Recovering HGTV House Flippers Make Great Land Academy Land Flippers (LA 1720)
Recovering HGTV House Flippers Make Great Land Academy Land Flippers (LA 1720)
Transcript:
Steven Jack Butala:
Jack and Jill here.
Jill K DeWit:
Hi.
Steven Jack Butala:
Welcome to The House Academy Show. It must be Wednesday, 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 recovering HGTV House Flippers and how they make great Land Academy, land flippers.
Jill K DeWit:
I love this. You know what’s funny, I was watching HGTV last night, as a matter of fact. You know what?
Steven Jack Butala:
Does it get better or worse, that channel?
Jill K DeWit:
It’s great. Because you know what? It is so fun, it’s so entertaining, and I’m not doing it. And it was funny because we were talking about one the other day too. Like, “That doesn’t even sound real.” I’m like, “You know I question it.” I’m sure some of it’s-
Steven Jack Butala:
No.
Jill K DeWit:
… probably not exactly-
Steven Jack Butala:
None of it’s real.
Jill K DeWit:
… accurate or real, but again, it is entertaining.
Steven Jack Butala:
Somebody told me in there, when we lived in Los Angeles, somebody from Hollywood said, “You know, reality TV is a style. It doesn’t mean it’s real.”
Jill K DeWit:
That’s true.
Steven Jack Butala:
[inaudible 00:01:00].
Jill K DeWit:
That’s actually really funny.
Steven Jack Butala:
The sit the way that some people film westerns, some people film reality TV.
Jill K DeWit:
Does the name start with a B?
Steven Jack Butala:
I don’t remember who said that.
Jill K DeWit:
Okay.
Steven Jack Butala:
I will say this that, the numbers that they flash on the screen about, “Oh, we bought this house, especially in Indiana, we bought this house for $5,000. The city was going to tear it down and we scraped it and put a new house up for $38,000.” How is that possible? There’s no stretch of, there’s no way those numbers can be right. You can’t put a new mobile home on a piece of property, I know this from recent experience, for less than 150,000 bucks. So, how you build a new house for 30,000 is just a crack up.
Jill K DeWit:
Exactly.
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. I’ve got to tell you, last year a ton of Land Academy members came to Jill and I needing extra help getting their blind offer campaigns in the mail. So, I took a look at how we personally send out mail with our key employees and ultimately, made the same people available to Land Academy members to get their mail out. We call it concierge data. It’s the exact same service I use with the same people that I’ve trained over the years to do our mailers.
Jill K DeWit:
Our staff.
Steven Jack Butala:
Our staff. A year later, hundreds of our members now are outsourcing their entire mail process with this product. Check out offers2owners.com and take a look at concierge data. See if it’s for you.
Jill K DeWit:
Erin wrote… Okay, I’m still running my red, yellow ring tests. I found out what appears to be some promising zip codes and decided to look at 12 months of past data. They look great in the last month but not so great for several months last year. See example. I saw that, what was there a minute ago. So, how much weight do you give to historical performance versus the last month or two?
Steven Jack Butala:
This is brilliant. A brilliant question. Do you look at just very recent data or the last two or three months? Or do you take a look at it a year back. Because this is kind of the experience that you’re having here, Erin, has flipped from my experience. Usually the most recent months, at least where we’re sending mail, are the best. They have the lowest days on market, the highest number of properties sold, and the lowest number of properties that are for sale. And all the ratios that were the red, green, yellow test that we run, the numbers are usually better. But if I saw a property or a market where, historically, something was really good, let’s say a year ago like you’re experiencing, and then not so much the last few months, that would cause me some concern.
Jill K DeWit:
Well, in this example, you said, they look great in the last month, but not so great for several months last year. So, it’s your example.
Steven Jack Butala:
Oh, okay, so I misread it. Yeah.
Jill K DeWit:
So you’re good.
Steven Jack Butala:
That doesn’t concern me at all.
Jill K DeWit:
Okay, good.
Steven Jack Butala:
I’m only concerned about what’s happened in the last, let’s say, six months max.
Jill K DeWit:
Especially nowadays. I mean, that’s what I look back, I’ll look back really current to, but usually you need to go at least six months to get some good quality data. But that’s, I love it.
Steven Jack Butala:
Last year was one of the strangest years we’ve ever experienced. All of us.
Jill K DeWit:
What I think Erin’s even asking too is, Am I nuts? Because I look back the last 12 months or so, and this area was not moving. Nobody wanted to go there. Nothing was happening. But right now, it’s hot. Am I seeing something that’s not there?” Is what I’m hearing. And I think that’s the weird times that we’re in right now, Erin. There are some places.
Steven Jack Butala:
In a good way. She means it’s a good, weird time.
Jill K DeWit:
Exactly. It’s a really good thing. You’re not nuts and you’re probably not missing it and if you, the way you’re talking with a red, yellow, green test, you know your stuff here,
Steven Jack Butala:
What you’ve got to remember and write this down on a piece, put it on your board if you have one in your office, this is all relative. And you are testing relativity from a time standpoint, not necessarily a geography standpoint, but I’m glad you’re testing both. If you need to, find out why. I mean, there’s markets that we’re in that your exact same thing that you’re describing are some of our primary mailing markets, because we’re riding the wave is crested and we’re up on the surfboard and it’s not, that wave’s going to eventually hit shore and you’re going to jump off the board. And so, riding that wave right now is where you want to be.
