-

Jill DeWit:
And make something.

Jack Butala:
… it’s extremely unfortunate. Or make something or whatever, that’s the have-nots. And I’m not talking about manufacturing a car. I’m talking about making a cup of coffee or spaghetti or whatever. So my number one is have and have-nots, and it’s the same. You don’t need to work where you need to anymore. Just like Jill, office buildings are done. It’s over permanently.

Jill DeWit:
Yeah.

Jack Butala:
There’s going to be only special use office buildings, and they’re probably going to be attached to manufacturing facilities where you have to be there to see what people are making stuff. And even then, that’s going to dwindle. Warehouse and shipping centers will replace all those office buildings and they will be in rural locations because that’s where stuff’s going to get shipped. It’s not going to get shipped into New York City anymore.

Jill DeWit:
That’s what we’re seeing with the malls, and I think that’s a great use for that.

Jack Butala:
Affordable housing in rural locations that have high speed internet, hold onto your hat. And guess what we buy and have been buying since 1994? Rural property that’s affordable.

Jill DeWit:
That should be … I’m going to write this down right now.

Jack Butala:
I wrote yours down too.

Jill DeWit:
By the way, here’s my number one, for every land property or whatever posting you write, you should say 5G, great schools. Those going to be what people want to buy.

Jack Butala:
Oh, I like it.

Jill DeWit:
5G, great schools.

Jack Butala:
I think we should create Gs. You know how we have As?

Jill DeWit:
Oh. What are the great … Okay. That’s a good idea for that.

Jack Butala:
We’ll talk about it, yeah.

Jill DeWit:
That’s a good one. As are for the buying the property and Gs are for the selling the property.

Jack Butala:
Or locating where to send mail.

Jill DeWit:
That’s good. Cool. What else you got?

Jack Butala:
My fifth is a different word for Jill’s fifth, freedom.

Jill DeWit:
Yeah.

Jack Butala:
We have freedom now like we’ve never had before and we have choices. And when are more choices bad? That’s my question to you. We have real estate choices. We have way, way, way more choices about where to send mail to buy property cheap and resell it and we have way more data that helps us make a very intelligent and informed decision about where to send mail, more so than we did last year, because there’s this huge migration going on. And it’s not any real big surprise about where people are moving or where the demand for stuff is. It’s warmer, cheaper.

Jill DeWit:
It’s easy to see. Yeah, everybody knows where it is. You can look at it. Pull it up on your phone, you can figure it out.

Jack Butala:
The hottest real estate markets haven’t changed in 10 years. And I don’t mean hottest … They have changed a little bit. They have shifted. And when you take in price, there’s strangely, consistently towns in the Midwest and the Rust Belt that make that list, but it’s only because those properties used to sell for $1,000, and I mean a house, and now they’re selling for 50,000, and it’s still … Try to get Jill into a $50,000 house and watch what happens.

Jill DeWit:
Try to get me to walk into a $5,000 house.

Jack Butala:
No, I mean 50.

Jill DeWit:
I know. That too.

Jack Butala:
So those are each of our five results. So, what do you do? You take a look at this data, this abundance of data, and you decide, yeah, this rural part of ,let’s say Georgia, or this rural part of northern Michigan is now a fantastic place to buy and sell property. And a year ago, it wasn’t. A year ago, it was just a sleepy little thing and the days on market were 180 and now they’re 30. That’s what you’re looking for, is this shift. And anytime there are shifts in markets, like in the stock market or anything else, people make bajillions of dollars.

Jill DeWit:
Is that a word?

Jack Butala:
No.

Jill DeWit:
Okay. Just checking.

Jack Butala:
If I say billion, everyone’s like, “I can make a billion dollars.” No, actually you cannot make a billion dollars buying and selling real estate. I think you can make millions a month.

Jill DeWit:
Just checking. Just checking.

Jack Butala:
I could say gazillion. That’s not a word either, but that’s crazy.

Jill DeWit:
Truth time. We were getting out the dictionary the other day, because it’s Friday. We got the topic covered. I can end on this. We were having our own little truth time the other day. And Steven was ever so politely …

Jack Butala:
This is Jill’s satire.

Jill DeWit:
Pointing out the words that I say. He’s like, “That’s not a word.” So what do I do? I go online. I look it up, and gosh, it is a word.

Jack Butala:
It’s a slang word, but it’s a word.

Jill DeWit:
It is a word.

