Outsourcing to Scale Your Land Business (LA 1693)
Outsourcing to Scale Your Land Business (LA 1693)
Transcript:
Steven Jack Butala:
Steve and Jill here.
Jill K DeWit:
Hello.
Steven Jack 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 the Valley of the Sun.
Steven Jack Butala:
Today, Jill and I talk about outsourcing to scale your land business. Every 10-
Jill K DeWit:
This-
Steven Jack Butala:
Go ahead.
Jill K DeWit:
The topic for me is, kids, we need to talk.
Steven Jack Butala:
Really?
Jill K DeWit:
Yeah.
Steven Jack Butala:
Every 10 weeks we teach a course called Career Path. We’re about the third week, third let’s say module, third week in the 10 week class.
Jill K DeWit:
Where we are now.
Steven Jack Butala:
And every time we teach this, there becomes a theme. And last Career Path was pricing, and this Career Path is scaling up. And the only way to do that is through outsourcing, so I wanted to share some of the highlights with everybody on this, because it’s incredibly important, and we’re all here to make money.
Jill K DeWit:
Yep.
Steven Jack Butala:
Sometimes we forget that.
Jill K DeWit:
Isn’t that funny, where I’ve got to pause on that. That’s a good note. We were joking about that the other day, because everybody was talking about hiring. We’re going to talk more about that, but they were talking about hiring and how do you motivate them, do you pay them per transaction or whatever. And we were kind of saying, you would be shocked and amazed how many people at that level, like a transaction coordinator position, they’re not there for the money. They’re not there to get bonuses when they close something. They’re there to make sure they have a steady paycheck. And it’s so amazing, you need to ask people by the way what they want. Usually they want flexibility, consistency, I know I’m going to get a check, that kind of thing. But we both chimed in and said that’s not how we are.
Steven Jack Butala:
No, no. No, every-
Jill K DeWit:
The owners are not that way.
Steven Jack Butala:
Totally off topic already, but I ask everybody before we hire them, what are you motivated by? Not a single person in my entire career, hundreds and hundreds of people, have said, “I’m motivated by money.”
Jill K DeWit:
Except for me.
Steven Jack Butala:
Which is my only motivation. Except Jill, which is now why we’re here in front of you after all these years later.
Jill K DeWit:
Thank you.
Steven Jack Butala:
And I never wanted to hire you anyway.
Jill K DeWit:
I know, [crosstalk 00:02:12].
Steven Jack Butala:
And we’re kind of in this together.
Jill K DeWit:
Just kind of, I fell into it backwards.
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. Comment on the shows you like.
Jill K DeWit:
Luke wrote, “I’m assuming that most, not all, parcels from county to county labeled NEC are unusable in some way. Not much on the interwebs from my initial search, but after getting a signed contract back with one of these designations, I discovered it was mostly wetlands and in the FEMA flood zone. Just curious to everyone’s experience with the properties they have that have these zoning labels.”
Steven Jack Butala:
Okay, so Luke, I’m not picking on you here, but we need to make some definitions. There’s two designations that these data aggregators, national data aggregators, put properties in to make them different from each other. One is land use, and one is zoning. They’re very, very different. And some counties, most counties, don’t use both. They just use one. NEC is short for something not yet classified. I’m not sure what the E is, but that just means we don’t know what to do with it yet. It’s another way of saying it’s really rural. It doesn’t mean it’s bad. It could end up being the greatest resort there ever was in five years from now. So NEC’s not a bad thing. There’s a ton of property in there that’s called NEC. NEC is, in the assessor’s mind, “I don’t want to deal with it. It’s NEC.”
Jill K DeWit:
They haven’t got to it yet.
Steven Jack Butala:
Yeah, they haven’t gotten to it yet.
Jill K DeWit:
Yeah. “We’ll figure that out later. When someone comes up with a use, I’ll add one in.”
Steven Jack Butala:
Yeah, or when somebody says, “I just bought the property and we’re going to put a resort in, so we need a zoning variance or a classification variance.”
Jill K DeWit:
Now we’re going to put something in there, yeah.
Steven Jack Butala:
It’s not bad. And so you should never, ever take these out of your mailer. In fact, you shouldn’t look at use, land use, at all in a mailer. You should just send it. And so I want to be really clear on that. The fact that you… a property came back in that’s classified as NEC, that’s pure… and it’s got a FEMA, in a FEMA way, that’s pure circumstance. Zoning is altogether different. Zoning is a way a civil engineer would go around a city and say, “We’re going to put the waste treatment plants as far as possible from where people live.”
Jill K DeWit:
“This is going to be the commercial area here by the airport, we’re going to put all this, this is going to be all residential over here.” There you go.
Steven Jack Butala:
So I never do land use designated mailers. Never. I always do zoning based mailers, specifically zoned property for all kinds of reasons. This is graduate to PhD level stuff, but please don’t let any kind of type of land use classification stop you from sending the way, sending the mail away.
Jill K DeWit:
And those zoning mailers we’re doing, those are for a specific need. For you starting out, what you’re doing, you want to capture them all.
Steven Jack Butala:
Yeah, don’t do a zoning based mailer now.
