How to Split Land Parcels Toward Huge Financial Success (LA 1723)
How to Split Land Parcels Toward Huge Financial Success (LA 1723)
Transcript:
Steven Jack Butala:
Steve and Jill here. 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 how to split land parcels toward huge financial success.
Jill K DeWit:
This sounds like a lot at first.
Steven Jack Butala:
It is a lot.
Jill K DeWit:
I know.
Steven Jack Butala:
I like to divide the whole land business and the education process into high school and college. And so splitting property is your last year of a master’s degree and your first year of a PhD.
Jill K DeWit:
Okay, that’s kind of funny. And a lot of people come to us with an associate’s degree or they’re wrapping up their associate’s, or they’re thinking about their associate’s and they’re like, “I want to do this.” Hold on everybody.
Steven Jack Butala:
I’m glad you bring that up because, and I’ll tell you why they do that. Because for the same reason I originally said, “This is what I’m going to do, split property.” It’s that whole bottle case theory. You buy a case of beer for 12 bucks or $24. There’s 24 bottles in there, and you sell it for $3 each. It’s not hard to do the math that you can make $50.
Jill K DeWit:
Exactly.
Steven Jack Butala:
$50 net on a case of beer. So it’s the same thing with land. You buy 40 acres for $10,000. You split it all up into one acre parcels. This is all theory. And now you’ve got 40 properties you can sell for $5,000 each. That’s the intrigue.
Jill K DeWit:
I understand.
Steven Jack Butala:
Show me where to start, Jack. That’s what they’re saying. 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 did you know that Jill and I personally instruct a handful of new and existing land academy members in a live class called Career Path? We do this every quarter. If you’re buying, selling land and you think it’s your career, or you think you want it to be, give us a call.
Jill K DeWit:
I would like to add, we are open right now and enrolling for session number four, and it starts April 23rd. We are doing it now on Saturdays. I’m so excited. Go to landacademy.com/careerpath and you’ll find all the details there.
Steven Jack Butala:
This is not a commercial in any stretch. But I will tell you, one person a day is signing up for this. I expect that, what do we have? Typically 20 people.
Jill K DeWit:
I’m making it a commercial because it’s good. Why do you always say that?
Steven Jack Butala:
I hate commercials.
Jill K DeWit:
I know.
Steven Jack Butala:
I hate selling and all that stuff. That’s not what this is.
Jill K DeWit:
Okay.
Steven Jack Butala:
We’re here to instruct everyone how to buy and sell land.
Jill K DeWit:
Yes, but we need to inform you.
Steven Jack Butala:
To a huge amount of success, so.
Jill K DeWit:
There you go. All right, Greg wrote, “I was wondering for those of you that send out neighbor letters first, how much time do you usually wait after sending the letters to list with a broker if you think you’re not getting any interest from the neighbors?
Jill K DeWit:
I’m getting ready to close, and I guess I should get a drone video first. Send neighbor letters, post on Facebook, et cetera. And then the last step would be to list with the broker if none of that seems to get much interest. Or maybe I have it all wrong.
Jill K DeWit:
Also, when you do commit to list with a broker, you owe them commission no matter where the lead comes from. Right?” Okay. So first things first, I’m just jumping in here.
Steven Jack Butala:
I’ll comment at the end if it’s necessary because I know where you’re going to go with this.
Jill K DeWit:
I love where you’re going with this. A lot of properties are fit into this model. And I love the neighbor letter, get the drones, get the pictures, market it yourself, try it. I would give it 30 days honestly. And if you’re not getting the traction that you need to get, then you can decide, do I want to keep on working at it or do I give it to somebody else that are going to get on the MLS, and they might have a buyer’s pool? Fill in the blank kind of thing.
Jill K DeWit:
That’s what I would do. Because part of it is what you’re doing right now is what a good broker would do. One of their first steps would be to do neighbor letters and things like that. I like the path that you’re going down. And the second question about a commission. Technically, if you really read the paperwork and the fine print, not only… It’s very hard to prove where the leads come from, so let’s just put it this way.
Jill K DeWit:
I count on when I have an agent, even if something I did triggered them to reach out to the agent, I’m not going to go back and argue and fight it. I baked that commission into it and they’re going to get paid, because it’s the right thing to do.
Steven Jack Butala:
I agree with everything you said here, but I will add this, whatever you do, do it on every deal. Make sure it’s a machine. We’re teaching the third career path right now. We have some people in there who are very successful, but they fall in love with these properties, and then they roll around on the floor with these properties and everyone is treated like one of their children.
Steven Jack Butala:
And I really think that’s not a good habit to get into. I think you should just say it’s a machine shop part and you’re just stamping parts out, doing the same thing over and over and over again with very little variance in how you manage it.
