Pros and Cons of Leveraging Time vs Money (LA 1466)
| Pros and Cons of Leveraging Time vs Money (LA 1466) |
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 DeWit, broadcasting from sizzling Scottsdale, Arizona.
Steven Butala:
Today, Jill and I talk about the pros and cons of leveraging your time versus money. 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, and if you’re already a member, join us on Discord. Seriously, join us on Discord.
Jill DeWit:
Okay. In case you can’t tell, he’s got a little bit of a thing for this Discord. It’s a little unhealthy. There’s no money involved. It takes a lot of time on his part. Just kidding. You love it.
Steven Butala:
Really Clubhouse?
Jill DeWit:
I was waiting for that. We each have our new favorites. Isn’t that hilarious? I’m like, “All right, you represent us on Discord. You just have a blast. Let me know if there’s anything interesting. And I’ll take the Clubhouse thing and that’s fun.” So, it’s perfect.
Steven Butala:
It’s funny you bring up unhealthy because somebody said, and it turned into this huge thing. Somebody said, “I listen to X while I’m scrubbing data.” And it just became a whole thing, and it unraveled about what people listen to and all their unhealthy weird habits about how they crunch data to get it ready for a mailer and when they do it and where they do it in their house. I listen to the band Tool extremely loud when no one else is around while I’m scrubbing data. And everyone’s like, “You think that’s weird, then,” fill in the blank.
Jill DeWit:
That’s hilarious.
Steven Butala:
It became this thing, like we are not healthy, normal people.
Jill DeWit:
That’s true.
Steven Butala:
We’re all these weird data people that are … That’s what I love about discord. And no one’s afraid of that. We’re all serious geeks, is what it is.
Jill DeWit:
Yeah. It’s a support group. That’s it. If you’re struggling to find friends because you are weird too, you can find them in Discord and you can all just have a great time together. Mom, I have friends. Leave me alone.
Steven Butala:
Yeah. You know what it is? It’s like this age, this is our video game.
Jill DeWit:
It is. Yeah.
Steven Butala:
The kids get on the line and-
Jill DeWit:
So they’re playing with the thing and then the talking. This is your version of you’re doing that while you’re scrubbing data.
Steven Butala:
It’s great.
Jill DeWit:
Oh, this is hilarious. The grown-up version of gaming with your friends. All right. Back to the question. Daniel wrote, “I’m in negotiations with a seller for a $1 million acquisition price for a bulk purchase of multiple properties. I need help pricing from a local realtor, but I’m hesitant to give them all the information since I do not yet have a signed purchase agreement. Is this something you’d be cautious with?” Yeah, I would. Totally.
Steven Butala:
Whatever you say, I’m going to agree with you on this.
Jill DeWit:
Get a signed purchase agreement. There’s no reason-
Steven Butala:
Jill has a, and correctly so, has a peeve about not signed purchase agreements. You’re not doing anything wrong in any way here, Daniel. It’s a good question. Jill likes signed purchase agreements.
Jill DeWit:
Well, for two reasons. Here’s reason number one. So Daniel, you’re going to sleep better. I would even take it so far if you’re really worried, take the signed purchase agreement, give it to an escrow agent and say, “Give me an escrow number. And even though we can all change our minds, I just want to have a number that it’s started the process,” because that’s good faith moving forward.
Steven Butala:
This is extremely important, what she’s saying, in my opinion.
Jill DeWit:
And as far as an agent’s involved, you’re in escrow. It’s like a hands-off kind of thing. Even though all you have is a number and nobody’s done anything, that’s all I care about. And then number two is I don’t want you to spend so much time on this. That’s my thing with a signed purchase agreement too. We have a few minutes. Right now, I’m even a little more flexible now. It used to be, I don’t even look at it. I don’t care about it. Until someone has a signed purchase agreement, then I’ll pay attention. But right now what we’re doing is so special and unique that I’m getting a little bit involved. I’m doing a little bit of a due diligence ahead of time. Even so much as running them by him. I’ll even say, “Here’s the scoop. I really think I can make this happen at this number before I even go in and really work on it. Is it worth my time?”
