Where Do I get the Money and Who is Going to Teach Me (LA 1410)
Where Do I get the Money and Who is Going to Teach Me (LA 1410)
Transcript:
Steven Butala:
Steve and Jill here.
Jill DeWit:
Good day.
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; where do we get the money? And who’s going to teach me? Came directly out of Jill’s mouth-
Jill DeWit:
Why?
Steven Butala:
… without any editing or without any polish.
Jill DeWit:
Thanks.
Steven Butala:
It went like this, “Hey Joe, what should we talk about today?” Well, somebody just asked me, “Where do we get the money? And who’s going to teach me?”
Jill DeWit:
Yeah. There you go. It happens a lot. I see new investors, I alluded to this a little bit yesterday on the show, new investors in multiple forums, all kinds of social media accounts and these are the two big things like, “Do I get lending? Do I get financing? Do I take a loan on my house? Do I run up my credit cards? Do I sell something? Do I sell a child? Whatever it is, where do I get the money to get this started?” I’ll talk about this more, but, “Who’s going to teach me?” and they just throw it out there like you’re just going to say, “Who will teach me?” And there’s going to be a flood of mentors. That’s the funniest thing too, but we’ll talk more.
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:
Paula says, ‘Hi, all. I keep hearing investors say they won’t touch a deal unless they see a potential for at least a hundred percent ROI, return on investment. Is there any reasoning to this other than just about maximizing profit within a range that will still accomplish high velocity sales, as in is this strategy directly related to my 1031 exchange in any way? Thanks.”
Steven Butala:
No, it’s not related to any 1031 exchange concept in any way. A hundred percent margin or return on investment in ROI, there’s no direct association with that at all, but here’s where it comes from. Very early on, I wrote a blog, ended up a little piece, a video piece on, “A 24 Month Millionaire.” That’s what I called it. As with everything, you do 20 of these things and one of them really stands out, well, that one stood out. I’ve gotten a lot of people over the years have asked me to do it again or talk about it more. So here’s a total Cliff’s notes version. You buy property for $4000 bucks. You sell it for eight. You buy two for $4000 and eight becomes 16, and 16 becomes 32 and if you do everything wrong under this scenario, you’ll have about a million bucks in the bank profit, pure profit.
Jill DeWit:
Why do you say wrong?
Steven Butala:
Well, if you do everything wrong because in my- [crosstalk 00:02:57]
Jill DeWit:
Because you can’t do better?
Steven Butala:
Yeah. No, it’s just because it’s so easy, I think this kind of stuff. That’s what kind of desert property, which we don’t talk about that much anymore because it’s too easy to on a couple of deals the way Jill does these days to make a million bucks anyway. So at that return on investment, that arbitrary, it’s doubling your money is where it comes from. In real estate, that’s almost unheard of. Just don’t do it. So the reason I included this, Paula, is because there’s several people in Land Investors forum that are really, for whatever reason, I think they were bored this holiday season or something and they’re just really active in it.
Jill DeWit:
That’s true, by the way. I’m sure, “Hey, what do we usually do?” “We go to the mall.” “Can’t go there.” “Hey, let’s go to this outdoor activity.” “Can’t do that. That’s closed too.” Let’s go to a movie.” “Nope.” That’s why.
Steven Butala:
What it’s become for me and Jill too, I’m sure I can speak for Jill is let’s look at two simple deals. I buy a property for $10000. I sell it for $20000. My ROI is 100% if the cash that I put into was off the purchase price. Nobody can shake a stick at that. It’s the greatest thing that could ever happen. Go ahead.
Jill DeWit:
My deal funding investor extra little note to you is the reason we investors say that is I want some wiggle room too. It needs to be that good of a deal that we know we can double our money. And let’s just say, you’re not good at marketing, you’re not good at this, you’re not good at that, we don’t quite double our money. We’re still going to do just fine.
Steven Butala:
Here’s as equally likely situation, and it’s one that we probably execute at least every month, maybe more. Buy a pizza property for $110000 and sell it for $200. That’s 90%, and maybe 80% return when you do all the math. It’s not a hundred percent, but we made $90000. Which one would you rather do? Same amount of work. So I know which one it is for us, and it’s the ladder. And it is, that’s what the forums are packed full of. So this hundred percent ROI, it went viral. It went… Our version of viral, not viral viral, because other people in real estate, when they’re looking at land as a thing to add to buy their apartment building portfolio or whatever, partner buildings make like 6% when you do all of it correctly.
Jill DeWit:
That’s scary, and they’re happy. The numbers, I feel so bad. [crosstalk 00:05:21].
Steven Butala:
It’s 6% of $60 million, but it’s 6%.
Jill DeWit:
I scratch my head all the time. Can we talk about this for a second? There’s a reason why we don’t own a bunch of rental properties, meaning apartment buildings, because I can’t sit around for 10 years to get my money back.
