Jack Thursday – Less Frequent but Bigger Land Deals (LA 1661)
Jack Thursday – Less Frequent but Bigger Land Deals (LA 1661)
Transcript:
Steven Jack Butala:
Steve and Jill here.
Jill DeWit:
Hello.
Steven Jack 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 the Valley of the Sun.
Steven Jack Butala:
Today is Jack Thursday. And I’m going to talk about my personal 2022 goals, which are less frequent, but bigger land deals.
Jill DeWit:
I want to hear about some of your other goals.
Steven Jack Butala:
Like try to be a better husband?
Jill DeWit:
No, no, no. Let’s see here, find a new hair stylist, because I failed at that one. So you’re…
Steven Jack Butala:
Yeah, if you are watching this, you can see.
Jill DeWit:
I got to share this. I walked into a local bar the other day and the sweet, sweet bartender says to me, “Jill, wow. Did you cut your own bangs?” I said, “You know, it might look like that, but no, I did not.”
Steven Jack Butala:
When someone says, “Do you cut your own hair?” That’s not a compliment.
Jill DeWit:
That’s a bad sign. Did you do that yourself? Oh darn. Nope. No, it sure looks like it, but no, I did not slaughter my own hair. So that’s one of our things for next year. You know, that’s one of the hardest things I have… I wanted dry cleaning. I got house cleaners. I got land… Well landscapers came to the house, so we got a couple wins there.
Steven Jack Butala:
We had a lot of wins.
Jill DeWit:
A lot of wins.
Steven Jack Butala:
Can’t win it all though.
Jill DeWit:
We have yet to figure out our trash service, we failed on that one and we failed on the personal hair and all that stuff, we’ve got to figure that out. I won on a dentist. Don’t have a doctor. It’s funny, but hey, it’s part of moving. It’s all right. It’s all good.
Steven Jack Butala:
We live in a town that doesn’t believe in charging taxes for anything. And they also don’t believe in providing any services.
Jill DeWit:
Street lights, and sidewalks.
Steven Jack Butala:
There’s no streetlights.
Jill DeWit:
No.
Steven Jack Butala:
There’s no sanitation or anything. You have to hire everything out independently. There’s literally no sewer systems.
Jill DeWit:
Right.
Steven Jack Butala:
Everything’s on septic.
Jill DeWit:
It’s hilarious.
Steven Jack Butala:
But it’s real cheap to live here.
Jill DeWit:
It’s great. Yeah. I wouldn’t call it cheap, but once you get past the water and the electric and the gas bill.
Steven Jack 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 don’t forget to subscribe on the Land Academy YouTube channel and comment on the shows you like.
Jill DeWit:
Ian wrote: If we’re looking for infill lots, and there’s a lot of lots owned by an HOA, and that HOA looks to be sparsely developed, like maybe 20, 25% of the lots are developed. That’s not a good candidate for what we’re looking for. Right? In Land Academy 2.0, infill lots, the example Steven shows looks to be lots with houses built all around them.
Steven Jack Butala:
Let me cut to the chase.
Jill DeWit:
Please do.
Steven Jack Butala:
The best case scenario for infill lots. You bought the last lot available in the entire subdivision. Everything else is built on. This country is packed full of failed subdivisions or there’s lots of different words for them. Paper subdivisions or where it’s 20% developed, and then there’re just tons and tons and tons of properties that are for sale, vacant land properties in a sub. When there’s an HOA, well, that’s just adding fuel to the problem, fire to the… Pouring fuel on a fire.
Jill DeWit:
Making fun of my “going down the rabbit trail”? Now you’re doing it. “Pouring fuel on the problem.” [inaudible 00:03:51] How about fire?
Steven Jack Butala:
Yeah.
Jill DeWit:
Yeah.
Steven Jack Butala:
So you want to stay out of those HOA driven paper subdivisions, and there’s lots of them. And they come up at our mailers. They come up every Thursday when we do “Would you do this deal?” because you can buy them real cheap. So it’s very, very tempting. And I’m not saying you can’t make money, Jill and I have literally made millions of dollars buying vacant lots in paper subdivisions on the outskirts of big cities. So it can be a great situation. But if you’re truly going for an infill lot that’s going to be developed and you’re going to sell it to a builder, look for ones that are in subdivisions that are… It’s just, it’s the last one.
Jill DeWit:
Well, and they’re still operating too, like it’s really easy to go into Zillow or Realtor or something and just zero in on that subdivision. See how many lots are for sale. If there’s like a ton of red dots and there’s like, 15 or more for sale, ooh that’s a red flag. And do you want to be competing with those people too with all those sellers? Like great.
Steven Jack Butala:
You can.
Jill DeWit:
You can.
Steven Jack Butala:
You just need to be cheaper.
Jill DeWit:
That’s the thing, you got to really be…
Steven Jack Butala:
And cheaper and the right size and all that. So.
Jill DeWit:
And check the HOA fees. There’s just so many things that go along with that. Just keep an eye out. It’s not that it’s a deal killer, but it’s just stuff to be aware of.
Steven Jack Butala:
HOAs are lean waiting to happen. HOAs were created by lawyers who are waiting for you to default so that they can collect the real estate.
Jill DeWit:
Exactly.
Steven Jack Butala:
Number one. Number two, they’re packed full of rules. Do we like rules or not like rules?
Jill DeWit:
Oh, I love rules.
Steven Jack Butala:
Do you want to live in a world where there’s just all kinds of rules all the time? I don’t.
