Red Green Yellow Test for Picking a County Explained (LA 1428)
Red Green Yellow Test for Picking a County Explained (LA 1428)
Transcript:
Steven Jack Butala:
Steve and Jill here.
Jill DeWit:
Hi.
Steven Jack 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 beautiful central Arizona.
Steven Jack Butala:
Today, Jill and I talk about the Red Green Yellow Test for picking a county explained. We don’t have a lot of dart boards in our office. We don’t do a lot of guessing about real estate and whether we should buy it or sell it or where we should send a mailer.
Jill DeWit:
I wouldn’t mind a dart board in our office, but for a different reason. Here’s what I think about what this person told me.
Steven Jack Butala:
There’s some politicians I’d like to put on a dart board-
Jill DeWit:
There we go. That would be nice.
Steven Jack Butala:
… But we’ll talk about that later. 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:
Mitch wrote, “Hello. So my first mailer did not get the response I was hoping for. I mailed one acre properties in Mojave County, Arizona targeting Meadview-
Steven Jack Butala:
Meadview.
Jill DeWit:
… Meadview, and I didn’t get much response. Luckily I was able to purchase three properties, but all were from the same seller. Other than that, I had only two calls come through, one being a hate call. I understand that this county is a highly competitive market, which could be the reason I didn’t get much response. However, I’m concerned that my pricing was way off and this is the reason I didn’t get any takers. I priced my property at $652 per acre. Now I’m getting ready to send another mailer to Santa Cruz County, Arizona targeting Rio Rico’s zero to two acre properties, and I was wondering if someone could give me any advice on pricing so I can hopefully get more response.”
Steven Jack Butala:
Oh, you’re going to get some advice from me in a second here.
Jill DeWit:
I’ve been waiting for it. I’m holding back, I know. “I know this is more of an art than a science, and I need to fail to learn, but I’m worried my whole thought process on pricing is inaccurate. Thanks in advance for any advice. Mitch”
Steven Jack Butala:
Mitch, this is not personal. I’m only responding to what you’re saying here to help everybody who’s listening to this.
Jill DeWit:
But put your face mask on.
Steven Jack Butala:
Yeah.
Jill DeWit:
Put your helmet on.
Steven Jack Butala:
Not going to use your name. I’m just going to assume that you’re just somebody. This is not personal. You cannot send a mailer out for $652 for a piece of property and expect to get anybody to respond. You just can’t. Those days are gone. They were gone in 1975.
Mojave County in Arizona is the county that I chose to, as an example, in both of the programs both the Cash Flow From Land Program and then Land Academy 1.0. 2.0 is about infill lots, so I used another county and I say, all the way through the programs, please don’t mail Mojave County. Please don’t use this. I’m only using it as an example. It’s not the place to do this. Meadview itself is becoming a subdivision of Las Vegas. In fact, Jill and I just bought a mobile home there. I don’t know when. It was like three days ago. We paid 5,000 bucks for it; it’s worth 40, on a one acre property in Meadview.
Santa Cruz and Rio Rico, you just stop. There’s 3,144 counties in this country. There are 13 counties in Arizona. They are grossly over-mailed. The same thing with Nevada. We have these Thursday calls and I have never been so proud as the last probably five calls that we’ve had. People are mailing counties that I’ve never heard of, and they’re killing it. They’re killing it especially on the East coast. This goes for everybody. Stop it with Arizona. It’s over… And he even bought three properties. So it’s not like you’re not going to buy property. You will buy property, and you’ll sell it and you’ll do well. It’s just, I don’t know what this obsession is with Arizona, Jill, do you?
Jill DeWit:
I just think that people see it as an easy place to start. And that was his first mailer and I get it, but take it to the next level. I like what you just said, go rogue, get creative. This is the whole reason that we did Land Academy is to teach you what are the triggers? What do you look for? How do you know this is going to work in this part of X state? You have it all right there. I want you to get out of your comfort zone and I want you to try some stuff like that. And you’ll have so much more fun and so much more success-
Steven Jack Butala:
Yeah and so much more success.
Jill DeWit:
… when you’re in an area that no one’s even heard about, and you’re over there quietly killing it.
