We Review About Twenty Properties for Every One Property We Buy (LA 1840)
We Review About Twenty Properties for Every One Property We Buy (LA 1840)
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 talk about how we review about 20 properties for every one or two properties that we actually buy. This is pretty important. This isn’t going to be the longest episode, but if you’re one of those people who are like, “Geez, I really wish they would just get to the point and stop horsing around,” This is that episode.
Jill K DeWit:
I love it. Let me start with this, too, by the way. I would love to say today is the last day, so you know of the awesome, awesome biggest so far in 2022 savings to join Land Academy. And not only have I got a nice chunk off, it’s $1,250 off, check it out, but also, joining through midnight tonight, you also get to be… not only the savings, you are put into a drawing for a 10 acre property in Oklahoma. The details are on our website. So go to landacademy.com. And by the way, if you have any questions, always just send a note to support@landacademy.com and my team will get back to you.
Steven Jack Butala:
Before we get into the topic, let’s take a question posted by one of our members on the landinvestors.com online community. It’s free.
Jill K DeWit:
Shannon wrote, “So how do we handle buying land from disgruntled family members who just want to get away from the family who owns everything surrounding it?” That’s hilarious. I feel like I’m in an episode of Bloodline. Somebody wrote that?
Steven Jack Butala:
Mm-hmm.
Jill K DeWit:
Oh, okay. Got that.
Steven Jack Butala:
It’s left over from…
Jill K DeWit:
Okay. Okay. So… That’s kind of funny. I wouldn’t care. Here’s the thing, if there’s no access and they’re going to withhold access, that’s the only problem I would see.
Steven Jack Butala:
This leads directly into what this topic is today.
Jill K DeWit:
Well, wait, wait, wait, wait, wait. Let me back… Can I finish the sentence?
Steven Jack Butala:
Sure.
Jill K DeWit:
Finish my thought here. So, properties surrounded by the whatevers and they just want to get out of it. If there’s, which there can be… there has to be at some point access most… pretty much everywhere, you can’t withhold access, right? They think they can, but they can’t. But the whole point of this is, sure they hate the family members and they want to get away from them, but you know what? The new person coming in doesn’t have that animosity with the family members. It doesn’t mean that it’s going to be a bad situation. So I honestly don’t have a problem with this. I don’t see a problem with this.
Steven Jack Butala:
So how does this come about? Actually, this is very common, not this problem, but to see multiple family members living in one area where the root of that is agricultural property and municipalities… Municipalities have always been in favor of taking a large piece of property and minor splitting it or splitting chunks off and giving it to the kids, let’s say, so it-
Jill K DeWit:
Mom and dad might have set out to do that.
Steven Jack Butala:
Farmers have been doing it since farming’s began. I’m going to give the back 40 to my daughter, I’m going to give this 40 acre over here to my son, they’re both married to other people, they’re going to farm it and we’re going to be over here if they need us. And so what ends up happening is they get letters from us and everybody else in our group and sometimes it’s, you know.
Jill K DeWit:
And you know what I would do, too, I’d be reaching out to the other family members at the same time, by the way, as you’re buying it and you’re an escrow, “Hey, do you want to sell too? I’m buying Bobby Joe’s, do you, Sally Sue, want to sell yours too?”
Steven Jack Butala:
So a lot of the comments in Discord for other people, and my favorite one was from somebody who said, “This sounds like a lot of work to me. Maybe you just open the next envelope.”
Jill K DeWit:
Well, it depends on how the transaction’s going to go down, right? Yeah. I get it.
Steven Jack Butala:
Today’s topic, we review about 20 properties for every one property we buy. So this is the meat of the show. As far as the question goes, you might have so many deals that you’re reviewing that you say, “You know what? This is a pretty good deal, but I’m not going through this drama.Good luck, have a good day.” Because you’ve got seven other deals that you’re doing and there’s no drama. So how do you get to that point where you’ve got all these deals that you’re reviewing and you’re choosing the absolute best one so you cannot fail. You get there because you send out tons and tons of mail. So let’s do some math. On a 50,000 unit mailer, it’s going to cost you about $25,000. “Oh my God, Jack, that is-”
Jill K DeWit:
That’s a lot of mail by the way.
Steven Jack Butala:
… that is insane how much money that is. I can’t… $25,000.
Jill K DeWit:
Most people aren’t sending out that much. Yeah.
Steven Jack Butala:
The average deal that Jill and I do, we make about 50 grand, 50 to a hundred thousand dollars. To ensure that we’re going to make 50 to a hundred thousand dollars, let’s say in 50,000 mailers, you’re probably going to buy, I’m just averaging, I’m really being conservative-
Jill K DeWit:
You can by a lot more.
Steven Jack Butala:
10 properties, but I think it’s going to be a lot more, but I’m just going to say, I’m going to do nice round numbers. We sent out 50,000 mailers, we fronted 25 grand. That’s our entire cost. We buy 10 properties where we make $50,000 each. That’s $500,000. We spent 25 grand and make $500,000.
Jill K DeWit:
Now I’m going to talk to the other people in our community. This is more realistic, but that’s what we’re doing. But what’s everybody else doing in land academy? They’re probably sending five to 10,000 a month. So that in mail costs 2,500 to $5,000. Much easier to swallow. And in those five to 10,000 units that go out, they’re going to get back a hundred or more, maybe a hundred to 200 responses. You could easily send out a 5,000 unit mail, I’m going to give you one example, and get over a hundred responses. That doesn’t mean a hundred signed purchase agreements, but it means the purchase agreements collected with all the phone calls that you got and the emails that you got. And every one of those, there’s an opportunity in there.
