How to Buy Your First Parcel of Land (ReAir LA 1679)
How to Buy Your First Parcel of Land (ReAir LA 1679)
Transcript:
Steven Jack Butala:
Steve and Jill here.
Jill K DeWit:
Good day.
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 to buy your first parcel of land, the ever present question.
Jill K DeWit:
Yeah. People watch, they hear us, they see us. They’re like, “I can do this. Okay. What do I do? Ready, I’m here. I showed up. What do I do? Is there a list somewhere? Do I just pick from them?”
Steven Jack Butala:
Keep going. This is great.
Jill K DeWit:
Do I just, I don’t know, go online and pick one that looks good to me and just call the person, just call the agent? Is that the best way? And they just handle it all. I just write a check.
Steven Jack Butala:
I’ll tell you a hint, and we’re going to obviously cover this all in just a few minutes here. The secret to buying your first piece of land is in our ebook. If you haven’t downloaded our ebook, even if you’re a long time Land Academy member, it’s like 10 or 15 pages, I think. It’s just blow through a read, but it tells you how to get your first land deal done fast. 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. Please don’t forget to subscribe on the Land Academy YouTube channel and comment on the shows you like.
Jill K DeWit:
Steven wrote, “Hope the holiday preps are going well for everyone.” So this is obviously from a couple weeks ago. “A question I’m curious about. When listing with a flat fee MLS service, do you provide for the buyer’s agent commission?” I have lot to say about this.
Steven Jack Butala:
I know you do. It’s perfect. I’m going to zip it here. You go for it.
Jill K DeWit:
“I have had some horrible experiences with unprofessional realtors. The problems have been with the poor quality of the listings they prepare.”
Steven Jack Butala:
Unprofessional.
Jill K DeWit:
I know. And in parentheses he wrote, “Why don’t you use the pictures I gave you?”
Steven Jack Butala:
Unprofessional realtors is a-
Jill K DeWit:
I know, we could talk for a whole nother month.
Steven Jack Butala:
That’s a redundant sentence, unprofessional realtors. Go ahead.
Jill K DeWit:
“Use the pictures I gave you, the ignorance of marketing outside the MLS.” I know.
Steven Jack Butala:
And out and out laziness.
Jill K DeWit:
“And the out and out laziness. If you get an offer on my property, forward it the same day, not the next week. I could go on and on. I like the flat fee”-
Steven Jack Butala:
I wish you would.
Jill K DeWit:
“I like the flat fee because I can control the listing details. I’ve been offering buyer’s agents the full 3%. No problem paying that if they bring a buyer. Do you guys think it makes any difference on the sales end to give the realtors their cut on the flat fee listing?” Okay. So here’s what-
Steven Jack Butala:
I like fat fee listing. I like your way better.
Jill K DeWit:
Thank you. So Steven’s talking about companies like Broker Direct MLS, and we’ve had other local companies that we’ve used. So what the heck are we talking about? Well, there are a number of places, brokers that say, “Hey, look for a flat rate fee, I’ll put it on the MLS for you. You’re doing the work. I’m not getting commission, but you can use my licensure and everything. This is all legal and legit. And through me, by paying me, I don’t have to get a commission. I’ll just take a flat rate. I’ll put it on the MLS for you.”
Steven Jack Butala:
It’s a tech company.
Jill K DeWit:
And some of them, they might help you with the work. I’m sure there are people out there that do that. Most of the ones I work with, and this is the way I like it anyway, they just say, “Here’s the paperwork. Fill it out how you see fit, check all the boxes that I would normally check. We’ll input it for you,” because they’re doing that. “And we’ll get it on the MLS for you. Give me the pictures that you want. Put the order that you want. Write the description that you want.” And that’s part of why it’s a win-win for both of them. They’re like, “I’m not doing any work. I’m getting on the MLS for you.” It’s probably great exposure for them because their names show up on there in some way. But it’s just getting on the MLS is what I want.
Jill K DeWit:
So when I first did this, like Steven’s talking about, I did it wrong too, by the way. I went in thinking, all right, I’m using this flat rate service, nobody’s getting a commission. I just want to get it out there. How I usually buy it without an agent, I also want to sell it without an agent. I’m not paying the listing guy anything other than a couple hundred bucks. Why the heck would I pay somebody bringing somebody to me a commission? Well, I lost sales because of that. I realized, oh, there weren’t brokers that are bringing because it’s now in the broker’s arena, not just places that the public is looking. So by not putting on there that I’m happy to pay a buyer’s agent commission, they were not putting my properties in front of their customers. I went, oh ding, ding. So I did change that, and I do happily pay that.