Steven Butala:
We have a new thing going on, dynamic between us, it’s new with this mailer and I think it grew out of the fact that we’re doing more deals now than we ever have. Jill and I are more involved in buying and selling land. All these education companies have kicked in. This took five years, but we got the right people in place that are running it, so all we really have to do with the education companies is provide the content, like recording this show. So, it has allowed us now to really step up buying and selling land, which is what we both love to do.
Steven Butala:
So she now, never before had she done this, she comes in to my office and says, “Look, this deal just came in. Here’s the APN. Here’s the county. I don’t want to spend any time on it. I’m not even going to call this person back until you say the purchase price on the agreement works and you know these areas that we’re buying these properties.” And I’ve been there and I’m very familiar with these areas. And so I know even like one mile from the center of the county, one mile east is awesome, one mile west, we don’t want it. So, she’s relying on me to … It’s working out really well.
Jill DeWit:
It really is.
Steven Butala:
She doesn’t waste any time.
Jill DeWit:
No. It’s like, “Hey, just give me a quick overview. Do you want me to even go forward on this one?” And he’ll be like, “Nope, don’t want it at any price. Who cares? This doesn’t work.” And a lot of it’s like, it’s zoning. It might come back that it was not zoned the way we thought it was and that doesn’t work for us. Maybe it’s too small for what we’re trying to do. I don’t know how that got in there kind of thing. Oops, we don’t want that.
Steven Butala:
Or access.
Jill DeWit:
Yeah. Or yeah, the famous access, like yep, this would be okay if you could get to it, so not doing it.
Steven Butala:
There’s a lot of roadblocks around the county, the two counties that we’re working right now. And I know where they are, because I’ve been there. And so these barricades that these owners put up, you can get around it. It’s a topic that comes up, but we don’t want to. We’re getting so many deals back in these areas that we don’t need to put up with anything. Unless it’s a smoking smoking deal, we don’t do it.
Jill DeWit:
Right, exactly. This actually goes in … So, all right. So I hope that answered your question, Daniel. I want you to be cautious. I want you to have that. Again, I want you to have the purchase agreement before you spend too much time on it. I want you to have that price that you feel good about because the guy might say a million dollars today. You go down this path, spend a week with an agent. You’re staring at the spreadsheet. You’re looking at all the properties, trying to assign the value, what you think makes sense. And he goes, “Second thought, I think it’s worth 2 million,” and now you’re done. You’re like, “I wish you would have said that a week ago, because I wouldn’t have done any of this work.”
Steven Butala:
And that will happen, because talked to their husband or whatever.
Jill DeWit:
Exactly.
Steven Butala:
Today’s topic, the pros and cons of leveraging time versus money. This is the meat of the show.
Jill DeWit:
That is exactly what we do, is like right now with these deals, like we just talked about.
Steven Butala:
Chances are you have one or the other, you have a lot of time or a lot of money. We have a lot of money, and so time is a huge issue with Jill and I, constantly an issue about what should we do? When should we do, fill in the blank? Should we take on this new product? Should we teach a new class? Should we send a new mailer out? We are trying to find creative ways of leveraging our time. One of the ways that we leverage our money, and it’s very, very effective, is deal funding. It takes very little effort for Jill and I to say, “This property is great. This member’s great. And we would love to do a deal with them,” and can’t write the check fast enough to get it to escrow.
Steven Butala:
We can do hundreds and hundreds and hundreds of deal funding properties at a single time and it doesn’t affect anything. It doesn’t take that much time for us to do that, and we have the money to do it. If you’re brand new, hopefully you’ve got a ton of time and no money, because that’s who we do deal funding with. So you just have to be conscious of this. This is a reason I actually chose this topic. It didn’t come from our staff like it usually does. You just have to really think about this for a second. Which one do you want to do? If you ask anybody who’s in private equity professionally as a job or a career, that’s all private equity is, is taking money. They’re the middle person. They take people who have tons and tons of money, tons of money, and they match it with people who have companies that are awesome, entrepreneurs. And so they’re leveraging other people’s time. I’m sorry. They’re leveraging other people’s money to apply it to entrepreneurs. I don’t know if you have anything to say about this.
Jill DeWit:
I do. I have two notes. The first thing I wrote was, are you nuts to even question this?
