Accurate Mailer Pricing in this Hot 2022 Real Estate Market (LA 1754)
Accurate Mailer Pricing in this Hot 2022 Real Estate Market (LA 1754)
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 are going to talk about accurate mailer pricing in this hot 2022 real estate market.
Jill K DeWit:
Yep.
Steven Jack Butala:
There seems to be, as there always are, Jill and I used to joke, and we still joke in Career Path, all questions lead to pricing, or answering your phone. In fact, there’s Career Path, you don’t need to go, price correctly and answer your phone.
Jill K DeWit:
There you go. By the way, you know how I know that this is all confused and screwy right now, because I have people sending me offers that are just too high.
Steven Jack Butala:
Yeah.
Jill K DeWit:
So we need to clarify a few things here, [inaudible 00:00:51] I hope we do.
Steven Jack Butala:
Do 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 I’d like you to know, we have a full-blown commercial printing company Jill and I own called offers2owners.com. And we set it up a lot of years ago, because we were unsatisfied with using products like Click2Mail, they just don’t really understand our very specific mailer campaign operations. So that was then, and now we do between 700 and 900 and offers, we get those in the mail every single month on behalf of our members, and non-members. Go to support@offers2owners.com, and check it all out.
Jill K DeWit:
JD wrote, “Just curious what everyone’s thoughts are on the following, does a buy for 25 to 35% of cost, and sell for 75 to 85% of market value, flipped 30 days or less, work for higher price land also?” I love this.
Steven Jack Butala:
This is a great concise question. JD was part of Career Path the last time, and I know what market he’s in, and yeah, of course it does. I can’t stress this enough, this is the moment of the podcast that you should really pay attention to, if there is one.
Jill K DeWit:
Yeah.
Steven Jack Butala:
In fact, this is the moment of the whole week, [crosstalk 00:02:12] save you some time.
Jill K DeWit:
Okay.
Steven Jack Butala:
Common sense applies here. If you look at a piece of property, and you can watch Jill do this multiple times on the Thursday call, if you say to yourself, “Oh, I’m buying this. The real estate’s great, it’s got all the six A’s, the price is amazing.” I can tell you right now, at the purchase price that it’s been accepted on the mailer of $30,000, and there’s immediate comps in the area for 100 to $200,000, or whatever the numbers end up being, we’re buying it. So how do you arrive to that point? How do you actually arrive to just being confident enough, and comfortable enough to say, like we all do on the call, Laurie and Brandon, and you and I that, “Yeah, I’m buying it and there’s no doubt about it. Let’s open escrow.”
Jill K DeWit:
I know-
Steven Jack Butala:
Experience.
Jill K DeWit:
Yeah, they were going to say the same thing. Good, yep.
Steven Jack Butala:
How do you get experience if you’re brand new? By watching the library of content that Jill and I have put together, thousands of hours, literally thousands of hours of us reviewing people’s deals.
Jill K DeWit:
That’s a good exercise, you know what I would do? I would watch the Thursday calls. They’re all recorded for you, our members, and I would go through, as we’re doing the, Would You Do These Deals? I would pause it on the video, and then kind of guess what I think my answer would be, and then let us, you and I, weigh in.
Steven Jack Butala:
Yeah.
Jill K DeWit:
How we do it is, people submit, they put in the state county APN, purchase price that’s accepted, what they think they could sell it for, and then any details, like is there power? Is there a well? Is there some great attribute? Whatever it is. They put all those details in there, or is there something, like we need to know about, here’s what’s going on with the seller, the whole story. So then we can quickly go, “All right, let’s look at this together.” And then we pull it up, we look at it, like you said, and then I would pause it right there, I would do my own little, “This would be good, this is how you get to get good at this.” Do my own little assessment in five minutes or less, and then say, “All right, I think Jack and Jill are going to say this.”
Steven Jack Butala:
Yeah.
Jill K DeWit:
Or, “I think they’re going to say that.” And then see how close you are.
Steven Jack Butala:
You have to get to the point where you’re completely applying your own common sense-
Jill K DeWit:
Yeah.
Steven Jack Butala:
About whether or not you should buy the property, and how much you should sell it for. Which leads me to the content of today. Today’s topic, accurate mailer pricing in this hot 2022 real estate market. This is why you’re listening. I’ve said this before over the years, mailer pricing, believe it or not, after you get the technical skills down, which is you just watch 3.0, chapter four in Land Academy 3.0, just a couple of times, and you can get the basics down pretty quickly. After that, it’s more art than science, which really messes with certain types of personalities.
