2021 Market Update (LA 1407)

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 Dewitt, broadcasting from sunny Southern California.

Steven Butala:
Today Jill and I really may… Not Jill, give you a 2021 real estate market update.

Jill DeWit:
Here’s the reason. When we were sitting, writing the topics, I asked for this topic. I said, “Babe, we talk a lot in the confines of our bathroom,” early in the morning when we’re getting ready, which is very true. Fortunately, we have a large bathroom. It’s not like a closed door situation. Don’t worry about that.

Steven Butala:
Fortunately, Jill has a large bathroom that she lets me into to talk to her, once in a while.

Jill DeWit:
We have a large bathroom. No. And there’s actually places to sit in the bathroom, which is very nice. So often one of us is getting ready, usually it’s me, not him and he sits down with his cup of coffee and we have these really great in-depth conversations. And lately, as I’m sure you are probably doing this also… I can’t wait for 2021.

Steven Butala:
Yeah.

Jill DeWit:
What do you think is going to be possible? What do think is going to happen with this, X, this kind of real estate and these situations and all of that? So I said, “Babe, can we move the bathroom discussion to the podcast,” which we are doing now and I’m lovingly calling it The 2021 Market Update by Steven.

Steven Butala:
Boy, that’s like truth time effect.

Jill DeWit:
It is.

Steven Butala:
That’s the most true thing I’ve heard with great detail.

Jill DeWit:
Yes. Do you want me to describe our bathroom more?

Steven Butala:
If you need to.

Jill DeWit:
Okay. It’s Okay. All right. Before we get into it, let’s take a question posted by one of our members on The Land Investors, online community. It’s free. Pete asks, I’m new to Land Academy but not new to real estate or investing.

Steven Butala:
Good. Good for you.

Jill DeWit:
I sent out my first 10,000 piece mailer… Nice… last week, and I’m waiting for the calls to come in. I’m in the middle of setting up my processes for when that does start happening next week. In a lot of businesses, I know that most of the money’s made in the follow-up not the initial contact with a prospect.
In this business, the money’s made when you buy it at the right price. Of course. Buy it right, what we say. So it makes sense to me that my focus should be on acquisitions and I’m confident that the rest will fall into place much easier. Is it typical for most of the sellers to agree to a deal on their first phone call, or is there a lot of, let me think about it.

Steven Butala:
These are good questions.

Jill DeWit:
And then you never hear back from them. If the latter is true, I’m thinking of having an extensive, automated follow-up campaign that were really help. By this, I mean putting these automated tools in place, emails, texts, ringless voicemails, Facebook retargeting ads, triggering them to visiting my website that I advertise on my offer letters. When I get a seller that’s not ready to commit right away, I would just drop them into my CRM and the rest would be completely automated until they respond again.
It’s not too hard to build up something like this that will follow up for a year. It would focus on a lot of contact within the first two weeks, then gradually get down to about one contact attempt a month. Has anyone built something like this out and does it bring a lot of deals that you may or may not have happened? Thanks in advance. Dying to know, did anybody comment on this yet?

Steven Butala:
Oh, there’s a bunch of comments on this but I’ll tell you, I just had this conversation with my tech team, like three days ago, that these tools are becoming prevalent, where somebody calls you, it goes into a CRM. You either took the call, hopefully. Jill and I just had in the bathroom, we had this call about, “Man, you got to answer the phone.”

Jill DeWit:
Yeah.

Steven Butala:
So I’ll tell you what you didn’t say in here is answering the phone.

Jill DeWit:
Sure.

Steven Butala:
Either you or somebody needs to answer the phone on the first phone call.

Jill DeWit:
Right.

Steven Butala:
And then I think all these tools are great. I think that you got to make sure that they’re law compliant.

Jill DeWit:
Right.

Steven Butala:
But I don’t think… I think-

Jill DeWit:
But if they responded to you… If you sent out an offer and now they respond back to you, I think that tackles it all because they engaged. So I think you’re legally okay there.

Steven Butala:
Yeah. I can tell you’re very experienced and I love answering questions like this because I’ll tell you four or five times in this whole question, you answered yourself. I would absolutely recommend every single thing that you brought up here. Every single one and your comments about acquisitions and how important they are, are dead on.

