Best Place to Buy Houses Right Now (LA 1690)
Best Place to Buy Houses Right Now (LA 1690)
Transcript:
Steven Jack Butala:
Steve and Jill here.
Jill K DeWit:
Hi.
Steven Jack Butala:
Welcome to the House Academy Show, entertaining real estate investment talk. I’m Steven Jack Butala.
Jill K DeWit:
And I’m Jill DeWit, broadcasting from the Valley of the Sun.
Steven Jack Butala:
Today, Jill and I talk about the best place to buy houses right now. What is right now, Jill? February 1st, 2022.
Jill K DeWit:
What is today? Wait, what is today? Well, today is two, two, two, two, two.
Steven Jack Butala:
No, tomorrow.
Jill K DeWit:
I know. Hold please.
Steven Jack Butala:
Oh, well, we’re recording it.
Jill K DeWit:
Yeah, it’s a little early.
Steven Jack Butala:
Yeah.
Jill K DeWit:
Is it early? Okay. I understand. Yeah. As we record this on 02/01/22, this show is airing on 02/02/22. How cool is that?
Steven Jack Butala:
I don’t know. Things like that amaze you.
Jill K DeWit:
I don’t think I’m alone. Last time I checked by the way, silly.
Steven Jack Butala:
You know what amazes me?
Jill K DeWit:
What?
Steven Jack Butala:
Revenue. 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 please don’t forget to subscribe on the Land Academy YouTube channel, comment on the show as you like.
Jill K DeWit:
It’s not me that amazes you, it’s just revenue.
Steven Jack Butala:
Well, you’re amazing. I don’t need to.
Jill K DeWit:
Oh, thanks.
Steven Jack Butala:
That’s redundant.
Jill K DeWit:
Me wearing a dress made of spread sheets. Would that impress you?
Steven Jack Butala:
Sure.
Jill K DeWit:
Okay.
Steven Jack Butala:
Sure. Let me think about that.
Jill K DeWit:
Okay. Awesome. All right. Michael wrote, I got a call from a seller that accepted my offer, and then he provided the following information, and he had the following question. He said that the land is designated as a flood detention area, and what would I use the property for? Does the flood detention area kill the deal?
Steven Jack Butala:
Yes.
Jill K DeWit:
How would you address the seller in regards to your potential use of the property. Thank you for letting me know. Have a nice day. I mean, is it like a dam now? Oh, here we go. Is there more to it?
Steven Jack Butala:
Yes.
Jill K DeWit:
Okay. Oh, there’s more to this point. Hold please, and I received a signed purchase agreement by email in a PDF format. Do I need to have the seller also mail me a copy of the purchase agreement with a wet signature on it? Or is the PDF version sufficient to complete the transaction? Well, I’m still wondering if we’re going to complete the transaction at all.
Steven Jack Butala:
Let’s decide.
Jill K DeWit:
Let’s see if we need to get all hung up on this PDF thing for a moment, which is not a hangup. Go ahead.
Steven Jack Butala:
We’ve all seen flood detention areas. They’re way different than waterways or FEMA flood zones or any of that. A flood detention area, and they’re not everywhere. They’re only in certain parts of the country. For some reason, you never see them in Arizona, or if you do see them in Arizona, they’re master planned so that there’s a soccer field there.
Steven Jack Butala:
But a lot of times in pre-planned industrial parks, you’ll be driving down the street and an industrial park, there’s buildings everywhere, semis all over the place, loading and unloading. Then there’s a vacant piece of property with a fence around it that you can look way down into. It’s way sub, it’s not on the level of the streets or anything, it’s way lower. That’s because it’s a designated retention, water retention area for flooding.
Steven Jack Butala:
Again, you only see this in certain parts of the country. Honestly, I don’t know why. I probably should look this up and find out why some places you see it, some places you don’t. You see it in California a lot.
Jill K DeWit:
Yeah.
Steven Jack Butala:
You don’t see it in Arizona almost ever, which seems strange because Arizona’s got its own natural way of retaining water.
