How much Available Investment Capital is Really in Land Academy Group (LA 1457)
| How much Available Investment Capital is Really in Land Academy Group (LA 1457) |
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 sweet Scottsdale, Arizona.
Steven Butala:
Today jill and I talk about how much available investment capital is really in this Land Academy group of ours. Lots.
Jill DeWit:
Yeah, that we know of, by the way.
Steven Butala:
I would actually say it’s limitless for the right deals.
Jill DeWit:
Mm-hmm (affirmative).
Steven Butala:
It’s limitless for great real estate deal.
Jill DeWit:
That’s true.
Steven Butala:
Before we get into it…
Jill DeWit:
Well now you’ve answered the whole… did the whole show.
Steven Butala:
That is pretty much… you don’t need to listen…
Jill DeWit:
There we go.
Steven Butala:
…to the rest if you…
Jill DeWit:
Okay.
Steven Butala:
…don’t want to.
Steven Butala:
Before we get into it let’s take a question posted by one of our members, LandInvestors.com. Our online community, it’s free. And if you’re a Land Academy member already, please join us on discord.
Jill DeWit:
Wouldn’t it be funny. So did you hear the show yesterday? Yeah, it was three minutes long.
Steven Butala:
We should do that one time. See what people say.
Jill DeWit:
That would be funny. They would… I think they would think that’s cute. Okay. So Chip wrote, “Hi land investors. I’m prepping for a mailer for large tracts of land that I will flip to a network of developers who focus on low density, large acreage land developments.”
Steven Butala:
I love that.
Jill DeWit:
Mm-hmm (affirmative).
Steven Butala:
Low density, large acreage land developments are my favorite.
Jill DeWit:
Mm-hmm (affirmative) everybody wants that.
Steven Butala:
Yes.
Jill DeWit:
Does anyone have a template for a non-circumvent non-disclosure agreement.
Steven Butala:
An NDA.
Jill DeWit:
Right, or whatever it might be called. There you go. “The price point of these properties will be beyond my capabilities and quite a bit larger than many of the deals done within the group.”
Steven Butala:
Well, this is a perfect question for this topic. Go ahead Jill.
Jill DeWit:
Gee, imagine how that happened.
Jill DeWit:
I know.
Steven Butala:
Honestly, it was just pure luck.
Jill DeWit:
Oh okay. “My plan is to either do a simultaneous close or simply sign the contract to the end, excuse me, end buyer. These developers form a new LLC for each land track,” which is kind of normal for that. “My concern is that when I present these deals to the buyer, they or partner of theirs will go around me and directly to the seller and then steal slash kill the deal for me. Does anyone have any suggestions or a template document that I could use for some level of protection?” You want to go?
Steven Butala:
Yeah, this has happened to me, and it’s going to happen to you. So you just have to accept that. Ask them for an NDA, because if they are big developers and they’re very experienced and it sounds like they are because they’re doing a new LLC for every deal, they’re going to have one. And so especially they’re going to have one, if they give it to you and you ask them to sign it and they say no, it’s like, why do they have have it. They make other people do it.
Jill DeWit:
Right.
Steven Butala:
So it’s not so much… I would actually get their NDA and then I would look out on the internet. I used to, when I was buying and selling long-term care facilities and brokering them, I would make them sign an open-ended agreement that says, look, you’re going to pay me 2% of the transaction value of any deal I bring to you and I’m going to register each deal and you’re going to sign it.
Steven Butala:
You’re going to sign it. When I bring you the deal, you’re going to sign that. Then you’re going to pay me. After a while, they stop… Everybody trusts each other and it’s over.
Jill DeWit:
Right.
Steven Butala:
Number two. And this is a great situation to be in. And if you’re new and you understand real estate, or you’ve been in real estate in your life, in the past, in any capacity, this is a great way if you have no money to make tons and tons and tons of money. I made ridiculous amount of money for my age bringing nursing homes to huge, publicly traded companies and getting paid. Using believe it or not mail and faxes and just like the exact same… That’s a long, different story. But it’s the same concept.
Steven Butala:
So I would really do two things. Number one, I would tell them that you’re exclusively doing this for them. You’re not going to say… That means a lot to them because they’re used to doing off-market deals and they’re probably geographic specific and they’re probably have some competition. So the last thing you want to do is bring a deal to the guy and he says no, and then bring it to somebody else, and then pretty soon, they’re just, they’re going to not respect you at all. So work for one person that you really like and get along with.