Steven Jack Butala:
Today’s topic, recovering HGTV, house flippers, make great Land Academy, land flippers. This is the meat of the show.
Jill K DeWit:
I love this. I love when this happens. I love, you know who you are, that are here that have had maybe lifelong careers, by the way, running construction teams and doing all kinds of things and your burnt out. A, your burnt out, a lot of you, and B, that you’re not making the numbers that you used to make. And C, you’re having trouble finding the property. I think what’s interesting, I think a lot of people come to us from some version of flipping houses because they need a better way to find properties. I personally think it kind of starts there, then they hear like, “Aah, so that’s how you guys are finding properties. Because I’m finding, I’m buying properties from people like you.” Yes you are.
Jill K DeWit:
There’s many people in our community that bought properties from us like houses. We’re just talking houses now. And they’re like, “Wait a minute. You know, how are you finding these houses so cheap? You’re clearly marking them up like X. I’m buying them from you. It’s still better than trolling the MLS. You got it for a great deal. There weren’t any agents involved. That was probably part of it. Yep. And now you’re passing it on to me. Now I’m doing the renovations and I’m off and running. So they have two choices, right? They could either keep buying from me or they could try to figure it out on their own and not many people do, but few of you have and you come and you’re like, all right, I need to know how to buy these houses better. And then once you get into our little world … I don’t mean to steal the whole show here, it’s okay.
Steven Jack Butala:
I want you to. But I still have a bunch of stuff to say, but you’re probably going to cover it all.
Jill K DeWit:
This is the progression of how it usually goes. You come here like, all right, I just need to learn how to buy these houses better and faster because I’m running out of inventory. Trolling the MLS stinks. I’m trying to do 18 things at once. If I could just send out offers in the subdivision that I’ve been working in this whole time, I know what I can do with these things.
Jill K DeWit:
But what happens is, you get into it and you realize what’s going on and how much, how great, we’re buying them and then we just mark them up and walk away and you go, “Wait a minute. You just made the same amount of money I did. And what you did, inside of 30 days, takes me, right now, six months to a year. Good luck finding the crews and keeping them motivated kind of thing, or the materials, or fill in the blank kind of thing. Like, wow.”
Jill K DeWit:
So, I have a lot of people that have done a little bit of both. They’ll keep the best ones for themselves. They’ll sell some of the other ones to other people in their community, the other flippers. You all know who you are when you’re all driving past everybody’s dumpsters in the driveway. You know, you all know. So, they sell some to them, then keep some. And then I’ve watched the progression go to, “I don’t want to do that anymore. I could sit at my desk. I could sit on the back of a boat and do this. I don’t have to show up every day at a job site. Wow.”
Steven Jack Butala:
I’m not aware of anyone who’s come to us, come to Land Academy from the house flipping or house renovation environment, who’s ever gone back.
Jill K DeWit:
Correct.
Steven Jack Butala:
Once they realize that buying the houses so cheaply, the way that we do or land … They then often expand back into land. They find out that they can make 20, 30, $40,000 a house or more, in a lot of cases, a hundred grand. That’s how we do house deals. We need to make a hundred thousand net. And then we don’t do any renovations at all. We just wholesale it, not wholesale, like the negative wholesale, but we buy the property. We close on it, just like with land. And we just sell it to somebody who’s going to renovate it.
Steven Jack Butala:
We sell it to the renovators. They become our customers, and repeating what Jill’s saying a little bit, but it’s really, really hard to argue with that. If you don’t have to pick up a hammer and you’re just shuffling a bunch of paper around making 50 to a $100,000 a lot, it doesn’t take long to make … you do 10 20 deals like that a year, which is not hard. Now you’re making over a million dollars and you’re not ever really going to see the site.
Jill K DeWit:
I’m a girl. So, let’s just, let me just give you the little truth time too. We’ve done that. You know what? And for a first couple times, I got to say, because I’m a girl, it was kind of fun. What color should I make the kitchen this time? I’m picking out the back splash. I’m picking out the flooring. I’m picking out the appliances. I’m picking out double ovens. I’m picking out all these things that I think would be great. Warming drawers. I’m having some fun. I’m putting chandeliers in the bathrooms where I want them. I’m making massive, awesome closets. That was fun first couple of times, then it gets really tiring, especially when you sit back because that’s what I’m trying to tell you. We did that. We went down that path with a lot of you saying, “I guess this is what we should all be doing now because we sure know how to buy it right.”
Jill K DeWit:
So that was the thing, we knew how to buy it right and now I just do the renovations. I had a general contractor, but I was still the designer and I still, I don’t care how great they are, you still got to babysit your own project, kind of thing. You can’t just go up say, “Okay, see you in 90 days” and it’s done, right? Oh, that would be funny. Nope. You can’t. You have to be there and often.