Jill K DeWit:
I can think of a few.
Steven Jack Butala:
Like I said, if you do see it in newer cities like Phoenix, that’s a soccer field.
Jill K DeWit:
Isn’t that funny? Yeah. Remember that place behind the Wendy’s in Torrance?
Steven Jack Butala:
Yeah.
Jill K DeWit:
Okay. That’s a huge, it was weird, and it was almost like, why doesn’t somebody fill this in? But it’s needed.
Steven Jack Butala:
Yeah.
Jill K DeWit:
It’s a needed thing. I know your first thought is, well, I can still use this. Can I just fill it in with dirt? Hold on a moment. It will mess with ecology and they have a plan out there and you can’t just fill it in with dirt.
Steven Jack Butala:
Don’t get me started.
Jill K DeWit:
Okay. I won’t.
Steven Jack Butala:
Somebody believes that they have a plan, and they’re long gone. Whoever put that, whoever said, “Yeah, we need that detention area.”
Jill K DeWit:
I see.
Steven Jack Butala:
They’re long, long gone on, honest.
Jill K DeWit:
That was 1919?
Steven Jack Butala:
They’re a Walmart greeter right now. Not that there’s anything wrong with that.
Jill K DeWit:
No. You know what? Some day, I’m going to be a Walmart greeter, so please don’t poo poo that. That’ll be fine.
Steven Jack Butala:
No. My point is, the Walmart greeter position in their chain of career decisions that that person made is an upgrade from that other engineering, civil engineering.
Jill K DeWit:
Oh, my goodness. Are you done with the question? Oh, wait. Okay, so back up, we covered that part.
Steven Jack Butala:
It’s a deal killing issue.
Jill K DeWit:
Okay, and then part two is who cares? We don’t care if it’s a PDF. It could be a photograph on their phone. If that’s all they figured out, you have some image of this that you want to move forward if you’re opening escrow, that’s the point. I don’t need a wet signature and neither does escrow, so we covered that. More importantly, I have a question for you before we get into this. I have an idea in my head.
Steven Jack Butala:
Oh, my God, here it comes. She’s got that smile like I’m going to get it right now.
Jill K DeWit:
No, no you’re not. No, it’s the question. I have an idea in my head of what would be my ultra, ultra, ultra retirement job that I’m only there for fun and I’m and just to pass the time, give back. I’m not there for a paycheck, you know? Because I’m so retired, but I got to get out of the house. Walmart greeter would be one. What would be, what’s yours?
Steven Jack Butala:
Teaching. Steve Wozniak, the co-founder of Apple Computer. He’s Steve Jobs’ original partner, in his life he’s a multi-billionaire, teaches young children about computers. That’s what he does in his life.
Jill K DeWit:
Where would this be? You’re going to be at the YMCA teaching computers to kids?
Steven Jack Butala:
No, I’m probably not. Wow.
Jill K DeWit:
Well, because I thought mine through.
Steven Jack Butala:
This is the first I’ve ever thought about this in my entire life.
Jill K DeWit:
Oh, I have a whole plan. I’m at the historical society.
Steven Jack Butala:
Well, you answer first. Give me a second.
Jill K DeWit:
I’m at the historical society and I am giving tours.
Steven Jack Butala:
It’s nice to talk to you by the way.
Jill K DeWit:
Thank you.
Steven Jack Butala:
We’ve never talked about this.
Jill K DeWit:
I know. That’s what I’m trying to say. That’s why I brought this up. I really thought through. I’m at our local historical society giving to… I’m a docent.
Steven Jack Butala:
What is that?
Jill K DeWit:
You don’t know what a docent is?
Steven Jack Butala:
I’ve heard of it before. I knew about it one time, but I forgot.
Jill K DeWit:
You’re a volunteer and you’re just giving information, historical information, and answering questions, and maybe you’re giving tours for free. You’re just talking about exhibits at the museum or maybe you’re showcasing Western art.
Steven Jack Butala:
You want to be a teacher?
