Top Three Data and Pricing Tips (LA 1491)
Top Three Data and Pricing Tips (LA 1491)
Transcript:
Steven J Butala:
Steve and Jill here.
Jill K DeWit:
Hello.
Steven J Butala:
Welcome to the Land Academy Show, entertaining land investment talk. I’m Steven Jack Butala.
Jill K DeWit:
And, I’m Jill DeWit broadcasting from sunny, I almost wanted to say Southern California, but I’m not there right now. It’s just a habit. Sunny, Scottsdale Arizona.
Steven J Butala:
Today Jill and I talk about the top three data and pricing tips.
Jill K DeWit:
I can’t wait. So, I’m sorry. Do we have three of each?
Steven J Butala:
Yeah.
Jill K DeWit:
Oh.
Steven J Butala:
My top three of each.
Jill K DeWit:
This is going to be good. This is important.
Steven J Butala:
This is crazy, crazy important. And it’s an imperative step to, I think, being really successful at this. There’s a bunch of steps, but pricing and data it’s all centered around that.
Jill K DeWit:
Yep.
Steven J Butala:
So, before we get into that, 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 Land Academy member, please join us on the Discord.
Jill K DeWit:
Bobby wrote, “Hello land investors/Land Academy community. I hope you’re all doing well. When scrubbing our lists, do you guys filter out owners who have owned their property for less than X, fill in the blank, years? For example, I am wondering if excluding owners who have owned their property for less than three years or whatever helps avoid wasting postage on those who just purchased the land and are less likely to want to sell. Money, saved as money earned, right? And postage is expensive. In the name of efficiency, what has been your experience?”
Jill K DeWit:
You want to go first?
Steven J Butala:
Yeah. I don’t think money saved is money earned. I think money spent as money earned when it comes to the postage and all of that. Number one, number two, I don’t know where this comes from. There’s a whole handful, not a ton of things, but there’s a ton of topics right now, somebody out there who’s less qualified, way less qualified than us is saying to do some certain things just probably because they’re real out about it. No, we don’t. If this makes sense to you, here’s a real answer. If it makes sense to you do it. We have never done that.
Jill K DeWit:
If it makes sense to you, I’m sorry. Don’t do it. Let me save you. This is one of the things about us that makes us different. So many people are trying to save a penny and send only due back tax property or only do out-of-state owners or they think there’s some magic to getting a really small whatever list and you know what? You’re missing a lot of people. So, what I cannot tell you how much wonderful property I have bought from people who fit this mold.
Jill K DeWit:
Dad just passed on, probate was done. The property just got in their name a month ago. Everybody paid the taxes on it. It’s all current. They just don’t know what to do with it. And they just got my letter. You would have missed them. Oh, and they live in the same state. By the way they lived, they live in the same city as this property that dad had down the road and I’m buying it. They just don’t want it. It’s all about the situation. And you just can’t assume one thing. You can’t assume that because they’re paying the taxes on it. They love it. No, a lot of people are paying the taxes on it because they didn’t know they could not pay the taxes on it. That’s the reality.
Steven J Butala:
Here’s the big picture perception, my perception of what’s happening with some of these topics, specifically mailer efficiency. And, then I’m going to follow it up with a incredible success story that happened to us yesterday in career path.
Jill K DeWit:
Okay.
Steven J Butala:
So, what you’re really asking is Bobby, what you’re asking is how can I make my mailer efficiency or my mailer yield more efficient? How can I send out less mailers and buy more property? I’m not interested in sending… Say it another way, interested in sending 3000 offers out and buying two or three properties. I’m not interested in that. I’m interested in making my mailer efficiency better. I’m interested in sending out a thousand letters and buying two or three properties. I want to know where the real low-hanging fruit or the gold is. And let me tell you something, forget it. Mailer efficiency? Just forget it. All you’re trying to do is spend a thousand dollars on a mailer instead of $1,200.
Steven J Butala:
And, my recommendation would be to save more whatever you’re doing in your life, save some more money on and do the mailer right. Because, I want you to succeed. I want you to mail everybody because you have no idea whether… We have very… I’m going to talk about this during the episode, there are steps to scrubbing your data that, and this is not one of them. And, I’ve been doing this since the early nineties and I don’t think my steps are incorrect. And the reason that Jill and I have a product called career path and we do a Thursday call and I do office hours every week for certain level members of Land Academy is because I want their feedback too. Because, once in a while, somebody will come back and say, “Jack, I know you’ve been teaching it this way, but I’ll tell you what. I went off on a limb. I tried this, this and this and this. And it works out great.”
