Failing Repeatedly is First Requirement to Stay on Course (LA 1413)
Failing Repeatedly is First Requirement to Stay on Course (LA 1413)
Transcript:
Steven Butala:
Steve and Jill here.
Jill DeWit:
Hi.
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 failing repeatedly and how it’s the first requirement to staying on course.
Jill DeWit:
This is clearly a Jack topic.
Steven Butala:
In hindsight, it could have been a different title, but what it really means is this. You got to be comfortable with the fact that some stuff’s going to go wrong and sideways. It does with everything in life. And if you just get through the parts where it’s not working, it’s not working, eventually it’s going to work. If you try hard enough at it, or either decide that it was not for you. I talk about this really early on in the Land Academy years about I will never play the guitar. I just won’t. And it’s not because I can’t learn how to do it. It’s just that I don’t enjoy the process. The end, it doesn’t justify the means and all kinds of stuff. It’s not that I’m not smart enough. I just don’t, for whatever reason, make it a priority.
Jill DeWit:
On that note, if you look on OfferUp right now, you’ll see four left-handed guitars for sale.
Steven Butala:
Yeah. It’s true. Yeah, just because I bought a cool guitar doesn’t mean I really know how to play it at all.
Jill DeWit:
Yeah. I know where you can get a great price on a guitar right now.
Steven Butala:
And I tried and failed and tried and failed and decided nope.
Jill DeWit:
Not for me.
Steven Butala:
You know what? I tried and failed in my land career, too. Tried and failed, tried and failed.
Jill DeWit:
Well, that sung to you.
Steven Butala:
Yeah.
Jill DeWit:
That made sense.
Steven Butala:
But I decided I was still going to try because I want to do it.
Jill DeWit:
Okay. Let’s talk about this more than the show because this will be a fun thing to talk about, things that we thought about and then we didn’t pursue. 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:
Jessica F… Hello, Jessica, wrote, “Hello all. I’m wondering what kind of due diligence you do related to the neighborhood the property is in? Do you analyze, if at all, if the property is in a nice neighborhood versus a not so nice one? How do you know where the desirable areas of town are outside the prices of houses sold? Are there specific indicators you look for, either good or bad, that can tell you more about a neighborhood beyond just the numbers of properties listed and sold?” Thanks.
Steven Butala:
I can tell you that with extreme confidence, I don’t look at this at all, not a single bit. And here’s why, because if I look at days on market, if I look at date DOM, days on market, in a place, let’s say, the Rust Belt is famous for having… I’m from Detroit. So there’s terrible neighborhoods in Detroit. There has been since the 60s. But if the days on market in those markets was within a range where we actively invest, I would be buying there. I don’t care why people buy property or don’t buy property or what they’re looking for. But if 50 properties sold in the days on market in any market, there were 50 properties… You have to take all the three statistics from the red, green, yellow test, and look at them together because… But I’ll tell you what, if you don’t have time to do that, or you don’t have the interest or whatever, days on market is going to smoke it all out for you.
Jill DeWit:
So what I think you’re saying is the numbers speak for themselves, which is I like this.
Steven Butala:
This is for land only. For houses it’s a little different,
Jill DeWit:
Well, I was actually going to put it on houses a little bit too, because follow me on this here. The numbers should tell the story. Days on market are low within X amount of whatever radius you choose. Maybe it’s a zip code. Maybe it’s a radius. I’m not sure, whatever it is. Price per square foot, oh, you’re rocking it kind of thing. After that, am I going to look up the school system? No. Am I going to see what’s going on in the Main Street and how many events they have each year? No. Am I going to look at how pretty things are? No. So I think that we’re on the same page and I think, and again for land or houses, it’s really still numbered.
Steven Butala:
The only thing that would come into play for me with houses is the entire subdivision or in some of the Rust Belt cities’ cases, was it built between 1918 and 1939? Because those houses are so hard to renovate and just keep up and all that.
Jill DeWit:
But that would probably be reflected in days on market.
Steven Butala:
Yes it would. So that was my final point. All those things naturally affect days on market, just because buyers don’t want to buy there or the prices adjust themselves and all of that.
Jill DeWit:
Right. That’s exactly right.
Steven Butala:
So if I were a house renovator and I had a show on HGTV, I would look at what Jessica’s talking about here.
Jill DeWit:
That’s what I said. Or if it was a primary residence. Because and that’s the thing, the saying is still true. Are you going to win emotionally or are you going to win financially? So if you’re going to win financially, you’re not going to look at this stuff. You’re going to look at just the numbers and let that tell you what to do. If you want to win emotionally because you want to live there and you want a different school system and you want to have a safe park to walk to, now you’re looking at that stuff.
