Jack Thursday – How Most Decisions Come Down to One Number (LA 1766)
Jack Thursday – How Most Decisions Come Down to One Number (LA 1766)
Transcript:
Steven Jack Butala:
Steve and Jill here.
Jill DeWit:
Hello.
Steven Jack Butala:
Welcome to the Land Academy Show, entertaining land investment talk. I’m Steven Jack Butala.
Jill DeWit:
And I’m Jill DeWit, broadcasting from the Valley of the Sun.
Steven Jack Butala:
Today’s Jack Thursday, and I’m going to talk about how most decisions come down to one single number. I have to say, if numbers are not part of how you make decisions, and you’re really making decisions based on how you feel, you’re in for it.
Jill DeWit:
I can’t wait to hear more of this [inaudible 00:00:36]
Steven Jack Butala:
Before we get into it, let’s take a question posted by one of our members on the landininvestors.com online community. It’s free. Please don’t forget to subscribe on the Land Academy YouTube channel. Comment on the shows you like. It actually helps us produce better content.
Jill DeWit:
John wrote, “If you’re new, your first year is most likely going through some of the growing pains of answering some of these questions for yourself.”
Steven Jack Butala:
This is very long, and this is okay, and it’s very … It’s not a question.
Jill DeWit:
I can talk.
Steven Jack Butala:
John is a … Let me set this up a little bit.
Jill DeWit:
You don’t like how I’m reading it.
Steven Jack Butala:
No, I love how you read it.
Jill DeWit:
Oh, okay.
Steven Jack Butala:
It’s just really long and I don’t want you to burn through it. This is a long … It’s not a question, what John did here, because there are a lot of questions. He decided, thank you, and this is why I put it in the show, to share his experience after a few years of sending mail successfully, and the things that he learned his first year that he’s sharing with about, you know, get over it.
Jill DeWit:
Cool. I kind of gathered that.
Steven Jack Butala:
Okay, good.
Jill DeWit:
All right. So he says, “If you’re new, you’re going to go through some growing pains and answering some questions for yourself. You’re going to make some mistakes. You’re going to have some mailers that don’t go as planned and deals that fall through, et cetera. You’re looking to weather those storms and make mistakes so you can come out of the first year knowing what you need to accomplish in order to succeed. If you have a budget for 30,000 mailers, to see if this works, I know it’s tempting to jump in with both feet and send out a bunch of mail, but I would suggest spacing that out over a year so you’re learning the cycle of this business. Mail goes out, hate wave and missed price offers come in a week, and then the core of the campaign happens over the next couple months, and then offers trickle in indefinitely. Rinse and repeat. It’s not foolproof, but understanding where you are in the response window for your mailer campaign is important, because over time you’ll get a sense of what type of seller responds at different stages.
Jill DeWit:
“And more importantly, if a campaign deviates too far from the norm, it’s good to reflect on where you’re targeting your pricing. If every time you send out 3,000 letters in California, you’re going to get about X hate, y no-deal leads, and then Z actual deals. And one campaign goes completely flat or turns into an ATM, you’ll have that knowledge of previous campaigns to say, ‘Let me pause and dig into what happened with this one.’ If you send out 30,000 offers all at once and nothing for another six months, it’s really hard to get a feel for what’s happened and what can be improved on. I partner with various members on campaigns, and another thing I notice is a batch of mail going out is like a birthday or a lotto ticket or spring training.”
Steven Jack Butala:
That’s how I feel about it.
Jill DeWit:
Yeah. “That excitement for what could come, starting from a clean slate, puts wind in people’s sails, versus trying to circle back on a previous mailer and looking to salvage it or wring it dry. That’s definitely part of the business, and important to see if you missed something, but you always want that new mail going out to keep the spirits high. No mail going out is the quickest way to ruin in this business.