Steven Jack Butala:
If this was a video, if you could see the video, if this show was we could enable screen share and all that, I would show you what’s for sale in Mojave County and no one that’s listens to this would ever think about mailing there again. It would never pass the Red Green Yellow Test, never, which is what I’m about to talk about. That’s all I have to say.
Today’s topic, the Red Green Yellow Test for picking a county explained. This is the meat of the show. In the program, and the reason that this comes up now is because Jill and I are going through the step-by-step going through the Land Academy Accountability Group. And this is the chapter that we’re on. So people are having a lot of questions about it. I’m looking at it with a fresh set of eyes over the last… Because I designed it all and put it all together for presentation. We’ve been using it forever, but for presentation in January of ’19. And that was a year ago and-
Jill DeWit:
Two years ago.
Steven Jack Butala:
Two years ago, and lot’s changed. There’s a lot more data available, so let me run through it.
Jill DeWit:
It’s even better now.
Steven Jack Butala:
Yeah, yeah.
Jill DeWit:
That’s the best part.
Steven Jack Butala:
It’s amazing, actually. There are now two Red Green Yellow Tests. I will present then the second one; nobody knows this. This is the first time I’m talking about that. The second one.
Jill DeWit:
I didn’t even know this.
Steven Jack Butala:
Yeah. There’s one for urban counties because there’s so much data available now and one for rural counties. The rural counties one has not changed. It involves this. You’re mining data all over places in the internet to get number one, the statistic: days on market. Number two: new list to sold. So theoretically, in a rural county or even an urban one, if 10 properties get listed this month and 10 properties are sold this month, it’s 100%. So you’re going to mine data on certain places in the internet to try to find that. That would be green. 100% is green and days on market in general, you want to be below 50. That would be green. If it’s 80 to 100, yellow. For a new list to sold, when you start to get into 400% where there’s four times more property listed than sold on a month-to-month basis-
Jill DeWit:
It’s too high.
Steven Jack Butala:
… That’s an indication to me that there’s just too much property and that’s what would happen in Mojave. Mojave would be… I should run the numbers just for fun on all the Arizona counties and no one would ever send mail again.
Jill DeWit:
Right.
Steven Jack Butala:
And then the last one is, geez, I’m drawing a blank.
Jill DeWit:
Is it the universe of property?
Steven Jack Butala:
Yes. The universe… Thank you.
Jill DeWit:
You’re welcome. I pay attention.
Steven Jack Butala:
That’s kind of makes me attracted to you when you…
Jill DeWit:
Thank you.
Steven Jack Butala:
In the universe of properties in a county or a zip code, what percentage are listed? And this is where Mojave would fall off the cliff. It would fall into the Grand Canyon, which is ironic because that’s where the Grand Canyon is.
Jill DeWit:
Grand Canyon is.
Steven Jack Butala:
You want a very small number of property listed as a percentage of all the property in the county or zip code, whatever you’re testing.
Jill DeWit:
Right. It doesn’t look like a mass exodus from that area.
Steven Jack Butala:
If you look, go to realtor.com or Zillow or Redfin, and you pull up Kingman, which is close to Meadview, what we’re talking about here, you’re just going to see… It’s going to look like chickenpox. There’s going to be so much property for sale. So this works for any county anywhere in the country. It works for New York County where Manhattan is. You can do it with any product type that where you have a subsection, like if there’s land. It works fantastic for houses. This is all we teach in House Academy. House Academy, there’s not a dart board in the same zip code where you’re running House Academy, from a pricing standpoint and everything.
Jill DeWit:
It’s even easier.
Steven Jack Butala:
If you’re an OCD weirdo and you can’t stand the fact that there’s a lot of variants and testing and you never really get to the bottom of it in land, go buy and sell houses with House Academy, which you get in our whole program. It’s all comes with it. And I think doesn’t it?
Jill DeWit:
No, it’s separate. That’s okay. That’s why I’m here.
Steven Jack Butala:
Get to know your company, Steve.
Jill DeWit:
That’s okay.
