Transcript:

Steven Jack Butala:
Steven 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 for the Valley of the Sun.

Steven Jack Butala:
Today’s Jack Thursday and I’m going to talk about the psychology behind being a real estate agent versus a land or real estate investor.

Jill K DeWit:
I’m a little nervous.

Steven Jack Butala:
No, it’s not a rant.

Jill K DeWit:
Oh good. Phew, good. Okay.

Steven Jack Butala:
I mean the gist of it is this, I came up with this concept because if you go on YouTube and you type in something like how to be a real estate lawyer, or how much do your real estate agents make, and the number of people that have viewed it in the last week is in the millions in some cases, or tens of thousands and there’s all different reasons for that. But if you go onto most YouTube places, even the really popular ones, about how to be a real estate investor, it’s a lot fewer people. So there’s some psychology behind this and I think I know why.

Jill K DeWit:
That explains our numbers behind our shows.

Steven Jack Butala:
Yeah. Jill and I get about six or seven views per episode.

Jill K DeWit:
We should title these. We should just copy and use the titles that work and then just do whatever show we want. This is the whole point. I’m going to read this because you’re going to read the question. So first let’s take a question post for one our members on the land investors online community. It’s free and please do not forget to subscribe to the Land Academy YouTube channel and comment on the shows that you like.

Steven Jack Butala:
Before I read this, Jill and I have, every other Thursday she hosts Clubhouse Talk. It’s a new app driven version of an old school talk show, radio show. And so people can call in or dial up and dial in and we move them up to our, she moves them up and they ask questions and we talk with them. And if we do everything right, it’s to the benefit of everyone who’s listening.

Jill K DeWit:
Right.

Steven Jack Butala:
I actually, I really enjoy it. It’s a chance for us not to be on in front of a camera. It’s audio only. And we really can, because the audience is not that large, really, I think do some good to the people that are there. They want to be there and just be truthful. So Aaron has an opinion about-

Jill K DeWit:
Go ahead.

Steven Jack Butala:
… Our last Clubhouse Talk and here it is.

Jill K DeWit:
Okay.

Steven Jack Butala:
He says, I listened to the last Clubhouse and sorry if this comes off harsh, but whoever is thinking that turning land investing into private equity fund, you’ll thank me one day, it’s an awful idea. I’ve worked and consulted with various funds in my time from algorithmic stock and futures trading to hard money lending funds and Reg 506 B and C all day long. Why is this such a bad idea? Well, remember how Zillow came up with and tried to beat everyone at the real estate investing game? They too thought that they were smart. I love this though. They took the attitude that they could buy houses for higher prices than anyone else and since they had the best data in a handful of other profit centers, that it would all balance out in the end and they would own the real estate, all the real estate in America.
There’s expletives in here that I can’t say or read out loud. You too can follow their glorious crash and burn on the investing side of things. Go start a fund. Be pressured to do deals because people keep throwing cash at you and you have to show something in the next quarter other than all the cash that’s sitting in your Wells Fargo bank money market account. So you buy a property for too much, but it’s okay because you get a management fee. This is what I’m getting at.

Jill K DeWit:
I hear you. Keep going.

Steven Jack Butala:
There’s fees, fees, fees, fees, fees. That’s where you make money, not actually by anything intelligent. So it’s okay, you get a management fee. Well this snowballs further. You can say no. You can say no to deals because honestly, your investors will be just fine to buy it at 80% of retail. It’s still a good return. And these are just passive investing pension types. So you market destruction the hell out of the land investing world. You get your management fee on billions and barely make a profit on any deals and it’s okay. You’re covered. That’s the market.

Jill K DeWit:
You cornered the market, yeah.

Steven Jack Butala:
Then you have to admit that returns are mediocre at best. Your early investors see a new shiny object in the crypto are comic books from the nineties or whatever and your management fee starts to shrink for the first time in six years and you start talking to your wife about doing something away from the corporate world. Do yourself a favor and realize that land investing is already as profitable as it’s going to get. I could not agree more. You don’t need partners. There’s capital out there for 50% of retail offer. Come on guys. The economy really, you’re offering 50%? You don’t even know. It goes on. So I’m going to leave it at this. He goes on for a while and ultimately says, you’re welcome, which I love.
Here’s the thing, this all started because, and this is my response in discord. Jill and I had a very healthy, I think, healthy talk about-

Jill K DeWit:
You shared that?

Steven Jack Butala:
Yeah. Oh yeah.