So your job is to, when those calls come in, even though they’re telling you “This price sucks, who do you think you are?” whatever it is, your job is to quickly get on the same page with them, calm them down, get on the same page, find out, “I get it, may have made a mistake,” whatever it is, “Do you in fact want to sell?” “Well, yeah, but not at that price.” “Totally get it.” What is the price? Now you know who I am, now you know how I roll. What is the number that you would say, “You know what, heck yeah, I want this out of my life anyway, you can have it for this.”
And often it’s not that far apart. I’ve had people that we offer $17,291 and they say, “Make it 20.” I can bank at 20. That’s not hard at all. I know how we priced our mailers. So back to this, my 5,000 unit, I’ve got over a hundred responses. Now of those, I’m probably whittling down to between 10 and 20 that I like, and then from those I’m buying one or three and I’m only buying the ones I love. They’re like, “This is no brainer.” Look how beautiful this is. I’m looking at it trying to find a problem, because I’m going, “This looks great, what am I missing?”
Steven Jack Butala:
And Joe’s example, let’s say it costs $2,500 to do a 5,000 unit mailer, but you’re going to do one deal, you have… maybe you could do three or five if your risk threshold, depending on where it is, but let’s just say for sake of argument, I want zero risk, I want a slam dunk, I’m only doing one deal.
Jill K DeWit:
Sure.
Steven Jack Butala:
And so now you’re making $40,000 on a $2,500 mailer.
Jill K DeWit:
Yeah. Because maybe so you spent 2,500, sent this all out, because you’re doing a buy for 20, sell for 60?
Steven Jack Butala:
Yeah.
Jill K DeWit:
Okay.
Steven Jack Butala:
Which is… this is so silly realistic and conservative. Honestly, it doesn’t happen that way. You buy a lot more property, so.
Jill K DeWit:
Well, you know what’s funny this is a truth, too-
Steven Jack Butala:
I just like the insurance policy. This is how I look at it, sending out tons and tons of mail is a great insurance policy that I’m going to make hundreds of thousands of dollars. And I’m only going to do the deals that Jill and I are both shaking our heads, going, “We have to buy this. We have to buy this property.” We’re going to spend the next week trying, while it’s an escrow, trying to find out if there’s anything wrong, did we miss anything?
Jill K DeWit:
Well, what happens too sometimes by the way, so you pick the one you love, you’re just starting out and you buy and now you got to know the area and you got to know everything, you would be smart to go back through the stuff you kicked to the curb and go, “I need to look at these again, because now I know this area and now I know this area’s really good because look how fast this one’s sold. What other properties? Maybe I told this guy that money’s too much. Maybe I offered 10 and he wanted 20 and now I realize I could sell these for 40, $50,000 all day long.” You know what? I’m going to go back through my list because I will give the guy the 20 now because I know how fast I can sell it because I just did it with this one.
Steven Jack Butala:
And what you’re doing is you’re learning the area.
Jill K DeWit:
Yeah.
Steven Jack Butala:
And you start to really learn an area like that, a zip code or two, and then you can start to mail the heck out of it for different acreage sizes, you can see what’s going to happen. You know what’s going to happen when you post it for resale.
Jill K DeWit:
But the whole point today is we want you to be picky. You need to send out volume because you need to be reviewing 20, not three. Because if you send out 500 offers and you’re staring at three and you’re like, “Huh, which is the better of what I’ve got to choose from here?” That’s when you make mistakes. You don’t have good stuff there. You’re trying to force a deal there when you shouldn’t. So you’ve got to have that good stuff coming back to you. Happy you could join us today. Five days a week, you can find us here on the Land Academy Show.
Steven Jack Butala:
Tomorrow’s Jack Thursday and I’m going to talk about putting your head down and just doing it. You are not alone in your real estate ambition. Believe it or not, I have many things in my life where I start them and don’t finish them. Buying and selling land is not one of those things and I’m going to talk about it tomorrow and I’ll tell you why. Oh sorry, go ahead.
Jill K DeWit:
It’s okay. I’m not going to steal your thunder… but does one of your examples involve a musical instrument?
Steven Jack Butala:
I won’t… I think I’ve used that too much.
Jill K DeWit:
Oh, that’s true. I can help if you need some. I could get you… I could bring up a few half done projects around the house. Oh my goodness.
Steven Jack Butala:
Sure. You know what? You should bring those up tomorrow and I’ll tell you why they’re not finished.
Jill K DeWit:
Oh gosh.
Steven Jack Butala:
Because everyone who’s listening to this can identify with “Yeah, I’m not doing it. It sucks. I don’t want to do this.”
Jill K DeWit:
You’re cracking me up. Hey, by the way, I have two things to say. Because tomorrow is the first Thursday of the month and guess where we are on the first Thursday of the month? We’re on Clubhouse. So check it out, go to Clubhouse. We’re on the first and the third Thursday of every month you can find us personally or find and join the Land Investors Club. It’s at one o’clock. One o’clock. Noon.
Steven Jack Butala:
It’s called Land Talk.
Jill K DeWit:
Is it on one o’clock? No, it’s at noon Pacific time, excuse me.
Steven Jack Butala:
Oh, okay.
Jill K DeWit:
It’s at noon. I had to think about it. It’s at 12 o’clock Pacific time is when we do it. First and third Thursday, but go to the club and you’ll find it, the Land Investing Club. They also… I want to just remind you again, you have hours left, just a few more hours, if you want to get in on the special have going on right now to join Land Academy. It’s awesome. We’re Jack and Jill.
Steven Jack Butala:
We’re Jack and Jill. Information.
Jill K DeWit:
And inspiration.
Steven Jack Butala:
Let’s buy undervalued property.
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