Steven Butala:
Right. Today’s topic, failing repeatedly is the first requirement to staying on course. This is the meat of the show.
Jill DeWit:
I have one more thing to add about that.
Steven Butala:
Sure.
Jill DeWit:
I don’t have the time. That’s my other thing. I’m doing so many deals. As you know, we have so many things going through our stuff. I don’t have time to spend to get to know the area like that and see how the school is ranked in the nation and that kind of stuff. That takes a lot of time.
Steven Butala:
We’re in the process of wrapping up what I think has been extremely successful mailer campaign in the very center of the country. And it’s not the nicest place in the world, but the days on market are amazing. All the other real estate tests that we look at, like how far is it from major cities? All of those, the tests that we talk about over and over and over again about where to send mail, it passed all those tests and the mailer did well.
Jill DeWit:
Exactly.
Steven Butala:
And it’s not the nicest place. It’s just not the nicest place when you look at it. But everybody wants to be there. That’s all I care about. So Jill was asking right before the question, what have you failed at?
Jill DeWit:
Oh yeah. So okay. So you mentioned the guitar. I’m thinking, I like to think… You’re going to tell me if this is right or not. I like to think that I’ve failed enough and I have created my own little list of conditions that I won’t invest money in something unless I know. For example, remember back when I was making jewelry?
Steven Butala:
Yeah.
Jill DeWit:
I was never going to make money at that. It was just kind of a fun thing. I thought, well maybe on the side I could make some money doing jewelry, right. This is so weird. Right? You never thought you’d hear me say this.
Steven Butala:
[inaudible 00:07:19] it was just a hobby.
Jill DeWit:
I did. So but then I invested a bit of money into this, getting all the tools and classes and I almost bought a kiln, but I didn’t. But so there’s a lot. And then at the end, after two years, what happened? I kept my favorite pieces and then I donated everything else. So someone else got a bunch of tools, great stuff. I didn’t care. It was a Goodwill event and that’s fine. So now I’m like, I catch myself because we’ve all had a few of those in life. And I’m like, now I have my own little mental checklist. I’ll be somewhere and I’ll go, “I want to raise horses.” For example, we talked about, I want a horse. Wouldn’t this be a great thing, right? Because we’re looking at properties, I’m looking at cabins and stuff with some land. I’m like, “I can finally get my horse. This is what we’re doing.” And I’m like, “Whoa, whoa, whoa, whoa, whoa.”
Before you go down that path and buy a horse and figure out where to put them and what’s going to happen, who’s going to train them and do it when you’re not there. How bad do you really want to do this? So, because I would fail. I know that even though it’s kind of a loose example, but having a horse, raising a horse, come on. That’s not my thing. I don’t have time for it. I would maybe go ride it once a month or a couple of times a month. Is that worth owning your own horse? No. I could rent a horse or borrow my neighbor’s horse and pay them something. And that’s the best way to do it, so.
Steven Butala:
I’ve had a lifelong love-hate relationship with long-term care facilities.
Jill DeWit:
Yeah.
Steven Butala:
I cut my teeth after the accounting portion of my career. We were buying and selling nursing homes and brokering them effectively, brokering them pretty, very effectively. And I successfully, very successfully from a fee driven standpoint, then I got involved in ownership. Then I got involved in management and the whole idea was to vertically integrate myself. And we were going to buy pharmacy company and in-home health and one of the companies we actually took public and eventually that didn’t work out. So I had a lot of successes and a lot of failures. Then ultimately decided not to get involved in it or stay involved in it at all. I always had a land business on the side while I was doing this and always loved it. It just required so little of my attention and gave back financially so much.
Jill DeWit:
Land?
Steven Butala:
Yeah, land. But this is back kind of before the internet. And it was in the early 90s before the internet was a household thing. And so there was still people that you really respected. And some of it’s still now you take companies public and there’s big dollars and everybody’s wearing a suit to work. So I was young and that was really impressive and worked for me at the time.
You get older and it’s just like, you know what? All this is just a bunch of, it’s just not real. And so healthcare itself, too, it’s really you have to start to ask you a question yourselves, I don’t know, should I be making this much money owning a healthcare facility? We’re trying to provide care. Is a nonprofit better? A for-profit better? So there’s all these things that just kept doing pros and cons. It kept happening for almost a decade before I finally said, I’m just going to buy and sell land.