Jill K DeWit:
And you’re right. So why would I do this? Maybe it’s a property that it doesn’t command a lot of money, but I need more eyes on it. I don’t really need someone running out there. Well, maybe it’s an area like you’re finding, Steven, that you can’t find a good agent, and that happens sometimes. It just may not be a rocking land person working that area. There might be a lot of house people, but not land people. That’s what I’ve found. But I need to get eyes on it. So I will do the flat rate listing, make it look fantastic. Do all my own copy, all my own photos, all my own drone shots. And then when people call, they’re getting me, which is so nice. They’re getting me. I can put my phone number right in there, and I will happily, like I said, pay those agents the commission that they’re due. No problem with that. What do you want to add?
Steven Jack Butala:
So, Jill did a very good job of describing what a flat fee listing is. What you don’t get out of a flat fee listing … By the way, this cost maybe a hundred bucks instead of 3% of the purchase price, which is what you pay typically when you list it with a regular real estate agent. What you don’t get is any service at all, which is okay for us. We’re used to doing this stuff anyway. But consider this, finding a good realtor, it’s very hard, but once you do, you’ve got to stick with that person and you can create a business around them. If they’re responsive, they understand the market, they understand land, they understand you-
Jill K DeWit:
Wear a cowboy hat.
Steven Jack Butala:
… they understand you and how you do business and the fact that they’re going to get a listing a week, or three listings a week in some cases. We have one person where we shove everything to them in one state, and we do great. So you have to ask yourself, is it appropriate to flat fee list and do a lot of work and still pay 3% instead of 6% or in some cases 10? Or is it appropriate eventually to find the right person the way that you would find the right business partner or to find the right mate in life. It takes a lot of work and a lot of time and a lot of research, but once you do, it pays off great. So I would suggest if you’re down this flat fee listing path, it’s temporary. In the end, you need to find the right person.
Jill K DeWit:
That’s what I’m saying. I would use it when I can’t find somebody good. That’s really it. That’s what makes sense to me.
Steven Jack Butala:
Listen, it’s different. I don’t know, a year ago, this is all we did. This is all we talked about on the show, flat fee listings are the greatest thing ever. So, stuff changes.
Jill K DeWit:
Yeah, and only use social media, only do this, do Facebook, do all this stuff.
Steven Jack Butala:
So, stuff changes all the time.
Jill K DeWit:
Sell it all those ways. And if you really want to spend some money, do flat fee listing. And now it’s evolved into, well, class two, as a community, we’re all doing bigger and better deals. So, keep that in mind. When you’re selling a property that’s $90,000, you need to get it in front of the right eyes, and it probably is not TikTok.
Steven Jack Butala:
Yeah. Yeah. Well, here’s the math on it. Buy for 30, sell for 90, which is a lot of what we do right now. Maybe buy for 50, sell for 150. We have a broker that has proven himself over and over and over again to Jill. So we’re happy to pay 10%. In a lot of cases, we pay a flat fee listing to him of 4 or 5,000 bucks just to make sure that we’ve got his attention, because he’s that good. So for $150,000, 10% is $15,000, and we paid 50 grand for it and we don’t have to do anything. We trust that the guy’s got great drone shots and he answers a phone and he’s on time. And just about every time we list something with him, he’s got it under contract in a week or two. That’s worth it.
Jill K DeWit:
I agree.
Steven Jack Butala:
That’s what you’re after. Today’s topic, how to buy your first piece of land, first parcel of land. This is why you’re listening. In the ebook that anyone can go download on the Land Academy website, I wrote a long time ago, a lot of years ago, the first chapter says something like this. Drop everything you’re doing. If you want to be a land investor, do this. And I say, go into Craigslist, which is still true. I can’t believe Craigslist is still around.
Jill K DeWit:
I know. Isn’t that funny?
Steven Jack Butala:
But it still works.
Jill K DeWit:
In its same basic archaic form. I can’t believe it hasn’t really evolved.
Steven Jack Butala:
I read somewhere like a year ago-
Jill K DeWit:
Is there even an app for it now? I don’t know if there is.
