Land Academy Members Overall Deal Quality is Now Amazing (LA 1486)

Land Academy Members Overall Deal Quality is Now Amazing (LA 1486)

Transcript:

Steve Butala:
Steve and Jill here.

Jill K DeWit:
Howdy.

Steve Butala:
Welcome to the Land Academy Show, entertaining land investing talk. I’m Steven Jack Butala.

Jill K DeWit:
And I’m Jill Dewitt broadcasting from sunny Scottsdale, Arizona. What was the long pause there for?

Steve Butala:
I forgot my line.

Jill K DeWit:
Wow.

Steve Butala:
I’ve said it 1,485 times.

Jill K DeWit:
1486, okay. Sorry.

Steve Butala:
Today Jill and I talk about how the Land Academy members, their overall deal quality is now amazing. Yesterday, we talked about at the end of the show, every Thursday, Jill and I have a member call. It’s a webinar. It began a lot of years ago. We’re on episode, I mean, it’s thousands of hours now.

Jill K DeWit:
Every week.

Steve Butala:
Every Thursday. And it began as a continuing education product a lot of years ago where I would just sit and talk.

Jill K DeWit:
Answer questions. Just answer your questions about things, rant here and there.

Steve Butala:
And it evolved over the years into us giving our opinions about members deals, whether they should buy it property or how much they should sell it. Or just a general question forum.

Jill K DeWit:
We have the Land Investors online community, which we’re going to talk about here in a second. And I’m going to read a question from there, which is great to write things in, but sometimes you need to see things. It became a, you know, especially visual became, you know what, here I’ll show you what I do kind of thing. And then it evolved into the call and the what are you want to call it? It’s a tool that it is today. The resource. Sometimes it’s more entertainment, entertainment and information. Entertainment first I think. And then information second.

Steve Butala:
And Jill and I treat the deals as if they were our own. So we would look it up, do the due diligence, check the floodplain, check the pricing, as if it was our own deals.

Jill K DeWit:
Yeah. It’s every Thursday. I love it. And it’s funny because now it’s a thing, I know people are just, I’m sure there’s people that may or not be doing as aggressively doing deals, but they’re on every Thursday call because it’s just so funny. And we can share things because it’s not edited like iTunes and Spotify.

Steve Butala:
It’s not necessarily rated Google like this show is.

Jill K DeWit:
And all the places that you get this show, so we can kind of really cut loose and be silly and have fun. It’s hilarious. And there’s interaction.

Steve Butala:
It’s very real. 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. If you’re already a member, join us in real time on Discord.

Jill K DeWit:
Greg wrote, and this is going to be a little bit lengthy, I’ll let you know now. “So the way I look at pricing is you can’t make everyone happy with the same pricing at X dollars per acre. This is because the values of the properties in any sample, regardless of the size will vary. So let’s assume a normal distribution. You can one, set your price based on the lowest junk you can find on the web. And most of the calls you get back will be from owners of the lowest priced junk in that sample and perhaps a diamond. Downside is you self-select to the junkers and lose out on the larger number of nicer properties in the higher value in that sample.”

Steve Butala:
Before you go on to number two, he’s dead right, Greg and this is why I chose your question. And this is how we used to do it. This is how in the early nineties, before we had all this information, before there was a Zillow or Trulia or realtor.com or any type of real comparison value online mechanism that you can get real time like you can now, that’s what we used to do.

Jill K DeWit:
Thank you.

Steve Butala:
Did I wreck your rhythm?

Jill K DeWit:
No, it’s okay. “Number two, set your price based on the mean value in that sample, hoping to entice some nicer properties and with that, you will get a lot of junkers that you will have to sift through or reduce the offer as needed. Downside is you give up on possible diamond opportunities in the mean range, but perhaps offers of diamond properties in the high tail of that distribution.”

Steve Butala:
Okay. This will almost always result, if not always, in overpricing a county. Go ahead.

Jill K DeWit:
“Number three, set your price on the junkers and buy the junkers you want, possibly the diamond. And then later, six months, one year, send another mailer to the same sample at a higher price and pick up a few more of the higher value ones.” Do you have a comment after over three?

