Role of Your Telephone in Your Land Business (LA 1699)
Role of Your Telephone in Your Land Business (LA 1699)
Transcript:
Steven Jack Butala:
Steph and Jill here.
Jill K DeWit:
Hi.
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 the role of your telephone in the land business. Well, really, Jill’s going to talk about it.
Jill K DeWit:
Yeah, exactly. That’s how it’s going to go.
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 K DeWit:
Jessica wrote, “Do you have a business line of credit? If so, where? And are you pleased with the service?” Well, this is interesting. Was this in discord?
Steven Jack Butala:
Yeah. It was a very popular topic and heavily responded to by other members.
Jill K DeWit:
Does anyone?
Steven Jack Butala:
Yeah,
Jill K DeWit:
Really?
Steven Jack Butala:
Yeah. A lot of people.
Jill K DeWit:
Ah.
Steven Jack Butala:
And different types of line of credit. So there’s lines of credit, there’s house, regular mortgage, second mortgages and all kinds of stuff. And everybody had a lot of positive stuff to say, which is why …
Jill K DeWit:
I don’t have …
Steven Jack Butala:
Which I brought it up here.
Jill K DeWit:
We don’t.
Steven Jack Butala:
This is why I brought this up because Jill and I don’t believe in debt.
Jill K DeWit:
Yeah.
Steven Jack Butala:
Whenever we need to get something done, which is every single day, we use equity. And so do I have a business line of credit? No. Could we go get a multimillion dollar line of credit against …
Jill K DeWit:
Anything?
Steven Jack Butala:
Probably just our credit scores.
Jill K DeWit:
Right.
Steven Jack Butala:
It’d be tertiary debt, just like unsecured debt, like a credit card. We choose not to do that for a lot of reasons. Mostly because both of us collectively and individual have been burned, extending too much credit, whether it’s asset based or not and having things go south and then having to mop that up. And this is in the way distant past for both of us.
Jill K DeWit:
Let me know and I can share.
Steven Jack Butala:
So what I think you need to do, it’s cheap as hell right now. You can get a line of credit for just 1% or 2%. So if you’re crazy confident in what’s going to happen in your career, that might be a good idea. It’s a personal preference, but I vote no.
Jill K DeWit:
Here’s my personal preference. We never have done this. So back in the day when we were huh, getting this going again, like I had acquisition funds, right? I had like a balance of our money that was set aside to buy land. And then when I was out of the acquisition funds, guess what I had to do? Hurry up and sell something so I could have the money to reinvest in something else. It just kept going and it would build up. It was great. So that’s my first choice. Like you just said, I’m just not a fan of this at all.
Steven Jack Butala:
Me too.
Jill K DeWit:
If you have $10,000, then you buy stuff up to $10,000. And you need to hurry up and sell it. If you do it right next, in 30 days, you have $20,000. And in 30 more days, you have $40,000. You hurry up and move this money through.
Jill K DeWit:
Now, if you need something more than that, or you don’t even have $10,000, then I would use a partner. Bring in a partner where you’re doing the deal together. You’re not borrowing the money. It’s like you’re partnering on the deal. And it all goes sideways, that person gets a deal. You don’t owe them anything. You’re just like, well, shoot.
Steven Jack Butala:
That’s equity.
Jill K DeWit:
I don’t get part of this. It’s the, yeah.
Steven Jack Butala:
It’s also way more expensive.
Jill K DeWit:
Yeah.
Steven Jack Butala:
If you get five people in, oh, I’m sorry. Are you done?
Jill K DeWit:
No. I’m on fire today. So with the partner, but yeah, you are giving up equity. That’s the whole thing. And then when the deal closes, you get half, you work it all out or whatever percentage you guys worked out. It doesn’t matter. So that’s just, I feel, you sleep so well at night knowing that, like if it all goes sideways or you bought something wrong, you paid too much money. I don’t know. It goes back to the person who owns it. No one gets penalized. You learn from it and you move on. Versus I borrowed it from a bank. They’re going to be bugging me. It takes a while to sell. Now they’re still bugging me. I’m having to come up with more money to pay this while this stuff sells. It just never … I just don’t like it.
Steven Jack Butala:
When I ask myself how I’m going to finance something, I don’t care if it’s a car or an office building or 600 acres of agricultural property that’s going to be a subdivision. The first thing I ask myself is let’s run the worst case scenario here and how are you going to get out of it.
Jill K DeWit:
Right.
Steven Jack Butala:
And so if you’re really happy with how you’re going to get out of it, and I’ll tell you, getting out of a line of credit is a mess. It usually involves bankruptcy. And so the days of setting up an LLC, getting a huge line of credit and having no personal recourse are gone, except with certain very specific asset types. Strangely enough, mobile homes are one of those asset types. So if you’re not familiar with these terms and you’re listening to this, I really would go back and replay this and research what these terms are before you start signing lines of credit and doing all that stuff.