Jill K DeWit:
I understand that. [crosstalk 00:05:03].
Steven Jack Butala:
My other comment is this, and Jill’s going to disagree. When you buy a property and you’ve bought it so well, and you love the property and you bought it for $30,000 and your real estate agents already looked at it. You’re a land person that says, “I can sell this in two weeks for probably 110 or 90,” or some number like that. Whatever the number ends up being. I personally, I’m not on the south side of this, Jill is.
Steven Jack Butala:
I would hire that person that day. And then I would say, “Oh, by the way, we’re going to do a bunch of neighbor letters, try to make your job easy.” And pay the fee. There’s trends that happen in Discord among land academy members and on the Thursday call and all the spaces that Joe and I have created for land academy members including where these questions come from.
Jill K DeWit:
To communicate.
Steven Jack Butala:
There’s this trend I’m noticing over the last month or so that the real question that everyone’s asking is how do I save money? And that’s what’s rooted in this question too. And for the rest of the week, there’s a lot of questions that are… Jack and Jill, you guys put these programs together and there’s, I don’t know, 30 or 40 or 50 combined hours of education and maybe 60 or 50 or 60 years of combined experience that you have, but I’m going to do it my way because I’m not sure. I’m going to send out 800 letters just to see, even though we say adamantly do not do that, it’s a way to fail quickly.
Jill K DeWit:
No, I’m just listening.
Steven Jack Butala:
Just rolling her eyes.
Jill K DeWit:
No, it’s okay.
Steven Jack Butala:
This is not the place to save time or money.
Jill K DeWit:
You’re just going deeper than I was… But I agree with you. Hold on a second. I agree with you. Listen, you know what? This is the thing. You know how to buy it, right? Bake all this stuff into your profit, account for it, make your life easy and do a bunch of them.
Steven Jack Butala:
Well said.
Jill K DeWit:
Thank you. Took me one sentence.
Steven Jack Butala:
Way faster than me.
Jill K DeWit:
When is that ever the case? Wow. Steve just dumped 45 seconds of stuff and Jill did it in 10.
Steven Jack Butala:
I’m not addressing this question at all. What I’m addressing is this concept. I know you guys say this to do this, but wouldn’t it be better to do this? No, it would not be better to do this. Should I do it over here like that? No. Why? But we have already figured-
Jill K DeWit:
But if I get my family that goes back to… if I look at my whole, “Hey, we’re all getting together for a family reunion next month.” I just figured we’re going to spend Saturday addressing envelopes and save some money. Really?
Steven Jack Butala:
[crosstalk 00:07:50]. When I was really young, I had to lick a bunch of envelopes for some reason.
Jill K DeWit:
Did you get paper cuts on your tongue?
Steven Jack Butala:
I didn’t get paper cuts, I just got high. Because back then it was like-
Jill K DeWit:
They make things that you just roll along the [crosstalk 00:08:03].
Steven Jack Butala:
Not in 1978, they didn’t.
Jill K DeWit:
Okay.
Steven Jack Butala:
Today’s topic, How to Split-
Jill K DeWit:
You were 11.
Steven Jack Butala:
I know. Child labor. Detroit’s [inaudible 00:08:14]. How to Split Land Parcels Toward Huge Financial Success. This is the meat of the show. This isn’t hard math. I addressed it very early in the podcast. It’s the bottle case theory. You buy a case for $24, you sell each bottle for $3 and you’ve made $50 net or so when you’ve got the case all sold out.
Steven Jack Butala:
The same thing applies to subdividing or splitting land. Here’s the deal. It’s very viable Jill, and I do it all the time. I can’t remember in recent professional history when she and I haven’t had some split going on in our lives in the background.
Jill K DeWit:
Not personally. Let me just back up.
Steven Jack Butala:
Let’s rewrite the title.
Jill K DeWit:
It’s not family members.
Steven Jack Butala:
Let’s rewrite the title.
Jill K DeWit:
That would be funny.
Steven Jack Butala:
How to Split Your Marriage Toward Huge Financial Success.
Jill K DeWit:
That applies. That’s the real topic today. Oh my God.
Steven Jack Butala:
You know what? Jill and I literally, I’m just going to leave it at this. Jill and I literally have success in this area.
Jill K DeWit:
Yeah, we do.
Steven Jack Butala:
We’re separately successful splitting up a marriage and then going on to get rich.
Jill K DeWit:
Yes. Oh my gosh. That’s great.
Steven Jack Butala:
That’s the whole show. It’s TMI too.
Jill K DeWit:
True. Okay. That’s great.
Steven Jack Butala:
Get your pen and paper out, here’s the deal. You can only do this where counties or municipalities are really, really encouraging you to do that. Like waving the American flag saying we are for freedom and we want you to be free and split some property up.