Jill K DeWit:
No, I’m just going to be a docent. I’m just there and answering questions.
Steven Jack Butala:
It’s just a different word for a teacher.
Jill K DeWit:
Sometimes, it’s where is the bathroom? I might be pointing that out. I mean, I might be out where’s the bathroom, and when you come back, I’m happy to fill you in on the artist who painted this. I think that would be really cool.
Steven Jack Butala:
I think that’d be fun for about a week.
Jill K DeWit:
Wait, wait, wait, back to yours. You want to teach kids? What do you want to teach kids?
Steven Jack Butala:
Not necessarily kids. It could be, maybe we have a tiny little group of Land Academy people that really are…
Jill K DeWit:
This is give back. You’re 80. You’re 80 here.
Steven Jack Butala:
Yeah.
Jill K DeWit:
So you’re not that spry.
Steven Jack Butala:
Making me feel like I’m almost 80 right now.
Jill K DeWit:
Yeah. Well, we’ll get to that in a minute. Come on. You’re 80, 85.
Steven Jack Butala:
I think that, especially when you’re 80, you need to be getting up in the morning and doing stuff.
Jill K DeWit:
You want to do something so different from Land Academy, it’s not even funny. Serious.
Steven Jack Butala:
You think?
Jill K DeWit:
Yep. You have a whole different plan. It’s running.
Steven Jack Butala:
She’s telling me.
Jill K DeWit:
Land Academy.
Steven Jack Butala:
This is a great display of what my life’s like with Jill.
Jill K DeWit:
You’re 85, and Land Academy runs better without us at this point.
Steven Jack Butala:
I answered her question. Hold on a second. I answered her question.
Jill K DeWit:
I don’t think you did.
Steven Jack Butala:
Very quickly. Hold on.
Jill K DeWit:
Okay, so let’s back up then. You didn’t quite tell me what age or what’s really going on?
Steven Jack Butala:
Oh, like what age I want to retire?
Jill K DeWit:
No, no, no, no, no. Can I just have a little more information? That’s what I’m asking you for. I can tell you exactly who the people are walking up to me in the little kiosk, and the kiosk that I work in.
Steven Jack Butala:
How much thought?
Jill K DeWit:
With my docent name tag, there’s a kiosk.
Steven Jack Butala:
Do you own the museum?
Jill K DeWit:
No, I don’t. Are you kidding? This is fun. I’m 85. I’m just having fun.
Steven Jack Butala:
I have not, never thought about this in my entire life until this moment.
Jill K DeWit:
All right. Okay. Well, maybe you should,
Steven Jack Butala:
You know the Scottsdale Museum down there, the Western Museum?
Jill K DeWit:
Yeah, that’s one of the places.
Steven Jack Butala:
That’s be a perfect place for you to do that.
Jill K DeWit:
That’s what I’m saying. Now, you know where I’m going.
Steven Jack Butala:
What’s your outfit look like, more importantly? Because I’m sure you’ve got that all mapped out.
Jill K DeWit:
Well, it’s a hat and cowboy boots. That’s exactly right. I’m a docent at the Western Museum. I’m very happy to help, and I will point out where the bathrooms are.
Steven Jack Butala:
My, Gosh. You and the bathrooms, huh?
Jill K DeWit:
Right. Exactly.
Steven Jack Butala:
I’ve never even been in that museum. Have you?
Jill K DeWit:
No, I have not. I need to go in there. Before I apply for the job, I should probably walk in there. All right. Today’s topic, best place to buy houses right now.
Steven Jack Butala:
This is the meat of the show. Could we have gone off topic any more? No. Selecting places to buy houses is shockingly, amazingly simple. There’s all over the internet. This is what prompted the title for this is a webinar that Jill turned me onto that I watched and subsequently discussed in great detail during one of our career path sessions on our Thursday call.
Steven Jack Butala:
One of the slides, if you can find it, it’s really worth watching. The title is, “What’s Going to Happen With the Housing Market in 2022?” And it’s put on by First American Title. One of the slides that she was talking about, the presenter was talking about, was where are people moving? That’s where you buy houses.