Jill K DeWit:
Oh.

Steven Jack Butala:
On Clubhouse this is what prompted this whole rant. Our discussion was not about, hey, let’s just start a fund.

Jill K DeWit:
Right.

Steven Jack Butala:
That’s not what it was at all. I would never ever start a fund for all the reasons he’s saying, but we could. Jill and I could start a fund tomorrow and we would be forced to make bad decisions, land acquisition decisions the next day and we don’t right now. We make great acquisition decisions because we don’t report to anyone and there’s no fees involved. And if we do great, we make a bunch of money. If we don’t, we lose a bunch of money. The way the world was intended to be. That’s not what happens in that private equity world. The confusion started with him, and I say this with a smile on my face. What I said was the structure of buying and selling land and then sometimes getting it funded the way that we do internally in our group, is the same structure that’s been bastardized and wrecked in private equity. It’s still the same structure and in our case, it works. And I think in the funding case it’s just, it’s what Aaron described. I can go into it, but that’s not really the topic.

Jill K DeWit:
Understood.

Steven Jack Butala:
Today’s Jack Thursday. I’m going to talk about the psychology behind being a real estate agent versus a land or a real estate investor. This is why you’re listening.
There’s some psychology behind taking on your own personal risk and reaping the reward from that or taking personal responsibility for the failure or whatever happens in between. For whatever reason, Jill, you from day one, since the day I’ve met you, have been hardwired to accept failure and celebrate success.

Jill K DeWit:
Thanks.

Steven Jack Butala:
That’s very, very, very unusual. So I bring this up earlier in the show, because there’s so many people are dying to be real estate agents, but they’re not dying to be real estate investors. Or people are dying to be lawyers. They’re just dying to represent somebody and get paid to represent them. But they’re not running around trying to be a real estate investor or be an entrepreneur that needs a lawyer, needs some legal advice. So let’s think about that for a second. Why would somebody just want to represent somebody else for fees and why would another personality like Jill and honestly like me, want to take the risk and reward? I’m asking.

Jill K DeWit:
I think it’s nature. You think I’m kidding?

Steven Jack Butala:
I think people, and it’s not just real estate agents, for whatever reason, are very comfortable taking money from other people and theoretically doing stuff to get that money versus buying something and selling it for more. Or buying the components in a manufacturing situation, buying 19 components for $10, putting it all together, packaging it up and selling it for $25.

Jill K DeWit:
I think it’s fear.

Steven Jack Butala:
I think it’s nothing good.

Jill K DeWit:
I think a lot of it’s fear. I’m afraid to put my, I’m afraid to… Let me tell you a story.

Steven Jack Butala:
Here we go. It’s a holiday weekend. Go for it.

Jill K DeWit:
It’s after the holiday weekend.

Steven Jack Butala:
Oh, right.

Jill K DeWit:
By the time this airs, you’re like, come on, get back to it. No, I had this very, very… I have this very sweet friend. Her name is Cammy. She still to this day says “Jill, I’m happy to live vicariously through you.” She never wanted to be the one to get out of the car and toilet papering somebody’s house, but she’d be happy sitting in the car when I say hit the gas, let’s get out of here kind of thing. So I think that there’s a healthy amount of people that like being on the sidelines. They hope to be part of it and they enjoy the process a little bit, but like, oh no, they don’t have the threshold for some reason to just dive in and go for it. And then there’s others. This is truth time. This is sometimes where I get myself in trouble.
I’m like, sure, okay, I’ll get on. I’ll try it. Stand back everybody, because I’m not sure what’s going to happen when I start this thing. But I’m like, all right, let’s just do it. I’ll figure it out kind of thing. Now as I have aged, I like to think, nevermind my hands are all bandaged up from all kinds of things here, but I like to think that I’ve developed a little bit of a safety pause and fear like, you think I need a helmet? It might be a good idea. I think I will put a helmet on today. But there’s times that I’m like, oh, a helmet might have been good but I didn’t need a helmet. It all worked out fine. I’m just going to go for it. So I think that that’s, for me, I think that’s where I say my nature, and it’s not like because, trust me, it’s not like I learned this over time because I’ve done things wrong and screwed things up.

