5 Ways Land Academy Members are Over Pricing Mailers (LA 1793)
5 Ways Land Academy Members are Over Pricing Mailers (LA 1793)
Transcript:
Steven Jack Butala:
Steven 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 K DeWit broadcasting from the valley of the sun.
Steven Jack Butala:
I wonder how many people fast forward all through that right there.
Jill K DeWit:
I know.
Steven Jack Butala:
I would.
Jill K DeWit:
I don’t know. You notice my hat? I’m like already in vacation mode.
Steven Jack Butala:
Today, Jill and I are talking about five ways, Land Academy members are overpricing mailers.
Jill K DeWit:
So here’s [inaudible 00:00:27].
Steven Jack Butala:
Last week was our vacation by the way.
Jill K DeWit:
Oh, we’re back. Well, no, [inaudible 00:00:32] I’m still traveling.
Steven Jack Butala:
We’re still in Santa Barbara, we’re in Santa Barbara now.
Jill K DeWit:
Okay. I don’t know what [inaudible 00:00:40] don’t ask me. [inaudible 00:00:41]
Steven Jack Butala:
Yeah. Jill just the talent. She’s like, [inaudible 00:00:44].
Jill K DeWit:
Thanks.
Steven Jack Butala:
She’s one of those people that [inaudible 00:00:46].
Jill K DeWit:
I wish I could [inaudible 00:00:47].
Steven Jack Butala:
[inaudible 00:00:47] Has her name in the back of the chair.
Jill K DeWit:
That would be nice to just sit down and they do my hair and my makeup. Clearly I do my own hair and my own makeup. I don’t get that perk.
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. And I should say, please listen to this. We are phasing out Real Quest for our community, the Land Academy community. I have a little, I get misty every time I talk about this, because Real Quest is honestly the reason that I started this whole entire company and it’s just become obsolete in the contract that they’re asking us to sign in this next renewal period is an absolute outrage and [inaudible 00:01:26]
Jill K DeWit:
Not even the money. It’s the [inaudible 00:01:28]
Steven Jack Butala:
The real reason is that DataTree’s so much better.
Jill K DeWit:
Yeah.
Steven Jack Butala:
Everybody loves DataTree, me included. I haven’t logged onto Real Quest in over a year and a half. I just looked.
Jill K DeWit:
Isn’t that funny, me too. I don’t even go there.
Steven Jack Butala:
Jill and I personally instruct a handful of Land Academy members or non-members in a live class called Career Path. If you want this to be your career or it is your career, please take a look at Career Path and let us know, support@landacademy.com
Jill K DeWit:
Hold please. Leonard wrote answering Evan B’s question. Interesting. I guess we’re going to figure this out as I go through it.
Steven Jack Butala:
Yes we are.
Jill K DeWit:
Okay. “It’s hard to assess why particular campaign worked or not. There’s a certain degree of chance. You obviously improve your odds with more mail and also diversifying areas. We don’t know where you are mailing or your pricing. Hotter markets tend to have a lower response in my experience.”
Steven Jack Butala:
Exactly.
Jill K DeWit:
“But you can make a big margin, if you get something.”
Steven Jack Butala:
If you hit one there.
Jill K DeWit:
“Maybe you need to consider more rural areas, which you might get a deal easier, albeit this might make the sales potentially slower. I’ve had differences in mailers and I’ve just replicated the exact same pricing in comparable areas. And then it didn’t work. So when I started almost three years ago, we sent out three mailers, 4,000 units. And before we got three lots from our last 200 unit mailer. What I would do is look up like 50 of your offers and do a, would you do this deal analysis, this ties into today. And then maybe even book a call with Kevin before you send your next mailer. Keep in mind the mailers only part of it.
And you must ensure you’re answering those calls.” Thank you. “And working the deals proactively. You can do this if you continue to put the effort in.” That’s totally good. So, this person’s obviously was struggling. We don’t know the details behind it. We’re going to talk about it today. But no matter what it is, I just want to say before I hand it to you, is by answering the phone, you could add money. You could take money away. If you don’t answer the phone, you don’t have a chance, you will fail every time.