Steven Jack Butala:
I’m a former accountant, we have a ton of engineers and pilots in our group that come from this from a technical angle, and for most of them that answer’s not good enough for them. They don’t want to hear about art, they want to hear about applications in science and applying rules to get a mailer in the mail that’s correctly priced.
Steven Jack Butala:
And so while both things are important, in the end, it’s exactly what JD was asking here in the question, you’re going to have to decide, at the very end of the mailer process, if you’re going to go into a market and price your mailer at 35%, or 60% or 75%. What I think, and this ends up happening is that somebody listens to a podcast from about two months ago, doesn’t do enough research, and just prices a mailer at 70%, instead of really looking through the mailer and saying, “I set these mailers up so that when you go in there, you can hit seven zero, and now it’s price is 70%.” And then you can go down and test 10, 20, 30, 40 mailers long before you could spend any money on postage.
Jill K DeWit:
Right.
Steven Jack Butala:
And then go through the, Would You Do This Deal Process? As if somebody signed to the offer and sends it back.
Jill K DeWit:
Can I please clarify-
Steven Jack Butala:
Sure-
Jill K DeWit:
Some of this?
Steven Jack Butala:
Sure.
Jill K DeWit:
Okay, so here’s the thing, we are only using numbers north of 50%, for sure things, and for very specific nichey things that we need property for, not the normal Land Academy way, and here’s why, I’d rather you buy for 3,000, and try to sell for 10,000. Because if six things go wrong, you’re fine, but if you try to buy for 7,000, and sell for 10,000, now we’ve got a problem. Because what if three things go wrong? You did something like, “Shoot.” Now you’re worried, and by the way, you’re working really hard, because you goofed up some stuff, and now you’re like, “Great, I made $500.”
Steven Jack Butala:
Yeah, so let me be super clear, the only reason you would ever price a mailer-
Jill K DeWit:
Thank you.
Steven Jack Butala:
Between 50 and 70% is because you have so much experience in that market, and the market is so hot, how do you know it’s hot? How do you see if a market’s hot? Because you know, because you-
Jill K DeWit:
Right.
Steven Jack Butala:
Have so much experience buying and selling, or tracking, micro-tracking properties that come up on the market and go back down, go up, how long days on market have intricate 10, 20, 30, 40, maybe 100 hours of research into two or three or four zip codes, and then you’ve been there.
Jill K DeWit:
Right.
Steven Jack Butala:
You’ve driven through these zip codes, you know the difference between this block, and this block, and who’s building what, and why. Then you can comfortably go in and say… It almost becomes like a house mailer, an SFR mailer where it’s like, I know these properties are selling for $500,000, if I get one for 400, which is 75%-
Jill K DeWit:
Right.
Steven Jack Butala:
I know I can sell it for 500 the next week.
Jill K DeWit:
That was the exact thing too, and the margin makes sense to you. For us, it’s got to be $100,000 or more, or I’m not going to do it, I’m not messing with it. I know it’s funny, I just got a deal in today that I haven’t even really looked at, it’s somewhere in Idaho, I can’t remember, it’s some serious [inaudible 00:08:32], where it’s buying in the low 400, because a guy thinks he could sell it for 650. So I’m like, “All right, I’m going to take a look at this.” Because then those numbers make sense.
Steven Jack Butala:
Right.
Jill K DeWit:
But buying for 40, and selling for 60, I’m a little worried about that one-
Steven Jack Butala:
Me too.
Jill K DeWit:
Too. So 400 to 600, all right, that-
Steven Jack Butala:
Yeah.
Jill K DeWit:
If it goes all wrong, and I don’t make 200,000, I make 100,000, I’m okay with it.
Steven Jack Butala:
Me too.
Jill K DeWit:
I’m good with that.
Steven Jack Butala:
And so yeah, that’s Jill’s experience coming up. I can’t stress this enough, if you don’t have any experience, and you’re doing this-
Jill K DeWit:
Hang out with us.
Steven Jack Butala:
This is new. Well-
Jill K DeWit:
That’s why you’re here.
Steven Jack Butala:
Well, don’t price a mailer at 60 or 70%.
