Transcript:

Steven Jack Butala:
I’m Steven Jack Butala.

Jill K DeWit:
And I’m Jill Dewitt, and this is the Land Academy Show.

Steven Jack Butala:
This is episode number 1,952, and today we’re going to talk about setting goals in land investment, a reverse engineering approach. You want to start at the end and work your way forward so you make sure you get there, and we’re going to talk about your ideal land transaction, explained.

Jill K DeWit:
This’ll be good.

Steven Jack Butala:
You want to do deals that, you know, you planned for.

Jill K DeWit:
Mm-hmm.

Steven Jack Butala:
You don’t want to just send a bunch of mail out. That’s what this is all about today, both of these topics.

Jill K DeWit:
Yes.

Steven Jack Butala:
You don’t want to just do stuff and see how it goes.

Jill K DeWit:
Yeah, “Let’s just blast this county, this state. Let’s just leave everything in, see what comes back and I’ll just figure it out. I’ll wing it.” I mean, that’s one way to do it, but I prefer making it easy and we’ll talk about that too.

Steven Jack Butala:
When the cameras are turned off and the weekend starts, which is about two hours from now for us, I just want to see how it goes. But not in my land career, I don’t.

Jill K DeWit:
No.

Steven Jack Butala:
I want to know exactly how it’s going to go.

Jill K DeWit:
That’s a good point. Just see how it goes. I want to pause and tell the story that you just talked about from our neighbor here at this-

Steven Jack Butala:
Okay, sure.

Jill K DeWit:
So we’re at this sweet, sweet park just outside Estes Park.

Steven Jack Butala:
RV Park.

Jill K DeWit:
Uh-huh, an RV Park, and Jack was talking to our neighbor who sounds like they just, on a whim, signed up to be a park host in Estes Park. Is it Rocky Mountain National Park or Estes Park?

Steven Jack Butala:
Estes Park. Right up there.

Jill K DeWit:
Okay, but not Rocky National Park. Anyway, they’re going to be a park host for like eight months and they just decided to do it on a whim.

Steven Jack Butala:
Said they’re both 67, he and his wife, and he was in the auto industry, I think as an auto mechanic.

Jill K DeWit:
Oh.

Steven Jack Butala:
She’s a retired teacher and they lost a very close friend of theirs a couple years ago and then they said, “That’s it. We’re done working.”

Jill K DeWit:
Oh.

Steven Jack Butala:
And they’re full time. They sold their house. They sold everything.

Jill K DeWit:
Oh, that’s so good.

Steven Jack Butala:
From Virginia.

Jill K DeWit:
All I heard out the window was him say, “I don’t want to be a statistic.” I’m like, that’s flipping cool. I agree with that.

Steven Jack Butala:
I have to say-

Jill K DeWit:
And I remember you saying, “That’s why we’re doing this stuff.”

Steven Jack Butala:
As a man-

Jill K DeWit:
Mm-hmm.

Steven Jack Butala:
People pull in and within the first five minutes that they’re here, you can see how much of a man they are. How they hook their stuff up, how they back their rig in, all of it. And that guy put me to shame. Usually that’s not the case. Usually I’m like, “I can handle all of this.”

Jill K DeWit:
We did come back last night and you said this, “This man’s serious. Look how perfect everything is.”

Steven Jack Butala:
Then we’re talking and he’s opening all of his storage and everything’s all perfect in there. He’s got a whole work chest. Pulled things out and he’s got screws. I’m jealous. Now I got to up my game.

Jill K DeWit:
Oh yeah, there you go.

Steven Jack Butala:
My stuff’s all falling out and I’m trying to clean everything out-

Jill K DeWit:
Exactly, just kind of kicking it and closing it. That’s how Jack rolls. Oh my gosh. Thank goodness our company… Well, no, our company started a little taped together too. That is how you roll.

Steven Jack Butala:
It’s getting better.

Jill K DeWit:
Yeah.

Steven Jack Butala:
Our land company’s not taped together because that’s what Jill does.

Jill K DeWit:
That’s right. See, this is our life. He starts… Well, even the land company started before me. It takes a woman or somebody else, someone organized to come along and just kind of like, “All right, let’s now put everything in place.”

