Jack Thursday – State of the Union – Do We Care About Lumber Prices? (LA 1507)
Jack Thursday – State of the Union – Do We Care About Lumber Prices? (LA 1507)
Transcript:
Steven Butala:
Steve and Jill here.
Jill DeWit:
Hey, hey, hey.
Steven Butala:
Welcome to the Land Academy Show. What the heck?
Jill DeWit:
I don’t know.
Steven Butala:
Entertaining Land Investment Talk. I’m Steven Jack Butala.
Jill DeWit:
And I’m Jill DeWit, and I apparently had too much caffeine.
Steven Butala:
Yes, you have.
Jill DeWit:
Thank you.
Steven Butala:
Today is Jack Thursday. I’m going to do what our customer service people have requested. A State of the Union, real estate in 2021. For example, do we care about lumber prices?
Jill DeWit:
I have a lot of questions, don’t worry.
Steven Butala:
Okay. Before we get into it, then, 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 Discord.
Jill DeWit:
Corey wrote, “Good evening.”
Steven Butala:
Sorry.
Jill DeWit:
When posting a deal on Land Tank or sending a deal to someone for funding, what info about the property is good to include, so that no time is wasted, to get a quick “yes” or “no” answer for funding? Of course, I know that the [inaudible 00:01:06] are important, but what else should I include? I love this question, by the way. I am new and I haven’t bought any land yet, but I’m sending offers to ten to a hundred acre properties, because I know that there are plenty of people here that will fund a deal if it’s right. P.S. Jill, I had to leave this in here. I absolutely love listening on Clubhouse.
Steven Butala:
You snuck this in here.
Jill DeWit:
I totally.
Steven Butala:
Jill has a love affair with Clubhouse.
Jill DeWit:
This is not me making it up. Corey really put this in here and I’m like, oh I am putting the whole thing.
Jill DeWit:
He said Jill, I absolutely love listening on Clubhouse for someone that isn’t a member yet. I feel like I’m breaking the law getting all the info for free that you guys talk about on there. Of course, the podcasts on this site are great too. Thanks, Corey. [inaudible 00:01:54] this is awesome. Okay. I need to know how the property is going, how the property will be sold, how fast it will be sold and what the game plan is. So let me give you an example. So Corey, you come up with a beautiful twenty-acre property and whatever county and whatever price let’s just say. Say it’s twenty-acre property for $20,000. So not only do you give me the property details. If there’s anything pertinent, I want that I found that there is a well, they used to have a mobile on there.
Jill DeWit:
I’ve found out that it just got rezoned to this. Something unique or cooler, something that’s making you want, why we’re doing this deal about the actual property. Then the other thing I want you to do is tell me about you. You’re selling me not only on the property, but you’re selling me on you because you’re coming to me to money and you should be saying, here’s how great the property is and here’s how great I am. And here’s what I’m going to do with this. So I need information that says, I’ve been studying this for six months. I’ve got three brokers lined up champing at the bit. They think it’s going to sell within 30 days at three times our money and how fast can I do it? And I can, and I’ve got the title agent ready to go. I can do this in two weeks. That’s the information I need.
Steven Butala:
Let me state the obvious.
Jill DeWit:
Okay.
Steven Butala:
And put this sentence in there. I don’t need anything from you guys except the money.
Jill DeWit:
Yep. Perfect.
Steven Butala:
[inaudible 00:03:36] We have not so much now anymore. We’ve had a lot big problems with that when we start started Land Tank and deal funding. Basically new people were just throwing a property in there. It’s a great deal. I know it’s a great deal and just handing it to us and expecting us to do work.
Steven Butala:
[crosstalk 00:03:51] I want you to think about a mortgage. When you go to get a mortgage on a house that you own a and you move into it, the people, whoever that you never hear from the mortgage company again you just make the payments and that’s it. They don’t come over to sweep your floor or help you clean up.
Jill DeWit:
Make sure the renovation is going well.
Steven Butala:
That’s what deal funding is. Help you choose colors.
Jill DeWit:
Cause actually they have invested interest in this property. They should say, no, no, that paint color is bad we’re not going to allow that.
Steven Butala:
Somebody asked this question yesterday, it’s very pertinent and timely. They said, as a percentage of all the money that’s available for dual funding, how much do you think goes unused? And then they said 80%? And Luke Smith jumped in immediately, as I did and said 99%. And as I said, I agree with Luke 99%. I don’t know why we have millions and millions of dollars. Jill and I have millions and millions of dollars ourselves. [crosstalk 00:04:54] to do deal funding. And it just isn’t as prevalent as I thought it would be. [crosstalk 00:05:00] So my point here is money. I hesitate to say this cause I don’t want to sound like one of these idiot real estate people that have these guru shows. You don’t need any money to get to start this, at all. You just need to find great deals and get educated and find great deals and the money will, it’ll find you.