Jill K DeWit:
And make money in our county.
Steven Jack Butala:
And increase our tax base. We want to take one assessor’s parcel number and divide it up into five or six or 10 or whatever they allow. In a lot of cases, there is no limits. But what they usually say is we’re all about it, let’s just all do it together and let’s do it responsibly.
Steven Jack Butala:
For instance, let’s not take 4,000 acres out in the absolute middle of nowhere where there’s no roads, there’s no infrastructure whatsoever, and then resell it fraudulently on the internet. That’s what they don’t want, and none of us want that. We’re in the land business, we don’t want that either.
Jill K DeWit:
We want responsible, respectful, dividing.
Steven Jack Butala:
And so on your checklist, number one is find out where municipalities encourage this and have an actual process online or that it’s documented somewhere to get a parcel spit.
Jill K DeWit:
What’s the first step, Jack?
Steven Jack Butala:
To take a look around.
Jill K DeWit:
I’d say make a phone call.
Steven Jack Butala:
I think it’s to take a look around in the internet and find out where there’s a lot of property that’s existingly for sale. Land that’s all adjacent to each other and you click on it, and you’ll see a prop map that, and you’ll see in the description that the person who divided it wrote. “Hey, we split this property up.”
Steven Jack Butala:
That’s a real good indication. This is maybe two hours on Zillow. A real good indication that area encourages or allows for parcel splits. You’ll be shocked. There’s no rhyme or reason about what municipalities allow it, and who doesn’t.
Jill K DeWit:
Usually they have an SOP about what has to get done. These forms have to get filed. This has to be applied for, you have to have a survey, you go out there, measure and figure out where the roads would go, and how to split up the APNs and how many you can do. There’s a minimum size, depending on what you want to build. And you can find all this information.
Jill K DeWit:
I’m trying to think about taking a step back. What I would think that, and you Land Academy members know what I’m talking about here. When you are getting ready to send out a mailer, one of the things we want you to do is check the county. See how responsive they are. If you have questions for the recorder, do they answer the phone? Do they have an online GIS? Can you pull up back taxes online?
Jill K DeWit:
You have your own little checklist anyway, because you don’t want to send on a mailer and they have it come back like, “Oh shoot, now I can’t get one in the county, I can’t get anything done. I have so many questions, I wish I hadn’t mailed there.”
Jill K DeWit:
So part of your checklist, I would say, add this in there. You’re you’re digging around on their website anyway. You’re already calling them. Add a list of things to do like, how hard is it to subdivide property in this county?
Steven Jack Butala:
And planning and zoning, we’ll be able to address your questions. And if you call planning and zoning and ask this question, “Hey, can you split property in your county? Do you guys allow it and encourage it? Because Jack said that on a podcast a couple weeks ago.” Their response is going to be click. Just hold on a second.
Jill K DeWit:
Or even how many have happened this year?
Steven Jack Butala:
Hold on. What you want to do is say, “I’m thinking about buying a piece of property, and here’s the APN. I’m wondering if I can split it the way that the guy down the street did. And I’m happy sir, to give you my APN and the parcel split APNs.” And he’s going to say, “Absolutely. I’m going to look those up right now for you and we’ll talk our way through it.” Please have an APN in your back of your pocket. Fact-finding missions and government local employees don’t mix.
Jill K DeWit:
I don’t know. I can Jillify it.
Steven Jack Butala:
I can’t. There’s no word such as Jackify it. They don’t want to talk to me, they want to talk to Jill.
Jill K DeWit:
What would Jackify it look like? It’s where when you put your middle finger up and walk away. That’s Jackify it.
Steven Jack Butala:
It’s me drunk in the gutter and somebody walking by saying, “I guess he Jackified it.”
Jill K DeWit:
That’s a new thing too. Oh my gosh. Car accident, Jackify.
Steven Jack Butala:
And Jill’s sitting in a mansion sipping tea. She Jillified it.
Jill K DeWit:
Me and everybody’s just drinking tea, having a good time. All right.
Steven Jack Butala:
So step one is to of course run in the internet out and find like [inaudible 00:14:37] results. Step two is Jill’s-
Jill K DeWit:
Get a pro.
Steven Jack Butala:
Call in. You’re going to call and say, “I noticed this guy did this and I want to do it soon. Where’s the instructions on how to do it?” And I think you’ll get a lot of traction if you approach it with an APN.
Jill K DeWit:
Can I even say this? Because I’m saying I’m doing it on the recon level. I could say what’s the minimum size?
Steven Jack Butala:
Well, they’re going to respond to it with a big list. Well, it has to be this is kind of zoning. The minimum size should be fill in the blanket, acre, acre and a half because that’s really to allow for a septic, waste management and then a well’s going to cost…. Then you got to do the math because especially right now, the cost of putting in these utilities is skyrocketing like everything else.