Jill DeWit:
I’m bad with rules. Put a rule in front of me and watch how fast I can break it.
Steven Jack Butala:
Jill’s…
Jill DeWit:
Or work around it.
Steven Jack Butala:
That’s Work Around Jill. That’s what I call her.
Jill DeWit:
That’s true.
Steven Jack Butala:
Today is Jack Thursday. I’m going to talk about next year with less frequent, but bigger land deals. This is why you’re listening. So every once in a while, somebody will come to us, usually on a Thursday call and they’ll say, why don’t you guys just cut to the chase here and buy a property for a million bucks and sell it for 3 million? To which I say, it’s very, very, very difficult to do that because people who own one million dollar property, whether it’s agriculture, waiting to be subdivided for subdivision or whether it’s industrial property in a park, some industrial park, know what that’s worth. They know exactly how much it’s worth and they’re not going to let it go for cheap.
Steven Jack Butala:
You don’t usually buy a trailer park or any commercial property at all, way, way, way, way under value. You just don’t. It can happen, but it’s not that likely. The sweet spot for Land Academy is buy for 30, sell for 90. Buy for 40, sell for 110, 120. That’s really just seems to be where…
Jill DeWit:
Or less.
Steven Jack Butala:
People just don’t carry out. Or less than that.
Jill DeWit:
Right. And you know [crosstalk 00:06:52] three, sell for 10. Those are fun and easy.
Steven Jack Butala:
That seems to be on wants and real estate, which is what we buy. People just want to cash out.
Jill DeWit:
They leave it in… At those price points, the lower price points, they hang onto these properties. They’re like, eh, it’s not worth that much. I’m not going to get excited about it. When it’s a million dollars, they’re not going to just be like, “oh yeah, I forgot about that.” That’s not the case.
Steven Jack Butala:
We try to make two million dollars a year net buying and selling property, land. Not houses, not anything else, not Land Academy or… Just buying and selling land.
Jill DeWit:
With a small staff. That’s our happy place.
Steven Jack Butala:
Right. And when you break that down, that’s a couple hundred thousand dollars or 150 to $200,000 a month and it’s one or two or three deals. Buy for 30, sell for 90. If you can do two deals like that a month, you’re going to do great. And we did it this year. And so I’m really, really focused now because properties always slip in from old mailers or whatever. And this one is addicted to buying and selling land. So…
Jill DeWit:
I am.
Steven Jack Butala:
If it’s a good deal, we’re going to do it.
Jill DeWit:
Sorry.
Steven Jack Butala:
Honestly, the truth is it’s a distraction. Some of these property deals we shouldn’t be doing, we should only do the amazing deals.
Jill DeWit:
I’m sorry, I’m going to start…
Steven Jack Butala:
Stop making so much money Jill.
Jill DeWit:
I’m going to start a club or.. What’s the word?
Steven Jack Butala:
Land of hogs.
Jill DeWit:
Something like that. I’m going to start a support group for people with the same disease that I have.
Steven Jack Butala:
Yeah. We joke about this one.
Jill DeWit:
I can’t stop it. It’s true.
Steven Jack Butala:
I’m actually not joking. Jill is literally addicted to buying and selling real estate.
Jill DeWit:
It just makes me happy. It does, and I’m sure some of you listening are in the same spot. Like, oh, I get it. I love it, this is my life. I don’t know what I would do, I can’t retire from this. I’m going to always be doing deals. Even if it’s not a lot, I kind of need it. I love… We get a weekly report on a Wednesday of all the current, not all of our inventory, but just the current things that are in some movement right now. Like they’re in Escrow. Usually it’s something like that. Or they’re just about to be listed with a broker and they’re just, before we kind of set them free, if you will.
Steven Jack Butala:
Yeah.
Jill DeWit:
And I get excited when the list is flipping long. And it’s pretty long right now. And I’m like…
Steven Jack Butala:
That’s exactly what I don’t get excited about.
Jill DeWit:
It makes me happy.
Steven Jack Butala:
I don’t want to see a long list. In a perfect world, we would own no real estate ever.
Jill DeWit:
It would be like buy today, sell tomorrow. And the list is empty. I know. Sorry. I goof all that up. Happy to join us today. Five days a week, you can find us here on the Land Academy Show.
Steven Jack Butala:
Tomorrow is Jill Friday and she’s going to talk about Jill-ifying year end land deals. You are not alone in your real estate ambition.
Jill DeWit:
Did you say you saw that discord or something that someone pulled out one of my hats?
Steven Jack Butala:
There’s a whole Jill-ifying it thing.
Jill DeWit:
Oh good.
Steven Jack Butala:
We had some hats made at the last live event. Jill-ifying. Say, Jill-ify it.
Jill DeWit:
One of my last talks was about Jill-ifying it. And I had hats for those who wanted them so… So they’re floating around out there.
Steven Jack Butala:
Is there one close by in this house?
Jill DeWit:
Yeah. I’m not going to run and get it right now. Oh, I’ll wear it tomorrow.
Steven Jack Butala:
Sure.
Jill DeWit:
Oh yeah. I’ll put it on for tomorrow. So cool. Thank you for tuning in. We hope you find our content valuable and we really appreciate your support. If you haven’t done it already, of course, please get on our YouTube channel. Hit that subscribe button.
Jill DeWit:
[crosstalk 00:10:24] We are Steve and Jill.
Steven Jack Butala:
Information.
Jill DeWit:
And inspiration.
Steven Jack Butala:
To buy undervalued property.
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