Steven Butala:
Number two, fix your fee. In hindsight, 2% was probably not the best idea, because, and there were checks that I got for six, $700,000. And that’s too much. If you say, look, $50,000 is fine. I just want $50,000 for each deal that you buy. They’re going to respect you more and do business with you a lot, maybe even exclusively. And then my final point is.. I love this question.
Jill DeWit:
I know you do. You have a lot to say.
Steven Butala:
Guess I have a lot to say about it, but my final point is… I forgot.
Jill DeWit:
50,000, be that guy.
Steven Butala:
Because I’m old.
Jill DeWit:
Are you worried about locking it in? Having an escrow or don’t worry about that?
Steven Butala:
Nah.
Jill DeWit:
Okay.
Steven Butala:
I’ll think of it in a minute.
Jill DeWit:
Okay.
Steven Butala:
Today’s topic, how much available investment capital is really in the Land Academy group. This is why you’re listening.
Jill DeWit:
While you’re backtracking and re-trying to trace your steps for that last point, which was great by the way…
Steven Butala:
Oh, take equity. Sorry. It’s $50,000 bucks cash.
Jill DeWit:
Good.
Steven Butala:
But you want two or 3% of the deal. And every single one of them will do that. And they will respect you more.
Jill DeWit:
Ding ding.
Steven Butala:
Now, you’re partner in a subdivision. What’s better than that? Just for bringing the deal to him.
Jill DeWit:
I love it. I think that’s awesome.
Steven Butala:
Sorry Jill. Go ahead.
Jill DeWit:
Okay, so here’s what we’re talking about for today’s show. This investment capital. What are you talking about? Okay. We started this in January, 2020, and we did it again in January, 2021. We’re going to do it every year now, in January. It’s our thing. We send out an email to all of our community to say, all right, how much money I got? How much money are you willing to spend per deal? All in all? What kind of deals do you like? Whatever. And what we’re doing is showing everyone, number one, how much money is available. And then two, putting people together. We share name, email, phone number for each person. And because they want to. They want to fund your deals.
Jill DeWit:
There’s so many people in our community that A, have more money than they know what to do with. B, are spending as fast as they can on their own deals and they’d like to partner with other people. Or C, don’t even want to do their own deals. Just want to be your bank. So, that’s what this is all about. So we put the list out, we published it in February, I think it went out February, yeah. It went out in February, how much money it was. And this, again, I know that people hold back. I hold back.
Steven Butala:
Oh we did.
Jill DeWit:
Right. Everyone holds back.
Steven Butala:
We put two million dollars in there.
Jill DeWit:
Yeah.
Steven Butala:
We, sign us for two million, but it’s like closer to 20.
Jill DeWit:
So if a lot of people don’t put their real numbers out, like I don’t want people to know how much money I really have.
Steven Butala:
Yeah.
Jill DeWit:
So, but even what they shared was right now in excess of 50 million, wasn’t it? Like 55 million?
Steven Butala:
Yeah, 55 million.
Jill DeWit:
Okay.
Steven Butala:
Total.
Jill DeWit:
Yeah.
Steven Butala:
That’s the people who responded. Let me tell you this. The last live event. There are two people in our live event and they’re only 30 or 40 people there. We intentionally, we capped it at 30, 40 people. There were two people there that were not in our group that represented hedge funds. That’s how interested people are in doing deals that are good.
Jill DeWit:
Well the other thing is…
Steven Butala:
Yeah, not bad.
Jill DeWit:
…and I’ve been told this for years now, years. So many of these investors, the money people, they love us. They like, we’re not just… we know what we’re doing…
Steven Butala:
Yeah.
Jill DeWit:
…is what I’m trying to say. We’re educated.
Steven Butala:
And it’s niche.
Jill DeWit:
We’re using data. We’re getting the properties the right way at the right price. They’re not, it’s not an MLS thing that I’m spoonfeeding to somebody. Like, I could find that myself.
Steven Butala:
Right.
Jill DeWit:
Nobody wants that. They understand how smart you are and we are. And they’re like, they have no questions. And the best thing is, I would say too, if an investor doesn’t understand it, you don’t want to work with them either.
Steven Butala:
There’s a lot of people who don’t understand land. Money people. They want to make money, but they don’t… they’re old school and if I’ve answered this question once, I’ve answered it a thousand times in my career. Why would you ever buy vacant land? It doesn’t produce any money. And so, okay. Then we can stop right…
Jill DeWit:
Move on.