Steven Jack Butala:
I don’t mean, because everybody’s moving out of huge cities and they’re moving into tertiary zip codes or counties that are adjacent to, or almost adjacent to, some of these larger cities.
Jill K DeWit:
It’s exactly what you said. It’s like a zoom. You’re close enough if you need to get into the office or to the heart of the town. But that’s one of the things that I thought was really good about the webinar that they did. It really proved our point.
Jill K DeWit:
You think people are really getting the heck out of Dodge and going out into the hills and hiding.Not so much. They’re really staying within the city limits, if you will, but they’re not in it, in it. They don’t need to have the leave your house and Starbucks right on the corner a hundred yards away. They don’t want that.
Steven Jack Butala:
I would heavily encourage you to analyze all this like we do in Land Academy by zip code, not by county. It’s really easy to get county data, for some reason, it gets reported. Not as easy to get zip code data, but we can create our own. That’s what Land Academy’s all about.
Steven Jack Butala:
Look at these zip codes and there’s big, huge… I mean, think about the zip code you’re in right now and then maybe the zip code that is adjacent to you. I know in our case, there’s huge differences in the zip code that we are in right now, and then the ones that surround it from a real estate statistic standpoint.
Jill K DeWit:
Can I ask you questions when you’re ready?
Steven Jack Butala:
Sure.
Jill K DeWit:
Okay. Number one, does price matter?
Steven Jack Butala:
Well, price is massive. With houses, we implement what’s called smart pricing and we have virtual assistants overseas line by line by line analyze what each house is worth that you’re making an offer on. Then we take an average of that and then discount it appropriately.
Steven Jack Butala:
In a super, super hot market, and that’s what I’m asking you to go find, real hot markets where everybody’s moving to, yeah, price really matters. You’re going to go in way more. You’re going to price your mailer a lot higher than we would, let’s say a year or two years ago.
Jill K DeWit:
How about, do I need to stay in the mid range for the price of the asset? My thoughts are, yes. Am I right on that?
Steven Jack Butala:
I don’t know what you mean.
Jill K DeWit:
I don’t want to go for the real expensive ones.
Steven Jack Butala:
Oh, yeah, yeah, yeah.
Jill K DeWit:
I want to stay right… it’s really, I’m just going for what is hot, right? I’m going to study what’s hot.
Steven Jack Butala:
Jill’s dead on.
Jill K DeWit:
Just try to get more of those.
Steven Jack Butala:
You almost never, and I can’t think of a circumstance where you would buy an extremely expensive house.
Jill K DeWit:
Wait.
Steven Jack Butala:
And then very quickly flip it.
Jill K DeWit:
Right. All right. Is the stuff that you’re talking about, so this is really where the best place to buy a house is right now, it’s 2022. Do you have the same response? Is it the same for us as an investor as it is for a flipper?
Steven Jack Butala:
Yeah. I mean, I look at us and that’s what we are, we’re flippers. We’re not wholesalers and we’re not rehabbers.
Jill K DeWit:
That’s the difference.
Steven Jack Butala:
We buy the asset. We do absolutely nothing to it. In some cases we might, I don’t know, replace carpet. I don’t know, I don’t think we’ve ever… We’ve done that one time that I can think of.
Jill K DeWit:
Paint and yeah, paint and carpet.
Steven Jack Butala:
Yeah.
Jill K DeWit:
Easy.
Steven Jack Butala:
Yes.
Jill K DeWit:
This is my last question because I’m thinking of things that people talk about and I read that they get all excited about online, right. One of the stats people throw around is, you know there’s only three months worth of inventory. I get tired of that. Should I worry about anything like that?
Steven Jack Butala:
Days on market, that’s how the ultimate gauge in my opinion, and then if you’re a Land Academy member, refer to your equity planner. All the information’s in there. If you’re not a Land Academy member, you could fly solo on-
Jill K DeWit:
Or House Academy.