Steven Jack Butala:
We’re taping late today because Jill just got done with the mobile notary coming to sign a deal we made $100,000 on. We netted out a 100,000 bucks on it, which is how it’s supposed to go. In fact, this is a great segue into this because we planned on that. We didn’t just send the mail out to every single landowner haphazardly pricing it just to see what’s going to come back. We plan on making $100,000 a deal.

Jill K DeWit:
There you go.

Steven Jack Butala:
Each week we answer questions from our Land Academy Discord forum, we review land acquisitions from our weekly Thursday member webinar, and we take a deep dive into two land related topics by popular interest. Hey, if you have a question and you would like us to answer it on the air or you need help getting involved with our community, text us. This is new for us at 480-530-7383. We read every single one of the texts that we get, and if we like your question, we’ll get it on live-

Jill K DeWit:
Live on our podcast.

Steven Jack Butala:
The next week, most likely.

Jill K DeWit:
Yeah.

Steven Jack Butala:
Now let’s take a question posted by one of our members on the Land Academy Discord online community. If you want to sneak peek, go to landacademy.com. It’s free.

Jill K DeWit:
All right.

Steven Jack Butala:
But first…

Jill K DeWit:
Uh-oh.

Steven Jack Butala:
We need to celebrate with Yuri who’s been a very loud, in a positive way, active member in the Land Academy group, and he’s-

Jill K DeWit:
You found this in Discord? Just kind of pause everything and give a little shout out?

Steven Jack Butala:
Two massive checks this month that go, and he will be done this year.

Jill K DeWit:
Oh. So am I reading that or are you reading that? Oh, okay. So Yuri, congratulations. This is a shout-out from Jack and I to you. This sung to Jack today, so I’m going to read this out. He said, “Just close on two of my best deals so far. Buy for $30,000, sell for $130,000 and buy for $25,000, sell for $140,000. Total profit, $215,000 before closing costs. 2022 was my first full year sending blind offers, and prior to that I had zero real estate experience.”

Steven Jack Butala:
Amazing.

Jill K DeWit:
“Here is a picture,” you guys can see it on Discord, “Of my office for the weekend.” What was it? Was it on the ocean?

Steven Jack Butala:
Yeah, he’s on the Pacific Ocean.

Jill K DeWit:
There we go.

Steven Jack Butala:
In a hotel room.

Jill K DeWit:
There we go. “Thank you Jack and Jill and Kevin.”

Steven Jack Butala:
Kevin Ferrell, who’s a-

Jill K DeWit:
Moderator.

Steven Jack Butala:
… Our moderator on Discord.

Jill K DeWit:
Yay. All right, so here’s the question from Dan. Dan wrote, “I have an easement question for you all. I just bought two adjacent 20 acre properties. They have a shared pond and in a great duck hunting area. There is a road that cuts through the corner of one of the properties for access. My broker says if I sell them separately, they will sell faster because we can set the price a bit lower for each and then end up making more altogether.” True, true that.

Steven Jack Butala:
I love that.

Jill K DeWit:
“The only issue is that the second parcel only has access across the first parcel. It’s only about 200 yards through a flat field along the north property line from the road to the second parcel. Can I just write up a simple document granting an easement across the north 30 or 60 feet of the first property to the second property and record it, or would you reach out to an attorney for this? Seems like just a simple cut and paste wording of legal description and copying similar easement wording from another deed would be the easiest and the quickest. Thanks.”

Steven Jack Butala:
A lot of people weighed in on this, which is one of the reasons I chose it, and they all said some version of what I’m about to say. You need to get a lawyer. It’s not going to be expensive. Maybe $1,000, probably less. You’re going to rerecord the deed that contains the easement, which is the deed where they drive across it to get to the second property.
Easements are recorded in the deeds that are being crossed, are being traveled on, most of the time. Sometimes you’ll see an easement recorded in the recipient or the property that’s the beneficiary of the actual easement, but not very often. It’s different.

Jill K DeWit:
Usually the legal description on the one giving up access will say, “This is the property except for the 30 feet here and the 200 feet here along this side,” and those dimensions and everything so everybody knows where the easement is.

Steven Jack Butala:
This is not something that you want to do yourself.

Jill K DeWit:
No.

Steven Jack Butala:
At all.

Jill K DeWit:
I was going to say a version of this, which is my number one resource is the county. I’d be like, “Hey guys, what’s involved to do this?” “This form, this form, record this.” “Can I do it myself?” “Well, yeah, but…” “Okay. Who would you recommend?” “Oh, Bob Smith. He’s just down the road. He does all this for everybody around here.” That’s what I would do.