Steve Butala:
No.

Jill K DeWit:
All right. Got it.

Steve Butala:
At the end I’ll tell you how to do it.

Jill K DeWit:
I was pausing. I’m like wait a minute, after every one, you had a little comment. Okay. So here’s the last thing that was it Craig, I think Craig wrote. If I get, Greg, okay. Let’s see here. “I feel like to get the most out of the data and effort, I should base pricing off the sample mean since there are more properties in the sample at this value, then at the lower or the junker tail of the distribution, anyone ever had any success re-mailing the same sample? Did you adjust the price? And what was the time interval between mailings?”

Steve Butala:
We never really mailed, to directly answer that question, but some of our advanced, very successful mailers have some methodology like that. We don’t choose to do that. Here’s how you do this, how you price. The end all, cure all, be all and we just went through this on career path, Jill and I have, we host a group of every quarter we choose 15 people or they choose to join career path because they are making this their career, they’re at various stages of their career. Some are brand new and some are very seasoned. Anyway, they’re making this the career and we just went over this.

Steve Butala:
The end all, cure all is to first do away with county pricing and adopt zip code pricing. And that’s just practice for APN pricing. So if you go into Data Tree and you click your way through any given zip code or county, you’re going to see a street by street where the break point is in APN pricing. So in Arizona, the APNs start with three numbers all the way through the entire state. So it could be described like this, the 400 properties, there’s the first three digits of the APN, go from baseline to meridian and then you can do north, south, east, west borders. And then it goes to 401 after baseline. It goes to 407 after meridian.

Steve Butala:
So here’s why, here’s how that came about over time. Is this boring as hell?

Jill K DeWit:
No. No.

Steve Butala:
Over time the past assessors, when a person who was doing a subdivision would come in, a developer, they would say, I’m going to entitle this, let’s say for sake of argument, the square mile. And so that assessor would assign it an APN scheme. And let’s say that starts with 400. So 400-01 is from here to here, 400-02 is from here to here. But all of 400 is generally going to be priced the same, both land and houses and everything else because it’s in the same area and it got subdivided or entitled at the same time.

Jill K DeWit:
They try to batch them together, don’t they. It’s like think of your phone number and an area code, like, remember when you used to be depending how your age is, used to be the whole state had one area code and then it got to be, this region had an area code and there’s more and more and more.

Steve Butala:
Such a weird way to describe that.

Jill K DeWit:
Thank you. They try to keep them generally in the same area like Orange County is 714, 213, 310, we got all that.

Steve Butala:
That’s the only way I send mail out now anymore. I’ll send it to the four hundreds, the 600s and is priced very, very differently. And so now if you got to use Greg’s terminology here, a junker APN scheme, you price it that way and you’re going to get a bunch of deals. If you’ve got a diamond APN scheme, which is kind of what Jill and I focus on now, you’re going to get some properties. And I’ll tell ya there’s massive variances in APN schemes, pricing wise.

Jill K DeWit:
I have two things to add before we go onto the show. One is this is all possible because the data keeps getting better and our sources keep getting better. We have really good stuff. I think Greg’s a member, I’m not sure, but if you are a member, you know and you use them all, use Real Quest, use TitlePro, use DataTree, you have access to all this stuff. You can really dig in there and get granular. And then you use, like Steven was saying, then you’re going to go out and look at for sale property and figure this out.

Jill K DeWit:
My second point is use that data and go and spend some time, bear this out. My job is so much easier because Steven spends hours and sometimes that for him is hours, for the planet it’s days, some people might be weeks and that’s okay. So if you spend that time on the front end to get in there and really think about, and look at the areas and try to make good offers for that area, like Steven just described, when the calls come in and letters come back to me and my team, it’s kind of a no brainer. I’m not discussing a lot of price. I’m really just saying now, do we really want it? Does it have the access that I need? What are the attributes? Is everybody alive? It’s the obvious things that I’m trying to make sure. And then we’re going to buy it.

