No Such Thing as a Failed Mailer (LA 1397)
No Such Thing as a Failed Mailer (LA 1397)
Transcript:
Steven Butala:
Steve and Jill here.
Jill DeWit:
Hello.
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 how there’s no such thing as a failed mailer.
Jill DeWit:
What?
Steven Butala:
Yep.
Jill DeWit:
What?
Steven Butala:
I really think this taps into a lot of people’s concern about their capability of pricing mailers and there’s all kinds of things that can happen after you send a mailer out. I’ve only ever had positive experiences, including, “Wow, nothing really came from that,” but I know I’m never going to mail that state again.
Jill DeWit:
Oh, that’s a positive too. We did that just recently.
Steven Butala:
That’s what I’m saying. We’ll talk about it in a second.
Jill DeWit:
Okay.
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:
David asks, “Hey, all. I was wondering what key metrics you all find most important and are useful to monitor and run your land business for acquisitions, sales, profitability, whatever you think are the most important ones.” Thanks very much. I know what mine is.
Steven Butala:
Go ahead.
Jill DeWit:
I monitor our bank balance.
Steven Butala:
You know what? I used to do that way before you.
Jill DeWit:
I do.
Steven Butala:
I think that’s dangerous.
Jill DeWit:
I know, but I do know if it’s going to the right direction or not.
Steven Butala:
I was fully prepared and I’m going to answer the question the way I was going to answer it anyway, but I didn’t know how much money I’d make. I have an accounting background, so I tend to complicate things just like, “Yeah, there’s a lot of money in there. More than yesterday. I’m going to go have some fun now.”
Jill DeWit:
Exactly. I think we’re doing okay.
Steven Butala:
In this business, like a lot of businesses, but in particular this business for some reason, there’s this relationship between how much cash you have, like Jill said, and how much real estate you have. And they’re constantly going up and down. What’s the value? So I’ll directly answer your question, David. I look at the number of properties that we own based on have we spent the money on. So if they’re in escrow and we’ve already purchased them, but they’re not yet purchased, so there’s cash that’s out. So how much cash is out and what’s the sale value of the real estate that we own? So right now, Jill and I own literally about $2 million, this is sale value of property. And we have generated this year so far … I don’t know what the numbers are, it doesn’t matter. A lot, millions of dollars in sales, sold property, and how much money did we make on it?
But I really, really focus, hyper-focus. If I’m in a hurry I only look at one thing, how much property, what’s the sale value, the whole sale value of the property that we have already paid for? And then I can sleep at night, because I know there’s a million dollars worth of property in there, it’s constantly being cycled through. And then secondarily, I look at what’s under contract, which means in layman’s terms that pipeline’s jammed full enough so that we’ve got a million dollars for sale property, we’ve got a couple million dollars of property that’s being worked on. Not all of it’s going to close for a lot of reasons, I’m sleeping good. What I don’t look at, and I probably should after Jill just made that comment, is how much cash that we have in reserves or … I’m not happy when there’s too much cash.
Jill DeWit:
I know, that’s true, but I do keep track of that. On the first of the month I write it down. What I don’t look at is, I look at the big picture, I don’t look at the number. I don’t have a bottom number, like I have to buy 10, I have to buy the good ones. So I don’t track that.
Steven Butala:
And I don’t track acres, do you?
Jill DeWit:
No, I don’t track acres.
Steven Butala:
It’s in there.
Jill DeWit:
I don’t track-
Steven Butala:
If wanted to look it up I could tell you right now, because the system’s built for all that, but I don’t look at it.
Jill DeWit:
And I don’t track things like the price per acre purchase and the price per acre sold, I don’t track any of that. I don’t track views.
Steven Butala:
I don’t track profitability.
Jill DeWit:
I don’t track … On some sites you can see who likes things, where they save them or something, I don’t track that stuff on a property, because it only takes one.
Steven Butala:
I’ll tell you, I used to track all of that in a daily report long before Jill. And we have a version of a daily report now, but technology is different, so it’s a lot easier to get data. When I began, I had a whole dashboard really, but now there’s a lot of assumptions, correct assumptions, that I make between the two of us and how we run stuff. If we’re buying a piece of property, it’s bad ass of property. I know we’re going to make, and I know it’s going to sell fast. Because Jill doesn’t buy junk, she just doesn’t … So I don’t check profitability or access or any of that. I really look at is the pipeline jammed full enough. If it’s not, then I go back into my own corner and say, “Okay, then I need to send out some more mail or I need to do something to jam her pipeline full,” because that’s my job.