Steven Jack Butala:
You put five people in a room, which we’ve done at live events and ask them about this topic. How do you get a deal done? How do you finance it if you don’t have all the money? Because you should never not do a deal.
Jill K DeWit:
That’s true.
Steven Jack Butala:
Never, ever, ever not do a deal because you don’t have the money.
Jill K DeWit:
Right.
Steven Jack Butala:
You have like nine or 10 options. A lot of credit is one of them. That’s not anything we would ever choose. We created Land Academy for this reason, to create business partners. Some of them are financial money partners. Some of them are operations people like us. And sometimes we reverse the roles. So we didn’t have to go and do this.
Jill K DeWit:
Thank you.
Steven Jack Butala:
So I can’t say enough bad stuff about debt.
Jill K DeWit:
Thanks.
Steven Jack Butala:
Today’s topic, the role of your telephone in lender land business. This is why you’re listening.
Jill K DeWit:
So I have three points to make about your phone. I think most of you know by now you’re going to have to talk to people on the phone. It’s you tried it. First, would you please share your experience of how that went and not having a phone number?
Steven Jack Butala:
Yeah, so very quickly, I started in my career buying and selling on other people’s behalf, long term care healthcare facilities, nursing homes and assisted living buildings, back in the day before there was email and it was one of the most complicated real estate deals there ever was. You got all kinds of federal approval and state approval and it takes a year. It took a year back then to get a deal done. And a lot of them fell through because it’s just too much time.
Steven Jack Butala:
So in the back of my head, I said, I got to figure out how to do a really simple fast real estate deal. And so what I did was remove all the people. Remove all other real estate agents. So now that you’re sitting philosophically or theoretically sitting across the table from an owner, you’re the buyer, there’s a seller, you sign some stuff, everybody exchanges some money and the deal’s over. Gets recorded at the county and it’s over. And so we did. I traveled down that path and ultimately landed in land as that vehicle. And so it’s the simplest transaction you can do. So from there, …
Jill K DeWit:
Tried to simplify it even more.
Steven Jack Butala:
I tried. So from there, I developed this online auction scenario where we would buy property from somebody. We would have a single conversation with the seller, turn it over to an escrow agent. The escrow agent would close the deal, that money would exchange hands. And then we would own the property, post it online on several different auction venues at the time. It would be auctioned off and the deal would close. People would pay online just like they were buying an ashtray.
Jill K DeWit:
And there was no talking. There was no phone number.
Steven Jack Butala:
We never had a phone number.
Jill K DeWit:
So these buyers could never ask any questions. What you see is it. If you’re not in, that was it. Did you even have email? Did you get email them back and forth?
Steven Jack Butala:
There’s email.
Jill K DeWit:
Okay. There was email back then, but there’s no phone number.
Steven Jack Butala:
There was contact.
Jill K DeWit:
Right.
Steven Jack Butala:
And that was the deal. And it worked fantastically well for a decade, like millions and millions of dollars we made. And …
Jill K DeWit:
Do you think you could have made more though?
Steven Jack Butala:
Oh my gosh.
Jill K DeWit:
That’s my point.
Steven Jack Butala:
We would have times ten.
Jill K DeWit:
Well, let me back up. You’re painting a beautiful picture, which I understand.
Steven Jack Butala:
It’s not possible to do this anymore.
Jill K DeWit:
Okay. Well, I even think that I would argue that you could have done better even.
Steven Jack Butala:
I think we would’ve made 10 times more.
Jill K DeWit:
Thank you.
Steven Jack Butala:
If Jill was involved …
Jill K DeWit:
And you had a phone number.
Steven Jack Butala:
Instead of the partners that I had at that time and where she was engaging these sellers, the way she does now and engaging the buyers.
Jill K DeWit:
Right. So here’s … Thank you for that story. I wanted you to share, really the point was, it would’ve been better if we had a phone number. There’s just so many things you’re missing by not talking to people.
Jill K DeWit:
Let me just give you a couple of examples here. Like I have three points. One is every time the phone rings, that’s an opportunity. It could be a seller. It could be a buyer. You never know who’s on the other end of the phone. It could be the neighbor who saw your sign in the ground, who wants to buy it. I mean, dream it up. It could be you send something to record, and I mean, we put our phone number on everything now. Even when we send in dates of recording, I want to know if there’s a mistake and because they’ll call you back and give you a nice opportunity to fix it and not have to go through the whole process. I’m going to mail it back to you with the form letter. You got to redo everything, mail it all in. When all I need is an extra check for 25 cents. Something silly like that. So it’s just so much you can capture on the phone.