Steve Butala:
This topic, this question really, it’s a statement about pricing. You as a listener are probably going to have one of two types of reactions to this. Number one and this was my reaction as I developed it over the years, oh my God, you just took all the mystery out of real estate investment.

Jill K DeWit:
True. That’s good.

Steve Butala:
Or why the hell do you make this so complicated? Why can’t I just get in my car, drive around, go look at the dilapidated houses, drive for dollars, buy some property? I don’t like any stinking data. I don’t want to do it that way. Why do you guys constantly make this so complicated and brainy? I don’t like it. If that’s you please don’t join Land Academy. If you’re the other person, I will tell you the truth, career path, this is the first career path we’ve done, there’s 15 people in it. And about 12 of them are engineers. Then the other two are accountants.

Jill K DeWit:
I’ll tell you why we do it, by the way, if you really want to know the real, real, real secret is why we do it this way, efficiency.

Steve Butala:
It’s success.

Jill K DeWit:
I’m not going to drive around. I’m not going to drive around and spend eight hours and maybe find three properties and then go back and research them to find out that two of them are dead. This one’s stuck in probate. This is this mess, why, and then great, I wasted a whole day. Now I’m going to do it again. No, I’m not going to do that.

Steve Butala:
There’s a data solution to everything in the world, in this planet, in your life. There’s a data solution and because of the internet, there’s more data and it’s readily available and really cheap. There’s a data solution to dating. It’s called match.com. You don’t type in what you want and it spits out something that you don’t want from a dating perspective, the attributes about whoever you want to date.

Jill K DeWit:
Where did that come from, by the way?

Steve Butala:
There’s data in everything. So there’s driving for dollars or why do you make it so complicated? Because we get, Jill and I, more me, way more me than Jill. Everybody loves Jill.

Jill K DeWit:
Oh thanks.

Steve Butala:
I get all kinds of emails from people that say, “What’s your problem, man? People have been buying and selling land since they made land and this data things relatively new or the availability of it. I just like my old way.” To which I say, knock yourself out.

Steve Butala:
Today’s topic, why Land Academy members are overall, their deal quality is now amazing. This is the meat of the show.

Steve Butala:
What changed? I think I have the answer, but why do you think in the last, probably 12 months, really specifically in the last six months, the amount of the types of transactions that we are reviewing on the Thursday call and where they’re located, where people are choosing to send mail is staggering. We’ve had a couple of weeks in a row now where every property that we’ve reviewed, every single one, we’re all shaking our heads saying, yeah, you’re going to make 30 to $80,000 on this. In some cases, it’s millions. We have a member who started with $20,000.

Jill K DeWit:
And she made a million.

Steve Butala:
She didn’t have any real estate experience is now a millionaire.

Jill K DeWit:
Yeah. That’s so sweet. I think it’s two parts, the people and the deals. So one part is the people. We have a really good group right now and they’re getting more and more experienced and they’re growing and they’re funding deals with each other and learning from each other, really participating and really getting a lot out of it and really showing up huge. So that’s one part.

Jill K DeWit:
And then two, I think I hate to say it, but there’s just so much good property out there. And there’s people that, for reasons obvious, I think right now need the money. There’s still people that are, I’m sure there’s jobs.

Steve Butala:
Oh you think there’s more sellers?

Jill K DeWit:
I kind of question or they’re making different life decisions, whatever it is. There’s been obvious, crazy things happening in the last 12 months or so, so I’m wondering if we’re just seeing better deals with that too.

Steve Butala:
A material percentage of the people who join Land Academy, send mail out and create equity for themselves, come from one of three other land groups out there, the Land Geek, Mark Bowski’s group, Jack Bosch’s group and Seth’s. I know Mark. He and I worked together for years, years ago and I taught him this business. And he, for some reason, believes that the real money in this business to be made is in like eight counties, San Bernardino County, Riverside, a lot of Nevada. And so he’s devised this secret county list and so when people come from Mark’s group to us, they have that in their head still. And I can’t emphasize this enough. There are no secret counties.

Jill K DeWit:
It’s true.

