Jack Thursday – Just for Engineers and Business Owners (LA 1482)
Jack Thursday – Just for Engineers and Business Owners (LA 1482)
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 sweet, sunny, Scottsdale, Arizona.
Steven Butala:
Today Jill and I talk about how it’s Jack Thursday, just for engineers and business owners.
Jill DeWit:
Bye-bye.
Steven Butala:
We have a tremendous number of business owners and engineers in our group, and I’m going to talk about why, and so is Jill.
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, and if you’re already a member, I urge you to join us on Discord.
Jill DeWit:
Okie dokie. Chris wrote, “Hi, my name is Chris B., and I’ve only been a member for maybe two weeks and I’ve watched all the videos.” Chris, those are two weeks you’ll never get back. Just kidding. Good for you. I am happy, you blew through that. “I didn’t know if there was a place on the website to make myself available to fund deals. Any input is appreciated.” There is. There’s two ways.
Steven Butala:
Well, there’s two that I know of, but let’s see if they’re the same.
Jill DeWit:
One is where you could be watching for deals via LandTank and HouseTank. When people need money, that’s where they post them. And you can just go in there and grab them.
Steven Butala:
Get on LandTank and make sure that you turn your notifications on, because every single deal without exception, that goes to Land Tank, it gets gobbled up within minutes by other funders. That’s one way. What’s your other way?
Jill DeWit:
Well, every January, we put out a master list where we … You’ll get on the next one, Chris. We publish who you are, all your contact information, any details about how much money you’re willing to spend per deal, how much money you’re willing to spend in total. If there’s any parts of the country that you like, any nuances about how much you’re willing to help or not help or whatever it is, funding other people’s deals. That’s it.
Jill DeWit:
The other way I’d say put it in, maybe Land Investors? I’m trying to think where else he could-
Steven Butala:
Nobody listens to that funding deal, and it comes out once a year anyway. It’s just cool to know that there’s $100 million available to people who were in the Land Academy to do good deals.
Jill DeWit:
Well, I look at it.
Steven Butala:
So, it’s a cool thing. I look at it, too, but it’s once a year.
Jill DeWit:
Okay.
Steven Butala:
There’s a section in Discord called Would You Fund This Deal. And people who need transactions funded, us included sometimes. We do some deals that are so big that we don’t want to bite it all ourselves.
Steven Butala:
There’s a section called, Would You Fund This Deal. If I were you, and there’s other people in this group that have no intention of ever sending out a mailer, they just want to fund other people’s deals, which is fine. People from institutions and hedge funds and stuff, actually, are members. I would go be real loud about it in Discord and say, “I fund deals. And they better be damn good deals. And you better be really intelligent or else I don’t want to work with you.” And I would really be that clear about it. Because you will-
Jill DeWit:
Not you, Chris. You tell them that if you want.
Steven Butala:
Tell them. Yeah.
Jill DeWit:
Yeah.
Steven Butala:
You better be intelligent and nice and have only five star deals.
Jill DeWit:
Give us your checklist. Jack’s like, “Here’s what I expect.” Come on, are we working together?
Steven Butala:
Between the two of us, Jill and I, I’m not allowed to fund deals.
Jill DeWit:
Correct.
Steven Butala:
Because of this attitude I have.
Jill DeWit:
Yeah. As you can see, he’s still on step one of my 10-step anger program.
Steven Butala:
You know what the truth is? When I get a deal funded, the deal ends. For some reason, there’s people reach out to me specifically to fund deals, which is fine.
Jill DeWit:
That is funny.
Steven Butala:
Which is fine. I go to other members, even without Jill. I don’t even talk about it with Jill. I go to other members and I asked them to come in on the funding side of it so they can actually manage the manager.
Jill DeWit:
Exactly, whatever. He has his own … But I don’t know what the word is. Willy-nilly way of getting things done. I have it in a system, but okay.
Steven Butala:
Today’s topic, it’s Jack Thursday, just for engineers and business owners. This is why you’re listening. Why, Jill? We have so many engineers, accountants and pilots in our group, but disproportionate amount of engineers, all kinds. Electrical, aerospace, mechanical-
Jill DeWit:
Data.
Steven Butala:
… software. Yeah.
Jill DeWit:
Numbers.
Steven Butala:
Data, and numbers.
Jill DeWit:
It’s a numbers thing.
Steven Butala:
I agree.
Jill DeWit:
And that they understand, they understand checklists.
Steven Butala:
This is money [crosstalk 00:04:37].
Jill DeWit:
They understand procedures, and you do this first, then you do this. And there’s a great spreadsheet called the Red Yellow and Green Test that you go extract this data. You put it in here, you add this and this, and you hit the button and bingo, you can see the top three ones. You can go, “Oh, I get it. There’s just no question. This is where I need to send the next mail based on this criteria.” And you can adjust your criteria. It’s all just how they think. It’s very natural to them, and I understand that.
Steven Butala:
We take the risk-
Jill DeWit:
It’s not a feeling. It’s not a dartboard. It’s not, “Oh, I heard a rumor.”