Steven Jack Butala:
Every once in a while my point in putting this in here is every once in a while somebody types into discord, “Hey, I sent a bunch of mail out. It just didn’t work.” And we all chuckle, because first of all, most of us have been there, us included and you just have to deconstruct. There’s only few reasons why it doesn’t work.
Jill K DeWit:
We’ll talk about those today.
Steven Jack Butala:
Yes we will.
Jill K DeWit:
Yeah. You know what my favorite thing is when people say it doesn’t work and like every single time that we’ve had this and we’ve done consulting with people about this, we’ll go, “What about this one? And what about that one? And what about this one?” They’re like, “Oh.” And then they call them back and then they do the deals.
Steven Jack Butala:
That’s what it is.
Jill K DeWit:
That’s usually the problem.
Steven Jack Butala:
Well, it’s honestly, it’s one of two reasons. The first one, is you priced it so low. Like I did a mailer one time to Michigan this a lot of years ago and I just sent it out for $500 a property, every single property in Michigan that was over an acre. And I just got screamed at for, and I wondered why it didn’t work. This is like in 2002.
Jill K DeWit:
Before me?
Steven Jack Butala:
Way, way, way before Jill. And so that’s, usually the case. That’s an extreme example, but pricing on mailers are so low that it’s just silly that’ll kill a mailer. The real reason that vast majority of the time, probably 90% of the time someone says, “Yeah, I guess this doesn’t work.” Again, this tiny percentage of people in Land Academy it’s because they’re not answering the phone and creating these deals. They’re expecting people to just sign it and send it back and then be compliant with everything you say. And people need contact.
Jill K DeWit:
All right, let’s get to today’s topic. Because, I have more about just that real one little part of it.
Steven Jack Butala:
Today’s topic five ways Land Academy members are overpricing, their mailers. This is the meat of the show.
Jill K DeWit:
Okay. So that’s, like the whole big picture. The mail goes out. I got to answer the phone. Got it. I could add money, take money away. Got it. But I want to take a step back. Today’s show is really about just getting from A to B, not all the way to Z when you’re staring at your bank account and it’s all done and sold. A to B, which is getting these offers in the mail and what is happening in this process where Land Academy people, so we’re going to get real specific today. And I like this topic that you came up with because Land Academy people are even goofing up, because one would say, well, hold on, everybody, Lord knows they have the right education. Yep. They have the right mentors. Yep. They have the right support. Yep. They have access to stellar data. Yep.
We covered all that. Well then, well, wait a minute. How the heck are these people screwing up? What are you guys talking about? Well, I’m going to give you my five and I’m sure you can give me your five. So, I really thought about the people that we’ve talked to and what we’ve seen experience over the years here, working with hundreds of you. There’re some things that still happen. So again, you have the education you have that you may or may not have used it, but we’ll skip past that. But one of the things I’ve noticed is some Land Academy people have not followed our guideline and still have some feeling that they need to associate assessed value in this. Don’t do that. That’s number one.
Steven Jack Butala:
Well, can you explain that? Because, that’s not on my list and it’s really important and I actually missed it.
Jill K DeWit:
Okay. Assessed value with a property is not always exactly what the county thinks today your property is worth. It’s not like an estimate or something like that. The county doesn’t go in there. The county doesn’t have those formulas. The county is doing two things. One, they’re using it to gauge how much your taxes should be, based on that. And then two, they only change it when there’s a reason to change it. It might sit for years. If you’ve noticed some of these properties that you might buy, if you’ve been in this for more than a year, you’ll know this.
You’ve looked at a property and it had an assessed value of let’s say $5,000 and you bought it for 40,000 and you sold it for 110 and all the while the taxes were only like, I don’t know, $200 a year or something like that. And now it might get reassessed at some point. So, it’s never accurate, current, up to date and it’s often I’ve talked to these counties about this too in the past. And they will full on admit it if you ask them they’re like, “Oh God, yeah, we’re like at least two years behind. By the time we take a look at this stuff.”