Jill DeWit:
I would like to add to that. In my situation, most of my conversations with them don’t go this way though. I’m usually making a deal right then and there, I got to say. Because we still have plenty of signed offers that come right back, so this is not needed. It’s just kind of the deal’s there if I want it, let’s do it. Or they call back and they have three little questions, like, “All right, this says net to me. Does that mean this? Does that mean that?” Little things like that or “I have to find out what the taxes are.”
Usually again, when we’re making the decision, I’m going to make a decision really, really fast. You can tell me if I’m… If you don’t like it-

Steven Butala:
No, no. I’m sure, Jill.

Jill DeWit:
Okay. My only personal concern is chasing people but if it’s automated and you’re not having to do that, then I don’t think that’s crazy. I’m not going to hire someone on my staff to say, “Here’s all the people that called me. I made them a counter. They didn’t like my counter. Blow up their phone until they agree to my counter.” We just usually send more mail. So I’m actually curious to see how this goes.

Steven Butala:
I wouldn’t try it out of the box.

Jill DeWit:
Right.

Steven Butala:
Well, our answer has been, if our deal flow ever gets slow, it’s just to send more mail out.

Jill DeWit:
That’s it.

Steven Butala:
And so then there’s just a whole new influx of people that their irons are hot already.

Jill DeWit:
Right.

Steven Butala:
And Jill closes them.

Jill DeWit:
This is good. This will be really good though… What if you’re micro-targeting a very specific type of property or an area. Say you just love hunting property in whatever part of the country. I don’t know. You’ve got a huge buyers pool for this, so you’re going hard after all these. This would make sense to me. Like, “I really need a lot of this property because I know what I can do with it on a niche thing.”

Steven Butala:
The tax would be annoying as hell after a while.

Jill DeWit:
Yeah.

Steven Butala:
Emails I get. We’re all victims of just so much email from like, “Hey, did you get my call?” “Hey, I noticed you haven’t talked to me in the last couple of days.” It’s like, you know what? That’s annoying.

Jill DeWit:
That’s my only thought. I don’t want to scare them away and make it… I could have had a deal but now I pissed them off so much.

Steven Butala:
Well, here’s a fact. Pete, these are all great ideas and I know you’re going to do well on this. I absolutely know.

Jill DeWit:
Yeah.

Steven Butala:
Just how this is worded and how you’re approaching this and trying to add to the basic thing and put your own little flavor into it. All those things are fantastic. But the way that Jill and I teach this and the way that everybody in our group, in the advanced group, and a substantial number of members do this, works really well.

Jill DeWit:
It’s true.

Steven Butala:
So whatever you’re saying here, I hope it adds to it, but don’t replace anything.

Jill DeWit:
Right. It’s not crazy. And please, if you would, share your results.

Steven Butala:
Yeah.

Jill DeWit:
I would love to know how this goes. That’s really good information.

Steven Butala:
So I love what you say here, and then we’ll move on about the focuses on the acquisition. I can tell you’re an acquisition person. Well, it just occurred to me-

Jill DeWit:
Correct.

Steven Butala:
… Where in the entire real estate business is the focus on sales? It’s within the real estate agent community. Where is all the controversy in the entire real estate business focused on? Real estate agents and how ridiculous most of them are and how unnecessary it is and on and on and on. So don’t be a real estate agent.

Jill DeWit:
Yeah.

Steven Butala:
Real estate agents get the flack that they earn because they’re trying to sell property for more than it’s worth, or they’re just shoving papers around it. If it’s priced right in the first place, you don’t need one.
Today’s topic, The 2021 Real Estate Market Update. This is why you’re listening. Jill’s like, “It was such a good answer to such a good question. Why did you have to wreck it with something like that at the end?”

Jill DeWit:
Pretty much. That’s exactly it. Could you just let that go?

Steven Butala:
The 2021 mark. So I was just looking back at-

Jill DeWit:
It’s like a kid. You don’t want to really take the wind out of their sails. “Hey, Johnny, you look great on the field, but God, you suck. Let me tell you, not only is soccer not for you, I don’t think any sport is for you. Maybe you should try ballet with your sister.”

Steven Butala:
I don’t think that’s the way-

Jill DeWit:
Okay.

Steven Butala:
I think parents in that way, that’s not that far off.

Jill DeWit:
I know and I don’t know how [crosstalk 00:09:21].

Steven Butala:
“Let’s get you a math tutor. You seem to be excelling in that.”

Jill DeWit:
I know but you just got to pretend you go to-

Steven Butala:
Soccer’s not your thing.

Jill DeWit:
You know? And I’m like, “God man, if I had known it was going to end like this, I’m not sure we would have had you.”

Steven Butala:
Oh my God!

Jill DeWit:
I’m just kidding.