Jill K DeWit:
I understand.
Steven Jack Butala:
Then you really need to sit down and do the math and see if it’s all worth it. Because it’s going to take between a year, and best case a year and two years.
Jill K DeWit:
And that’s why this is for the end of your career. This is when you get bored, I’m going to wrap it up on this for me. This whole discussion is great. Now you’ve got some insight to this, you know what’s possible. You have an idea where to start.
Jill K DeWit:
We’re trying to plant this concept in your head. We’re getting detail, detail, detail. A, this is not the place for it. We can’t show you on screen what we could on YouTube. We’ll get to that. But the other thing is, this is for when you’ve already got your systems going, you’re making money. This is working. That’s working, you got agents over here, you got three different brackets of properties that you’re dealing with, and you’re like, “What should I roll in next?”
Jill K DeWit:
Even for us, we didn’t start with this. It would be crazy to start with this. Talk about getting discouraged and then getting out of the business right away. Because you’re like, “This is stupid, and we don’t want that.” That’s my last point, [inaudible 00:16:28].
Steven Jack Butala:
And it’s expensive. What you want to do is cut your teeth on buying and selling land, and you want to see if it’s for you. And you want to see how profitable it is. Do you want to buy property for $30,000 and sell for 60 without ever going there and just shuffling paper and doing a lot of phone work to get a deal done?
Steven Jack Butala:
This is buy for 60, sell for 200 or 300, but it’s going to take… Where do you get that $60,000 to buy it? You might as well forget about it for at least a year, maybe two years plus-
Jill K DeWit:
And don’t forget to bake in another 50 for all the stuff you got going on.
Steven Jack Butala:
[crosstalk 00:16:59], surveys and making sure that roads are in and all that. The whole world is packed on the internet. All the land people talk about this. This is how much money you can make. They’ve never done it. They don’t have any experience in it. And if they do have experience and they’re sugarcoating it, they’re just not telling the truth. They’re trying to sell you something.
Jill K DeWit:
Thank you.
Steven Jack Butala:
This is the truth here.
Jill K DeWit:
I appreciate that.
Steven Jack Butala:
Tomorrow?
Jill K DeWit:
Thank you for joining us on the Land Academy Show, five days a week. You can find us right here. That’s okay.
Steven Jack Butala:
I can’t read the teleprompter.
Jill K DeWit:
That’s all right.
Steven Jack Butala:
Tomorrow the episode on the Land Academy Show is, well, I interview former career path member who is crazy successful in Florida, Josiah Ronco. You are not alone in your real estate ambition.
Jill K DeWit:
I have actually not seen that interview.
Steven Jack Butala:
It was good.
Jill K DeWit:
Oh good. I’m so glad.
Steven Jack Butala:
It was good. We got some new software. We use Riverside FM now instead of Zoom. So it’s really clear-
Jill K DeWit:
Good.
Steven Jack Butala:
… and I’m going to go back and watch it.
Jill K DeWit:
I’m curious about the content.
Steven Jack Butala:
[inaudible 00:18:02]. We’ve done interviews in the past with people who are very successful at Land Academy, but uninterested in having anything other than basic wifi or in some cases just through the cell towers. It’s hard to listen to and hard to watch even for me.
Jill K DeWit:
Got it. You’re not telling me anything about what you talked about. You’re going to make me wait?
Steven Jack Butala:
With Josiah?
Jill K DeWit:
Yeah.
Steven Jack Butala:
Josiah’s smashing it out of the park financially. He’s got it figured out Florida. He’s deal funding on both sides. He’s getting funding. He’s deal funding for other people, and he’s getting funding from other people. He’s expanding out of Florida into other areas.
Jill K DeWit:
Great. That’s what I want to hear.
Steven Jack Butala:
And this is a musician. He’s a musician. You’d think it’s a former accountant or something. The way that he talks.
Jill K DeWit:
Was he in a hammock while you were doing this?
Steven Jack Butala:
In the beginning.
Jill K DeWit:
You got to watch this interview. Josiah’s a crack up. We love him. Thank you for tuning in. Hey, by the way, we want you to know, just and make sure you heard it here. That Land Academy 3.0 is out. It’s available. We love when we call it Catching Up With Land Academy.
Jill K DeWit:
Jack and I spent six months creating the most up to date educational program on the market to help you succeed at buying and selling land. It’s new for 2022. It’s got five hours of how to video. And if you are already a Land Academy member, you know about this, because you’ve got it for free. So if you want more information, email support@landacademy.com and they will help you figure out if this is for you. We are Jack and Jill.
Steven Jack Butala:
We are Jack and Jill. Information-
Jill K DeWit:
And inspiration.
Steven Jack Butala:
It’s about undervalued property.
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