Steven Butala:
Yeah.
Jill DeWit:
I can’t wrap my head around that. But in 10 years, I will get my money back. Well, that’s great, but that’s a long time. I’d rather get my money back next month.
Steven Butala:
Well, it’s a different game.
Jill DeWit:
True.
Steven Butala:
So with apartment buildings, you raise the rent 3%, it changes the capitalization rate, or the gross rent multiplier, however you look at it, and then you go sell it. So you don’t your money by-
Jill DeWit:
Buying and holding.
Steven Butala:
You don’t make your money off of just doing a fantastic acquisition.
Jill DeWit:
Yeah.
Steven Butala:
That’s how we do it. That’s why we’re adding so much value.
Jill DeWit:
It’s very different.
Steven Butala:
There’s a lot of stuff that can go wrong in an apartment building if you’ve ever owned one. You know what I mean? There’s a break point for commercial real estate where none of the problems that are associated with owning properties and tenants and all that, don’t reach you. So in the beginning of your life when you’re really young, it’s easy to deal with all that stuff. You’re going into it’s with somewhat naive, which is what that takes. You need to do stupid stuff to figure out what you eventually want to do.
Jill DeWit:
That’s funny. Okay.
Steven Butala:
So at our age and what we know, apartment buildings just aren’t for us.
Jill DeWit:
Right. I understand.
Steven Butala:
The next topic, where do I get the money? And who’s going to teach me? This is why you’re listening.
Jill DeWit:
I have to comment that I noticed that you actually took the time to arrange the chairs outside. Didn’t put the cushions on them, but at least they’re arranged.
Steven Butala:
Yeah. Why would I put the cushions on them? It’s raining.
Jill DeWit:
It’s kind of cute though. That was very sweet to even arrange them. I’m like, eh. Leave it, whatever. Kind of looks like we’re not here.
Steven Butala:
I did it for you because I don’t care what it looks like back there.
Jill DeWit:
That’s cute. That’s funny.
Steven Butala:
Can’t tell if you’re thanking me or saying, “What the hell?”
Jill DeWit:
Do you know what’s really weird though? We’re going to look back on this in five years, I hope this is all different, I’m betting on it, that we’re going to be all past all of this. This is now 2021. We’re all looking at vaccines and lights at the end of the tunnel. I’m seeing the people on the beach behind me and that gentleman on a bicycle exercising with no one around him. He was like, what? Going 20. Anyway, with masks on. What are we going to look back and say in five years about all this?
Steven Butala:
So much to say, and- [crosstalk 00:07:53]
Jill DeWit:
Not today.
Steven Butala:
… none of it.
Jill DeWit:
Not now. You know what’s so funny about this? I’m sure you agree. We’re all sick of it. We’re all tired of it. Get together your friends, this is the topic [foreign language 00:08:04]. Can we just talk about something fun?
Steven Butala:
Yeah.
Jill DeWit:
I don’t want to talk about this anymore. Are there some new bands working on some stuff? Because I would love to hear that is there. Heck, I’ll take new Netflix movies any day over this stuff, the COVID and the political stuff. I don’t want any more of that.
Steven Butala:
At least some of the political stuff’s gone with the election.
Jill DeWit:
That’s true.
Steven Butala:
Not all of it by any stretch, but it took a lot of the wind out of their sails, which was on both sides.
Jill DeWit:
That’s true. So speaking of today’s topic, where do I get the money? And who’s going to teach me? So this is because I’m reading this and I’m like, this is the top two things that I see people ask who have decided they woke up today and said, “You know what? I’m doing it. I’m going to be an investor. I’m going to be just like Jack. I’m going to be just like Jill. This is my new occupation effective today.” And then the next thing they say is, “Where do I get the money? And who’s going to teach me?” I’m like, “Okay. Hold on a moment. There’s a little bit you got to think about here, but the both of them are not that hard. So you, as we were chatting together, Jack, you had a beautiful way of explaining where the money comes from.
Steven Butala:
When you’re new, no one expects you to have any money. I used to walk around and hang in my head saying, “Man, if I had a bunch of money, I could do this, this, this, and this.” So I want you to forget that. It’s completely not true. The only reason that you need money when you’re young and ambitious is to pay rent and for food and stuff, and you can really reduce that very low if you really start to lower your standards, especially guys. So what you want to think about as far as investing money is… So where do I get the money? You get it from people like us because the real estate deal that you found is so amazing that we can’t pass it up.
Here’s an example. I’ll use the example that I use in the question. If you bring us a deal that you’re convinced you and maybe a partner that’s a little bit to your senior that you bring in are convinced that $110000 acquisition is going to sell for $200000 quickly and give us a bunch of reasons why, well, this one… I just looked on our discord. There’s somebody in there saying, “I listed my first property and the two properties sold within a week across the street over my listing price.”