Steven Butala:
Geez.

Jill DeWit:
I was going to say it another way, but I’m like, “G rated. G rated.” All right.

Steven Butala:
I looked back at some of the stuff we talked about, right when the COVID happened on this show and in our whole community and on our Thursday calls and everything and I just laughed at myself because all the predictions that I made were so wrong, it’s silly. Not all, but-

Jill DeWit:
No. I like this show. Hi. This is Steven eating his words. This is-

Steven Butala:
Because Jill and I cut our teeth in some ways. Jill does certainly, with Land, during the last downturn in 2010-ish, 2007.

Jill DeWit:
That’s for sure.

Steven Butala:
It was tragic. We got cut to our knees, real estate-wise and kept there for a while. And we got ourselves out of it by buying cheap houses and reselling them in specific places in Phoenix. So I thought because of the COVID and because we’ve had such a prosperous real estate climb, and because I researched this stuff all the time, that some version of that, like many, many people, including leading economists that work for the government or employed by the government, believed that that was going to happen, some version of that. And the exact opposite happened.
What happened was, and there was three huge variables that caused this, that I didn’t take into consideration. Number one, just a pure raw population growth from this millennial generation exceeds the baby boomer generation, which was until now, the largest generation ever in the history of ever. So just the pure population growth is fueling this market and it’s not going to stop. They don’t predict it’s a stop even in 2022. So that alone is amazing and it didn’t get discussed at all until COVID, for some reason.
The migration. No one could have predicted the migration. The stay-at-home order, all this stay-at-home stuff, especially in California, or out West and in New York. It’s not just out West it’s in-

Jill DeWit:
Everywhere.

Steven Butala:
… in large cities.

Jill DeWit:
Right.

Steven Butala:
… is where it predominantly is, has caused people to leave, to sell their assets for a pretty good profit, by the way. Sell assets in town, move to a larger place because everybody is working from home, has been working from home. And now I think we all agree, and this goes way into 2021 and beyond and I include us in this. We have a team of people that are… I wouldn’t have believed it, are incredibly capable of hitting their numbers and doing what they’re responsible for at home and living…
And we just had our online Christmas party yesterday, achieving this life balance, which this is what it’s all about. The reason that you want to be self-employed is so you can play with the kids and make some money from 5:00 to 8:00 or whatever works for you and have a life balance with work.

Jill DeWit:
Exactly.

Steven Butala:
So the migration out of the city is to move into a larger asset, cheaper asset and take that equity out of there and pour it into a better investment for your family. That was something I never would have predicted at all.
And then third, this rural… I don’t know how to say it. I’ve never seen such a demand for very rural real estate and I think it’s because I think there’s some political reasons for it and I think that there’s some anti… This has sparked a personal choice for a lot of people-

Jill DeWit:
Right.

Steven Butala:
… about just getting out of a city for a lot of reasons.

Jill DeWit:
I hear you. Not just taking control of their lives and their living, their income, the land part of it. Yeah. It’s very interesting.

Steven Butala:
We talk to so many people who are in a land market and so many Land Academy members that are like, “I’ve just had it with New York City.”

Jill DeWit:
Right.

Steven Butala:
Or fill in the blank. I’m not picking on New York. Well, I am kind of.

Jill DeWit:
Well, pick on where we are, in Los Angeles.

Steven Butala:
In Los Angeles. They’re just tire of it.

Jill DeWit:
Yeah.

Steven Butala:
And it’s not-

Jill DeWit:
Us included.

Steven Butala:
Yeah, us included. I include ours… We’re just tired of the whole thing.

Jill DeWit:
Right.

Steven Butala:
So from a money standpoint, the housing market itself, which the land market tends to follow, has never been this strong since 1983. And then I forgot to mention interest rates. Interest rates are two and a half to 3%. So it’s this perfect storm of real estate. That’s not going to go away. And then the cherry on top is forbearance. So we’re seeing, people are being allowed-

Jill DeWit:
It’s amazing.

Steven Butala:
… which is… That never happened in 2010. People are being allowed to not pay their mortgage or rent for a bunch and they’re getting a bunch of money from the government if they need it, which is causing this situation where there’s not a lot of inventory on the market, so it’s driving prices up and all of that.

Jill DeWit:
People don’t have to move. Not yet.