Jill DeWit:
Doesn’t mean it wasn’t going to work. Just you decided it wasn’t for you.
Steven Butala:
Exactly. That’s the same thing with the guitar. It’s not a priority enough. There’s enough things, enough hurdles and enough stuff that I have to do that I’m just not going to dig it to make me stop.
Jill DeWit:
So it was the point then that tells me, I think the point today is you got to try a bunch of stuff and you’re going to fail, but one of them is going to go, this is it. It’s almost like we talk about your niche will find you sometimes not like you find your niche. Once you get into just even within our world, there’s so many different kinds of properties you can invest in and things you can do that one will rise to the top. You’re going to be the pro of X over here because you realize no one else is doing it and you’re going to do great. And you’re going to kill it over there.
Steven Butala:
I’m just not… You’re actually better at this than I am. I am not afraid of failing. I don’t take it personally. I’m not afraid. There’s a couple of pieces of property that we have in inventory still that we’re probably going to have to, if we want to get rid of them at all, we’re either having to step up marketing to the point of insanity or we’re just going to have to sell them at a lower price just to get them moved. And I don’t look at that as a failure. I think that’s kind of funny.
Jill DeWit:
Yeah, I don’t care. I don’t care about-
Steven Butala:
I think it’s a natural course of this.
Jill DeWit:
Because you know why? Well, because we’re not into it. We’re not into it. That’s why. These whatever properties we’ve had them so long. I don’t know why we stopped caring about them, but we kind of did. So this is really seriously my lack of excitement is your gain. You can have them kind of thing.
Steven Butala:
My point is, I’m not just your… And Jill is just fearless. She doesn’t care what people think on the phone. She’s truly fearless when it comes to business and deals and all of that.
Jill DeWit:
Thank you. Thank you.
Steven Butala:
So again, there’s some new members coming on and they’re asking questions as they should. And one of the questions I get a lot, and this is usually way before people join, this is over at a cocktail party, maybe. So you’ve done all these deals. Well, how many did you lose on? And I wouldn’t be standing here in front of this whatever house that we’re standing in that’s ridiculously expensive if we failed at a lot of them. So but I get that question a lot. And I think that the kind of person that asks that question is, do you fail at 49% of them and make it at 51%? Or I mean, I think that there’s a personal thing. It’s like-
Jill DeWit:
Do you fail at nine and make it at one? I mean, you know what I mean?
Steven Butala:
I don’t know. I-
Jill DeWit:
We don’t.
Steven Butala:
We don’t. Of course not.
Jill DeWit:
We don’t and that’s not why we would be here. But I have this right, so the-
Steven Butala:
I don’t think of it that way.
Jill DeWit:
So if you’re new, you’re starting out and you’re trying to get into this and you’re wanting to stay on course, please plan on failing.
Steven Butala:
Yes.
Jill DeWit:
Please plan on making a mistake.
Steven Butala:
Thank you for stating the obvious.
Jill DeWit:
This is going to happen. And we’re going to tell you again, I’m going to repeat what we have said many times before. We’re not going to let you fall that far. We’re right here. If the only reason you would not be successful is if you don’t use us and use your resources, if you are not positive about some of your decisions, you better be on that Thursday call and giving us the deal and we’ll review it for you and we’ll redo it with you so you can go, “Ah, I got it.”
And you have questions about you’re going to fail talking to sellers. That’s why I’m here. Ask me about it. I will tell you and go back and listen to some of our stuff all about it. We’re right here. We really mean it when we say you’re not alone. Yeah, it is in the… Do we say that to end of this show? Yeah, we do. Yeah, you’re not alone. We’ll help you. But I want you to plan on making some mistakes. It’s not going to be perfect. You’re not going to be perfect. There are a lot of moving parts, but we’re here to help you every step of the way. So it’s not going to be catastrophic. Like that?
Steven Butala:
Yeah. Perfect.
Jill DeWit:
Thank you. I got a tickle in my throat. Do you have anything else you want to add? Okay. Happy you could join us today. Five days a week you can find us right here on the Land Academy Show.
Steven Butala:
Join us next week for another interesting episode. You are not alone in your real estate ambition.
Jill DeWit:
See, there was that phrase, in a good way, in a great way. Thank you for tuning in. We hope you find our content valuable and we really appreciate your support. If you haven’t already, please check out our YouTube channel and hit the subscribe button.
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Steve and Jill:
We are Steve and Jill.
Steven Butala:
Information…
Jill DeWit:
… and inspiration…
Steven Butala:
… to buy undervalued property.
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