Jack Thursday – Why I Killed Several Land Deals My Partners Already Approved (LA 1846)

WP Jack Thursday Why I Killed Several Land Deals My Partners Already Approved LA 1846

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Jack Thursday – Why I Killed Several Land Deals My Partners Already Approved (LA 1846)

Jack Thursday – Why I Killed Several Land Deals My Partners Already Approved (LA 1846)

Transcript:

Steven Jack Butala:
Steve and Jill here.

Jill K DeWit:
Hi.

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 DeWitt, broadcasting from the Valley of the Sun.

Steven Jack Butala:
Today’s Jack Thursday, and I’m going to talk about, in detail, why I killed, recently killed, several land deals my partners already proved.

Jill K DeWit:
This is fun.

Steven Jack Butala:
I think this is-

Jill K DeWit:
I get to sit back and let you… Because I kind of saw it in air table, kind of watched it happen, which is really nice.

Steven Jack Butala:
This is going to be informative, I think.

Jill K DeWit:
Yeah. This is cool.

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, it’s free, and please don’t forget to subscribe on the Land Academy YouTube channel. Comment on the shows you like.

Jill K DeWit:
Anthony wrote, “Infill lot advice from a builder,” I read this the other day. This was really cool. “I recently had a conversation with a builder who took a chunk of lots off my books. It was a good talk. I asked him about the metrics he uses to decide where to build. The answers were eye-opening. He won’t touch any area where new construction fetches under $400,000.”

Steven Jack Butala:
Boy, that’s the truth.

Jill K DeWit:
Yeah. “Though lumber costs have fallen from recent highs, he still budgets,” this is more than I even thought right now, “he budgets 150 to $175,000 a square foot. I was shocked at all the fees and hurdles on new construction. My takeaways, number one, due to the high costs of new construction for infill lots, make sure the markets you mail have a medium home price of over $400,000.”

Steven Jack Butala:
That’s… One second before you run into number two. That’s been the case for a long time.

Jill K DeWit:
Right.

Steven Jack Butala:
That number keeps moving, but it’s been the case, because you need to make money.

Jill K DeWit:
Right.

Steven Jack Butala:
This is the antithesis of affordable housing. All you read about in the news, in real estate news, is, “Why the hell…” And all these articles are written by little tiny journalists that are maybe still in middle school, “We need more affordable housing.” Well, great. Here’s the reason we don’t have it, because of this post. Go ahead.

Jill K DeWit:
Okay. “Number two, I will limit my infill offers with an eye towards an expected sale price of no more than 15% of the estimated new home price.” So think about that.

Steven Jack Butala:
It’s been that way for-

Jill K DeWit:
So $400,000, you’d go back… You could go back like 20%.

Steven Jack Butala:
Yeah.

Jill K DeWit:
Buy for 20, sell for-

Steven Jack Butala:
40.

Jill K DeWit:
Or buy for 40, you could even sell for 80 maybe. But now, he’s saying go even lower than that.

Steven Jack Butala:
Yeah, I agree with that.

Jill K DeWit:
Yeah. Totally. “Number three, since all these costs and the hurdles on new SFR construction, the demand for cheaper options will only increase going forward.” So true.

Steven Jack Butala:
Cheap land.

Jill K DeWit:
Right. “I will be giving priority to mobile home zoned lots. I know there’s a deep reservoir of knowledge on this subject here. So what do you guys think?” I didn’t get to see what everybody else weighed in on.

Steven Jack Butala:
Yeah. And a lot of people had a lot of stuff to say, including me. This guy’s been in our group for quite some time. He’s very, very bright. And these are the types of people, fortunately, that Land Academy attracts. I do a whole module on Land Academy Mobile Home Land, and actually developing or dropping mobile homes on land in our Career Path.

Jill K DeWit:
Yeah.

Steven Jack Butala:
So check it out.

Jill K DeWit:
And you’re going to add more about subdividing a career path too.

Steven Jack Butala:
Yeah. Subdividing properties specifically that are conducive to putting mobile homes in. Mobile homes are the definition of affordable housing.

Jill K DeWit:
I know people that have joined Career Path Five because they’re looking forward to that stuff.

Steven Jack Butala:
Yeah. Today’s Jack Thursday. Why I killed several deals my partners already approved. This is why you’re listening. Why would I do that? I have seasoned business partners, Jill and I do. Jill’s a partner in every deal I do, by the way. And we’ve recently brought in people that are really seasoned in other types of real estate that are looking for the next thing to do in their career. And we’re plowing our CRM full. We get sent a bunch of mail out together, plowing that CRM full of opportunities. And as our partners are putting these deals in, they’re either taking on the role of, “Oh my gosh, we need to do this deal. It’s so cheap,” probably because they’re not… A lot of seasoned real estate people can’t believe how cheap we buy property. Or two, “Hey, Jack, should we buy this? Looks like a pretty good deal.”
So I start to apply the stuff that I’m applying in decision-making with land for years. Like, “Yeah, this is really cheap, but there’s no access at all.” Comes back to those six A’s. Access, does it have access? Affordability, is it cheap enough? Almost always, it’s cheap enough. Attributes, is it cool? Is there something around it? Is it close to the Grand Canyon? Can you hunt on it? Any type of attribute instead of just dirt.