Steven Jack Butala:
Jill’s being nice about it. I’m going to be a little bit more direct.
Jill K DeWit:
Do it.
Steven Jack Butala:
Assessed value has nothing, nothing to do with market value.
Jill K DeWit:
Thank you.
Steven Jack Butala:
Yeah, but Jack, I mean, it has to do something like it’s the same county, the same county assessor. There has to be some relativity component. Yeah, this property’s assessed for $5 million over here. It’s worth more than this property that’s assessed for $500 over here. No, no, no. Assessed value has no place in valuing a mailer.
Jill K DeWit:
Thank you.
Steven Jack Butala:
It is something that we are taught our entire lives and careers by other sources of whatever, starting probably with our parents and them complaining when we were kids at the kitchen table about how their assessment went up and the property value went up. And so, their taxes went up. Just forget all that. I have to make a big deal out of this, because just forget about assessed value. This is the 21st century and we have amazing, amazing tools to value and price real estate, which the vast majority of our members are utilizing correctly and smashing it out of the parks and assessed value has no place for that.
Jill K DeWit:
Thank you. Number two, they’re skipping the red, yellow, green test. [inaudible 00:09:23]
Steven Jack Butala:
I have five different [inaudible 00:09:24]
Jill K DeWit:
Yeah. [inaudible 00:09:24]
Steven Jack Butala:
[inaudible 00:09:24] Five different. [inaudible 00:09:26]
Jill K DeWit:
I’ve watched this. They blow through this. They’re like, “Oh, I just got to get the mail out.” And they’re skipping some real components, because one of the things, here’s how I know this, when we are doing [inaudible 00:09:36]
Steven Jack Butala:
[inaudible 00:09:37] 10 reasons, not five.
Jill K DeWit:
Okay sorry.
Steven Jack Butala:
No, listen. [inaudible 00:09:40]
Jill K DeWit:
[inaudible 00:09:40] It’s going to be a long show, but I promise it’s really beneficial. I know this when we’re doing our Thursday member call and we’re doing, would you do this deal with people? And one of the things we’ll do, we’re like, okay, this looks good, that looks good. Let’s go price it and see how many properties are available. When we zip over to put that zip code into Zillow or wherever we’re looking at and to see how much is available and there’s 3000 properties for sale in that zip code, I know they didn’t do the red, yellow, green test, because that would’ve uncovered it. Do you really want to swim in that pond? Heck no. I want to be one of 3000. Oh I narrowed it down to my size. Now there’s 1000. Great, I don’t want to compete with 1000 properties available between one and five acres. Not doing it. So, I know they missed that. They skipped it. Number three, do you want to comment or you want me to keep going?
Steven Jack Butala:
I want you to keep going, but I want you to just keep this in mind, because I love your momentum and the advice that you’re giving is great. The title of this show is Why People Overprice Mailers.
Jill K DeWit:
Yeah. They skip the red, yellow, green [inaudible 00:10:41]
Steven Jack Butala:
Oh Really? You think that’s [inaudible 00:10:42]
Jill K DeWit:
Yes.
Steven Jack Butala:
Go ahead.
Jill K DeWit:
Yeah. Why they overpriced? Let me go back. Number one, they overpriced because they use assessed value in their calculations. Wrong. Two, they skip the red, yellow, green test. They’re not really looking at market data. They’re not looking at what’s for sale. They’re skipping some of these things. Number three, is this is a really good one that I see. Some countys it’s hard to get a good gauge of what’s a good price right now. What’s a good price for square foot. Some people are not digging far enough to get more than a handful of comps.
You will probably not price your mailer if you had two comps and one’s a million and one’s a thousand, you take the median and you send your mailer out on that. And because one had multi properties in there, let’s just say, it was like a 10 pack. You didn’t check and find that out. And one of them was us exchanging properties and you took the median said, well I got the median price in here and that’s what I based my offers on. That’s wrong. You’ve got to have more than a handful. Number four, and I’ll let you go on here. Number four reason. And I’m talking to Land Academy members people that we all know and love that are goofing up and complaining about it, but they’re not testing for reason.