Steven Butala:
You mean me?
Jill DeWit:
No.
Steven Butala:
Yes, I am nuts.
Jill DeWit:
No, just anyone who’s not sure about leveraging time versus money. What’s the exact topic, excuse me, here? The pros and cons. There’s nothing, but positives about really paying attention to your time and your money. Here’s the point. If you can’t use money to leverage your time, if this is making sense, let me know if I need to reword this.
Steven Butala:
No, this is perfect.
Jill DeWit:
You’re never going to grow. You’re never going to expand.
Steven Butala:
That’s right.
Jill DeWit:
You have to use money to, like the NeighborScoop, you know what, the $75, whatever it costs a month, I don’t even know, for NeighborScoop. If I were me 10 years ago, I’m not kidding, I would have spent $500 a month for NeighborScoop.
Steven Butala:
Me too.
Jill DeWit:
Totally would have. I remember when we first got RealQuest Pro and it was like 250 a month for us to have nationwide access just for you and me. That’s what we spent ourselves. And it was a no brainer.
Steven Butala:
Oh, there’s no question.
Jill DeWit:
It’s like, I don’t care. It was nationwide access for $250, done, done and done. I couldn’t do it fast enough. I know there’s no way to do it otherwise. Am I going to save $250 going county by county and writing … By the way, sometimes this county data is not free also, and it’s not even $35. It might be $150 and take you 10 days for the right person to go and pull it and then they send it to you however they send it to you. It’s crazy. It’s so important to make conscious good decisions, obviously. Don’t just go writing checks and sign up for every possible software solution that’s out there, and that’s why you’re here, I’m sure. Pick those good ones and it will pay off.
Jill DeWit:
I mean, like the example you just said, I can’t tell you how much it saves me every day, three to five, however many calls I’m dealing with a day that are coming in from potential sellers, and to sit there and go right away on the phone, and look at NeighborScoop, and I have a yes and a no and a no and a yes. That’s it. And then I take it to the next level. I wait for the purchase agreement to come back, and then we really take it seriously and then we act on it. I mean, it’s amazing.
Steven Butala:
What’s more efficient than that?
Jill DeWit:
Exactly. So the volume of what we can do and the quality too, it’s not even just the volume, it’s I can make really good decisions because I have the tools. I can with a click of a button, I take the whole property outline and I plop it into Google Earth Pro and I’m looking at the whole thing. I’m checking the elevation. I’m seeing what’s around there. We were talking about-
Steven Butala:
How efficient is that?
Jill DeWit:
Right. We were talking about the date timestamp on Google Earth the other day with somebody. We told the guy on one of our weekly calls, this gentleman selling the property, he said there was once a house there. Well you can’t look at it, you can’t see it now, but if you go back in time in Google Earth, you can see it. I said, “You should show that picture when you sell this property. Put arrows showing, here’s where the house used to be.” You can see it from the Google Earth image dated 1985, or whatever it is. It’s so valuable. So anyway, again, I just think if you don’t get this, I can’t help you.
Steven Butala:
Well, no, it’s just the reason, again, I can say it again, because it’s really important. You just have to be conscious of which one or both and how you’re using them. It’s a resource. So in the beginning of your career, regardless of your age, you’re going to be leveraging time. If you do everything right, let’s say, I don’t know, maybe in five years, you will start to leverage money more than your time and kick your feet up.
Jill DeWit:
Exactly. If you do it, and cheers to that, call us.
Steven Butala:
Yeah.
Jill DeWit:
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 What Your Father Never Told You About Land Investing. You are not alone in your real estate ambition.
Jill DeWit:
This is the Jack Thursday.
Steven Butala:
This is Jack Thursday.
Jill DeWit:
Oh, speaking of kicking my feet up-
Steven Butala:
And Jill Friday’s coming too.
Jill DeWit:
I’m going to kick my feet up on this one tomorrow. If you need access to any sort of ownership or property details, including seller/owner phone numbers and FEMA flood map overlays, check out neighborscoop.com created by investors, that’s us, for investors like you. We are Steve and Jill.
Steven Butala:
We are Steve and Jill. Information.
Jill DeWit:
And inspiration.
Steven Butala:
To buy undervalued property.
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