Jill K DeWit:
No, you don’t really-
Steven Jack Butala:
It’s not for new people.
Jill K DeWit:
Because I see people ax selling, that’s kind of why I wanted to bring this up to date too for me is, we still get mailers, not as many as you would think, it’s funny, there’s not a lot of us out there, but I get random mailers for property that we own, and I love looking at them, seeing who it is. And it’s funny, I just had one from a sweet couple from the live event who brought me chocolate, do you remember that?
Steven Jack Butala:
No.
Jill K DeWit:
You remember Dave and Christie?
Steven Jack Butala:
No.
Jill K DeWit:
Oh, okay, all right. Anyway, I got an offer, if you still listen, Dave and Christie, last name starts with A, I got an offer from you guys, and I didn’t look at the number, but sometimes they’re priced too high, I’m like, “Shocks.” This is not you guys, Dave and Christie, I know you, but from other people that are new, I’m like, “I can help you. One’s a little too high.”
Steven Jack Butala:
Yeah.
Jill K DeWit:
And sometimes I write, I had one that I wrote on it, I’m like, “I bought for this, and sold for that, you’re a little bit off.” And try to help the person.
Steven Jack Butala:
Let me end on this, because this is a very, very, very popular topic in Career Path-
Jill K DeWit:
Yeah.
Steven Jack Butala:
It’s a very hot topic, and on the Thursday call, people are always asking these questions. This is a very advanced thing that Jill and I do when it comes to 75% pricing offers, you should stick to the age-old Land Academy model, and if you’re concerned about getting mailer response, then stick to the 35% model, just send out a ton of mail. I think that mailer efficiency is still a topic, I don’t know why, but it still is. Mailer efficiency is not something that should enter your mind.
Jill K DeWit:
Right.
Steven Jack Butala:
You should be spraying the world, after you’ve qualified it, run the red, green, yellow test and do all that, once you’ve qualified it, you’ve got good pricing spray it.
Jill K DeWit:
Sounds gross, but okay.
Steven Jack Butala:
I know. Spray it with a hose, that’s what I mean.
Jill K DeWit:
All right.
Steven Jack Butala:
Wow, Jill. Right to gutter.
Jill K DeWit:
No, I’m just saying, just an interesting choice of words. We’ll end it on that. Happy you could join us today. Five days a week, you can find us here on the Land Academy Show.
Steven Jack Butala:
Tomorrow, episode in the Land Academy Show is called Coaching Real Estate Agents About Our Land Business, You Are Not Alone In Your Real Estate Ambition.
Jill K DeWit:
There’s a lot of coaching that still goes on. You know what’s kind of funny? Six months ago, I was bragging about all these great land agents, and there’s more of them, and it’s awesome, and we’re doing great together, and then the last few months, I’ve had some duds.
Steven Jack Butala:
Yeah.
Jill K DeWit:
I’ve literally had to tell my transaction coordinator, “I don’t think this person’s into it, see if they want to get out of trying to sell this, because I don’t think their heart’s in it.” By the end of the day, the agent sent me the… Canceling the listing, they’re like-
Steven Jack Butala:
Wow.
Jill K DeWit:
“No, we don’t want to do it.” I’m like, “What? Is it-”
Steven Jack Butala:
Well, I mean, actually that probably saved you a ton-
Jill K DeWit:
Oh, totally.
Steven Jack Butala:
Of time. It’s like, “Thank you for telling me.”
Jill K DeWit:
Yeah. One agent said was complaining about [inaudible 00:12:14]. Well, actually, I’ll save it for tomorrow. Thank you for tuning in. Hey, and by the way, Jack and I are really aware, because this was us at one time, that not everyone has a couple hundred grand lying around to buy property. So don’t worry, we, and our members fund land deals every week, and just check out landfunding.com. And I was saying, it’s not just us, us and our community have, oh my gosh, millions.
Steven Jack Butala:
Tens of millions of dollars-
Jill K DeWit:
Yeah.
Steven Jack Butala:
At our fingertips.
Jill K DeWit:
Exactly. So do not worry if you’ve got a good deal, the money’s there. So again, go to landfunding.com.
Steven Jack Butala:
We’re Jack and Jill.
Jill K DeWit:
We’re Jack and Jill.
Steven Jack Butala:
Information.
Jill K DeWit:
And inspiration.
Steven Jack Butala:
To buy undervalued property.
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