Steven Jack Butala:
That’s a big one.
Jill K DeWit:
Before that mailer goes out, they’re not taking a moment and saying, “Okay, if this came back right now today, would I buy it?” And look at all the stuff that we look at and look at what’s available for now for sale. What’s sold recently, does this price fall in line with that? Like, oh yeah, if I could buy this for $18,000 right now, based on what I’m seeing everything’s selling in this area is like nothing less than $50,000. Yeah, I would do this deal. You have to test it for reason and make sure that you’re right and your pricing was good before it goes out. And then my number five thing, is the people that are overpricing in Land Academy. They’re passing it on to the wrong person.
They might be again, they don’t think they’re good at it. They’re not investing the time on it. You could do this. I could do this. Am I going to be as good as him? No. But am I going to do it as fast as him? Hell no. Might take me weeks where it takes him hours, but you got to put the time in and learn this. And I think that some people are like, “Hey, my brother-in-law said he could do this. And I just told him the steps and let him run with it. And he priced my mailers.” Hold on a moment. Not the right person.
Steven Jack Butala:
Five reasons people in Land Academy over price mailers. Number one, they use a service. They’re subbing it out, because they’re trying to find an easy button. This is nothing easy about pricing mailers.
Jill K DeWit:
Like an online push a button service?
Steven Jack Butala:
Yeah.
Jill K DeWit:
Not like an internal service.
Steven Jack Butala:
People have constantly approached Jill and I to do a joint venture where we sell the fact that fillintheblank.com as a way to price your mailer. And forever Jill and I have said, “No, we’re not doing it.” Because, it doesn’t exist. If we created neighbor scoop, we would create a pricing tool, if it was effective and share it with everybody and charge for it.
Jill K DeWit:
You’re going to miss stuff.
Steven Jack Butala:
It doesn’t work. Here’s why. If you take, Jill’s example’s perfect. There’s property. Here’s a zip code. There’s 20 comps for sale and active properties. The highest one’s a million dollars, the lowest one’s $500. And there’s a bunch of stuff in between. Well, it’s going to get in an automatic fashion. If it’s pulling that data from an API and giving you an average or a mean number in the middle or an average, however, you look at, it’s going to be wrong. You have to remove, this is in my number two, so automatic service doesn’t work period, you’re going to fail. Number two, [inaudible 00:14:29].
Jill K DeWit:
Like an automated computer.
Steven Jack Butala:
The most popular one is Prycd with a Y, PRYCD.com. The two guys that started, this are fatal narcissist that contacted [inaudible 00:14:38]. We had a couple of meetings. They were chewing with their mouth wide open during the call and pounding on a keyboard and wondering why two old people like us would ever not be graced with being involved with them. And it doesn’t work. Time after time, after time people come to us and say, this mail didn’t work well or we got so many offers back and we couldn’t do the deal, because it wasn’t priced right. And to which we say, yeah, I mean, that’s our experience with Prycd also. Number two, and the reason that those services don’t work, is because they’re not removing the exceptions. So, in Jill’s case where one’s a million, one’s 500 and then there’s a bunch that are probably correct comparison values in the middle.
You need to remove the exceptions and there’s no automated way to do this. “Well, wait a minute, Jack, what do you mean it, there’s not an if then statement, I’m a mechanical engineer. I have to have a rule. What’s the rule?” There is no rule. You have to go in there and look at it and say this million dollar exception, I don’t know why it’s in there, but it’s completely and totally screwed up my percentages. My average price per acre for that zip code needs to be removed, entirely removed, not adjusted, removed. Maybe the $500 one needs to be removed too. And then the middle three give you an accurate price. I don’t know, but I’ll tell you every zip code I analyze in price, I have to remove data, every single one. And if there was an if then statement or even an algorithm that was, let’s say two or three pages, believe me, I would write it.