That kind of stuff we’re going to start throwing money at deals like that. So where do I get the money? You get them from people like in Atlanta Academy Group or people that are in the industry that love doing these types of deals.
Jill DeWit:
People with the money.
Steven Butala:
And people who are also, for free, are going to say, “This deal’s not as good as you think and here’s why,” or, “This deal’s fantastic. We should do it.” So more people get hung up on it and rightfully so, I get it, hung up on, “I only have $5000 bucks in my checking account or $500.”
Jill DeWit:
Yeah. I see it for land and houses, by the way. I know you’re talking mostly land, but I see it [crosstalk 00:11:13] … for houses too because I see a lot of going… The discussion then goes to, “Okay. Where I get the money?” And they’re going, “What did you guys do? How did you structure this deal? How did you get the financing? What should my credit score be?” I’ve seen all kinds of things. “Do I leverage my own home? Do I borrow over here?” Kind of things. So you don’t have to do that stuff, and I don’t really want you to do that stuff because that’s all negative… You don’t have control over the asset like you think you should. So I don’t care if it’s $150000 house, but you’re buying a $150000 house. It’s worth $210 in its current condition and all cleaned up and beautiful, it could be $310 kind of thing after someone put some money into it.
So it’s coming to someone, even like me, we have a site just to prove this to you too. It’s called, House Tank, where our people in House Academy do this all the time. They find the asset, they don’t have the money, and all they say is, “Hey everybody. We got to buy this.” And it’s usually ours that these deals are funded. Somebody in there is trolling looking for deals to plop the money down because you found the asset. You already did all the work. Just need funding to get this and buy it and then turn around and flip it to somebody else who’s going to fix it up and make it beautiful, and you guys are going to split $60000 bucks. Something like that.
Steven Butala:
Your job in life is to understand data, understand how to do a mail merge, which is all what this is based in Land Academy 101 stuff, and how to start feeling phone calls when you send out a bunch of mailers and do all that in a secure and amazing real estate deal times 10. That’s your entire job. You shouldn’t even ever think about money. If you use resources like Land Tank and House Tank or whatever, those are websites that Jill and I have developed. The money’s going to find you.
Jill DeWit:
Well, now you’re tapping into, who’s going to teach me? So we tackled the money part. Okay. We got that out of the way. Now, we’re talking about, okay. That’s great. Who’s going to teach me? Now that I know what to get the deal, how do I go find the deals? Because I know who’s going to fund me for the deals. What do you say to that?
Steven Butala:
Who’s going to teach me? I’ll tell you this is what you need to do, especially if you’re new and young, or let’s just say new, not necessarily young. You need to ice out about six hours, four to eight hours depending on your personality type and how well you can type, and lock yourself in a dark room, get on the computer and start doing a bunch of research and you will find whatever it is that you want to learn about. You will find a path that makes sense to you. I think there’s a few criteria that we put down together, Jill, about how I make decisions about how I want to learn from because I am a student in other people’s groups, believe it or not. I’m not a real loud one, but I A, want to see how they’re teaching and B, I want to learn. There’s a bunch of things I want to learn about. I need to continue my education about real estate so I can be a better instructor.
Jill DeWit:
Some of our criteria was- [crosstalk 00:14:18]
Steven Butala:
And I didn’t find those people on accident. That’s my point.
Jill DeWit:
Right. How many deals have they done? How long have they been doing this?
Steven Butala:
Yeah.
Jill DeWit:
How old are they? Let’s be honest. Let’s talk about their experience.
Steven Butala:
And then the final one-
Jill DeWit:
Accessible.
Steven Butala:
Accessible?
Jill DeWit:
How accessible are they to me if I really have to ask a question?
Steven Butala:
Yeah. Jill and I are real people that go to work every day and we’re on the other end of either a camera or microphones-
Jill DeWit:
Or a phone.
Steven Butala:
… or live on Thursday. We do live events. [crosstalk 00:14:52]
Jill DeWit:
Webinars, phones. [crosstalk 00:14:53]
Steven Butala:
Jill does, all Tuesday, does live stuff for women-
Jill DeWit:
Yeah.
Steven Butala:
… and all Thursday, she and I are in front of a camera and accessible and we’ll have developed and releasing products this month, January, that are going to make us even more accessible to our members. I think it really separates us from all the noise out there because the last thing you want to do is learn the wrong way from somebody who’s young and just wants your money. Then you have to undo it and finally, come to somebody, a group like ours that have established- [crosstalk 00:15:20]
Jill DeWit:
If you hang in there that long. Some people will give up. A lot of people will say, “This doesn’t work,” and leave.
Steven Butala:
Right.
Jill DeWit:
And I feel bad.