Steve Butala:
This works in every county. It works in the city of Manhattan. It’s all relative. And the more creative you get about where you’re sending mail, the strangest weirdest county in, let’s say Minnesota or Montana or any place like that, the more creative you get, the more success you’re going to have.

Jill K DeWit:
True.

Steve Butala:
Those counties that he has, those eight or 10 counties, she’s looking up on the internet. You should never send mail out there. It’s so over mailed and the properties, most of them, you can buy property for $50 an acre and go sell it for a hundred. But that’s not the business we’re in.

Jill K DeWit:
Or 399 on terms. A month. I mean $3 and 99, just kidding.

Steve Butala:
And so he’s all about term sales, which we’re not, we’re all cash people here. It doesn’t take long for people from those other groups to learn the right way to do this.

Jill K DeWit:
Very true.

Steve Butala:
He’s also loves back taxed property, properties that are, so does Jack Bosch. Jack’s whole premise, I don’t know what they still teach now, but was all about focusing on back taxed property.

Jill K DeWit:
Shifting it back to us and our people. You know what I love, I say that was my only note on what you just said is I love that. Don’t ever feel bad if you did that, like, oh, I should have started with you guys or whatever. I’m like, oh gosh, no, no. I think you always learn something from different people and different spins and you get different experiences.

Steve Butala:
Yeah, me too.

Jill K DeWit:
But so many people come to us, I think for two reasons, one is they’re missing some information. I’ve heard that a lot and I get that, we fill in the gaps and teaching how to do this, you know how to find the county on your own, that’s a huge one. And the second thing is they want to make this, really make it a career. We’re about making this a big business. I’m not about you making a thousand dollars a month for the rest of your life, we’d like you to make a thousand dollars a day for the rest of your life kind of thing.

Steve Butala:
We have people who are career path, who are happy making half a million dollars a month. They want it to be 2 million a month.

Jill K DeWit:
That’s hilarious.

Steve Butala:
Which I completely identify with.

Jill K DeWit:
It’s funny.

Steve Butala:
If you can make half a million bucks a month, you can make 50 million a month doing this.

Jill K DeWit:
But their deals, I’m so proud of you, all members here listening of the deals that you’re presenting to us. Now we have a thing called it’s, you know this on our Thursday call, would you brag about this deal? Sometimes we’re like, are you just showing off here? Because this is awesome, but we love those. Those are my favorite also. I love it when you say, yeah, I already bought it and it’s a contract right now for this.

Steve Butala:
I love it. I was just going to say that, I love when they trick us, they’re like, would you do this deal? Oh good. Yeah because I already bought it and resold it and I did make 50 grand on it.

Jill K DeWit:
Exactly, because here’s what I made. Actually I mean more than what you’re thinking. So just had to tell ya, I think that’s awesome.

Steve Butala:
Me too.

Jill K DeWit:
I’m so glad. Happy you could join us today. Monday through Friday, you can find us right here on the Land Academy Show.

Steve Butala:
Tomorrow the episode on Land Academy Show is called it’s Jack’s Thursday. Mailers are never finished. You are not alone in your real estate ambition.

Steve Butala:
I just got off the Discord right before the show and I was talking to people in career path and this person, one of the members in career path, he chose a county and it has no comparison values. It has no data. He can’t find either sold or active comps, so he was forced to go, he did this on his own, forced to go to LandWatch and Land and Farm and dig in there and digging into completed deals and go back further than a year. And he completed and sent me, all of us in career path, the screenshot, it was, I mean, it was a, would you brag about this kind of situation? It was pure art art. It was like I said, this is like art, looking at art in the Guggenheim for me and everybody else piped in and said, yep. So that’s that’s what this is tomorrow, it’s mailers, you’re never finished. There’s more art than science to it at this point.

Jill K DeWit:
That’s awesome. Hey, by the way, if you need access to any sort of ownership data or property details, including 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.

Steve Butala:
We are Steve and Jill. Information.

Jill K DeWit:
And inspiration.

Steve Butala:
To buy undervalued property.

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