Steven Jack Butala:
It’s a good situation.

Jill K DeWit:
“Who’s the attorney?”

Steven Jack Butala:
Very often you don’t own both properties and you’ve got physical access but not legal access and you’ve got to deal with another property owner to get an easement to the property that you own.

Jill K DeWit:
By the way, occasionally stuff like this, you don’t need an attorney but you do need to know someone that knows the ropes, like someone involved with the county that does surveys and things like that. So for me, sorry, my answer’s different. I would call the county first and find out what’s the process, because like I said, maybe the local survey guy can do it and he does that for everybody and gets it recorded.

Steven Jack Butala:
It’s a good situation to be in because you have all control and that’s what you want.

Jill K DeWit:
Yeah, and I agree with this, by the way. He didn’t say how big they are, so I’m assuming they’re big enough. It’s not one acre and one acre. Oh, 20 acre properties.

Steven Jack Butala:
Two 20 acre properties.

Jill K DeWit:
Okay, good. Now we know. So this is not going to mess with anybody’s view or anybody’s enjoyment of their property. Now one property’s going to be 19.9 when they’re done or something like that.

Steven Jack Butala:
9.5. Yeah.

Jill K DeWit:
So, all good.

Steven Jack Butala:
20 acres is a great amount of property to shoot a 12 gauge at a duck pretty safely, I think.

Jill K DeWit:
There you go.

Steven Jack Butala:
If they’re square and you’re hunting, then… Yeah. Nevermind.

Jill K DeWit:
If the ducks are square?

Steven Jack Butala:
No.

Jill K DeWit:
If the duck are square stick-

Steven Jack Butala:
If the properties are square.

Jill K DeWit:
I took Jack the other day in Fort Collins into an underground arcade area. I did Skee-Ball, Jack did shooting, and I think you could have used a square animal to hit.

Steven Jack Butala:
I could have used a non-moving screen-size animal smiling.

Jill K DeWit:
That’s what was needed. I said, “Hit the bucks, not the does.” He’s like, “Well, you got a buck and you got two does.”

Steven Jack Butala:
So you get negative one.

Jill K DeWit:
Yeah, exactly. I’m like, “Oh, sweetheart.” You were out of practice, in your defense. That was pretty darn funny. I have the video for that. I’m going to send that with to my team here soon.

Steven Jack Butala:
First off, we’re going to talk about this.. Setting goals in a land investment, it’s a reverse engineering approach. So we’ve said this millions of times. You want to start at the end. In fact, we’ve institutionalized it now with what we call the equity planner. We start out, and we just went through this in Career Path and second by second walked everybody through in the career path class about how to use the equity planner to plan for how much money you want to make a month, and obviously a year, how many deals do you want to do. Jill and I like to do two or three deals a month and make $100,00 each deal.

Jill K DeWit:
Or more.

Steven Jack Butala:
Right.

Jill K DeWit:
Like deal funding.

Steven Jack Butala:
That ends up being three to $4 million a year. That’s a real good comfortable place for us, for some reason. It’s not a lot of work. We’ve got all everything in place. And so knowing now that we want to make $100,000 a property, there’s a very specific way at the end. We know if we want to hit our goals at the end, we move our way back and we only hunt for or fish for properties that are going to make us $100,000. We don’t buy properties for $5,000 and sell them for 10. I’m not knocking that. I built the company on that actual business model. Exactly what I just said.

Jill K DeWit:
Heck, even lower than that.

Steven Jack Butala:
Right.

Jill K DeWit:
Buy for 1,000, sell for three and do a lot. I mean, back in the day we were doing a lot of little deals. Just getting rolling and getting going and then figuring everything out. That’s why you’re here. I look at it this way. I love your equity planner. This is the equity planner that you as a Land Academy member have in our stuff, that you can sit and put in for the year. You know what else this is? Your 24-month millionaire.

Steven Jack Butala:
Yeah.

Jill K DeWit:
We haven’t talked about that in a while too, but that you wrote and put in there and shared with our people what it looks like and how hard you have to work, which is not that hard. That’s the whole thing.

Steven Jack Butala:
Know what? We’ll talk about that next week. I mean, you just gave me an idea for a topic next week and we will.