Jill DeWit:
So this ties into this, what we do track David, and you should keep an eye on for sure is, are people sitting around with nothing to do? You need to up the mail volume. Are they overwhelmed? Do you need to hire more kind of thing. And be thinking about ways to be more efficient as well, that kind of stuff. How much time … Honestly, time is an important thing to keep track of, even mine and yours. Good questions though.
Steven Butala:
Great question. David, I know, because I just did this this morning, is not a member. And so this is a kind of question, I’ve never answered this question before ever in the five years that we’ve been doing this and this is an incredibly intelligent … I can tell in your soul you want to get the metrics to be fed back to you so you can make decisions. That’s what reports are for. People don’t understand. Most of the people that are in business don’t understand that. They think that reports are there to punish them, “I have to do a bunch of reports and then I have to give it to the person above me and then they don’t read it anyway.” Ask anybody who does it. I believe that people should get reports, not do them. The way that technology is, we get all the data we need mostly without any real input. And then at some point, theoretically, the person that is working, let’s say a transaction coordinator, is going to start to look at that data and make some, consciously or subconsciously, make some decisions on their own-
Jill DeWit:
These are just trends.
Steven Butala:
Yes.
Jill DeWit:
Trends will pop up.
Steven Butala:
And they’re going to say, “Yeah, I mean, they’re not … These guys aren’t going to go for this deal.” And they’ll start flagging them, and that’s how you get promoted.
Jill DeWit:
I would pay attention to though, one of the things I would track is try to find out as best you can where your sales are coming from and then redo that. If you’re finding mostly Facebook and Instagram, not so much Twitter and [inaudible 00:07:37], whatever. Those little things like that that I do try to … It’s not hardcore tracking, but I try to find out and make a note of that, so I can go, “All right, I need to do more of that”. So those are the obvious things. I guess my point is there’s going to be a few things that are blatantly obvious, “I need to keep an eye on this. This is important. I see where it’s going.”
Steven Butala:
We use Airtable as a CRM that has … And the way that we set it up is with summaries, every section we’re looking at the acquisition, it got flagged for an … Yes, I want to do it. Jill and I both agreed that we want to do it. Great, that’s in the engineering stage. Great, it’s in the sold stage. So all the properties that are in those sub-categories, there’s about six categories that we use, it gets all summarized. So I can tell you, within seconds how much we have under contract, what the price per acre is, what the totals are. So if you can set up your CRM, make sure it totals everything so you can see all that data. It’s very easy to automate it where you get an email in the morning that says, “Here’s the deal.”
Jill DeWit:
Cool.
Steven Butala:
Today’s topic, there’s no such thing as a failed mailer. This is why you’re listening. This topic came up because Jill had a consultant call with somebody and they said some version of this, “I’m going to buy this very specific type of property. It needs to make net this amount of money and I want to sell it fast.” And so to do that, and he’s talking to himself now, “To do that, I know I need to send out 25,000 mailers,” or I guess it was 20,000 mailers, and he’s going to make a hundred grand on a property. So what’s the cost of 20,000 mailers? So by anybody’s gauge, sending out 20,000 mailers is a lot, it’s a lot of work, but it’s only one property that’s [crosstalk 00:09:30].
Jill DeWit:
It’s 10,000 bucks.
Steven Butala:
It costs about $10,000 to do a 20,000 unit mailer to make a hundred grand. Is that a failed mailer?
Jill DeWit:
No, that’s not a failed mailer.
Steven Butala:
If you send out a mailer and you weren’t really prepared, but you really just wanted to baptism by fire it, and you have a job and you get 42 calls and none of them you could answer because you’re at work, and nobody left a message. There’s 42 calls with 42 caller IDs on the number that you set up. Is that a failed mailer?
Jill DeWit:
No.
Steven Butala:
Well, you didn’t buy a property.
Jill DeWit:
You didn’t call them back or you didn’t have somebody to answer the phone.
Steven Butala:
So you failed the mailer, not the other way around?
Jill DeWit:
Yeah, the mailer didn’t fail, you failed.
Steven Butala:
You failed the mailer?