Steven Butala:
But finally, which leads me to my final criteria and I think it’s the most important, is whether or not you seem to get along with the people that are in the group and get along with the instructors.
Jill DeWit:
Correct.
Steven Butala:
People have been telling me my whole life, “Man, you need to chill out. You need to settle down, calm down. There’s no fire. I don’t know what got into you today, but you’re going a million miles an hour,” and I can’t make the finger gesture on the camera that I wanted to want to make to them. Jill and I are exactly on the same page about this. We hit the ground running in the morning.
Jill DeWit:
People think we’re nuts.
Steven Butala:
We’re pretty intense. People that are a little bit more chilled out about this or anything really, it doesn’t work for them. So those first four criteria, it could be great because we do have all of them in our space on the internet. By leaps and bounds, we have all of them. But it’s very possible that our approach or my approach… Everybody loves Jill. My approach, specifically, just doesn’t work. I’m kidding around. We have a data centric, everything’s surrounded around data. For a lot of people, that’s just not what they want. They’re sales driven and don’t want to deal with that.
Jill DeWit:
Well, it isn’t even about us in particular. I’m just saying whatever you pick as your niche, whatever you want to get into, maybe you want to be a house flipper. Maybe you have a background in construction. You’re studying right now to be a general contractor, let’s just say, and you’re like, “I’m going to be the general contractor on steroids. I’m going to find my own deals too.” That’s possible. I know those people are out there.” “Maybe I’m going to do this. Maybe I’ll go to find my own deals. I’ll pick the easiest best deals for me and I’ll sell all the other ones off to my competition, and it’s going to be awesome,” because that would be a great business model for somebody. So whatever that is, all these things apply.
You want to find someone in your world for the parts that you don’t know, which say in this scenario, it’s how do I find the deals? You need to seek out and find someone that’s done thousands. I don’t want hundreds, you guys. I want thousands of deals because they’ve been doing this for over 10 years, then they’ve got that many.
Steven Butala:
Yes.
Jill DeWit:
And by the way, they need to be at least 40. I’m serious. I got to say at 40. I don’t know, because I really want experience and I want them to be set and this is their life passion too because if this is just a stepping stone for them onto something else, then I don’t know. Then what were the other things?
Steven Butala:
Well, there’s nothing wrong with-
Jill DeWit:
And you click with them.
Steven Butala:
Nothing wrong with what I said earlier. Lock yourself in a room and do four to eight hours of research on the internet and find out who’s in the space.
Jill DeWit:
Yeah.
Steven Butala:
If you want to learn how to be a water heater installer, that’s the same process. You’re going to find it for somebody who gets you and you understand, and is going to say, “Hey, you have to use these tools, this tool, this tool and this tool…” You don’t have to go through all the stuff I did. I didn’t have this, but if you do use these tools, you’re going to be doing three, four or five installs a day.
Jill DeWit:
Yeah, and you know it’s the right thing. Pretty much everyone in Land Academy when they accomplish in six months what took us years because we didn’t have anybody, and that’s the whole point. That’s why you’re doing this too. You want to fast forward and get going. There’s enough deals to go around. The right person is not going to withhold stuff from you, and you guys are all going to do great deals together. [crosstalk 00:19:12]
Steven Butala:
And charging more for the next level. There’s big issues with that.
Jill DeWit:
Right. So anyway, happy you could join us today. Five days a week, you can find us right here on the Land Academy Show. Join us tomorrow, or excuse me, this is your script. [crosstalk 00:19:26]
Steven Butala:
Tomorrow, the episode of the Land Academy show is called… Yeah. If people are real humans on a show, audio and video, then that’s a good sign, I think.
Jill DeWit:
And they mess up
Steven Butala:
Tomorrow on the episode of the Land Academy Show is called, “The Value of Our Thursday Deal Review Webinar: You Are Not Alone in Your Real Estate Ambition.”
Jill DeWit:
Isn’t that funny? Some shows you just have a lot to say and this run. Yesterday’s show was like 13 minutes. Today’s like 20. We had lots to say about this topic. I had a lot to say about this topic. This is really popular and I know right now going into 2021, there’s a lot of people are saying, “All right. This is a really blank or get off the pot year for people. We got to make something happen. I can’t rely on anybody else. I’m going to do this,” and I’m really happy- [crosstalk 00:20:21]
Steven Butala:
Yeah. There’s no better time to be doing this than right now.
Jill DeWit:
So happy for them. Thank you for tuning in. We really hope you find our content valuable and we appreciate your support. If you have not already, please get on over to our YouTube channel, 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 helps to support our channel’s algorithms engage your interest in future shows. [crosstalk 00:20:46] We are Steve and Jill. Information…
Jill DeWit:
And inspiration…
Steven Butala:
… to buy undervalued property.
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