Steven Butala:
We take all the risk and emotion out of buying and selling real estate. There’s no dartboards anywhere in our office, there never have been. We don’t take all the risk out, we take 98% of the risk out of doing a land deal.
Jill DeWit:
You might start with a thing like, “I heard X company or X something was leaving here and going there.” You might read some articles that point in that direction, but you don’t do it. You don’t dive in based on your gut. Now you go and check it and make sure it’s right, and then you know you make a good decision.
Steven Butala:
Everybody’s moving to Austin, Texas. It’s the hottest place to move for some reason right now. If you look at Austin in a zip code map perspective … This is why engineers and accountants flock to the Land Academy. You deconstruct Austin with no emotion. You take the zip codes and you look at each zip code and you run through the system that I designed called the Red Green Yellow Test. Each one of those zip codes, it will tell you where to send mail.
Steven Butala:
So what has the lowest days on market? How many properties are actually listed for sale? All different kinds of properties, land, apartment buildings, you name it. Versus the universe of properties in that market, you want that number to be real low. You want your days on markets to be real low or in the middle range right now. And a bunch of other statistics that make it red, green, or yellow.
Steven Butala:
And so now you know, if you actually end up with a property there through the mail, what it’s going to sell for, with great predictability. How much it’s going to sell for price per square foot or price per acre, depending on what type of property you’re buying. How long it’s going to take to sell it within reason, and the exact amount that you need to send the offer out so that you make money.
Jill DeWit:
And you just hit the button and do it.
Steven Butala:
That makes sense to engineers.
Jill DeWit:
It does. It makes sense to me.
Steven Butala:
It makes sense to me too.
Jill DeWit:
Should make sense to you too, think about it.
Steven Butala:
Yes. That’s my whole point to this show, this episode.
Jill DeWit:
If you knew that-
Steven Butala:
If this doesn’t make sense to you-
Jill DeWit:
If you knew and you had data, this is the whole thing here. If you had hard data, you can go back six months a year, how far are you [inaudible 00:07:19] feel comfortable and go, “Holy cow, every single house in this zip code priced at or below $300 a square foot,” whatever it is, “in any condition, flies off the shelf within 23 and a half days.” And it hasn’t changed, it’s only improved in the last six months. What does that tell you?
Steven Butala:
So then your job quite simply becomes getting offers in the hands of all the people that have like-kind real estate in that market that you’ve analyzed over and over and over again until somebody signs … Many people sign them.
Jill DeWit:
Yeah. And if it’s a house, maybe it might be 5,000.
Steven Butala:
Yeah.
Jill DeWit:
Let’s just see, took your 5,000 to get one person-
Steven Butala:
Let’s say it’s 10,000.
Jill DeWit:
… to agree to sell this house at $80,000 below whatever, because it’s a disaster. They’re COVID nuts. Let’s just line it all up. Mom died, they’re COVID nuts. They don’t want anybody walking in there, and they don’t even want anybody to see what the garage looks like. They can’t wait to get this off and they’re willing to do that, they’re happy to do that, by the way.
Jill DeWit:
It’s not like … This is one of the things too I have to just let people know that this really does happen. There are a lot of people out there, I’d rather … You and I almost did this, we were going to take a … There’s things that we’ve almost sold and taken a hit because I just want it done right now and done fast.
Steven Butala:
We do this all the time.
Jill DeWit:
Yeah.
Steven Butala:
All the time.
Jill DeWit:
Think about your last garage sale, everyone. How many times have you at the end of the day said, “I don’t care if somebody gets it for free, get it off my yard.”
Steven Butala:
That’s it. And we’re about to do that [crosstalk 00:09:01].
Jill DeWit:
Share, I could take pictures of it and get it on eBay-
Steven Butala:
sure.
Jill DeWit:
… or OfferUp or whatever, Nextdoor or something like that.
Steven Butala:
Hey, I’m going to give you an example.
Jill DeWit:
Sure. I could spend some time and make 20 bucks. Do I care? No.
Steven Butala:
Here’s a great example of … I’m going to throw Jill under the bus.
Jill DeWit:
Oh-oh.
Steven Butala:
Jill has a girlfriend in California that said this over drinks a year ago. “Oh yeah, when we moved from Texas, it didn’t make sense for us to move down here the furniture.”
Jill DeWit:
Correct.
Steven Butala:
“Because the moving cost was more expensive than the actual value of all the furniture, so we just bought all new stuff. New silverware, everything.”
Jill DeWit:
Yep.
Steven Butala:
So guess what? Jil did a spreadsheet. And she had her personal assistant do all the research and calculated that it costs about the same to move all of our stuff versus getting new stuff, from California to Arizona.
Jill DeWit:
That’s assuming nothing gets damaged.
Steven Butala:
And all the other variables in that time, like time wasn’t even a factor, our time.
Jill DeWit:
Yeah, yeah.
Steven Butala:
So, hey, someone’s going to get a house full of really good beachfront stuff for very, very little to nothing.
Jill DeWit:
Lightly used, because we’re not there.
Steven Butala:
Yep.