Jill K DeWit:
Acreage.

Steven Jack Butala:
Acreage, is it big? Big is almost always better. Not always, but almost always. Alive, are the people there… Is the daughter-in-law calling 20 years after they stopped paying taxes? And finally, adjacent, which is my favorite, what’s going on immediately around that property? Is it a piece of property, and then there’s a farm right next to it on the east, there’s a river on the west, there’s a road, it’s a county road going right through the middle of it, and to the south is your property? That passes the adjacent test, because there are all kinds of cool stuff happening that’s next to the property where they’ve addressed utilities and sewage and all of that.
So in the simplest form, the reason that I’m killing deals is because it doesn’t have one or all, or most of those A’s. And in most cases, I’m killing deals because of adjacent. I don’t care if it’s two thou… We’ve got a 40 acre property in and an amazing part of the state that we sent mail in, and it was about $22,000. Everything around there is selling and has sold for in that acreage for six digits. And this property has absolutely no…. And where we send mail, I’m fortunate enough to have been there. And I know we’re going to have a tough time selling it.
The second biggest, because of adjacent, in that case, it was access and attributes. The second biggest reason we’re not approving deals, and Jill’s given me a star on my forehead for this, is I’m just not, in my life anymore, going to buy for 12 and sell for 22.

Jill K DeWit:
Yes. You’re going to get a big kiss on the lips later for that one.

Steven Jack Butala:
Because you go through as much stuff to get a real estate deal done, making 10 grand, as you do a hundred hundred.

Jill K DeWit:
A hundred.

Steven Jack Butala:
In fact, I would argue a lot of times, a hundred is easier.

Jill K DeWit:
It’s easier. Yeah. Yeah.

Steven Jack Butala:
So I included this as Jack Thursday today because we have a lot of new members right now, because Jill ran a back-to-school promo last month. Please go through the program. Please. All these things that we have set up, Discord, the Thursday call, all the accumulated 300 plus Thursday calls are on landinvestors.com. If you-

Jill K DeWit:
Recorded and saved for you.

Steven Jack Butala:
If you go through tons of those calls and listen to them and listen to what we say about reviewing people’s deals in our group, you’re going to learn a ton. And please go through the program once or twice, maybe as many times as you need to really process and understand everything, and you will-

Jill K DeWit:
You’ll get it.

Steven Jack Butala:
… make great decisions about when deals start coming back. Great decisions on your own.

Jill K DeWit:
Yeah.

Steven Jack Butala:
Once you’re real educated about this, about, “Yeah. Should I buy this property or not?” I guess we did a show last week, maybe two weeks ago, and we talked about this on the one of the Thursday calls recently. At our point, and I’m not saying this is appropriate for you, but we get about 20 deals in.

Jill K DeWit:
Oh, yeah.

Steven Jack Butala:
And we probably approve between one and three.

Jill K DeWit:
Yeah.

Steven Jack Butala:
Why? Because we need to make a ton of money on each deal. It needs to be a slam dunk, and it needs to be large enough, so if we’re splitting it, whether it’s deal funding, or with our partners, or even with each other, we’re here to get rich. We’re not here to just do real estate deals and high five each other, because it was cheap and we sold it for more.

Jill K DeWit:
Yeah. Thank you. That’s appreciated. That was wonderful. 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 Jill Friday. She’s going to talk about how to get a land deal done with a mediocre partner.

Jill K DeWit:
And it’s not Jack.

Steven Jack Butala:
Yeah. I think this is-

Jill K DeWit:
That’d be funny.

Steven Jack Butala:
She’s going to have some stories.

Jill K DeWit:
That’d be really funny.

Steven Jack Butala:
You are not alone in your real estate ambition.

Jill K DeWit:
Yeah, if it were you.

Steven Jack Butala:
Yeah. How to live with a-

Jill K DeWit:
How to live with a mediocre partner.

Steven Jack Butala:
… mediocre man. That’s a show.

Jill K DeWit:
That is true. That’s great. How to raise a family with a mediocre man.

Steven Jack Butala:
Everybody wants to hear that show now.

Jill K DeWit:
Yeah, they do.

Steven Jack Butala:
Even mediocre men want to hear that show.

Jill K DeWit:
Hear that show, yeah. What’s your version of it? What about a mediocre woman?

Steven Jack Butala:
It’s more prevalent than you think.

Jill K DeWit:
What? Oh, no. Okay. Well, we’ll talk about that another time.
Hey, thanks for tuning in. We hope you find our content valuable, and we really do appreciate your support. If you haven’t already, please check out our YouTube channel and hit the subscribe button. And don’t forget, you heard us talking about it, you’re in Land Academy. Get on Discord. It rocks. That’s where we all are, 24/7 chatter and information and helping each other in deals.

Steven Jack Butala:
That’s where all these questions come from-

Jill K DeWit:
Yeah.

Steven Jack Butala:
… on all the podcast episodes.

Jill K DeWit:
It’s where all the cool kids are.

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.

If you enjoyed the podcast, please review it in Apple Podcasts . Reviews are incredibly important for rankings on Apple Podcasts. My staff and I read each and every one.

If you have any questions or comments, please feel free to email me directly at steven@BuWit.com.

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