Jill DeWit:
Just thought about an idea for Clubhouse. I might do this. I was thinking it’d be fun if I, cause Corey’s been listening and kind of be a little bit of fly on the wall and I want you to ask questions. So Clubhouse is listening and asking questions. But I thought it’d be kind of fun. Maybe one week Lori and I will do a live we’ll talk on Clubhouse and review a deal together and let everybody listen to us talk about why we like it, why we don’t like it. Things like that. That might be kind of fun.
Jill DeWit:
Cool.
Jill DeWit:
Today’s topic: State of the Union. What do we care about? And do we even care about the lumber prices?
Steven Butala:
This is why we’re listening. You just read my lines.
Jill DeWit:
Sorry. I jumped out. [crosstalk 00:06:06] I did. This is important cause I always want to know what’s in your head. And I’m sure I’m not alone. Things pop up. Is an area might see a slowing. We all new 2020 and 2021 people are moving around. Mortgage rates are down, mortgage rates is one. There’s so many big things going on. I’m worried about mortgage rates. I’m worried about lumber prices. I’m worried about finding a builder. I’m learning about a slowing down. I’m worried about the bottom falling out. I’m worried about making a mistake. I’m worried about spending so much money in all these properties and have it all get turned off tomorrow with another COVID strain 20-COVID-20. So please, Steven, will you help us and put our minds to rest and please tell us what’s important right now. And what should we really care about and be watching?
Steven Butala:
Here’s the good news. The fact that this is even getting any attention or getting discussed is great. You should be thinking about this stuff all the time. I spent my entire career thinking, wow, is this going to crash? Is it going to go up? Is it going to go down? Word for it is speculation. And so this is the strangest real estate market I’ve ever seen.
Jill DeWit:
More than the last one?
Steven Butala:
Oh way more. [crosstalk 00:07:26] So the last crash that’s really what everybody’s asking is [crosstalk 00:07:30] when is this going to end? When is this going to crash? It’s not. It’s not going to crash. It’s going to level out. Supply will eventually catch up with demand. Prices will flatten out, or just remain going up slightly. There’s three things that work here and why we’re seeing this just hyper demand in real estate. [crosstalk 00:07:53] And lands, I include land in this. Number one, mortgage rates are cheap, historically cheap. When Joe and I were kids, mortgage rates were 17%.
Steven Butala:
So we’ve got, we have much more technology and meaning that people make decisions at the federal level about things like this have a lot more access to data. They had no access to data in the seventies, really. This is before the internet. So they’re intelligently and correctly I think keeping mortgage rates low, number one. Number two, interest rates, I mean. Number two, the COVID happened. And with the stay-at-home thing, companies, and I include Joe and I in this who have a lot of employees, got rid of their offices. We literally got rid of our office and the people who can take responsibility for themselves and perform and are accountable for their performance at home. We sent them all home and they’re happy. [crosstalk 00:08:52] We gave them raises.
Jill DeWit:
The ones that couldn’t aren’t here with us anymore.
Steven Butala:
We actually gave everybody a raise.
Jill DeWit:
Yeah.
Steven Butala:
And said, enjoy yourself at home. [crosstalk 00:09:00] And we’ll get together once in a while. And usually for drinks, we don’t even work. So there’s that stay-at-home thing that I don’t think now is going to change. I know Google is not back. For sure.
Jill DeWit:
They gave them a full year through July, but I don’t know how, I don’t know what they’re going to do after July.
Steven Butala:
So companies are realizing that employees are happier at home, where they can raise their kids and do their job and on and on. So there’s a stay-at-home thing that’s not going to substantially not going to revert back after the COVID is over. And then finally, people are actually staying at home so they want to clean their house up. Or, they want to move. They don’t need to live in downtown San Francisco if you work for Google anymore. You can go to Philippines if you want, or whatever. So in a regular year, about 20% of the population moves. Last year, it was closer to 40%. It’s doubled.
Jill DeWit:
It’s amazing.
Steven Butala:
This is creating. So what about lumber prices? This is creating a massive and significant over normal demand for stuff. Joe and I just bought an RV and if we would have ordered a new one, they were a year and a half out.
Jill DeWit:
Yup.
Steven Butala:
So all these companies are having record years. Manufacturing companies, specifically.
Steven Butala:
There’s all these things that are going on. You know, why do we care about lumber prices? We don’t. I don’t care about lumber prices. Is it going to make prices go up for houses? Yeah. Is that bad? I don’t think so. Every article I read, I’m going to rant here for a second. It has a title like this. You just can’t buy a house anymore. [crosstalk 00:10:36] Every single house.
Jill DeWit:
Fear tactic.
Steven Butala:
It’s bidding, there’s a bidding war. [crosstalk 00:10:41] I can’t afford it. These are all written by very young journalists who are feeling left out.