Jill K DeWit:
Don’t do what we’re doing. Don’t pick it, yeah.
Steven Jack Butala:
That’s for after your 30th deal.
Jill K DeWit:
There we go.
Steven Jack Butala:
Today’s topic, outsourcing to scale your land business. This is the meat of the show. Jill has a lot of notes.
Jill K DeWit:
Oh kids, we need to talk. And I get it. It’s hard to make that decision for a lot of individuals. You were just getting over starting a land business or starting any company, and maybe you or your significant other or your partner, somebody’s now at the point where you can quit the job right? So you’ve got one full-time, and you’re doing it part time in the evenings and the weekends, whatever it is. Now you’re getting to the point where, shucks, we need help. What should we do? Do I quit my job or do we bring somebody on? And then it’s scary, because you’re thinking all right, we’re already taking care of our own finances and livelihood. Maybe you did leave your job by the way and you’re happily covering your own bills. But now you’re thinking, I’ve got to bring somebody on because it’s holding me back, which is the right way to do this too.
Jill K DeWit:
We’ve always said, when you quit your job you should be saying, “I wish I would’ve done it a year ago,” and you have so much savings and you’re so planned, and you’re so into it that it’s like, no-brainer. Same with bringing on somebody somewhat. It’s a little bit different, but the point I’m making is, I know that it’s scary because you feel like you’re responsible for someone else’s livelihood. So how do I get around that? How do I feel good about this? Because it’s going to hold you back. You better do this or you’re not going to get to the next level.
Steven Jack Butala:
Yep.
Jill K DeWit:
So well number one, I’m going to go to… I have three points, and point number two, which I’m talking about it right now, is don’t overthink this. The only person holding you back is you. It’s your mindset right now. If you’re having this discussion with yourself, it’s you. It’s not like, am I there yet? I don’t know. Maybe I could do five more deals. Come on, you’re in it, you know you could, so you’re holding yourself back. So get past that. And how do you do that? Well you plan it out really well. You need to know what your needs are, what time’s going to be involved, how much money this is going to save you, and how much money you could potentially make. When you spend an hour or two, that’s all this is going to take, and put this on paper and see it like that, now you know. You like that?
Steven Jack Butala:
That’s a beautiful little speech.
Jill K DeWit:
Uh-oh.
Steven Jack Butala:
I can see how this whole week’s going to shape out.
Jill K DeWit:
Oh my God.
Steven Jack Butala:
This is brutal truth week. Brutal truth about owning a business and the things that have to get going on. We talk about buying and selling land here all the time. What we don’t talk about enough, and this whole week we’re going to talk about it, is the brutal truth of actually owning a business and the stuff that you have to do that you probably don’t want to do. I’m not sure anybody wants to do it, but you do it because you want to get to the other side because you have goals. All the answers, all the answers that you need to run an amazingly successful business and get it as big as you want, literally as big as you want, buying and selling land and real estate, lie in the math. In the math that represents the numbers.
Steven Jack Butala:
Hiring a full-time $80,000 person is not expensive. You just have to do one more deal every period that you do deals. Every quarter, one more deal a quarter. You’re already doing deals. You have to outsource this stuff, and there is no way… you have to. What I’ve always done, and now I do it with Jill, is to run my business to the point where it’s going to implode, and then I hire some people to settle it all for me. And that’s always hard.
Jill K DeWit:
That’s truth time there. Yeah, let me tell you. Is it going to break? Oh, it’s about to.
Steven Jack Butala:
I set it up that way.
Jill K DeWit:
I know.
Steven Jack Butala:
I set it up to break, I set it up to go 100 miles an hour. And it looks like a dusty ball of mess.
Jill K DeWit:
Yep.
Steven Jack Butala:
While it’s happening.
Jill K DeWit:
That’s true. Again, we’re here to save you.
Steven Jack Butala:
To the point where you have no… like think of, I’ve done this before. If you send out a 25,000 unit mailer and never tell anybody that you’re doing that…
Jill K DeWit:
Yeah, watch what happens.
Steven Jack Butala:
And watch the deals that come in, and watch everybody start to pull their hair out. So that forces you. You can’t do that if you own a convenience store.
Jill K DeWit:
No, you’re right.
Steven Jack Butala:
You can’t say… I mean, I guess you could give everything away in the store and people line up around the block.
Jill K DeWit:
Or order so much inventory no one knows where to put it and run a sale without telling everyone. Yeah.
Steven Jack Butala:
I mean, I guess you could do that, but you’re not going to see the financial results of… we just have a lot of control in this business model. So there’s some critical things that need to be outsourced for you to really succeed, and Jill and I put together products to make it easier for you. Concierge Data is a product that’s probably six or eight months old that Jill and I put together, because everybody was asking us for it because they’re tired of doing their mailers, or they just don’t want to do it. And so if you call Concierge Data, which is-
Jill K DeWit:
If you go to offerstoowners.com-
Steven Jack Butala:
Offers to Owners. This is not a commercial.
Jill K DeWit:
You have to dig a little bit, but go there and call them.
Steven Jack Butala:
Yeah, it’s not a commercial here about this.