Steven Jack Butala:
I read somewhere a year ago that a couple of guys got together. They were either graduate students or PhD candidates. And they rewrote Craigslist for free and submitted it to get college credit. They submitted it the Craigslist itself and said, “You guys need to get in the 21st century. If you want to do it, here, it’s free, and we’ll support it.” And they’re like, “Nope.”
Jill K DeWit:
No, we’re not doing it.
Steven Jack Butala:
When have you ever heard anyone be successful in the tech industry by digging their heels in-
Jill K DeWit:
By not making changes.
Steven Jack Butala:
… and saying, “The old way’s better”?
Jill K DeWit:
That’s hilarious. Nope.
Steven Jack Butala:
Go to Craigslist, go to wherever you see real estate, either the wanted or where people are selling real estate and type this in, some version of this. Cash waiting for your unwanted rural vacant land, phone number. And it’s shocking. To this day, it’s shocking how many people-
Jill K DeWit:
How many people just pick up the phone and call you.
Steven Jack Butala:
… reach out to us, reach out to me specifically and say, “Well, I did my first land deal. I’m not a Land Academy member, but apparently this works. Tell me where to sign up.” Is that the absolute right way to get into this business? Not at all. But if you’ve got some Jill like moxie and you understand real estate in general, yeah, you can get away with that in certain markets, for sure.
Jill K DeWit:
Here’s the point of that exercise, if I can just jump in for a second.
Steven Jack Butala:
Sure.
Jill K DeWit:
It’s not like I was joking in the beginning talking about, well, I can just go find one online and I’ll buy it. So, you’re not necessarily in a lot of situations dealing directly with the seller. That’s the piece that we’re trying to hit home with.
Steven Jack Butala:
She’s exactly right. So in my Craigslist example, as well as the entire Land Academy model, there’s no stuff, we don’t buy for sale property. We buy property directly from an owner that’s off the market, which is why it’s such a great deal. And we generate that transaction. So my Craigslist example is equivalent to walking into a casino, pulling down a handle, and winning the first time, which never happens. It might happen on Craigslist once in a while. It might happen in a casino once in a while, but that’s not the business we’re in. We’re in it to make hundreds of thousands of dollars, if not millions of dollars a year.
Steven Jack Butala:
So how do you do your first land deal the right way? You do a ton of research about how we buy and sell property, how we orchestrate a blind offer campaign, how we get involved, all of our members, us included, on a daily basis are involved in Land Academy Discord to ask questions. You go through all the education. So starting today, you’re about two months, maybe three months away from your first acquisition.
Jill K DeWit:
That’s what I wrote down.
Steven Jack Butala:
This is not get an E-Trade account, deposit 10 grand and buy Tesla stock.
Jill K DeWit:
In an afternoon.
Steven Jack Butala:
In an hour. That’s not what this is. And for that reason, and I say this with gleaming pride, that’s why the whole world doesn’t get it. If you get it, you’re one of the few and you’re one of the Land Academy group of people that understand this. You’re patient and you’re analytical and you have a little bit of sales in you, or you have enough in you to know that you need a salesperson. Or vice versa, you have enough sales in you to understand you need a tech person.
Jill K DeWit:
You’re a data guy.
Steven Jack Butala:
It takes a few months. What do you have down?
Jill K DeWit:
Well, I was going to say, that was kind of funny, because that was my first point too. Even the Tesla example, I’m not going to go and get an account in an hour because I heard one newscast and dump all my money in it. I’m going to do some research. You should be doing a whole lot of research.
Steven Jack Butala:
Months of research.
Jill K DeWit:
Study the area. And then it’s not even studying the whole process, but it’s studying the areas that you’re thinking of doing this. We have a version of, it’s our red, yellow, green test, where we know how to look at an area and then really dissect it, and then pit regions or zip codes or something within that together to really fine tune and make sure we’re not making a mistake before we ever download any data and ever send out any mail. That’s not how you test an area, by the way. We don’t just let her rip.
Steven Jack Butala:
We don’t leave any of this to chance.
Jill K DeWit:
Exactly.