Jill DeWit:
They want you to read their article. [crosstalk 00:10:49].
Steven Butala:
[crosstalk 00:10:49] Here’s the article I would write. You’re a homeowner: kick ass for you. You’re winning.
Jill DeWit:
Yeah.
Steven Butala:
But nobody ever looks at it from that perspective.
Jill DeWit:
Right.
Steven Butala:
I’m not sure why. It’s like someone who’s wrecking young people’s dreams or something. No, that’s not what’s happening at all. The COVID happened. That’s what happened and these markets are responding, as they should.
Jill DeWit:
What about the millennials? Is that worth talking about or not, not even a big deal?
Steven Butala:
The millennials are the smartest generation and the largest generation that has ever existed ever. They’re the most tech proficient. They’re the most educated. They want the same things that everybody wants. They want to buy a house. They want a couple of kids. Stuff is going to be more expensive, but it would have been more expensive anyway. The good news is this. You don’t have to live in San Francisco anymore. You can go live in Illinois. There are houses in Illinois that are $20,000 that you can drive right up and turn the key in and it’s great. So I don’t buy a lot of this stuff. That’s the truth.
Jill DeWit:
Thank you.
Steven Butala:
Nothing’s going to crash. It’s going to plain out. It’s going to kind of revert back.
Jill DeWit:
Because there’s nothing funny going on is what you’re saying too. It’s not like they’re.
Steven Butala:
Okay. Yeah, let me finish.
Jill DeWit:
It’s not being propped up.
Steven Butala:
Let me finish with that.
Jill DeWit:
Okay.
Steven Butala:
The crash last time, because the mortgage, the way mortgages were getting issued was borderline fraudulent. There was just a lot of numbers, games, and crazy stuff. And that, all the laws changed. That administration dramatically changed that industry. I think for the much better. It’s a little bit more, usually I’m not a big fan of all this regulation and stuff, but it was predatory. And so, and it cracked the foundation that the lenders in the entire country were built on and cause a stock market to really crash and investment banks were going bankrupt. It was terrible. Jill and I were buying what are now $300,000 houses for 20 and 30 or $40,000. And we couldn’t get, there was no financing for them. So I don’t see. There’s nothing like that going on this time.
Jill DeWit:
Thank you. I feel much better.
Steven Butala:
Do you?
Jill DeWit:
I will sleep well tonight. That’s all I wanted know. I just wanted you to please address for all of us. Cause I see little things pop in, in our, in Land Investors and Discord and, uh-oh I just read this and oh, I just read that. So I want to make sure, [inaudible 00:13:16] you should be watching that. You should be aware of this. It’s like, it’s all you know how you drive, you’re driving down the road. You’re aware of a bicycle on the sidewalk. [inaudible 00:13:26] [inaudible 00:13:26] I see some flashing lights there. Your peripheral vision is catching all this stuff, but it’s not enough to swerve and slam on the brakes. You are just paying attention. So that’s how I want you to, What I want you to take away from this. So, nothing. Don’t be worried that, that’s all the bottom’s going to fall out. Just.
Steven Butala:
We’re headed into an inflationary period. Is it going to change our, our lives day-to-day? I don’t think so. Are we going to see 17% mortgage rates? No.
Jill DeWit:
Not overnight.
Steven Butala:
No, no. It will never, I don’t believe it will ever get that high again.
Jill DeWit:
Yeah.
Steven Butala:
That was for lack of information. And then, one of the ways that you can really hedge off inflation in my opinion, is by printing more money, which we do. This country does. [crosstalk 00:14:15] And a lot of people disagree with that. But I, I agree with it. So what’s the best.
Jill DeWit:
I am a fan of printing more money.
Steven Butala:
What’s the best [crosstalk 00:14:23] what’s the best hedge against inflation? Land. And I’ll leave it at that.
Jill DeWit:
Happy you could join us today. Five days a week, you can find this right here on the Land Academy Show.
Steven Butala:
Tomorrow, the episode in the Land Academy Show is called [inaudible 00:14:38]. Sometimes, it takes the owner to get a deal done. You are not alone in your real estate ambition. How much fun did you guys have coming up with [crosstalk 00:14:49] these topics last week?
Jill DeWit:
It’s good. It went really fast too. I’m like, oh, I got another one. Yeah, that’s good. This’ll be fun. Do you need to send out a few thousand offers to property owners, like us? Check out offers2owners.com. It’s offers, the number two, owners.com. No setup fees, free mail merge, and exceptional customer service. We should know because it’s our company. Give Offers 2 Owners a call today.
Both Steven and Jill:
We are Steve and Jill.
Steven Butala:
Information
Jill DeWit:
And inspiration
Steven Butala:
To buy undervalued property. What is the number at Offers 2 Owners?
Jill DeWit:
I forgot.
Steven Butala:
Me too. It’s an 800 number. [inaudible 00:15:38]
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