Steven Butala:
So my whole-

Jill DeWit:
I don’t have to pay and I’m not getting kicked out yet. I get to sit tight and see what happens

Steven Butala:
So my prediction in the early part of the year was like, well, forbearance is going to go three months and it’ll all catch up and then everybody’s going to have to pay. Well, I just watched a very detailed, incredibly intelligently and well delivered presentation about forbearance and foreclosure, by the guys at [Adam Real Estate/reality track 00:00:15:12] and they said, “There’s no end to this forbearance in sight and when it does happen, which might not even be until ’22, ’23, they will be eked out.” It won’t be like, “All right, it’s January 10th and it’s over.”

Jill DeWit:
Floodgates.

Steven Butala:
“And you owe all the money that you didn’t pay and we know you can’t pay it. Ha ha,” which is kind of what happened in 2010. The bank just said, “Oh, you’re not paying your mortgage. Okay. It’s 90 days late, we’re foreclosing on you.” There was no program. There was no one to even call-

Jill DeWit:
Right.

Steven Butala:
… for these people. I know this because Jill and I were buying tons and tons of houses. REO bank-owned houses, and you could watch the data happen. Go ahead.

Jill DeWit:
I feel so fortunate in this position. It’s very interesting because this market update, you’re talking all about real estate. This is just such an amazing time. 2020 is not only an amazing year for all of the regular reasons that we all know and how all of that went down, but the real estate, the opportunities and stuff that’s created in the movement, you just said. I never could have predicted this, too. I can’t wait to see what the next year, the next 10 years.

Steven Butala:
Yeah. Me too. That’s what I mean. Actually, I was going to say that.

Jill DeWit:
As this show is airing right now, it’s New Year’s Eve. This is so perfect. I am so excited. And in March, I was not excited. In March, I was nervous, I was hesitant as were you. So if you’re in our world, have anything to do with real estate or want to, there’s just so much coming. A lot of opportunity.

Steven Butala:
Just when you think it’s like this might not… We just had the greatest experience financially and all of that because Jill and I, we all had a great year this year and I hope it was not at someone else’s expense.

Jill DeWit:
Right.

Steven Butala:
You never want that but I can’t wait-

Jill DeWit:
I argue that we saved some people.

Steven Butala:
Me too.

Jill DeWit:
I know we did. Save some people that like, “I didn’t know how to put food on the table. Thank you very much.” Yeah.

Steven Butala:
But that was my point. I mean, I think our membership was great. We’re getting incredible reports from people, our membership group, that they’re doing really well and it’s working out and there’s no greater compliment for us than that.

Jill DeWit:
I will add on this. If you want to enroll, this is the last day, by the way. If you’re thinking about joining Land Academy, that just came to me, today it ends tonight at midnight. Use a coupon code, throwback, T-H-R-O-w-B-A-C-K and you get our 2015 pricing. It’s awesome. So check out landacademy.com.
Happy you could join us today. You can find us right here, five days a week on The Land Academy Show.

Steven Butala:
Tomorrow, on the episode on The Land Academy Show, which I guess is New Year’s day, is 2021 Mindset for Success. You are not alone in your real estate ambition.

Jill DeWit:
It just hit me. I’m like, “Well, wait a minute. Wait a minute. Wait a minute. What’s the day? It’s New year’s Eve.” I’m excited.

Steven Butala:
I’m glad it’s over.

Jill DeWit:
But everybody is.

Steven Butala:
I’m glad we survived it.

Jill DeWit:
We did.

Steven Butala:
Like financially and physically and everything. I am glad you survived it.

Jill DeWit:
Exactly. We’re still here and we’re here to help.

Steven Butala:
Yeah, Jill. We’re here still.

Jill DeWit:
Hey, and by the way, today’s episode was brought to you by NeighborScoop.com. Check it out. It is your place to do all your due diligence, FEMA flood maps and more. NeighborScoop.com.

Steven Butala:
Nice little commercial there.

Jill DeWit:
Thank you.

Steven Butala:
Thanks for tuning in. We hope you find our content valuable and we appreciate your support. If you haven’t already, please check our YouTube channel and hit the subscribe button.

Jill DeWit:
We are Steve and Jill.

Steven Butala:
What happened?

Jill DeWit:
Let’s just do that. I’m just changing it up because it’s kind of boring and I thought I changed it up.

Steven Butala:
It’s boring?

Jill DeWit:
Well, not boring, but it’s getting kind of… I want to throw in some NeighborScoop with some other good stuff. We covered it, right?

Steven Butala:
Right.

Jill DeWit:
We are Steve and Jill.

Steven Butala:
Information.

Jill DeWit:
And inspiration.

Steven Butala:
To buy undervalued property.