Steven J Butala:
So, that we rolled that kind of stuff into without compromising confidentiality or where this person had the success. We rolled this kind of methodology into our… So it’s a constantly-
Jill K DeWit:
Evolving.
Steven J Butala:
Renewing thing. So, unfortunately this mailer it’s out there now. This concept of cutting off how long the years… For a long time-
Jill K DeWit:
I remember one person doing it.
Steven J Butala:
For a long time, there were a couple of things that were happening for years. It was, we were dealt with this, with the, get a list, buy list off the internet. And we dispelled successfully dispelled that it took years. You need data, you need data.
Jill K DeWit:
Fresh.
Steven J Butala:
So, here’s the success story. There’s a guy in our career path group who his mailer, he’s he happily reported that he made a million two last year doing this. And he said, “But here’s the bad news. My mailer yield is getting worse. I now, to make a million and a half dollars, I have to send out about 350,000 pieces of mail a year. And, it keeps going up.” To which I said, okay, “Wait, it costs you 50 cents a mailer. That’s about $175,000 of costs in mail to make a million two.” He’s, “Yeah. I’d like it to be less. I’d like it to be more efficient.” To which I said, “What the hell is wrong with you?”
Jill K DeWit:
Yeah.
Steven J Butala:
“Does it really matter if you spend 175 or 150,000?”
Jill K DeWit:
Yeah.
Steven J Butala:
To which he said, “Oh my gosh, you’re right.”
Jill K DeWit:
Thank you.
Steven J Butala:
Today’s topic, three data and pricing tips. This is the meat of the show.
Jill K DeWit:
I can’t wait. Are you going to list them? Are we going to David Letterman them? Or we’re going to go three, two, one? Could we do one first and then the other?
Steven J Butala:
Yeah.
Jill K DeWit:
Okay,
Steven J Butala:
Here’s the data.
Jill K DeWit:
Okay. I want to hear these.
Steven J Butala:
These are not in order of importance. They’re just three steps.
Jill K DeWit:
Can you say it and then I ask questions?
Steven J Butala:
Sure.
Jill K DeWit:
Okay.
Steven J Butala:
Here’s number one.
Jill K DeWit:
Okay.
Steven J Butala:
Pull data from a reliable, easy to use source.
Jill K DeWit:
Examples?
Steven J Butala:
Of data [inaudible 00:07:29].
Jill K DeWit:
Got it. So don’t get a list.
Steven J Butala:
Never get a list.
Jill K DeWit:
Don’t do the recycled thing.
Steven J Butala:
Never ever.
Jill K DeWit:
What about calling the county? Why don’t just do that?
Steven J Butala:
That’s how this all began. And, if you have a PhD in big data and data analysis and a PhD in Excel, or databases, then you should call the county and pay $50. You’ll get a CD.
Jill K DeWit:
Spend six weeks.
Steven J Butala:
I bet you a dollar your computer doesn’t even have a CD drive in it anymore, mine doesn’t. None of ours do here. In fact, I wouldn’t know what to do with a CD if I got one.
Jill K DeWit:
It’s kind of funny.
Steven J Butala:
So, you’re going to go get a CD and plug it in… A USB CD and you’re going to get the worst gobbledy gook, [inaudible 00:08:10] delimited, or CSV file that you’ve ever seen. You probably don’t even know what those are. And, there’s a reason for that because there’s data tree.
Jill K DeWit:
Thank you, very much. Give me another one. Hit me.
Steven J Butala:
Number two, scrub data. Scrub your data. According to a consistent protocol and format.
Jill K DeWit:
Ah, can you give me an example, please?
Steven J Butala:
Here’s what we’re avoiding here. Having feelings.
Jill K DeWit:
Do I leave it in? Do I want this guy to get an offer?
Steven J Butala:
So, what if you were going [crosstalk 00:08:40].
Jill K DeWit:
I go line by line, does that count?
Steven J Butala:
You’re sitting in the back of an airplane waiting to go from San Francisco to New York and the pilot announces something like this, “You know, I’ve had some feelings today.”
Jill K DeWit:
“I don’t saw puffy clouds over there.”
Steven J Butala:
“I don’t feel like I’m going to check the landing gear. So can you all, please just do a prayer because I usually have a checklist, but my checklist of do this, this, this, this, and this and this before we take off, I only feel like doing about 20 or 30% of those and the landing gear is not on it. And I’m not sure if we have enough fuel. So, why don’t you guys say a prayer and I’ll let you know when we’re in the air.”