Jill K DeWit:
Number two, it is the very best way you can forge a relationship with a broker, with a seller, with a buyer, having that phone time. And I don’t mean a half hour phone time. You can do it in five minutes or less, have a nice relationship. I have a beautiful example of, I sent out some neighbor letters for a property, because we are trying to get, we have legal, it’s physical access, but potential buyers are saying they really want legal access. I’m not going to go do it. But you know what? I’ll make sure that it’s possible. I can send out a couple neighbor letters and talk to the neighbors and get them all on board. And then I can say, “Here’s the deal. Bob and Mark have all agreed it’s going to be fine, if you want it, and here’s their numbers and we’ve all talked.” That’s all it is. Right?
Jill K DeWit:
But also in the conversation when I send out neighbor letters, I also put in there, Hey, by the way, if you want to buy it, let me know. Well, sure enough. First, first, there’s three neighbors. First one emailed me back right away and said, “Sure, no problem.” Second one called me. And so I called them back. And I was doing something or I would’ve answered the phone, but anyway, I promptly called them back, as you should. And we had a quick conversation. It was so funny. In the conversation, he went from being, “I’m not going to give you access. I don’t want anybody doing this.” And I said, “Look,” so I had a nice conversation. I said, “Look, I’m not here to make your life difficult. It’s going to happen anyway. You earlier mentioned that you maybe would be interested in the property. What do you … Let’s talk about that.”
Jill K DeWit:
And so we’re both, I’m going to get access and/or maybe sell it to him at this point. We both have stuff to, we both, I said, “I’ll think about this. I’ll think about this price. You think about this proposal I just gave you. We’re going to talk in two days.” He’s like, “Great.” And I couldn’t have done that if I didn’t talk to him on the phone.
Steven Jack Butala:
This makes me more attracted to you.
Jill K DeWit:
Oh thank you. I really said, “Josh…”
Steven Jack Butala:
She just makes it happen.
Jill K DeWit:
I said, “Josh, I’m not …”
Steven Jack Butala:
Jill gets on the phone and makes stuff happen.
Jill K DeWit:
I’m not trying. And I said, “Josh, look, you and I both know, in this state, as in most states, you can’t withhold access, so it’s going to kind of happen anyway. And the road’s there.” So, and I even said, “Look, I’d rather just give you $1000, because it’s going to cost like $2000 to get it done legally.” And I said, “I’d rather just give you $1000 and you say, okay, and then I don’t have to go that step.” He’s like, “Yeah, that kind of makes sense.” Because I’m going to spend $2000 and you get nothing and I’m still going to get the access. He’s like, “Yeah, you’re right.”
Steven Jack Butala:
And then he is in the loop too.
Jill K DeWit:
Yeah.
Steven Jack Butala:
Then he’s like, “Okay. Put it four more feet over here, please.”
Jill K DeWit:
Yeah.
Steven Jack Butala:
That kind of stuff.
Jill K DeWit:
Exactly. No big deal. So, and then my third point is being on the phone and why I carry it around is it’s the quickest solution to make sure you’re on the same page. I am 100% sure every one of us has had situations where there’s email confusion. You’re like, that’s not what I meant or what do they mean? There’s just some confusion in the wording because you can’t hear it in an email. Things can be confused and taken out of context. So instead of firing back that email accusing somebody of something or whatever it is, pick up the darn phone and get on the same page. And it’s usually better than you think it is.
Steven Jack Butala:
Absolutely. I agree with that. I was just going to say that, you know the thing is, if they like you and Jill’s an expert at this, then they’re going to, eventually, they’re going to work with you.
Jill K DeWit:
You know what?
Steven Jack Butala:
It might not happen immediately. But … Go ahead.
Jill K DeWit:
I like your comment because let’s take it the other way, especially if they don’t like me. If they like this guy, you know what? This guy didn’t like me. You know why? He knows the guy that I bought the property from. He knows what I spent. Apparently they talked. Not kidding. He knows what I spent.
Steven Jack Butala:
Of course.
Jill K DeWit:
So he came in hot, not liking me. But you know what, at the end of the conversation he did like me.
Steven Jack Butala:
Of course.
Jill K DeWit:
And now we’re going to work this out. So I like it too. If someone doesn’t like you and you’re getting that vibe, that’s all the more reason to get on the phone with them and calm everything down and say, and like I said, I’m not trying to make your life difficult. I’m not trying to be hard. I’m just trying to … This is my business. How can we … Let’s get this together. I don’t want the wrong … I’m not going to sell to some jerk too.
Jill K DeWit:
And then what’s interesting about this story is I had a seller. We were going through escrow and the seller, and I told this guy. I totally was truthful. I said, and you may have met this guy traversing back and forth on the property. I said, “This guy was a jerk.” He wanted to change the purchase price at the last minute. And I wouldn’t have it. That’s not how I roll. What I promise, I follow through on. I said, and that guy, I said, so that guy, I won’t sell to him. Because I’ll make sure you don’t get a neighbor like that. So by sharing that too, the guy loves me. He’s like, well, thank you. You know?