Jill DeWit:
Yeah. Keep going-
Steven Butala:
He sent out-
Jill DeWit:
Ask more, I like this game,
Steven Butala:
I am. I’m prepping my thought here to make it super clear. Because Jill and I, this is our life at Land Academy. I sent out 2200 units in one zip code. I got 42 calls back. I got 42 calls back, I had eight conversations, because on the weekend I answered the phone and had eight conversations. Six of them, I really got yelled at. I got called words that I didn’t even … Wasn’t called since I was a kid by my parents. And I got two signed purchase agreements back that I haven’t looked at yet. I think one of them is going to be okay, but I haven’t decided yet. Is that a failed mailer?
Jill DeWit:
Nope.
Steven Butala:
These are all real stories. These are all real … It’s not as prevalent as I’m saying, but there’s people listening to this, maybe they’re members and maybe they’re not, this is their life right now. They’re right in this situation and they’re saying, “This doesn’t work.”
Jill DeWit:
Right. We did one a while back with a couple of guys, a couple of their … I think they’re related. I think there were brothers, I don’t know. But they were thinking that they had a failed mailer and it was a consulting call. We were both on it. I said, “Show it to us please.” And they screen shared their spreadsheet. And we’re like, “What about that one? And what about that one? And what about that one?” We talked to them like, “Oh”. It wasn’t a failed mailer, they were just a little too picky. I’m like, “This is a great deal. I don’t understand, what am I missing here?” Like, “Oh, I guess it is.”
And I think it’s just experience, you have to dig in there. And that’s the value of the Thursday call. If you’re really not sure and you really … When you’re in that situation, you’re staring at them going, “Oh, you’re new. I got these back. I got my … ” You just said, I got two signed purchase agreements, I think, I’m not sure. Usually if you have your checklist that we help you with and you know what to do, you know what you’re looking at, you’re doing your due diligence. If it checks all the boxes and you’re going, “Uh-oh, I think this is a great one,” most likely it is, and you need to pull the trigger. If you’re really, really, really not sure, “There’s something about it. I don’t know, about the access. I don’t know, I’m not sure if I have enough, if I’m looking at this right price-wise or something.” That’s why we’re here to answer these questions. I’m not sure where I was going with that.
Steven Butala:
What happens on a Thursday call very often is somebody will say, “I bought this property,” or “I’m thinking about buying this property,” and, “Would you do this deal?” And it comes up and it usually happens with really expensive properties. And after it gets presented and Jill and I look at it and we all talk about it, our answer is, “This is a lot of money, but it looks like an incredible deal. I don’t feel like I’m qualified enough because of the price of the property to say yes or no, you should do the deal.”
And invariably, people in the chat say, “This is right around the corner from me, I’ve done 10 of these deals.” People we’ve never heard of that had been lurking on the show on the Thursday call forever, “Please give me a call and I think we can probably do this deal together.” So if you’re sending out mail in some crazy place, that you live in Chicago and you’re sending it out in Montana or something, there’s going to be somebody or a group of people in Montana that are in our group that are going to see something in properties that you are going to promptly turn down as they come in.
So here’s my big picture point after being pissy about this, and intentionally so. You have to work this. If you’re not going to put the time and the energy in it’s not going to come back correctly and you’re not going to do deals. There was a time when we started Land Academy that the prevalence of transactions was so great, and this is before Jill, this is long before I ever met Jill, that I only did transactions where I received the purchase agreement, I checked it, it worked, and that was it. Because we were getting 10 or 20 of those in a day.
Jill DeWit:
Because nobody was doing anything.
Steven Butala:
That’s right, because no one ever sent mail out, ever.
Jill DeWit:
Well I would argue no one else had a way to sell their property too by the way. There was not a flat rate MLS, there were not a lot of land brokers. They would only call the real estate agents that they knew, and they were just doing houses, they don’t know how to do the land. So there was no other way to sell land. That was back in 1920 when you started. Just kidding, I’m joking. You do a lot of before Jill, I’m like, “What’s with all the before Jill?”
Steven Butala:
Because it was wrong. Every time I say before Jill, it’s like, “Oh, well now there’s Jill and now I learned the right way to do it.” I mean, Jill and I joined forces at the same time the internet became relatively prevalent.