Steven J Butala:
When you don’t have a very specific scrubbing protocol with an A to B to C, to D to E, and we teach all this stuff, you don’t have to go design your own. That’s what Land Academy is for. You’re setting yourself up to not execute the same thing over and over and over again so you can make real good decisions after your fourth mailer. It’s, “Yeah, I probably should add this to that. I probably shouldn’t be sending letters to the United States of America anymore. They haven’t been responding.”
Jill K DeWit:
Waiting for the president to call, but he does not.
Steven J Butala:
That’s the real problem with…
Jill K DeWit:
Could you imagine?
Steven J Butala:
We’d love to sell you that $6000…
Jill K DeWit:
Did you know the White House is behind in taxes?
Steven J Butala:
6,000 acres.
Jill K DeWit:
I’m sending I’m an offer. Here we go. All right, sorry. Go for three.
Steven J Butala:
When you scrub data, or when you do a mailer in general, it has to be in some type of calendar. It should be data Tuesday and get it in the mail Wednesday or whatever your calendar works like. But, it has to be consistent. This is the single biggest problem that Jill and I see with would be multimillionaires in this business is for whatever reason they just aren’t interested in, or can’t get organized enough to say, “Every Tuesday I’m going to scrub 1800 units and then every Wednesday,” for example, “I’m going to get it to offers to owners and get in so they can get into the mail by Friday.”
Steven J Butala:
Every single week. So then what it does is it makes your entire business consistent. There’s consistent number of calls coming in, you know exactly what you’re going to do on Tuesday and Wednesday. And so I can’t express this enough and it’s a big topic for me, which I feel like I’ve actually kind of mastered at this point in my life because I failed at it for so long. It’s hard to get organized, but it’s super, super imperative.
Jill K DeWit:
So, that was number three of the data call?
Steven J Butala:
And then the trail on that, the reason I asked people why they aren’t doing that. And then they say very clearly to me, “It’s not done yet.” So, at the time in your calendar, if it’s from one o’clock in the morning to three o’clock in the morning because you have a couple of young screaming kids and two jobs, I get it. From one o’clock in the morning to three o’clock in the morning at three o’clock, whatever you have, you got to submit it.
Jill K DeWit:
Cut yourself off.
Steven J Butala:
And, I’ll tell you from personal experience, it’s never going to be perfect. Here’s a story. I was teaching career path yesterday and I’m using my most recent mailer as the example. This mailer went out and we’re still buying amazing, amazing properties off of this mailer, Jill is. And, I’m going through my checklist, my airplane checklist, do this, do this, do this, scrub this out. And oh, take a look at my screen, see here’s my most recent gorgeous mailer because I’m awesome. And, half the things I said were like, I forgot to do it. I sent letters to the United States of America as an owner. So, even at this point in my career, it’s not perfect, but it does get out on time. And you have to get this stuff out on time to really be successful.
Jill K DeWit:
Mm-hmm (affirmative). Are we on the pricing tips now?
Steven J Butala:
Yeah.
Jill K DeWit:
Okay. Now, we would love to hear your first pricing tip.
Steven J Butala:
Collect existing properties that have been sold and are currently for sale, like kind properties in the areas where you’ve determined are good places to send mail. What the hell does that mean?
Jill K DeWit:
Yeah.
Steven J Butala:
If you want to send only prop people who own five acre properties in the Dallas area, I think it’s Bexar County. Then go to Bexar county on Zillow or wherever you go, collect all the data for existing five acre properties that are for sale and the ones that have been sold. That is the first point of doing great mailer, because you can’t price a mailer. You can’t accomplish pricing without knowing what the market’s doing right now.
Steven J Butala:
What happened, you’re just not going to?
Jill K DeWit:
I was just listening.
Steven J Butala:
Am I making this boring and preachy?
Jill K DeWit:
No, no, no. You’re…
Steven J Butala:
Can you add some humor?
Jill K DeWit:
Well, I’m trying to, there wasn’t a lot I could add right there. Trust me. I will, if I can. All, I thought, what was going through my head, I’m like, “Where’s Bexar?” I thought it was Tarrant County, but…
Steven J Butala:
Maybe it is.
Jill K DeWit:
Okay. Got it.
Steven J Butala:
I’m sorry.
Jill K DeWit:
Actually, I went on I’m, “I thought it was Tarrant County. Where’s Bexar? I don’t even know.” I thought it was Tarrant and Fort Worth counties together there for Dallas, Fort Worth.
Steven J Butala:
Jill knows Texas better than me.
Jill K DeWit:
Anyway. Okay. Go for it.