Steven Jack Butala:
But yeah, there’s pricing for every house and it’s just it’s very, very tight. So that’s the Red Green Yellow Test. You’re mining this data for all the sources. So what’s changed is not how we look at this property. That’s been the same for as long as I’ve been doing this, we look at the same stuff. What’s changed is the availability of data. And so Redfin itself, not Redfin data, but Redfin itself has this amazing download function where you can get days on market for a… if they cover the county. And this is when now I’m talking about the urban Red Green Yellow Test. If it covers that county, you’re going to know exactly what’s happening from… and where to send mail. And I’ll end with this. This only works, this Red Green Yellow Test…
And it’s free by the way, once you learn how to do it… You need a subscription to some stuff, but you get all that with Land Academy. This only works if you pit a couple of counties, or four or five or six counties, against each other. So if you took all 13 counties in Arizona and you lined up the Red Green Yellow Test, one or two of them would be… If you did choose to mail Arizona, which I really discourage you to do. You’re going to see that, oh, this one’s probably better. Or this one clearly should never, ever get mail again. There’s just too many properties for sale. It’s permanently done. In California, if you do that, you’re going to find, let’s say you take the central part of California, there’s probably… There’s a lot of counties in Texas, too, same thing. And line the counties up, it’s going to show you exactly where to send mail. Smack you in the face exactly.
Jill DeWit:
Yeah, it’s amazing. We didn’t have this when we started. This is so good that we have this data and especially I love the stats and the numbers that we have at our fingertips now with really accurate comps and sale prices and transfer dates and all kinds of things with land. That’s the best part. It was a lot of doing our best back then and we made it work.
Steven Jack Butala:
And here’s the amazing news. I guess I’m not going to end on that. When you pick a county that’s covered by Redfin, the prices are in there too. So you’re taking that first step toward achieving that first step of pricing, which is what our property’s for sale, the price breaker, and the sold price breaker. See, that’s in that dataset. This is all free.
Jill DeWit:
Yep. I concur. Happy you could join us today. Five days a week can find us right here on the Land Academy Show.
Steven Jack Butala:
Join us next week for another interesting episode. You are not alone in your real estate ambition. Was that too harsh?
Jill DeWit:
No, no.
Steven Jack Butala:
I just want to drive that Arizona point home.
Jill DeWit:
Yeah, people need to hear it. Just stop it. Stop it, we want you to succeed.
Steven Jack Butala:
Jill and I are done.
Jill DeWit:
And we want you to be succeed. I’m sorry. Hey, if we get a little animated or we get a little strong here, it’s because we’re looking out for you and shaking you. It’s like a girl. I’m shaking a friend saying, “Stop dating this man.”
Steven Jack Butala:
Yeah. You don’t want to. I’m like, no, I don’t think you should shake girls.
Jill DeWit:
Oh. I didn’t say baby.
Steven Jack Butala:
Well I don’t think…
Jill DeWit:
Oh, I can shake a girl.
Steven Jack Butala:
A girlfriend.
Jill DeWit:
I can grab my girlfriend and shake her and say, “Stop dating this man. How many red flags do you need?” We have one girl. Her name is Lindsay, and I love her. She’s a sweetheart. She’s like, “Oh, I’m a red flag magnet.” She’s like, “I know it.”
Steven Jack Butala:
I know, why does she? I noticed that about her.
Jill DeWit:
I know. She admits it. She’s got this fireman that she just cannot shake. The sex must be fantastic.
Steven Jack Butala:
Really?
Jill DeWit:
That’s all I can think about. Yep. I don’t get it. But anyway, and she knows it. I’m like, “How’s red flag guy?” She says, “Yeah, I know. I’m going to see him this weekend.”
Steven Jack Butala:
What?
Jill DeWit:
I know. So anyway. It’s funny.
Steven Jack Butala:
You know men are baffled by this.
Jill DeWit:
Yeah.
Steven Jack Butala:
This whole topic men are like, “I don’t understand why you would ever even talk to that guy and let alone date him.”
Jill DeWit:
Well, hold on a moment. We know men that do the same thing too. And they’re like, “Yeah, yeah, you’re probably right.” And I’ll leave it at that.
Steven Jack Butala:
Yeah. That’s true I guess.
Jill DeWit:
Thank you for tuning in. We hope you find our content valuable and we appreciate your support. If you haven’t already, please check out our YouTube channel, hit the subscribe button, and give us some feedback on the shows that you love.
Steven Jack Butala:
We are Steve and Jill.
Jill DeWit:
We are Steve and Jill.
Steven Jack Butala:
Information-
Jill DeWit:
And inspiration-
Steven Jack Butala:
… to buy undervalued property.
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