Steven Jack Butala:
Sure.
Jill K DeWit:
So I’d rather sell to you, it’s your, just to expand your property, have 10 more acres kind of thing. So anyway, those are just three examples and points I want to make about the role of the telephone in your land business. It’s very important. Please have your phone number out there. You’ll know, sure, you’re like, oh gosh, but I get calls all day from all kinds of tire kickers. Yeah, you do. So what? Get used to getting them off the phone and identifying that they’re tire kickers and sending them on their way because for every four tire kickers, you probably get one really good solid buyer. And I don’t want you to miss those phone calls.
Steven Jack Butala:
Being on the phone is unavoidable in this business. I’m just being, this is true time. I successfully avoided it, but it came to a screeching halt in large part because I refused to have an open mind about it. And Jill and I cranked it up again times 10. So if you’re like me and you just can’t stand the phone part of this, you’re going to have to find somebody. Either you to suck it up and do it for a while until you’re successful enough to find somebody that’ll do it for you or it’s not going to work.
Jill K DeWit:
How often do I come to you and say, I know why this person’s selling to us. I know why this person’s buying from us.
Steven Jack Butala:
Yeah.
Jill K DeWit:
Because we answer the phone. Sometimes, that’s going to make or break your business.
Steven Jack Butala:
Yep.
Jill K DeWit:
How many times do you call the bank and you’re frustrated, right? Because you can’t get someone. There’s a lot of shift in a not good way for the planet to automate this stuff and even other land sellers. So you know what? You guys, you’re missing the boat if you don’t have somebody in place. If it’s not you, get somebody in place.
Steven Jack Butala:
You have to realign your thought process on this because, and Jill said it earlier. You need to look at when the phone rings, an opportunity, not a pain in the butt. And especially this day and age, with cell phones and all the spam calls you get and just the terrible stuff that goes on, just throughout a regular day.
Jill K DeWit:
Yeah. So what.
Steven Jack Butala:
Half the calls you get just in a regular day are spam calls trying to sell you something. And so you got to get over it. You have to answer the phone because two or three of those calls, if you send the right mailer out, are going to be massive profit opportunities for you.
Jill K DeWit:
Right. Happy you could join us today. Five days a week, you can find us on the Land or House Academy Show.
Steven Jack Butala:
Tomorrow, the episode on the House Academy Show is called …
Jill K DeWit:
Due diligence for off grid SFRs. Is that right?
Steven Jack Butala:
Yeah.
Jill K DeWit:
Okay. Got it.
Steven Jack Butala:
You got it.
Jill K DeWit:
Whoa. Tomorrow’s show is 1700.
Steven Jack Butala:
Yeah.
Jill K DeWit:
Holy moly. I got to pause on that for just a second.
Steven Jack Butala:
Yeah. 1700 episodes.
Jill K DeWit:
And that’s not, we didn’t start. I mean, we started at episode zero by the way. And then episode one, two, three. So yes, we have been sitting next to each other doing these for 1700. Wow.
Steven Jack Butala:
And we keep … You’d think you’d be getting better at it as we go.
Jill K DeWit:
It’s pretty awesome. Yeah. I know.
Steven Jack Butala:
But I don’t think that’s what’s happening.
Jill K DeWit:
No. No changes. So.
Steven Jack Butala:
You are not alone in your real estate ambition.
Jill K DeWit:
That’s funny. Remember, if you have not gone back, listener, and found those earlier episodes, it’s comical, like where I’m sitting at my desk in this little office. Remember that? And it’s a different computer in front of me too. Like it was … That’s …
Steven Jack Butala:
We’ve been through a lot of changes.
Jill K DeWit:
Going on seven years ago. Were you just, we’re just kind of … You’re asking me about my deals and we’re just kind of gabbing and some of those shows are like 45 minutes long. Were so darn funny. And I was, oh, this is the best part. I was never supposed to be his co-host. I was the fill-in person. And then I became the co-host because I was the only one I would show up consistently.
Steven Jack Butala:
We would book people for the show and they wouldn’t show up. And so here’s Jill again.
Jill K DeWit:
Yep.
Steven Jack Butala:
Then when I actually did book somebody, everybody would pipe in and say, why aren’t you doing this with Jill? Is it over?
Jill K DeWit:
God. That was so funny.
Steven Jack Butala:
We finally worked it out.
Jill K DeWit:
We did. That was good. Thanks for tuning in. And if you’re a Land Academy member, make sure you are communicating with us on discord.
Steven Jack Butala:
We are Steve and Jill.
Steven Jack Butala:
Information …
Jill K DeWit:
And inspiration.
Steven Jack Butala:
To buy undervalued property.
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