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Top 5 Mistakes New Land Investors Make [ReRun] (LA 1883)

Top 5 Mistakes New Land Investors Make [ReRun] (LA 1883)

WP Top 5 Mistakes New Land Investors Make

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Transcripts:

Steven Butala:
Steve and Jill here. Welcome to The Land Academy Show, entertaining land investment talk. I’m Steven Jack Butala.

Jill DeWit:
And I’m Jill DeWitt, broadcasting from sunny, Southern Scottsdale. Where it’s got a cowboy vibe around here. Let’s just tell it like it is.

Steven Butala:
Whenever Jill goes into any new environment, even if it’s very temporary, she has to dress the part. So, she’s got… Like if we go skiing, even though she doesn’t ski [inaudible 00:00:31], she will get all the outfits…

Jill DeWit:
Yeah.

Steven Butala:
If it’s a six day ski trip, she’s got six outfits, six new outfits.

Jill DeWit:
If we were in Japan, I’d be wearing a kimono right now.

Steven Butala:
We’re no stranger to Scottsdale. We lived here together and separately for years, years and years. We never had cowboy boots.

Jill DeWit:
First separately, and then together.

Steven Butala:
We never had cowboy boots, never had hats or anything, and now she’s got all that.

Jill DeWit:
Totally.

Steven Butala:
What’s all that about?

Jill DeWit:
Got them in Utah, which is really funny. Park City started the whole thing. It’s just cool. I love it. I enjoy this environment.

Steven Butala:
Today, Jill and I talked… And she doesn’t find the cheap ones.

Jill DeWit:
Come on. It’s not like I have 10 of them.

Steven Butala:
Today, Jill and I talk about the top five mistakes new land investors make. This is going to be an interesting show. We all went in separate corners and listed the top five separately. So, I have no idea really-

Jill DeWit:
It’s going to be fun.

Steven Butala:
Yeah. I wonder how much they overlap. I bet not at all.

Jill DeWit:
I bet they do. I bet there’s total overlap.

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, and if you’re a Land Academy member, please join us on Discord.

Jill DeWit:
Luke wrote, Hey guys, hope everyone is doing well. Just curious, how many of you send just the purchase agreement in the mailer from offers to owners, to the title company / attorney versus closing with another version of the purchase agreement. Perhaps even as far as the state or the realtor version of a purchase agreement. I only bring this up because many attorneys have sort of chuckled at my purchase agreements I’ve used when I was wholesaling houses, as if to say they were short-sighted and too basic for such an agreement. It sounds like they chuckled at it, but they took them, which is kind of funny. Just wondering if the one used in the mailer is more of a barometer of testing the willingness of the seller. Then from what you utilize a more detailed and professional purchase agreement. Thanks.

Steven Butala:
I’m going to answer this, all right?

Jill DeWit:
Sure.

Steven Butala:
When I started this, I sent a scaled down version of the purchase agreement that we use now, which is literally half of a page to my lawyer. And he looked at me and said, “this is the greatest thing I have ever seen ever.” Total binding legal document with parameters for both parties and a timeframe. I think whoever said this, they’re not laughing, Luke, because it’s not comprehensive. They’re laughing in a manner that’s like, congratulations, you guys are doing this the right way. I don’t want to say you’re getting away with it, but this is thought out, it’s a binding agreement. It does the job. People sign it and send it back. And it’s a single page. It’s very clear. I want to buy a property, here’s the APN, here’s the legal description for the price within this timeframe. And here’s how we’re going to do it. Everything else in life is complicated as hell, everything.

Jill DeWit:
I agree.

Steven Butala:
Why does a real estate deal have to be complicated.

Jill DeWit:
The answer to the question is no, we use the exact form. That’s what I sent into a title company or attorney. And they’re like, okay, here we go.

Steven Butala:
Jill and I just got done closing on our primary residence here. I bet we signed our signatures each a hundred times.

Jill DeWit:
Probably. It was nice.

Steven Butala:
It’s an outrage, how ridiculous the realtor version of a purchase agreement… And it’s ineffective. We were represented by multiple people, that shouldn’t happen. We should be represented by one person.

Jill DeWit:
I know.

