Jill Friday – How to Confidently Make Land Decisions with Limited Information (LA 1782)

Jill Friday – How to Confidently Make Land Decisions with Limited Information (LA 1782)

Transcript:

Steven Butala:
Steve and Jill here.

Jill K DeWit:
Hello.

Steven 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 Butala:
Today is Jill Friday, and she’s going to talk about how to confidently make land decisions with limited information.

Jill K DeWit:
Yep.

Steven Butala:
When have you ever heard somebody said, “I’ve done all the research. I’m very comfortable-

Jill K DeWit:
Oh, I know everything.

Steven Butala:
… and confident that I’m ready to have a baby.”

Jill K DeWit:
Oh.

Steven Butala:
Never.

Jill K DeWit:
Wouldn’t that be hilarious?

Steven Butala:
No one’s ever said that sentence in the history of-

Jill K DeWit:
That’s true.

Steven Butala:
… humans.

Jill K DeWit:
That’s very true. Oh, that’s a weird example to bring up.

Steven Butala:
Well, it’s the same thing, and I know it’s Jill Friday. It’s obviously your topic, but you just, you never have all the information. Never. And I … I’ll save it for the show.

Jill K DeWit:
Okay.

Steven 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. Check out neighborscoop.com. The teleprompter doesn’t work correctly, or maybe it’s user error.

Jill K DeWit:
You’re fine. Don’t even worry about it.

Steven Butala:
Check out neighborscoop.com.

Jill K DeWit:
What he is trying to say is, if you’re a land investor like us, you don’t have a street address. Because you’re dealing with vacant land, and they haven’t signed it yet. How do I find these dumb things? NeighborScoop. So, go check out neighborscoop.com.

Steven Butala:
Thank you, Jill.

Jill K DeWit:
There’s a bunch of videos on there. You can see how it works. And let me tell you, I don’t know how I got by without it. And every single person in my world, it’s on their computer all day long, because I can pop in state, county, APN, and I have everything I need. So, it’s awesome.

Steven Butala:
This is Luke talking about mailers.

Jill K DeWit:
Okay. Luke wrote, “We’re up to around 8,000 to 10,000 units a month of mail going out now. But as Steve and Jill said in their last video, so much of the work is outsourced. We pick the county and we scrub the data. We outsource the pricing, but we try to verify it by cherry-picking and running a real-life scenario to see if it pans out.”

Steven Butala:
Excellent.

Jill K DeWit:
What do we call that? We call that …

Steven Butala:
Testing for reason.

Jill K DeWit:
That’s it. Yep. “This is a day-or-so project with our team member, and he’s very easy to work with. We schedule about four to six counties in advance, and currently, keeping the title examiners on task is our biggest ask.” Well, that’s for sure. “Not the closing attorney or title companies specifically. Other than that, getting back to sellers with properties we don’t want is our biggest time suck, and with no added value involved. This will soon be outsourced as well. When you send this amount of mail or more, the sheer amount of trash properties coming back starts to pile up.”

Steven Butala:
That’s for sure.

Jill K DeWit:
I feel bad. It’s kind of funny. It’s not necessarily … It’s just that. It’s like your criteria changes. You’re like, “I don’t need to buy that. I don’t want to buy that. I have 20 spectacular properties. I don’t need to worry about those.”
“Everything else is easy and worth doing, since it directly correlates to our private margin. Agent conversations, pre-and-post closings at the attorney’s office, seller conversations, picking the counties, working with our team all are immensely quick, easy, and profitable. Zillow also adds to the suck fest.” This is awesome. “When we list our own deals, since they now aren’t as easy to work with when the property doesn’t have an address.” I know. “So we will either be looking to expand into more flat-rate listings, which is awesome, or just exit with a broker across the board, which is great. No matter. It’s kind of like expanding the mailers and not worrying about having the funds to buy. Splitting the deals with funders still makes a ton more of money per month. I feel the same with 10% land agent fees. Move on to what we’re great at instead of trying to do everything ourselves.” Brilliant.

Steven Butala:
So, here’s why I included this. And my hat’s off to you, Luke, because you sound like you just don’t care. And I think that’s the greatest thing ever. A lot of what goes on in Land Academy is, “Am I doing it right? I’m not sure of myself. I might be doing this wrong. Is this okay?” Just go do it. You might fail, and that’s okay.

Jill K DeWit:
Do you know what this is like? He’s got a team, so they’re making good money. I’m going to guess a million. Let’s just say they’re making a million a year.

Steven Butala:
At 10,000 units a month, they should be making a million bucks.

Jill K DeWit:
Okay. Yeah.

Steven Butala:
For sure.