Jack Butala:
The word is-

Jill DeWit:
Irreplaceable.

Jack Butala:
No, no.

Jill DeWit:
Irrespective?

Jack Butala:
It was irregardless.

Jill DeWit:
Irregardless.

Jack Butala:
Which is not a word.

Jill DeWit:
Hold on a moment.

Jack Butala:
It’s an acceptable unrecommended word.

Jill DeWit:
Regardless. Irregardless.

Jack Butala:
You know what else I see all the time still? As per.

Jill DeWit:
What?

Jack Butala:
As per is not correct.

Jill DeWit:
I hate that.

Jack Butala:
Just say per.

Jill DeWit:
Yeah, I don’t like that too.

Jack Butala:
Per Jill.

Jill DeWit:
That’s like an attorney thing. As per.

Jack Butala:
Per Jill, change your attitude. That’s what I get.

Jill DeWit:
Irregardless, you’re picking on my words. And you know what? If you do that, you will get a bajillion kisses from me.

Jack Butala:
You know what you’ll get? A roasted chicken with some mashed potatoes.

Jill DeWit:
I’ll take it.

Jack Butala:
And some steamed broccoli with that-

Jill DeWit:
Thank you.

Jack Butala:
… Havarti cheese.

Jill DeWit:
I’ll take it. Happy you could join us today. Monday through Friday, you can find us right here on the Land Academy Show.

Jack Butala:
Join us next week for another interesting episode. You are not alone in your real estate ambition. There’s so much opportunity out there.

Jill DeWit:
Yeah, it’s true. People should … I hope that they see it. You remember when this first all started? A lot of people were like, we felt the panic.

Jack Butala:
Yeah, I did. I was one of them.

Jill DeWit:
And depression.

Jack Butala:
Yeah.

Jill DeWit:
And scared. And I hope that we’re on the backside of that. I hope that people have found opportunities, because there’s a lot of opportunities and positive that you could be doing right now. Like, okay, we’re going to now … We knew this very sweet couple with a little kid, they packed up and went to Canada, living with their parents. And her business is doing great. She always had an online business, by the way. It was her own company, and she’s like, “I don’t need to pay this California rent.” She’s not nuts. Moved in with the parents back in Canada and doing just great. So, I’m just saying this to you. I hope that you have found some new niche, positive, silver lining, something to feel good about moving forward.

Jack Butala:
If you need a job, there are hundreds of thousands of jobs in construction right now.

Jill DeWit:
It’s true.

Jack Butala:
From the top to the bottom. If you know how to weld, you’re going to make 35 bucks an hour out here. So I understand that the unemployment rate, I just looked, and it’s 20%. It’s insanely high. You might have to consider changing your job description and what you want.

Jill DeWit:
And you know what? You might find something better. Be open to it.

Jack Butala:
Do you know how many times I’ve done that in my life? I can’t count.

Jill DeWit:
Yeah.

Jack Butala:
You have to adjust to the market.

Jill DeWit:
So what?

Jack Butala:
The market’s not going to adjust to you.

Jill DeWit:
So what? You know what the beauty is? Remember back in the day where dad got a new job and everybody had to be uprooted and move, and it was hard because you’re leaving your friends and your school system. Well, you can kind of keep your friends and your school system because it’s online now. But every time you do that too, like we’ve done that.

Jack Butala:
How much stronger are you and how much do you learn?

Jill DeWit:
I know. Exactly. I would argue that you’re doing your kids a favor by broadening their horizons and getting them out there and teaching them how to make new friends and pick yourself up and move on. Find a new opportunity.

Jack Butala:
You know what? I didn’t do it enough.

Jill DeWit:
Go where the work is.

Jack Butala:
I should have done it more. I should have been a lot more open.

Jill DeWit:
Interesting.

Jack Butala:
It all turned out okay. But when you don’t have any money, it’s hard to … It’s just hard. It’s harder to make those decisions.

Jill DeWit:
Thank you for tuning in. We hope you find our content valuable and we really appreciate your support. Please zip on over to our YouTube channel, if you haven’t already and watch us there. And while you’re at it, please hit the subscribe button.

Jack 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 to support our channel’s algorithm, and engage your interest in future shows. We are Steve and Jill.

Jill DeWit:
We are Steve and Jill.

Jack Butala:
Information.

Jill DeWit:
And inspiration.

Jack Butala:
To buy undervalued property.

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