Jill DeWit:
I have a couple of things I would like to share. This topic gets me mad, because I don’t think that this is possible. And here is why. I have no … And we all know what a perfect mailer is. If you don’t, I’ll tell you real quick. A perfect mailer is you priced it great, you have two days of getting yelled at, big deal. And of those two days you’re getting yelled at, you’re quick on the phone, you’re saying, “Hey, if I added three zeros based on what you said, I screwed up, do you even want to sell?” And they’re going to go, Hell no.” Well, it’s not a seller anyway, they just wanted to be mad about it, who cares? There might be a few in there.
That’s what I do, you don’t have to. But I try to see if there’s a few in there to work those deals and sometimes it works out great, it doesn’t matter. A couple days of hate. Then after that it takes a few more days. There’s almost a lull, and then here comes the real guys. Because the real people open it up, put it on the dining room table or they stick it on a magnet on the fridge and they think about it. They’re thinking about it, thinking about it, thinking about it. They’re calling the kids or sleeping on it, they’re talking to their wife, and then they’re going to reach back out to you. And that’s the juice.
But sometimes it’s way later too. I just had someone laying in bed, reading this morning about a girl said. I can’t believe it. I just had someone, “Hey, everybody, don’t [inaudible 00:16:41] your mailer, I just had one come back from February and it’s a fantastic property, I’m going to buy it.” I personally had one, by the way, I didn’t tell you this, it’s a property I don’t want, but a guy came back and said … Because we were talking in August. I went back and looked, I’m like, “Oh my gosh.” I gave him my highest best offer in August and he said, “That doesn’t work for me,” and I said, “Okay, I understand that.” He just came back now in December and said, “Would you reconsider your August-
Steven Butala:
Why don’t you want to buy it?
Jill DeWit:
Because it’s a state that I’m not real common … It’s just one area that I’m like, “Shucks”. I wasn’t sure about movement in the area, and now since August, and now there really isn’t any movement in the area, I don’t want to-
Steven Butala:
[inaudible 00:17:25]. Are you sure?
Jill DeWit:
Yeah, I really looked it up. And I don’t want to insult the guy and say … Well, I kind of did. I said, “You know what?” Actually, I went back to him and said, “I’m not interested in that price anymore, and here’s the reasons why.” I gave him some comps, I really did, I said, “The price I would be interested is about half of my highest …” I’m not kidding.
Steven Butala:
Jesus, Jill.
Jill DeWit:
No, I’m serious. And he’s an attorney, I’m like, “I feel that [inaudible 00:17:48] he’s an attorney.” Because it says … It’s John Wilson, Wilson Attorney and Law Group, and I’m like, “I’m sorry, Mr. Wilson but … ” And I gave valid reasons. I’m a professional, he’s a professional. And I could say, “Here’s the deal. I looked up in your area this is how many are available, just a brief overview, what I could find doing a few minutes of research. This is how many are available, this is how many have sold in the last 12 months”. And why I can’t justify this price, you can’t argue with that, it’s just the facts man.
Steven Butala:
He’s living there right now too.
Jill DeWit:
Yeah, he knows it.
Steven Butala:
He is trying to sell it, he can’t sell.
Jill DeWit:
Yeah, he can’t sell it.
Steven Butala:
So we don’t want that, Jill.
Jill DeWit:
No, that’s my point. So my highest and best back then is now half. And I very politely said it and he replied, “Thank you. I understand, I appreciate it. I wish you all the best.” [inaudible 00:18:37].
Steven Butala:
That’s how it should go, just like that.
Jill DeWit:
Exactly. So this is the kind of communication you should be having on all of your mailers. So those are some good stories but what I want to share is you did it all wrong. I have story, after story, after story, and we do, of members that said, “Holy cow, I priced these so wrong that everybody called me back. Uh-oh, that was a mistake.” You know what? It’s still not a failed mailer. You could do what I just said with this guy. There’s a way to politely say, “Shucks, I thought it had ABC and D, now I found out it only has A. So I am still interested your property, but because it doesn’t have these other three things, this is the best I can do.” So that’s not a failed mailer. You came in and offered too much, that’s how you solve it.