Steven Jack Butala:
Jill and I just had a very long, very expensive meeting with a New York lawyer about some business ideas that we have about the future. And his specialization was, he was a great specialist for what he specialized in and how we were trying to apply what he specializes in, didn’t get through to him and that didn’t matter to him. The clicking part of it didn’t matter. What mattered to him is that he was in the middle of a billable hour with a beautiful background of New York City and I believe that that’s mostly what, it’s a process that he enjoys not… I was a commercial real estate broker at the very beginning of my career and from the very first phone call that I took with our apartment building owner because I was trying to sell him an apartment building by a different owner.
All I said to myself was, I want to be on the other end of that phone. I’m halfway embarrassed that I’m actually putting this deal together and taking a fee for it. It’s embarrassing. Fees are embarrassing. Billable hours are embarrassing. What matters in life is actually owning something and then creating something with it, creating equity with it, or teaching somebody else how to do it. Something that actually matters, not just representing somebody else and getting in the way. They’re getting in the way of the deal. If we took every word to heart that that lawyer told us today, we’d be broke in a couple years.

Jill K DeWit:
I hear you. I’m still in my head thinking about that conversation and thinking I got a lot out of it. Number one, there’s some nuggets in there and I still think there could be a way to do what we want to do and if anything, I don’t know. I know what to watch out for. I know some things to watch out for.

Steven Jack Butala:
Yeah, I mean I agree. And look, I’m going to talk out of the other side of my mouth now. We hire real estate agents all the time and expect them to sell land for us. And you know what I don’t do ever, and neither does Jill, for some reason we’re on the same page on this completely, is skimp on the price. We are happy to pay them a full 10% on any land deal that they sell. I’m never going to skimp out on paying or trying to get a cheaper fee, but I expect them to do the job and get it done, which half the time happens, it seems like. Maybe it’s probably better than that. I only hear about the bad ones, not the good ones.

Jill K DeWit:
Isn’t that funny? And I never go, no, make it this percent, you could have my property. I never do that. I’m like, can you get that price in those many days and go? All right, done.

Steven Jack Butala:
I still can’t imagine enthusiastically saying, all right, great, I got the list and now I’m going to go sell this. I’m going to go take out, I’ll take a look at the property and take some great pictures, get a drone operator out there and maybe I’ll even clear the property a little bit if I need to get somebody and we’ll sell this thing in a couple weeks. I don’t in my head ever have that vision of commercial real estate agent actually being into their job and trying to succeed the way that you are. You hit the ground running in the morning. You get on the phone and you’re buying and selling land, or dreaming up the whatever the next thing is for us to do and honestly, so am I, more so in Land Academy and Jill more so in the actual land business. So I just don’t see representing somebody with enthusiasm.

Jill K DeWit:
You know what, well lucky for us that we have those people. I’m good with that too. I can end it on this that they don’t have the threshold that I have. Maybe when they started out, I think some people started out they didn’t have the capital to do it or didn’t know the means to do it and then they get settled in and maybe for whatever reason, so now they’re settled in and they love it or they really still don’t have the confidence to break off and do it. Whatever it is, I’m happy and grateful for those of you awesome land agents that do deals for us in the Land Academy community because we need you. That’s all I have to say.

Steven Jack Butala:
Me too.

Jill K DeWit:
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 tomorrow’s Jill Friday and she’s going to talk about embracing the hate and sending out more mail. You are not alone in your real estate ambition.

Jill K DeWit:
I feel like I just talked about that recently.

Steven Jack Butala:
You think?

Jill K DeWit:
Yeah, it’s come up a little bit, but that’s fine. I’ll talk about it a little bit more. I’ll let you ask me questions.

Steven Jack Butala:
Yeah, so remember when I walked in your office about three hours ago and I said, “Hey, do you need to check the topics for today? Do you want to sign off?” And you said, “Oh no, I trust you.”

Jill K DeWit:
I know. No, I’m going to talk about it. I’ll come up with some. That’s what I said, I’ll let you ask me some questions or something. We’ll change it up, okay? Maybe we can role play. I don’t know. Figure it out. Hey, thanks for tuning in and again, we hope you find our content valuable and we really do appreciate your support. So if you haven’t already, check out our YouTube channel. There’s a lot of stuff there by the way. I was looking at it just yesterday. There’s a lot about career path, a lot about our weekly member call, all kinds of really good information that if you’re thinking about doing this, you’re going to want to check out. And if you are in Land Academy by the way, make sure you’re with us on Discord.

Steven Jack Butala:
We are Jack and Jill, information-

Jill K DeWit:
And inspiration.

Steven Jack Butala:
To buy undervalued property.