Steven Jack Butala:
There’s no dart boards in our office. Jill had a, I’m going to let her describe it, but this week, actually … What is this, Tuesday? Tomorrow, we are launching our third Career Path, which is, if this is your career, then you need to look at joining Career Path. Jill had a conversation with somebody who signed up for it last week, who said, “Hundreds of thousands of dollars I made last year. I just quit my job. I’m scheduled to make one 1,500,000 this year.” So these are real stories that happen. I’m not sitting here trying to sell you anything. This person clearly gets it. Do you want to tell the story or?
Jill K DeWit:
You just did?
Steven Jack Butala:
Oh.
Jill K DeWit:
I don’t what else to add.
Steven Jack Butala:
I don’t know if there’s much more to it. I tend to extrapolate all the numbers out of a story and just say the numbers.
Jill K DeWit:
That’s all you get out of that. I know. I understand. I can tell you where they live. I can tell you about their family. I can tell you what’s going on in their world right now. That’s okay. That’s why you have me.
Steven Jack Butala:
But there’s a methodical A to B to C way of buying real estate, all real estate, not just land, through doing a ton of research about defining your acquisition criteria, finding the properties that fit your acquisition criteria in general, sending everybody an offer with an actual price on it.
Jill K DeWit:
Step two.
Steven Jack Butala:
And then fielding those offers with somebody that-
Jill K DeWit:
Step three.
Steven Jack Butala:
… understands how to talk to people, unlike me, and buying the property and then reselling it for more quickly. That’s how you do this. And it doesn’t happen overnight.
Jill K DeWit:
No. So that’s why I said, so one is study the area, of course. Two, send mail. And three, answer the phone. This is about just buying it. Not selling it, not building a business, not quitting your job. That comes later. All this is about just starting with step one and making sure you buy it right. There’s a lot of research that we do that goes into not only picking areas and sending out the mail and pricing offers, and that’s on Steven’s side of the sheet. And then when it comes into me, there’s still due diligence involved. Let’s make sure we can do what we think we can do with this property. Do we really want it? Does it have the six A’s. Yes, hold onto your hat. There are six now. It used to be four A’s. Now there are six.
Jill K DeWit:
That’s going to be another show, where we’ll cover all that. But doing that. And before you even get to the due diligence part, one of the main steps people miss in how to buy your first parcel of land is answer the phone. People, they’re like, “Oh, I’ll just let it go to voicemail. See if they fill out this form online. I’m going to direct them here.” Don’t make it hard for them. Make it easy for them. That’s my best tip on buying your first parcel of land. You make it so darn easy and they love you, that they want to sell to you. And they’re like, “I just want to get X out of it. It’s yours.” And you go, “I’ll take it from here.”
Steven Jack Butala:
I spent almost 25 years making mistakes doing this. I did failure after failure, not so much failing, failing, but wow, I could have really done that better. I made some money, but we can do it better next time. So if you’re going to spend two or three months of research and some money on education or invest your time, however you look at this, why would you just buy one property? That’s what Land Academy’s all about. We’re not hobbyists here. We’re here to become multi-millionaires in 12 to 24 months. So, my point to writing this title was how to buy your first piece of property, it all starts with your first property, but how do you buy 1000 properties might be a better discussion.
Jill K DeWit:
That’s another show.
Steven Jack Butala:
Because it’s the same process.
Jill K DeWit:
It’s true.
Steven Jack Butala:
Exactly the same process.
Jill K DeWit:
I haven’t said that in a while, but that was one of our sayings. If you can buy one, you can buy 10. And if you can do 10, you can do 100. Hang on. Happy you could join us today. Five days a week, you can find us here on the Land Academy Show.
Steven Jack Butala:
Tomorrow, well it’s House Academy. It’s the House Academy Show tomorrow, and we’re going to talk about house deals made as easy as land deals. You are not alone in your real estate ambition.
Jill K DeWit:
People don’t realize that the same techniques that we use here also carries over to anything you want to buy.
Steven Jack Butala:
Strip malls, trailer parks, ice scrapers.
Jill K DeWit:
Once upon a time, there was going to be a car academy and a airplane academy and a boat academy, which there’s a lot more to those things, and we’re land people. But it’s the same concepts, especially for all ways of real estate. I know we’ll talk about that more tomorrow. Thanks for tuning in. By the way, don’t forget, if you’re a Land Academy member, make sure that you are with us on Discord. We are Steve and Jill.
Steven Jack Butala:
We are Steve and Jill. Information.
Jill K DeWit:
And inspiration.
Steven Jack Butala:
To buy undervalued property.
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