Steven Jack Butala:
Yeah, or House Academy.
Jill K DeWit:
Yeah.
Steven Jack Butala:
Fly solo on days on market or just common sense if you really know the market well.
Jill K DeWit:
Know what’s so funny? This is my last point, it ties into this. I think people get all, they’re afraid of areas because of low inventory. I think that’s what I hear like, “Oh, there’s only X amount of months.” Like I just said, they have an easy button that they think is perfect and that talks about inventory in an area. I’m going to argue that I want low inventory because I want to be one of the 10.
Steven Jack Butala:
Well, here’s the thing. Here’s how it works in reality. Jill and I have been instructing at Land Academy for years and years and years now, since 2015. God, this is year seven, I guess.
Jill K DeWit:
Yeah. Hold on. You, okay?
Steven Jack Butala:
No, it’s fine and I completely understand this and respect it, but with new people, people come in and they tend to have the same questions before they go through the material that it’s just a cycle that keeps happening and they’re excited. I completely understand that. I literally remember being excited after my first one or two deals too.
Jill K DeWit:
I’m still excited.
Steven Jack Butala:
Yeah, me too, and so pricing, it’s not going to be perfect. You can expect to have what’s called yield, and if you make a huge mistake in pricing, you’re going to fix it on the phone on the back end, whether it’s you overpriced or under priced.
Steven Jack Butala:
I think this, this is my opinion, I would much rather do pretty well at pricing, but not perfect, it’s never perfect, in a super hot market, get one or two deals that come in where Jill can reel them in. Then, because you know once they’re signed how fast it’s going to sell.
Steven Jack Butala:
In a market right now, there’s real hot markets all over where we buy these properties in three separate states. For some reason, the price point that seems to work well is around $600,000, and those houses four years ago were literally two or 300,000. It’s that hot. It’s gone up that much.
Steven Jack Butala:
I take it upon myself, personal responsibility for finding one or two deals per mailer to make sure that we can… And then they automatically sell themselves very, very quickly for a hundred thousand dollars more. Yeah. Wouldn’t you rather do it in a super hot market like that, just know it’s going to sell?
Jill K DeWit:
Of course.
Steven Jack Butala:
Just put the acquisition responsibility, not the sales responsibility.
Jill K DeWit:
Of course.
Steven Jack Butala:
That’s it, just yes.
Jill K DeWit:
Yeah. Would I rather give the work to you than to me? Heck, yes. Is that what you just said? Yeah, wouldn’t you rather be on the purchase price on how I queue it up than you have to really work hard at it? Well, I’m not dumb. Yeah. But I can help, it’s okay.
Jill K DeWit:
Happy you could join us today. Five days a week, you can find us here on Land or House Academy Show.
Steven Jack Butala:
Tomorrow’s Jack Thursday, and I’m going to talk about how to host a successful podcast. You are not alone in your real estate ambition.
Jill K DeWit:
Who’s asking this question?
Steven Jack Butala:
It was just all me and here’s why. We hit, for the first time ever, we’ve had this show since 2015, we have hit 100,000 consistent unique downloads per month.
Jill K DeWit:
That’s pretty darn cool.
Steven Jack Butala:
I can say pretty safely now, and it’s consistent, this has been maybe the sixth month that we’ve done this, that it’s successful.
Jill K DeWit:
You figured it out, in spite of us.
Steven Jack Butala:
For six and a half years, it was just Jill and I talking to each other with the camera on.
Jill K DeWit:
That’s right, and three people and they changed all the time.
Jill K DeWit:
Hey, thanks for tuning in. We would love to connect with you, by the way, on Clubhouse. So, join us the first and third Thursday of every month. I don’t remember what time, but go to the Land Investing Club in Clubhouse and you’ll find us. We are Steve and Jill.
Steven Jack Butala:
We are Steve and Jill. Information.
Jill K DeWit:
And inspiration.
Steven Jack Butala:
To buy undervalued property.
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