Jill K DeWit:
So, here’s what I’m thinking. So the way he’s talking about it, he’s saying, “We’re making 1.1 right now the way we’re doing business. If I got into these things, and I tried to manage this and manage that, and do this and do that, I might make it 1.175.” Who flipping cares?

Steven Butala:
Or 2.

Jill K DeWit:
Right.

Steven Butala:
Or 2 million. Does that matter?

Jill K DeWit:
Two, it does. But really, the little thing is not that big of a deal. So, yeah. He’s saying everything right, and I love it.

Steven Butala:
That’s a show, because there’s a diminishing returns for me at some point with buying and selling land. It’s like, “You know what? Do I need another $2 million of tax liability this year?”

Jill K DeWit:
Is it going to change my life today?

Steven Butala:
Not at all.

Jill K DeWit:
No.

Steven Butala:
It’s not going to change a darn thing.

Jill K DeWit:
Am I going to drive a different car?

Steven Butala:
Nope.

Jill K DeWit:
Do I care about that? No.

Steven Butala:
It’s numbers on a computer screen.

Jill K DeWit:
Exactly. Cool.

Steven Butala:
Today’s Jill Friday. How to confidently make land decisions with limited information. This is the meat of the show.

Jill K DeWit:
So I started with the story about a true thing that happened, because I think it’s kind of funny. Because it’s really not possible, like Jack was saying, to know everything. So, we had this great property. We bought it with title insurance. Everybody did everything right, so we thought. Then we list it with a broker. Everything’s great. Going on, it has a buyer. Now we’re selling it through title insurance. All of a sudden they come back and go, “Hey, somebody missed $2,000 of taxes when you bought this.” I’m like, “What are you talking about?” And it wasn’t even a hidden, weird kind of thing. When they went back and checked the taxes, they just didn’t go that far. They didn’t go back to year … They did maybe years one, two, or three of back taxes. They didn’t go back to four and five, and there were more back taxes. And guess who … It was on me to pay it, which sucks. It’s technically the title agent’s fault, who did it on the buy side, but eventually I had to let that go. That’s a whole nother show.
But anyway, my point is, you’re not going to know everything. And even title companies, very solid, strong, big, established, Chicago Title, they’re going to make mistakes too. You do the best you can. So, I’m telling you that story so you feel confident. I want you to feel like, “Hey, if they can make a mistake, then I know I can make a mistake. Nobody’s perfect.” Yeah. So you need to have that confidence, and go in and do the best you can. So, how do we make these decisions? How much is enough? Well, let’s think about the due diligence. That’s really the main point when I’m making decisions. Because I know what he did putting in to these offers, and they went out in the mail, and the pricing, and all of that that comes back to me. This is the most … What are you looking at?

Steven Butala:
What’s going on with this blouse today?

Jill K DeWit:
Why? You don’t like it?

Steven Butala:
No, I like it. It’s just kind of not your usual blouse.

Jill K DeWit:
Oh, I know. It’s open in the back. That’s why. And there’s a tie here. And I have a ponytail, so you can see it’s open in the back.

Steven Butala:
Thank you for directly answering my question.

Jill K DeWit:
You’re welcome.

Steven Butala:
The question was, “What’s going on with this blouse,” and you answered it.

Jill K DeWit:
It’s open in the back. There you go. Everybody got that? There you go. Did you not hear me say yesterday that I’m spending a lot of time at F45? So, I’m wearing a blouse to show off my back.

Steven Butala:
Oh, you’re hilarious.

Jill K DeWit:
Okay. So, back to what I was doing. Thanks for totally derailing my speech. That’s okay. So, the critical time here. I’m making decisions. When am I really making these decisions, and what’s the most critical time? It’s when I buy it. If I don’t buy it right, then I’m not going to sell it right, and there’s a lot of problems that could happen if I don’t buy it right. So, what do I need to do to buy it right? I’ve got to do my due diligence, and I’ve got to really check into everything that I can. But you know what? You’re not going to know it all. You can check the taxes. You can check the zoning. You can check what’s possible. You can check if there’s an HOA, if there’s a POA. You know how to check if they’re alive and the right people are signing. You know how to check acreage. You know about that.
I’m thinking about, what am I running through? In my head, I’m running down the list of six A’s. And you Land Academy members, you know what the six A’s are. The things you need to look at to make sure you don’t make these mistakes. Do I want you to have 25 A’s or a 25 list? No. Do I want you to go and make sure that the person who owned it three times ago on a title search didn’t owe child support anywhere, just in case that pops up?

Steven Butala:
Jeez. Jeez.