Steven Butala:
…I’ve learned now…
Jill DeWit:
Done.
Steven Butala:
…that they’re probably apartment people or cap rate analysts or whatever. long-term care, nursing homes, whatever. They need that revenue streams because they’re not transaction driven, they’re cap rate or income driven, which is fine. The world needs all kinds of people. But they don’t understand…
Jill DeWit:
What we do.
Steven Butala:
Yeah. Transaction value. Transactions as ordinary income. That’s really the issue.
Jill DeWit:
Right. And then, my other point I want to make today is how do you serve up a deal to these people so they’re interested. Because this is huge for me, because when people present deals to me, there’s a less than 25%, honestly, that give me all the information right upfront.
Steven Butala:
It’s really frustrating.
Jill DeWit:
Yeah. And I need everything. I need to know everything about the deal, right? And then I need to know, what about you and how you’re going to sell it. So I’m the investor. I need to know everything… You know, where it is, how big it is, why it’s great. Look, here’s what’s going on in the market. Here’s other deals in the area that have closed.
Steven Butala:
Why it’s great.
Jill DeWit:
Here’s what’s happening, and here look what I found. It’s clearly… I’m just coming to you, Jill, because I don’t have 50 grand and it’s worth 180 right now.
Steven Butala:
Yeah.
Jill DeWit:
We could probably, gosh, maybe get 210 out of it. I don’t know. I mean, I can’t believe this guy is selling to me. We’ve got to do this fast. So it needs to be presented with not just a statement like that, with examples backing it up. I need to see, here’s three comps of what just happened in the last 90 days and why we got to act fast kind of thing.
Jill DeWit:
And then the other part is you want to present you. You’re selling not just the deal, but you. In which needs to be, I have been studying this market for six months. You don’t even have to live there. I’ve been watching what’s happening. I’m hearing, I’m reading, I know. I got this person, that person, I already talked to three agents. Here’s what they say can happen. I haven’t picked anybody yet. I know how this is going to go. I’ve got it all spelled out. Jill, it’s…
Steven Butala:
I just need the money.
Jill DeWit:
…so it needs to be… That’s it. I just need the money. And if you come to me like that, or anybody on this list, they can’t write a check fast enough.
Steven Butala:
That’s exactly right, jill. What ends up happening instead of that very often is, “Hey Jack and Jill, is this a good deal?”
Jill DeWit:
Yeah. Would you do this deal?
Steven Butala:
Would you do this? And then, would you fund it?
Jill DeWit:
Yeah, no.
Steven Butala:
And then the answer is like, I mean, once in a while we’ll do it to like that. But the answer is almost always no, unless it’s a great deal.
Jill DeWit:
Mm-hmm (affirmative). I’ll look at it….
Steven Butala:
And then it’s like, if it is a great deal, and we’ve done deals like this, we’re doing deals now like this. If it is a great deal, we end up negotiating or discussing a very different percentage split because Jill’s going to have to do all the work. Because when somebody comes…
Jill DeWit:
Oh if they don’t know their stuff.
Steven Butala:
If somebody comes to us and says, “this is the greatest deal. I’ve done 15 deals. This is by far the best deal. I don’t have the $50,000, here’s why,” and spells it all out just like Jill said, then we’re going to believe that person and we’re going to believe that they can actually do all the work that’s associated with it and take it seriously. If someone comes to us and says, let’s say this is the exact same deals. The real estate deals are the same. And it’s presented by somebody who’s maybe brand new or they’re saying, “Hey, would you do this deal? Is it a good deal? Mom and dad, is this a good deal? Should I do it?” Then what is going to happen is we’re going to say, “yeah, we will do the deal, but you’re not going to get paid anywhere near what we…”
Jill DeWit:
If I’m going to do the work.
Steven Butala:
Yeah.
Jill DeWit:
That’s the whole thing. If I’m going to hold your hand, and that’s okay, too. So be open to different percentages and different splits based on who’s doing all the work and the heavy lifting.
Steven Butala:
That’s right.
Jill DeWit:
That’s totally fair. I would do the same thing.
Steven Butala:
And that’s not just us.
Jill DeWit:
Oh no.
Steven Butala:
Every other money person that we know in the group is like that too.
Jill DeWit:
Well, I’m also talking to anyone in our industry. Anyone in real estate. I don’t care if you’re a house flipper, you do apartments, you do whatever. If you’re doing it right, you run out of money at times because you have such a good deal…
Steven Butala:
We’ve run out of money.