Jill K DeWit:
[crosstalk 00:10:30].
Steven Jack Butala:
I’m just saying, you can outsource that entirely. There’s some people in Career Path right now that are having mental issues with giving up control on the sell, after you buy it and just throwing it to a real estate agent and saying, “Sell it.”
Jill K DeWit:
That’s my favorite thing to do.
Steven Jack Butala:
Call me when it’s done.
Jill K DeWit:
And I’m a sales pro, but I’m over it and I’ve got more deals to do.
Steven Jack Butala:
So think about the shape of a football or a bell curve. It’s really a bell curve, but football’s easier to visualize. If you outsource the mailer and all of that, not the pricing but the entire mailer, all of that except for the pricing, you do that at the end-
Jill K DeWit:
The downloading the data-
Steven Jack Butala:
The scrubbing the data, the whole thing [crosstalk 00:11:09].
Jill K DeWit:
Right.
Steven Jack Butala:
A lot of people struggle with that. You don’t need to. The mailer hits, and now you internally are answering or dealing with saying, “Yes I want to do the deal,” or, “No, I don’t want to do the deal.” Critical decisions. And then you’re done, you actually shove it off to an escrow agent to close it, you’re done. You just manage that escrow agent a little bit. It’s not a lot of hours in the day. You can do 100, maybe 30 deals at a time. You could very easily do it from what I’m describing. And then as soon as the thing closes, you throw it to a pre-qualified real estate agent who loves land in the area, who you hopefully have a relationship with by now, and they sell it. So those ends of that football are entirely outsourced, so all you do is that critical stuff in the beginning. In the middle I mean.
Jill K DeWit:
I concur.
Steven Jack Butala:
Jill and I have done this all wrong for years.
Jill K DeWit:
Yeah.
Steven Jack Butala:
And for the last five, or probably the last 10 years, we’ve been really doing it correctly. And so I’m here to tell you, we don’t sell our own property anymore, and I certainly don’t do my mailers anymore. I just sign off on them. We don’t answer the phones anymore.
Jill K DeWit:
Personally, yeah.
Steven Jack Butala:
If we didn’t have these, if we didn’t have to do this podcast and all this Land Academy stuff, we would be working maybe five, four or five hours a week if we wanted to. And I’m not bragging or I’m not… this is no feather in my cap in any way, that’s not what this is. I’m just saying, scaling is not that hard and it’s not that expensive, and if you do the real math on it and you do it in order, you’re going to do great. There’s not a lot of businesses you can scale. I mean, I’ll tell you if you ever watch any episode of Shark Tank, the predominant theme for years and years on Shark Tank has been, “Hey, I love this business and I think you’re going to great. You and your family are going to do great running this thing for a lot of years. It’s not for me because I can’t scale it.”
Jill K DeWit:
Right, “And we can’t do it without you. It’s going to take you, and you need to be able to remove yourself.” Totally agree.
Steven Jack Butala:
Yeah. Scalable, think about software. So Windows 10, there’s one copy of it and it’s sold a billion times. That’s very scalable, software is scalable. It’s not repeatable. Repeatable is McDonald’s, super successful story, but they just keep repeating the same model on a different corner like Walmart. So I’m talking about scalable, where you’ve got… if you can do 30 deals in a month, hire another person, another transaction coordinator, now you’re doing 30 deals… again, it’s very, very scalable. Doing the same stuff over, and over, and over again.
Jill K DeWit:
I agree. Thank you. Happy you could join us today. Five days a week, you can find us here on the Land Academy show.
Steven Jack Butala:
Tomorrow, the episode on the Land Academy show is called the three critical success points in every single land deal. You are not alone in your real estate ambition.
Jill K DeWit:
So I had a third point to make, but I didn’t want to mess with your whole spiel.
Steven Jack Butala:
I would love to hear it. I have like 50 more points to make-
Jill K DeWit:
I know you do.
Steven Jack Butala:
But I don’t want to talk here for an hour.
Jill K DeWit:
I like coming up with these little, I don’t know if it’s an acronym or what, but it’s three As. Not to be confused with our six As, don’t go there. That’s another thing. But I thought all right, when you figure this all out, you need to act, adjust, and add. You like that?
Steven Jack Butala:
That’s great, Jill.
Jill K DeWit:
Act on it, adjust that person as you need to, and then add people.
Steven Jack Butala:
That’s great.
Jill K DeWit:
Thank you.
Steven Jack Butala:
We’ve got to roll that in here somehow.
Jill K DeWit:
Well it is, it’s in the after show.
Steven Jack Butala:
No, no. I mean in our whole program.
Jill K DeWit:
Oh okay, that’s true.
Steven Jack Butala:
For scaling.
Jill K DeWit:
Yeah. Thank you, I appreciate that. And thanks to you for tuning in. We hope you find our content valuable and we appreciate your support. If you haven’t already, like we hit it home, please check out our YouTube channel. Hit the subscribe button. We’re Steve and Jill.
Steven Jack Butala:
We’re Steve and Jill. Information.
Jill K DeWit:
And inspiration.
Steven Jack Butala:
To buy undervalued property.
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