Steven J Butala:
You should never ever price a mailer based on assessed value. Never. You should never price a mailer based on your feelings. The data’s-
Jill K DeWit:
Are we doing number two or is that still on number one?
Steven J Butala:
No, this is number one.
Jill K DeWit:
Okay, got it.
Steven J Butala:
You have to establish what’s in an existing market and what that price per is per acre for those five acre properties and you’re going to come up with some number like $1,432. That’s the average of all the properties that are for sale and sold in that county. And, so-
Jill K DeWit:
In that size range?
Steven J Butala:
In just five acres, we’re just using a five acre example.
Jill K DeWit:
Okay.
Steven J Butala:
So, number two is it leads me right into number two from that $1,492 price per acre amount from, we’ll call it from existing sold or for sale prices. You need to determine what you want the profit margin to be. So, doing the simple math, a five acre property, if you determine that all the properties, what I just said there, the retail or existing in sold properties are, let’s just say it’s a thousand dollars to make it round numbers. A five acre property is selling for $5,000 in that market, calculate how much money you want to make when you send your mailer out. What your offer is. If you send out offers for $2,000, you’re going to make three grand. That’s the difference between five and two. If you sent it out for $4,000, the difference between 5,000 and 4,000 is thousand dollars. So, you’re not going in blind. There’s no dart boards in any of this just [crosstalk 00:15:53].
Jill K DeWit:
Totally. Just kidding. No, what’s number three on that board. I’m listening to you, Steven. Come on.
Steven J Butala:
Number three is this. When you’re done with your data set and it’s all on a spreadsheet and you’ve determined that you really do want to send offers out for 2000 on all the properties because they’re selling for five, go look down your spreadsheet and pick out at least 20 and test them for reason and run the due diligence on it just like if the offer came back signed and you’re staring at a signed offer and everybody’s jumping up and down and your entire office, you first, you got a signed offer in, and then look it up, run through your due diligence and see if it actually worked. See if you would actually do that deal. You’d be shocked how often it’s like, “Wow. I thought it was all perfect. My pricing was great.” $3,000 is not enough.
Jill K DeWit:
I do that too. And you’re going to catch little things too. That’s a good thing to get through. Scroll down your completed PDF is really what he’s kind of… This is where it comes to me. I’m one of the last pair of eyes before they go out on a lot of our mailers. And, I’m going to scroll halfway down, pick a random one, look it up and make sure I pull it up a neighbor scoop. First of all, I make sure owner, correct. APN, correct. This, correct. Legal, correct.
Jill K DeWit:
Okay, obviously the fields, everything copied over when the mail merger was correct. Great. Now, would we buy it? If the guy signed it at this $4,862 and 45 cents, would I buy it? I’m going to go look and pull up all available property, see how it falls. I’m even going to look it on the map, you know? And, then just checklist down the thing. And if you feel good about that then it’s a let her rip.
Steven J Butala:
So, do you have to do all of these things to totally succeed? Absolutely not. Up till a few years ago, Joe and I were still looking at a county… Because, we didn’t have the data available that a few years that we have now, the data is amazing. Even the last three to five years, it’s just… It’s completely game changed.
Jill K DeWit:
Right.
Steven J Butala:
We were back, even five years ago, sending a mailer to a county for everything for $200 an acre, just to see what comes back in. A couple of properties always came back. We always stayed in business and kept food on the table with that, but where it’s really getting efficient and we’re getting scientific about it now because we made a lot of mistakes. We want you to know those mistakes. So this, while these lists, if you’re brand new, probably sounds like, “What? This is complicated as hell.” It’s really, if you break it all, decompose it and break it down, deconstruct it. It’s not that hard.
Jill K DeWit:
Exactly.
Steven J Butala:
Step by step.
Jill K DeWit:
Happy you could join us today. Monday through Friday you can find us right here on the Land Academy show.
Steven J Butala:
Tomorrow the episode on the Land Academy show is called it’s Jack Thursday, more deals, less work. You are not alone in your real estate ambition.
Steven J Butala:
How brainy and boring was that?
Jill K DeWit:
No, it was good. I was, you wanted me to break it up, I don’t want to break it up. This is a serious show. No, seriously. I think people will get a lot out of that. I know they will. I did.
Steven J Butala:
All right, good.
Jill K DeWit:
If you need any sort of ownership 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.
Jill K DeWit:
We are Steve and Jill.
Steven J Butala:
We are Steve and Jill.
Steven J Butala:
Information.
Jill K DeWit:
And inspiration.
Steven J Butala:
To buy undervalued property.
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