Steven Butala:
I don’t want to get into it now, but no, that purchase agreement-

Jill DeWit:
You don’t need all that stuff.

Steven Butala:
… purchase agreements’ awesome.

Jill DeWit:
When you really sit and read all that, there’s a bunch of gobbledygook. If you watch, I could see the wrong people will make sure for a rural piece of rural vacant land, you’re sending out the [inaudible 00:04:26] report. I don’t need to sign a [inaudible 00:04:28] report on a piece of rural vacant land. There isn’t any.

Steven Butala:
You know what’s in that-

Jill DeWit:
Or bedbugs. I don’t need the bedbugs.

Steven Butala:
You know what’s in that realtor… If you’re a realtor, you are required by law to use that purchase agreement. So, we’re not real estate agents, we’re not required to do this at all. What’s in there as a standard agreement, as part of the… First of all, it’s not one agreements, there’s like 19 agreements in there. And one of them is exclusive representation for every single piece of property that Jill and I buy for the rest of our lives. What does that have to do with buying a house? So, if I signed it and sent it back, all the land we would ever buy forever, they would get a commission on. This is a peeve of mine. This is the reason I-

Jill DeWit:
You just got to read the stuff too.

Steven Butala:
… included this in the show. Now with DocuSign, you can’t red-line stuff like you were used to.

Jill DeWit:
I do. Do you know what I do? I refuse the DocuSign, I print [crosstalk 00:05:28].

Steven Butala:
You print it out.

Jill DeWit:
And then send it back in. Scan it myself. I’m like, I’m not signing like this.

Steven Butala:
No RPA is great. And I bet your lawyer’s proud of you.

Jill DeWit:
Yes.

Steven Butala:
Today’s topic, top five mistakes new land investors make, according to me, and according to Jill. This is the meat of the show.

Jill DeWit:
We happen to know several hundred or so.

Steven Butala:
I was a new land investor and I’ve made more than five mistakes.

Jill DeWit:
There is that too. I’m going to make five today. All right. This is fun. So, let’s do this. I like we both did a kind of David Letterman style. So, we’re going to go five, four, three, two, one, in our order of priority. Let’s start at the bottom. What’s your number five? Number five mistake by Steven, the top five new land investors make.

Steven Butala:
They don’t go through the education entirely.

Jill DeWit:
I like that.

Steven Butala:
There’s certain new people, everyone’s had people like this, and you know who you are. In classes, that they didn’t read the book and they don’t listen to the instructor, they ask all the questions that are addressed in all the material and the things that the instructor says.

Jill DeWit:
Interesting. That’s actually not on my list. That’s good. What’s number four.

Steven Butala:
No, [inaudible 00:06:40].

Jill DeWit:
I was just saying just go through your five and I’ll go through my five, because I can talk about them, you could talk about mine.

Steven Butala:
They don’t seek help along the way. These are in order of least important. So, number two for me is, they don’t seek help along the way from other members or from… We have a whole staff, customer service staff. They don’t ask. Every time I talk to my customer service staff, because they help write these topics every week now. What’s the number one thing that people ask about? And you know what they say every single week, “I don’t know how to log into Land Academy.”

Jill DeWit:
Got it. All right. So that’s five, that’s four. What’s your number three? Now we’re getting to the juicy parts. What’s number three? The third top.

Steven Butala:
They never get a mailer out. They get hung up on life or something or whatever. Number two is, they continue to attempt to do this on their own without getting a partner. That’s really important. I’m going to talk about that in a few minutes. You don’t need to send a mailer out, do it all yourself, figure it all out, do a few deals and then you’ll get a partner. You can get a partner from day one. In fact, we’re in the process of collecting names in our group to find out who’s the Jack in the thing and who’s the Jill, and who’s both. We’ll try to match you up. Not try to, but-

Jill DeWit:
Make it available.

Steven Butala:
Make it available. But the single number one thing, mistake that I see people make, and I didn’t learn this until probably four or five years ago. And it changed my life overnight, is I don’t see people making a schedule, creating a calendar with events in it and sticking to it. That’s the success for me for everything, it changed my life.

Jill DeWit:
This is very different from mine [crosstalk 00:08:21]. I like this.