Jill DeWit:
“And lastly, I’ll get off my soapbox, mailers have a mind of their own, and it’s maddening trying to figure out why two perfectly priced mailers in similar settings perform so differently. I’ve had campaigns I’ve bet a kidney on succeeding spectacularly, fail, and others I send out, zero hope of success, pull in multiple deals. There’s a random element to this that you’ve got to live with, otherwise you won’t make it for the long haul.”
Steven Jack Butala:
Mm-hmm. Boy, that’s true.
Jill DeWit:
“A lot of it is pricing. Maybe even more of it is being responsive to interested sellers and working those phones. But some of it’s just chance. So, don’t lose hope if a perfect mailer doesn’t perform, and don’t get too up if another one is a smash-it-out-of-the-park grand slam. With time this will all even out, so best to try to stay even keel through the highs and lows.” That was so nice.
Steven Jack Butala:
I appreciate your input, John. I remember speaking with you when you started out. This was in response to some people who were going through the motions of their first deals and first mailers. And it also, in good form for Discord, sparked a lot of reminiscing and discussion afterward in Discord on these comments. And there was a lot of back and forth that was involved in it, too. It’s still going on, actually.
Steven Jack Butala:
But one person in particular said, “It’s very difficult to cast a fishing line in the water and watch 25 bass pass it, because that day, they just weren’t hungry.” And so, there’s a million fishing analogies to these mailers, but the fact is, you just don’t know what’s going to come back. Sometimes a ton of them come back. Sometimes they don’t. Sometimes you should take it personally and change things. Sometimes you shouldn’t. That’s what’s intriguing to me about this business. Probably drives a lot of people nuts. For my personality type, it just seems to work. For Jill’s, too.
Jill DeWit:
Mm-hmm. I’m okay with it.
Steven Jack Butala:
But if your personality is just one big if-then statement, this might not be the best thing for you.
Jill DeWit:
Isn’t that funny? We’re good at weathering it and just powering through and like, “Do it again. Fine. Do it again.”
Steven Jack Butala:
And I’ll tell you, I think about this, because we teach this now, we’ve teaching it for years, jill and I do that with everything. If something doesn’t work in our lives, for some reason, we don’t say …
Jill DeWit:
Throw in the towel and go, “Well, oh, well.”
Steven Jack Butala:
We just don’t ever. Neither one of us, if we want it, if Jill and I both want something, it’s going to happen.
Jill DeWit:
It’s true.
Steven Jack Butala:
And it might take a year.
Jill DeWit:
It’s true.
Steven Jack Butala:
But it does happen. Today’s Jack Thursday. I’m going to talk about how most decisions come down to one number. This is why you’re listening. This is more philosophical than about land. If you make $5,000 a month after tax, then the world and the universe of mortgages and how mortgages fit into your life says that you should be spending about 20 to 25% on where you live. So, $5,000, 20%, that’s $1,000. 25%’s a little bit more. A stretch, you could spend probably … safely afford $1,500 for mortgage or rent. That’s that one number you’re looking for, what can I afford on housing? Sometimes it takes a bunch of numbers to get to that one number. What do I make? What’s my net? I got it. I work everything backwards on a personal note.
Steven Jack Butala:
Fast forward to how much money you want to make a year in Land Academy, I want to make a million-and-a-half dollars, that’s divided by … $1.2 million then divided by 12, that’s $100,000 a month. Every 3,500 mailers I send out, I get one transaction, and that’s worth 20 grand times five, I need to send out X number of mailers. That’s that one number I’m looking for, X number of mailers. So you’re always solving backwards for what you want. Same thing with car payments, same thing with children’s tuition or your own tuition.
Jill DeWit:
I was going to say “children.”
Steven Jack Butala:
Everything is solving backwards for that one number and how it all fits in your numbers big picture. So, I have never made any decision, as far back as I can remember … And this is all subconscious until we started teaching Land Academy and I’m like, “Wow, this is actually what I do.” Solving back for that one number comes down to one number.
Jill DeWit:
Well, now, back to children. That’s why there’s three, because we have a good chance at one.
Steven Jack Butala:
Yeah. Actually, that’s pretty lucky.