Jill K DeWit:
No. I mean, you should have 50 to 60, you said 70% in the topic, of feel-that-good-about-it. And the biggest thing that you know about … That you should move forward. And the biggest thing that you should have locked in your head is price, because that will account for everything. If you do what we do, and how we tell you. I want you to buy it right. I know how much money you can make on this. Then, if there’s some little hiccup, like my hiccup where there was an extra $2,000 in back taxes that nobody caught and that I had to pay for. Which wasn’t right, but it was fine. Why? Because I had $50,000 of profit baked into it. That’s okay. So as long as you, like I said, go through those six As. Please don’t spend a week on it. I want you to get that down to 15 minutes. Maybe 15 minutes on day one, and you love it. And it goes to your day two due diligence, because now you got your phase two due diligence.

Steven Butala:
Not day two.

Jill K DeWit:
Not day two. Excuse me. Phase two due diligence, which is, “All right. I need to check zoning. I think there’s a mobile on it. I got to find out about if there’s some utilities here, because that could be awesome. And then this and this.” Fine. Now you’re spending a little more time on that, but you just do the best you can, and you move forward. Don’t get hung up, because you’ll be sitting around not getting deals done, hung up trying to perfect it, and it’s not possible.

Steven Butala:
We’ve all had people in our lives, or have people in our lives, maybe they’re employees, maybe you’re married to them, maybe they’re your parents, who are perfectionists. And they have a real tough time when things don’t go the way that they think that they should go. This is incredibly unhealthy. They’ll say things like, “Well, last week, you told me to do it this way.” Yeah. That was last week. This is this week.

Jill K DeWit:
Or that property was different. There’s something that was different about it.

Steven Butala:
Yeah. Or I have more information, or new information now.

Jill K DeWit:
Yeah. So what?

Steven Butala:
Or you know what? Maybe I just changed my mind.

Jill K DeWit:
Yeah. I didn’t need to do that after all.

Steven Butala:
So, I have a lot of experience with this. We’ve had a lot of employees, Jill and I.

Jill K DeWit:
Yeah.

Steven Butala:
None of them who say things like that work for us anymore.

Jill K DeWit:
Yeah.

Steven Butala:
You have to roll with changes. You have to go into something knowing you’re not going to have all the information. You might not make the best decision, but this business, and the reason that I chose it is, it has what I call revenue justification. So if you’re going to buy for $30,000 and sell it for $130,000, a lot of stuff can go wrong, and it’s still going to be okay. I’m here for the money. That’s it. I’m here for the money. I’m not here to prove to myself that everything’s perfect and I can’t have a little scratch in my car, or we spilled some milk on the … It’s just spilled milk. So what? Clean it up and laugh about it. That’s what land deals are. So if you’re that type of person, where you just can’t handle spilled milk, or you can’t handle a scratch in your car, or you don’t want anything to ever change, this business, really any business-

Jill K DeWit:
Well, any business. It’s not this business.

Steven Butala:
It’s never going to work.

Jill K DeWit:
You can’t do it, because the-

Steven Butala:
You need to change yourself long before you ever try to do something like this.

Jill K DeWit:
Well, if that’s you, you’re a one-man show, because no one will ever meet your expectations.

Steven Butala:
Yeah.

Jill K DeWit:
You have to get over that. But today, it’s just about just trusting you did everything right. You’re with us. You know your checklist. You have your checklist. Make sure you do those things, and then move forward. And then really make sure, like I said, I’m wrapping it up on this, that you’re buying it right price-wise so you have a cushion there. If anything goes sideways, so what? We used to laugh about this. Every now and then someone would say, on our Thursday member calls, “Oh, I screwed up.” I’m like, “What do you mean you screwed up?” “Well, I didn’t double my money.” “All right. Well, how much did you make?” “Oh, I made 80%.”
I’m like, “On what planet is that screwing up?” “No, but you said I’m always supposed to double money.” I’m like, “Knock it off. Hold on a moment. In no other world can you do that. So what you made some mistakes and you only made 80% of what you bought it for? Big deal. You did everything right. Move on.” That’s awesome. Happy you could join us today. Five days a week, you can find us here on the Land Academy Show.

Steven Butala:
Join us next week for another interesting episode, You are Not Alone in your Real Estate Ambition.

Jill K DeWit:
Right?

Steven Butala:
And I have so much experience with perfectionists, it just makes me sad.

Jill K DeWit:
Yeah, I know.

Steven Butala:
I really don’t understand that. How disappointed …

Jill K DeWit:
Yeah, scroll through that. I’m not going to read that. You’re all good. Keep [inaudible 00:13:13].

Steven Butala:
How disappointing must it be?

Jill K DeWit:
Yeah.

Steven Butala:
You just must be upset all the time, because stuff never goes the way you want.

Jill K DeWit:
Right. I agree. We are Jack and Jill.

Steven Butala:
We are Jack and Jill. Information-

Jill K DeWit:
And inspiration-

Steven Butala:
… to buy undervalued property.

Jill K DeWit:
Cool.

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