Jill DeWit:
…that you can’t let it go. So I want you to be able to present it to somebody and you need to come at it with confidence on the deal and confidence in you and get that point across. I don’t care who you are or who you’re calling. You could be calling Toll Brothers Homes to say, “I know your path and where you’re going. And I have a property that I know is going to be perfect for you. Here’s what it is.” I don’t know if that’s a great example, but you just need to be able to… I want you to know that there’s money out there.
Jill DeWit:
I’m in all kinds of different things that I’ve, especially Clubhouse right now. And I’m having so much fun in Clubhouse. And there’s so many different people in Clubhouse. And I find a lot of people that are not jumping in to all kinds of real estate because they’re hung up on money. And this is not a hangup. You don’t have to go get your mortgage on your house, take out a second, get a hard money lender, worry about these points or whatever it is. You don’t need to do that.
Jill DeWit:
If you’ve got a great deal, all you need to do is spend a little extra effort finding someone who can fund the deal. And they’re out there. You know in the old days people used to put stuff in the paper to try to find investors. Now with social media, it’s even easier to find someone, especially in unique investment, there’s all kinds of wonderful, unique investor groups all over Facebook. You can find… There’s somebody right now sitting, who buys all kinds of things, sitting on a ton of cash who would love to fund your deal. So you don’t have to do it the old school way. You just have to know how to present it.
Steven Butala:
Think of it from an investor’s perspective, a money person’s perspective. I can do a hundred deals as a money person. I can probably do five deals as a transaction coordinator. And maybe those numbers aren’t that accurate. Maybe it’s like, I can do a thousand money deals actually, and maybe 20. So work is hard… Time and work is harder than spending money.
Jill DeWit:
Mm-hmm (affirmative).
Steven Butala:
And so if you’re either one or the other, or both. We’re both. But you always should be aspiring to be the money person. So you should get to…
Jill DeWit:
Perfect.
Steven Butala:
…learn a business. Find great deals, use other people’s money including ours, but eventually just keep it in your head, when you get really successful, pay it forward and become the money person. And you will do great.
Jill DeWit:
It’s not only paying it forward. You’re going to make more money yourself.
Steven Butala:
Well.
Jill DeWit:
That’s the whole point. You get to a point…
Steven Butala:
None of this is free.
Jill DeWit:
Well you get to a point where, like you just said, you can only handle your own deals so often. Who would not want to be in this situation. I’ve got five deals. I have five deals at a time at this volume. This is pretty much what we can handle on my staff. Then, I also have 10 extra deals running in the background, where I’m doing no work, I’m just the money guy and I just get a check.
Steven Butala:
Yep.
Jill DeWit:
That’s it. That’s what you want to be and that’s awesome. Happy you could join us today. Five days a week you can find us right here on the Land Academy Show.
Steven Butala:
Tomorrow the episode on the Land Academy Show is called becoming an influencer by Jill DeWit. You are not alone in your real estate ambition.
Jill DeWit:
I did not know this topic was coming and I hope I have some… You’re going to kind of interview me here.
Steven Butala:
Yeah.
Jill DeWit:
Okay. Good.
Steven Butala:
We were standing in the kitchen a couple weeks ago, and our third kid said, because you guys… He ended his sentence with this. “Because you guys are an influencer…”
Jill DeWit:
He said that?
Steven Butala:
Yeah. Both of us, well, you don’t remember, but both of us turned around and said, “we’re influencers?” And then he looked at us and just laughed and said, “Oh my God, Chess.” You know. So apparently you have to have a lot less of a presence on the internet to be an influencer than we do. I’d never call myself an influencer ever.
Jill DeWit:
This is hilarious.
Steven Butala:
And Jill’s on Clubhouse now.
Jill DeWit:
Oh ya.
Steven Butala:
Is 10 times the influencer that I’ll ever be, which is good. I think it’s supposed to be that way.
Jill DeWit:
Very sweet of you. Thank you.
Jill DeWit:
Need to send out a few thousand offers to property owners like us? Checkout offers2owners.com. It’s offers, and the number two, owners.com. No setup fees, free mail merge, and exceptional service. We should know as it’s our company. So give offers2owners a call today.
Steven Butala:
We’re Steve and Jill.
Jill DeWit:
We’re Steve and Jill.
Steven Butala:
Information
Jill DeWit:
And inspiration
Steven Butala:
to buy undervalued property.
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