Jill K DeWit:
And because things change, things come up. They’re going to make decisions that, and you’re not there, they’re going to make decisions just because. You’re like, “Eh, close enough. They’ll never notice.” Nope. You need to be there, kind of thing. But when I took a step back and I came up from air, I’m like, “That was so much work.” I mean, it was more than eight hour days. By the time I get up and pack a sandwich, not kidding, I had a folding chair and a cooler and I’m either sitting on the job site or I’m in Home Depot because it’s taken all day to pick out doors and pick out windows.
Steven Jack Butala:
So think about this for a second. Think about what you’re really worth financially.
Jill K DeWit:
Oh my gosh.
Steven Jack Butala:
That’s not the good use of your time.
Jill K DeWit:
Nope. That was it too. Because there were times like … Hey, $50,000 is nothing to sneeze at. Right? Especially in the market we were working at here in the Phoenix area a couple years ago. That was good money for people. Doing one of those a quarter, or more, a lot of people would be really, really happy with that. But I’m like, “Oh I could make so much more money just sitting at my desk and working an hour a day.”
Steven Jack Butala:
There’s no part of that process I enjoyed. I’m not a girl. Here’s what I enjoy. I enjoy depositing a check at the end. That’s the highlight of the whole project for me. And then I quickly found out that we can write a check and then deposit a check inside a 30 day period for almost as much as we would have if you buy it right in the beginning using data.
Jill K DeWit:
And removing the construction part out. That was the point here.
Steven Jack Butala:
So then, pretty soon, Jill and I are doing 10 times the number of deals, just the two of us back in the day without ever having to renovate anything. And that’s when we were looking at each other saying, “This is how to do it.”
Jill K DeWit:
Then we took it to the new level, by the way. It was fun doing, we would do it with boots on the ground in other states and do the same thing. It’s basically doing our version of house flipping, which is we don’t move any walls or do any construction. We just mark it up and move on because we found it right. That was the best, best thing.
Jill K DeWit:
I love what my last point is. I love you people who are used to this. Because boy, do you understand the whole process and boy, do you understand what goes on. And you know real estate, and you know what goes to buying, and then you find us and it’s almost like, I have to kind of hold your shoulders and tell you, I have to, seriously, I have to hold your shoulders. I look you in the eye and say, “That’s all, no more. You don’t have to do that. You don’t have to do that. You don’t have to.” “What do you mean, I don’t have to go get a perc test and a survey and a this, and it. Oh, well I’ve got to hire the- I need to get this done, that done.” No, no you’re not doing anything you don’t need to. Don’t think about rocks on sale right now. I don’t need you to figure out your team and the timing. You don’t have to do any of those things. It’s so nice.
Steven Jack Butala:
Every career path, we have multiple people who are recovering from house flipping. And it’s a perfect skillset, because there’s the frustration. The frustrating part of this business is on site. The great part of this business, which is data and deal making and all of that can happen without any of the frustrating part. And it’s really fun for me to personally watch somebody transforming themselves from being a renovator to just buying and selling houses and getting there first.
Jill K DeWit:
I’ve found they sleep better. Their families are happier. Kids are thriving in school. The whole family life is just better.
Steven Jack Butala:
The trifecta is, and we have a guy in career path right now who’s, he owns a franchise flip houses. He’s tired of it. And he has owned and currently owns other businesses. He’s mentally set up to do this whole thing and he’s smashing it. He sent out a 50,000 unit mailer during career path. You can’t fail if you do that. He just gets it and it’s a pleasure to watch him mentally go through this, “Oh, I don’t have to do this stuff anymore.”
Jill K DeWit:
Yep. By the way, go to landacademy.com/careerpath and you’re going to get all those details too if you think this is for you. Happy you could join us today, five days a week, you could find us here on the Land Academy Show.
Steven Jack Butala:
Tomorrow’s Jack Thursday and I’m going to talk about deadlines, deliverables and communication. You are not alone in your real estate ambition.
Jill K DeWit:
Why does tomorrow feel like a team meeting?
Steven Jack Butala:
Well, I’ll tell you. I’m sorry, some of the stuff that I have to talk about is boring.
Jill K DeWit:
Sounds like a…
Steven Jack Butala:
That’s why you’re here.
Jill K DeWit:
Sounds like a team meeting we just had. That’s okay, I understand.
Steven Jack Butala:
You know what we forgot to mention? If you’re an interior decorator, you should find another podcast.
Jill K DeWit:
Maybe you are and you don’t want to be anymore. That’s okay. Seriously, no problem. Thank you for tuning in. Hey, we’d love to connect with you on clubhouse. Join Jack and I on the first and third, Thursday of the month at one 1:00 Pacific time. You know what that is? Tomorrow, by the way. So tomorrow, if you go on clubhouse, either search for us or search for the Land Investing Club, you will find us and we’d love to chat with you there.
Both:
We are Jack and Jill.
Steven Jack Butala:
Information
Jill K DeWit:
and inspiration
Steven Jack Butala:
to buy undervalued property.
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