Jill DeWit:
Yeah. See what I’m saying?
Steven Jack Butala:
It’s not a 33% chance.
Jill DeWit:
No, we’re going to have seven children.
Steven Jack Butala:
You have about a 10% chance.
Jill DeWit:
Think of this. If you got seven children, one of them’s going to be an attorney, one of them’s going to take care of all the other one, one of them is going to figure it out. One of them is going to be able to take care of you.
Steven Jack Butala:
And one’s going to go to prison.
Jill DeWit:
There we go. See? Three might have been low. I’m not sure they could take care of us at this moment.
Steven Jack Butala:
When you start to think about that, specifically in the Land Academy example where it’s a hundred thousand a month, I’m going to do five deals a month, they’re $20,000 each, it takes the pressure off of you. It takes the emotional pressure off of you when you bring a property in and you know you’re going to make 20 grand on it. You buy it for 15. You know you’re going to sell it for 50, 60. Maybe it’s worth 80, but you need to make 20 grand. So, sell it for $20,000 more, and keep sending mail out, keep doing what you’re doing, instead of squeezing every single tiny nickel out of one property and then wondering why it takes a year to sell it.
Steven Jack Butala:
A lot of drama in your life could be eliminated by just solving for that one number that you’re going after. If you know that 3,500 to 5,000 offers that you send out, you’re going to generate $20,000, maybe send out 10,000. Send out 10,000 offers and expect one $20,000 profit margin property to come in. Now you’re super safe. All the stress is out of it, instead of sending out what Jill talked about a few days ago, 400 offers.
Jill DeWit:
That’s scary.
Steven Jack Butala:
It’s silly. You’re going to fail.
Jill DeWit:
You’re going to be scrambling.
Steven Jack Butala:
Can’t send out 400 offers.
Jill DeWit:
You don’t want that. You want a fire hose coming at you of deals, because then you won’t make a mistake. It’s really easy to line them up and go, “All right, well, this is clearly the winner. And then maybe I’ll look at this one and this one too, but at least I got this winner.” That’s what you want.
Steven Jack Butala:
Suze Orman has this quote that I say once in a while. I say it to myself once in a while, “If you don’t have enough money, it’s because you don’t make enough money.” So, it all starts with something like that, and then you say, “Well, wait a second. All my bills cost $2,000 a month. This and this and this really, really need to happen. I’ve been deferring this, and my kids probably need to go to a better school,” or a better college, whatever. “I actually need to do X.” And then whatever X is, work your way back to that one number, and it’ll work. It’s not going to happen overnight, but you need to solve for that one number.
Jill DeWit:
Thank you. Happy to join us today. Five days a week, you can find us here on the Land Academy show.
Steven Jack Butala:
Tomorrow’s Jill Friday. She’s going to talk about lucky career path millionaires.
Jill DeWit:
Believe it or not [inaudible 00:11:19]
Steven Jack Butala:
You are not alone in your real estate ambition.
Jill DeWit:
Save it. Don’t bring it up, because that’s funny. I want to talk about it.
Steven Jack Butala:
Okay. It’s funny as heck, actually.
Jill DeWit:
Exactly. It was really, really good. Thank you for tuning in. In case you didn’t hear me on Monday, I’m just going to bring it up again now, Land Academy enrollment has been closed for weeks. We cap it. We like to keep it intimate, personal, and provide the attention that our sweet, awesome, amazing community needs and deserves.
Jill DeWit:
Having said that, it’s about to reopen, so keep an eye out on social media, keep an eye out here, keep an eye out in your email. If you’re not in our email system, send a note to support@landacademy.com and you will get in our email system, or download our eBook. That’s a great way too, off of landacademy.com, because it’s coming at the end of this month. That’s all I’m going to say, and there may be something special coming when we reopen it, so stay tuned. We are Jack and Jill.
Steven Jack Butala:
We are Jack and Jill. Information …
Jill DeWit:
… and inspiration …
Steven Jack Butala:
… to buy undervalued property.
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