Jill DeWit:
But so that’s the point. So this group, it just … We knew it, but it’s good to talk about. If you’re a data person, you’re a numbers person, you fall into these categories, this will come really easy to you. And if you really understand … You live in Excel, you don’t know how to do anything outside of Excel, then this will come really easy to you.
Jill DeWit:
And for everyone else, you can get there. You can learn it, and you just … And it’s so nice knowing that you will have data to keep you from making any big mistakes. And we teach you and show you how to use that data, and double-check your thoughts and your gut and make sure you’re doing it right.
Steven Butala:
So what can go wrong in that Austin example I just did? What can actually go wrong?
Jill DeWit:
I’ll have to think-
Steven Butala:
It’s not all peaches and cream.
Jill DeWit:
Okay-
Steven Butala:
There’s always a catch to something.
Jill DeWit:
Let me think here. So at what point of the process? Give me an example.
Steven Butala:
Here’s what I think can go wrong. Austin is such a hot market specifically. When you have such low days on market, there’s a bunch of MSAs, a bunch of big cities around right now that … I would never send mail personally to Austin because the market’s too hot. There’s too much stuff going on. People are too in-tune with their houses and their land and the values.
Jill DeWit:
So you have to send more mail then.
Steven Butala:
So sending somewhere, if you do a Red Green Yellow Test around Austin. Let’s say there’s three rings. There’s the, the city itself, then the outer ring and then the-
Jill DeWit:
Five miles out, 10 miles out.
Steven Butala:
Yes, yeah.
Jill DeWit:
Something like that.
Steven Butala:
I’ll tell you what, 10, 20 miles out of Austin, you’re going to make some dough.
Jill DeWit:
Yeah.
Steven Butala:
And I’m just using Austin as an example, but most MSAs.
Jill DeWit:
Well, here’s another possibility too, because I talked to somebody about this. You’re hitting a market that’s really, really, really hot. And you’re used to making $80,000 a deal. You might make 60.
Steven Butala:
Yeah.
Jill DeWit:
You might have to come in a lot higher-
Steven Butala:
Exactly.
Jill DeWit:
… because the market’s so hot, but if you do the volume and you do it right, you’re still going to make some good money.
Steven Butala:
Jill and I, we’re famous, famous.
Jill DeWit:
Ans it’ll happen faster, so there’s a trade-off.
Steven Butala:
Up to the COVID time, we’re scraping the bottom from a price standpoint.
Jill DeWit:
Right.
Steven Butala:
If I concluded that $800 an acre was retail, we would go in at 100. Ever since COVID and this how hot this markets are, we don’t do that anymore. And we’re making way more money than we ever had. We’ll come in now at two or three or four or $500 an acre.
Jill DeWit:
Because you know what’s nice what’s happening? Here’s some little truth time. So we come in higher, by the time I’m putting it up for sale I can even sell a little bit higher.
Steven Butala:
Yeah.
Jill DeWit:
So it’s working out.
Steven Butala:
Right.
Jill DeWit:
And we’ve always known that. When these markets, you could … Within reason, the spread won’t change, but how much you buy it and what you sell it for will be … You buy a little higher, you sell a little higher. You buy it lower, you sell it lower. So that’s kind of the goal.
Steven Butala:
There’s always four or five people in our group at any given time that obsess on this percentage.
Jill DeWit:
Oh yeah.
Steven Butala:
“What percent of the sale price that I’ve determined through scraping or whatever, the retail price of the property, should I make an offer?” I have never understood that. I don’t understand obsessing on 15% or 20%.
Jill DeWit:
Because everybody wants one number.
Steven Butala:
I know, and there’s not one number.
Jill DeWit:
Because here’s the reason why, you know-
Steven Butala:
And Austin’s different than Phoenix, different than Los Angeles, different than Manhattan.
Jill DeWit:
Well, you’re different, your threshold. “What if Steven’s doing 25%? I’m going to do 30. What if I’m come right behind him with 30%, I might get some more stuff.” [crosstalk 00:13:39].
Steven Butala:
The answer is, how much confidence do you have in your sales ability? That’s the answer.
Jill DeWit:
That too.
Steven Butala:
And how hot the market is. If every single piece of property … We’re in a market right now, we’re sending mail where every property, it goes up for sale and with the day somebody buys, it’s under contract.
Jill DeWit:
It’s really just numbers and timing and-
Steven Butala:
So you got to believe that I’m going in really high, because I have so much sales confidence on the sell side.
Jill DeWit:
Right. I’m never going to mailer behind you though.
Steven Butala:
It got really off topic.
Jill DeWit:
We did.
Steven Butala:
Really happy you could join us today.
Jill DeWit:
Yeah, as am I. And 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 Jill Friday. So much fun looking at our properties. You are not alone in your real estate ambition. Jill and I bought a new toy.
Jill DeWit:
Yes, we did.
Steven Butala:
According to the IRS though, it’s a tool.
Jill DeWit:
It is a tool.
Steven Butala:
It’s a tool.
Jill DeWit:
It is. Hey, you need to send out a few thousand offers to property owners like us. Check out offers, the number two, owners.com, offers2owners.com. No setup fees, free mail merge, and exceptional service. We should know as it is our company. Give Offers 2 Owners 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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