There’s no way to do this. Every single person in Career Path who make millions of dollars a month. In many cases, there are people in Career Path that make 6, 7, 8, 10 million a year doing this, say they screwed this up at some point and they just believed in the data and sent it out and failed. You have to remove data exceptions. Number three, and they’re not breaking up acreages. The price per acre for a property that’s 0.5 acres, a half an acre, versus a five acre property, versus a 40 acre property in the exact same zip code. That price per acre is going to be very different. So, you want to break those up.
Jill K DeWit:
That’s good. Yeah, that’s a good point.
Steven Jack Butala:
Dig into the education and I’ll show you. We show you exactly how to break those up and why. It starts with 640 acres and divide by two backwards. My next point, is there are in more urban locations, pricing by in a single zip code is not enough. You need to break the zip code up in a lot of cases. Or alternatively, you can go in solo and then have the person answering your phone, adjust for it. We do a version of both. Whereas, one zip code we just mailed where you could draw a line down the middle of the zip code, half of it was in an urban center and the other half was in outskirts of a rural center with no way to get to it. So, we’re getting comps all over the place. So, I had to break it up by API, which is not hard.
Again, if you check chapter four in Land Academy 3.0, I talk all about this. Number five, and this is the biggest reason and Jill hit it and it was her number five too. You’re not testing the mailer. I’ve seen people do this. I review the concierge. We have a service called Concierge Data, where we do all this stuff for you, except price it. We take it right to the five yard line. All you got to do is change the percentages in the spreadsheet and send it [inaudible 00:18:12]. And the only way that you’re going to accurately change those percentages in the spreadsheet, is if you test for reason. If you take, would you do this deal for yourself.
This is the truth, when we’re done recording here, I’m going to spend the rest of the day, probably six to eight hours today, testing for a reason on a mailer that I got back from Concierge Data and I already started to do it. And I’m like, wow, because we’re constantly improving Concierge Data. And I’m like, wow, what they send back now is way different than what we sent back to a customer even like five months ago. It’s truly just all teed up. All I have to do is look up two or three properties in every zip code, maybe five, eight properties in every zip code at different acreage sizes and see if I would do the deal and then adjust the offer percentage to a point where yeah, I would do the deal. And then finally, this is out of the scope of this a little bit, but it’s a topic that’s we’re talking about in this context. Wow. It’s 20 minutes long.
Jill K DeWit:
I know.
Steven Jack Butala:
Very often there are zip codes and counties that don’t have enough data. There’s no property that’s been sold and there’s no property for sale. You have two choices depending on your experience level and confidence level. Number one, you can go to another county and work that. Or number two, if you have some confidence there and you have, maybe it’s where you live, you can piece it all together through different sources and send out a mailer, because I’ll tell you what, no one’s ever sent a mailer out there before ever. We do very well with data less countys.
Jill K DeWit:
That was a lot.
Steven Jack Butala:
Yep.
Jill K DeWit:
That was good. Happy you could join us today. Five days a week, you can find us here on the Land Academy show.
Steven Jack Butala:
Tomorrow, the episode on the Land Academy show is called three topics from the advanced member discord channel. You are not alone in your real estate ambition.
Jill K DeWit:
This is good people want to know what’s going on. People often want to know, well, always want to know what’s going on with this group. What are you guys talking about? And how do I get into that group? We’ll talk about that tomorrow. And thank you for tuning in. By the way, we recently, well, this year 2022 has been a big year for us. We released a Land Academy 3.0, called Catching Up With Land Academy. It covers everything that we’re doing now, like Jack just talked about and the new ways that we pull data and there’s still some members by the way, you know who you are, who have not watched 3.0, and I see you in discord. And I even tell you, knock it off. [inaudible 00:20:47].
Steven Jack Butala:
Start with three [inaudible 00:20:48],
Jill K DeWit:
[inaudible 00:20:48] it is. It’s like, this is me figuratively knocking the mouse out of your hand as you’re clicking on Real Quest Pro and I want you to go click on DataTree and I want you to do these extra three little steps and I promise it’s going to be better. So, anyway, if this crazy community sounds like it might be for you, give us a call or send a note to support@landacademy.com. We are Jack and Jill information and inspiration.
Steven Jack Butala:
To buy undervalued property.
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