Steven Butala:
I know. But I want to mention this, not anywhere did I say they pay too much for a piece of property. None of these are property related. If you get so far as you’re getting purchase agreements back… Has anybody ever come to you and said, “I paid too much for this property, what do I do?” In your entire instructor Land Academy career.

Jill DeWit:
You know what? Only before they found us.

Steven Butala:
Yeah, I bought… [crosstalk 00:08:46].

Jill DeWit:
Like, I’m thinking about joining, I’ve got to dump this property. Tell me about the property. I’m like, why are you selling at that high? You’re never going to sell it. Because [inaudible 00:08:54]. I’m like, well, you paid too much for it. He goes, yeah, I know that now. I’m like, I could help you. You just have to get rid of it.

Steven Butala:
[crosstalk 00:09:01].

Jill DeWit:
Yeah, totally. Then they join. I’m like, you need to get rid of it now and just get it off your plates and move on.

Steven Butala:
Has anybody ever said, “wow, I really wish I wouldn’t have sent that mail to that area?”

Jill DeWit:
No.

Steven Butala:
Never. It’s not about the deals.

Jill DeWit:
It’s a learning thing too. And if you’re like, I only got something this out of it, I learned something.

Steven Butala:
It’s the stuff inside of you, it’s not the real estate.

Jill DeWit:
Yeah.

Steven Butala:
Go ahead, Jill.

Jill DeWit:
Okay. Here’s my top five list of the top five mistakes new land investors make by Jill. Number five, they chase something shiny and not focus on their acquisition goals. It happens. You send out a mailer. Everything’s great. And the person says, “I also have this, this and this.” And you’re like, you got all excited about a golf course. Are we really going to try to sit, undo and figure out how to buy a golf course? It may be cool, but that’s not what we’re doing here. And you’re going to spend how much time chasing that.

Steven Butala:
I was in this fishing section of Walmart recently in California, which is right next to the ocean. It’s pretty bad-ass fishing section. They have in there now this thing called a fishing glitter. So, whatever you drop in the water, whether it’s bait or hooks or lures or whatever, you put sticky glitter on it-

Jill DeWit:
wow.

Steven Butala:
… make it shiny.

Jill DeWit:
That’s hilarious.

Steven Butala:
And it works, I guess. I don’t know. I’ve never used it.

Jill DeWit:
Sure it does. All right. Number four, they waste time trying to make a bad deal work.

Steven Butala:
Well, we’ve all been there. I’ve been in relationships like that.

Jill DeWit:
That too. Cut your losses. Don’t worry, just move on. Open another letter. That’s the whole point of that one, open another letter. Number three, they don’t trust the process. They veer from our instructions and they get poor results. I see it all the time.

Steven Butala:
I see that too.

Jill DeWit:
I was watching a conversation today, and it wasn’t a member, so I know it was… But I watched someone’s like they were scrubbing out. It was a whole thing in… I think it was on Facebook. They’d say, “Hey, do you like me scrub out anyone who’s purchased a property or the ownership has changed hands in the last five years.” I’m like, you guys are missing a lot of people.

Steven Butala:
That’s crazy. Why don’t you do that?

Jill DeWit:
Exactly. They think that they must have just bought it, so why would they possibly sell it? And everybody, including me, said, “that’s nuts, because someone could’ve just inherited it, someone could’ve just died yesterday.” There’s a lot of reasons that something could have just changed hands and they still want to sell it. But they didn’t see it like that.

Steven Butala:
Let me expound on this for a second. The cost of doing a mailer from the money standpoint and your time standpoint is tiny. It’s tiny compared to the money you make on a real estate deal. To send 1500 letters out, which is about what you just send every month if you’re new, that costs six or $700. You’re going to make six, 10, 12, $15,000 minimum a transaction. You want to get as much mail out. You want to send mail to an area, zip code or a county. Then when you’re done and you shake your hands, you want to say everybody got a letter.

Jill DeWit:
Let me get to that in just a minute here, it’s on my list.

Steven Butala:
Sorry.