Now the flip side, you went in, you accidentally sent an offer out for $2 to the planet. How do you solve that one? Everybody hates you. Will you do what I just said a few minutes ago, which is they call you back, they’re hating you, cause you sent an offer for $2 and you meant to put 2000. It really was a typo, maybe it was a typo. You’re not a bad person trying to do that. So you say, “Okay, number one, I’d fire that person if I could, but they’re me, make a joke out of it, seriously. “I clearly made a mistake. Please, do you want to sell? And let’s talk about it and let’s get to the bottom of … Okay, you do want to sell. What’s the … ” Find out more about the property and you can come back with a better offer, come back with a real offer, or my favorite is, “Look, here’s how I operate, here’s what I do. Everybody has a bottom number. If you could walk away tomorrow with what number would make sense to you to have cash in your hand.” And everybody says, “All right.”
And the right people, they’ll have a number in their head or they’ll say, “Let me talk to my wife, I’ll get right back to you.” And it’s going to be something usually reasonable. And if it’s not reasonable, if they go do their research, sometimes they’ll do the research and come back with a retail number. And I’m like, “Okay, that’s not who I am. I wish you all the best.” I have a guy right now, this is exactly what’s going on. And it’s all via email, by the way. I said, “Yeah, no.” And he’s like, “Oh, hold on a moment.” And I’m like, “Shoot.” You have to be careful, because you don’t want to get into negotiating things. So I’m going to give him … I may or may not if I want it, give him one … Now I know where he thinks is it’s valuable from my number is down here.
Steven Butala:
Is it way different?
Jill DeWit:
Kind of. I mean, because it came back retail, I’m not retail. They will come back, “That’s what I want to sell it for.” Not what I’m going to buy it for, that’s not who I am. They didn’t understand the exercise here.
Steven Butala:
When these properties come back and there’s a moment, it’s maybe a second or two, when you’re going to buy it or you’re not. And then nine times out of 10, there’s nothing that changes that. We’re buying a portfolio property in a state right now, I can’t wait till it closes. I can’t wait. I’m sitting around saying every day, I’m like … And I know it’s a process because there’s a lot of stuff involved, a lot of property, and there’s just a lot of stuff involved. And the second that deal came back, Jill and I were doing a dance, both of us, without looking at each other or talking about it.
And so if you send out enough mail those are the types of deals that you want to do. We’re going to make seven or $800,000 on that property, that portion of properties. And it will lead us into talking to the neighbors and buying a bunch of other property in a very localized area. Let’s say I had nine failed mailers where I didn’t buy any property, well, I failed the mailer, but for whatever reason, and then I did this one and I’m going to make seven or 800,000 bucks in less than 12 months. You average all that out, you just never fail. You never fail at this, never.
Jill DeWit:
And then again, I’ll come back to … I would argue for anyone who’s been in our group and have been doing this more than a year you see things come back later, like, “Ah-ha, how funny is that? I kicked that to the curb when I just got a signed purchase agreement with a loving note saying, ‘Are you still interested? It’s the end of the year now, there’s a life event and I need to get rid of this. And you’re the only person that expressed interest’, or ‘I like you’.”
Steven Butala:
There’s a section of a county in New Mexico, central New Mexico, that’s got a ton of oil and gas wells on it. And I’ve mailed it by mistake a couple of times in my career. And it comes back, a lot of stuff signed and we do the research and I’m like, “I should’ve never done this again.” Because we’re just not oil and gas people. All the properties only can be used or should be used with leases on it. And they come with leases, it’s profitable. That’s not our thing. So was that a failed mailer? I don’t think so. We didn’t buy any property from it. We got a lot of signed purchase agreements back to which we send them to a specific person who I know buys property there. We don’t even charge a finder’s fee or anything. So was it failed? I don’t think so.
Jill DeWit:
No. Happy you could join us today. You can find this five days a week right here on the Land Academy Show.
Steven Butala:
Tomorrow the episode on the Land Academy Show is called the right questions to ask, you are not alone in your real estate ambition. The right class questions to ask.
Jill DeWit:
Oh, I’m going to have a lot to say about that.
Steven Butala:
Let’s just leave it at that.
Jill DeWit:
I’m going to try not to get into it. I’ll try not to rant tomorrow, I promise.
Steven Butala:
I’ll help you.
Jill DeWit:
Okay. And thank you for tuning in, by the way, I hope you find our content valuable and we appreciate your support. Please check out our YouTube channel and hit the Subscribe button.
Steven Butala:
And 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 gauge your interest for future shows.
We are Steve and Jill.
Jill DeWit:
We are Steve and Jill.
Steven Butala:
Information …
Jill DeWit:
… and inspiration …
Steven Butala:
… to buy undervalued property.
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