Jill DeWit:
Hold please. So, that was number three. They don’t trust the process, they veer from… They do that. In yourself you’re like, this can’t be right, so the best thing I can say too is, if you join and you’re doing this… There’s a reason why we’ve been just doing this for how many years, we can save you. My number two is, overanalyze picking a county or scrubbing data and then it results in no action. That could be tied in with your calendar thing too. You’ve got to cut yourself off. Sunday afternoon, I’m going to pick a county. I’m going to download data, I’m going to price it. Then by Sunday night, eight o’clock, whatever your time limit is, you better be done. You can’t push it to next Sunday, then the next Sunday, because next thing you’ve done, now you’ve done nothing.

Steven Butala:
That’s the calendar.

Jill DeWit:
That’s what I’m saying.

Steven Butala:
That’s my calendar.

Jill DeWit:
That’s what I just said, it ties into that. And my number one thing that I see new investors, the top mistake is they don’t send enough mail.

Steven Butala:
Absolutely.

Jill DeWit:
They think 500 units to test an area.

Steven Butala:
You’re exactly right.

Jill DeWit:
You’ve got to send more mail.

Steven Butala:
There’s no such thing as a test mailer.

Jill DeWit:
Because this sounds like a driving thing. Like you have more… At a faster speed you can recover, or is it a boating thing? I don’t know.

Steven Butala:
Boating for sure.

Jill DeWit:
Okay. But you’ve got to send more mail, that just solves everything. You have bad deals, you’re not liking this thing. These sellers are kind of whatever. Your pricing is… Who knows whatever it is. Send more mail, you’ll fix it and you’ll get it. Because the whole point is you want to have a lot of deals review. You will have so many great ones that you’re like, I just can’t…

Steven Butala:
That’s right.

Jill DeWit:
I can’t possibly buy all of these. I need to get some money behind me, because these are all so great, because I really flooded this area.

Steven Butala:
You know what should have been in my top five list is-

Jill DeWit:
Send more mail?

Steven Butala:
No. Just worried about money. You don’t have to worry… You don’t ever have to fund a single deal, ever.

Jill DeWit:
It’s true.

Steven Butala:
I should have had that on my list.

Jill DeWit:
That’s true.

Steven Butala:
I see a lot of people… I think that stops a lot of people.

Jill DeWit:
True.

Steven Butala:
It’s like, well, I only have seven grand in my account. I can’t send a mailer out, because what if I get a good deal?

Jill DeWit:
That’s [crosstalk 00:14:09].

Steven Butala:
All you have to do is send it to us.

Jill DeWit:
Exactly. That’s really good.

Steven Butala:
Or any number of the other money people in our group.

Jill DeWit:
That’s awesome. I think that was really great. Happy you could to join us today. Five days a week, you can find us right here on The Land Academy Show.

Steven Butala:
Tomorrow the episode on The Land Academy Show is called housing versus land investing in 2021. You are not alone in your real estate ambition.

Jill DeWit:
Do you want to tie in some stuff from that webinar that we listened to the other day?

Steven Butala:
Yes, I am.

Jill DeWit:
That’s going to be cool. That was really-

Steven Butala:
Here’s a hint. They’re both awesome.

Jill DeWit:
Nothing but great information. Isn’t that funny, listening to that webinar the other day, I love one expert explaining how he listened to another expert. Someone he really looked up to who was forecasting how the end of 2020 was going to go and he was wrong.

Steven Butala:
He was dead wrong.

Jill DeWit:
Exactly.

Steven Butala:
This is a high paid economist.

Jill DeWit:
It’s very interesting.

Steven Butala:
That’s okay.

Jill DeWit:
It happens.

Steven Butala:
I’m glad he was wrong by the way, because-

Jill DeWit:
Wrong in the right way.

Steven Butala:
Yeah. He really predicted there was going to be a mess, it’s not going to be a mess. And we’ll talk about it tomorrow.

Jill DeWit:
That’s awesome. If you need any sort of ownership or property details, including owner phone number and FEMA flood map overlays, check out neighborscoop.com. Created by investors that says for investors like you.

Steven Butala:
We are Steve and Jill.

Jill DeWit:
We are Steve and Jill.

Steven Butala:
Information.

Jill DeWit:
And inspiration.

Steven Butala:
To buy undervalued property.

Thanks for listening, and finally, don’t forget to subscribe to the show on Apple Podcasts.

Greetings – Thursday, February 2, 2023

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