Jill K DeWit:
Do you want me to write that down real quick?

Steven Jack Butala:
I’ll do it.

Jill K DeWit:
Okay, good. Okay, so the equity planner that we have, I love because I don’t see things month to month like you do. I don’t pay that much attention. I’m not the accountant, clearly, but I do know about hitting your goals every month. I’m in sales. I’m very familiar with that one. Hero to zero. We all know what that means, but I’m very familiar with the big picture stuff. I love the big picture and I love backing it up, and here’s the reason why.
What Jack’s explaining is thinking about your goals. What do you want to make for this year? I have a good example. We have a sweet couple in the Land Academy and they want to three X her salary from last year. It’s going to put them about $3 million this year. It’s like, okay, $3 million. Great, but how hard do I want to work? How much time do I want to put in? How many deals? How comfortable I am?

Steven Jack Butala:
It’s 10 X, but okay.

Jill K DeWit:
And how much are… Okay, yeah. I love it when you correct me,

Steven Jack Butala:
Sorry. And derail your thought process.

Jill K DeWit:
Exactly. Those are two of my favorite things. Okay. Oh, boy.

Steven Jack Butala:
Sorry.

Jill K DeWit:
It’s okay. So anyway, you put in your number and you think about… Let me just make this very simple for everyone. I want to make $1 million this year. Got it. And I want to have some wiggle room in there. Okay. So let’s say our goal is $100,000 a month, right? So it’s 1.2 if I did it every month, but I’ve got some wiggle room. I know if I screw some things up, I’m going to get a million this year. Awesome.
So now my goal is $100,000 a month. Okay, but how much time do I have to put in it? Not a lot. I’m still got a day job. My partner’s available full time, but I have a day job. Okay, got it. So let’s say you’ve got enough bandwidth to do a deal a week. All right? Got it. So this is not nuts. Think about this. $100,000 a month, you’ve got the bandwidth to do one deal a week. Great. So what does the deal need to make? $25,000 each. That’s nothing.

Steven Jack Butala:
Easy. That’s crazy.

Jill K DeWit:
That’s really not hard.

Steven Jack Butala:
Crazy easy.

Jill K DeWit:
That’s buy for 30, sell for 60, and you’ve even got your cushion of fees and things in there. And buy for 30, sell for 60. I’m going to argue you can sell it even more. If you’re buying something for 30, it’s probably worth 90 nowadays. So there’s even more of a cushion for you. So that’s really what this is about. Setting goals like that and then working it backwards.
And when you look at it and go, “Oh, I can do a deal a week.” What if I don’t even want to work that hard? I only want to do one deal every two weeks. All right, now they each got to make 50. That’s still not nuts. Buy for 30, sell for 90, and there’s my cushion in there too. I’m going to make at least 50 on these deals and do two deals a month, and you’re going to make a million. That’s how I sit and look at it and think about it.

Steven Jack Butala:
That’s exactly what the equity planner is, and there’s all kinds of variables that you can put in there.

Jill K DeWit:
You can take it even smaller down to how much mail do I need to send?

Steven Jack Butala:
That’s what it’s for. What it does is it spits out all the answers for you. You got to send out this much mail, you have to troll for properties that exist within those parameters.

Jill K DeWit:
Correct.

Steven Jack Butala:
If you want to buy property for 30 and sell for 60 like Jill’s talking about, then you set your parameters to troll for areas to send mail where those types of values are prevalent. In the southeastern California desert, you’re going to buy properties for 5,000 and sell them for 15, maybe 10, maybe less. So you’re not going to hit your goals of $1 million a year unless you double the number of properties that you buy and sell, which is fine.

Jill K DeWit:
And some people might like that.

Steven Jack Butala:
Yeah.

Jill K DeWit:
“I want to buy for 10 and sell for 25. That’s my sweet spot. I’ll make $15,000 on every deal. I love those.” That’s nothing wrong with that.

Steven Jack Butala:
$15,000 a month for my first year.

Jill K DeWit:
Do it, then I’m going to do two a week or something like that. That’s fine.

Steven Jack Butala:
Yeah, and then next year rolls around and you reset your goals and maybe increase it because now you know how to do it. Now you know the process of buying and selling land.

Jill K DeWit:
What’s great about this is too, you hit your goal this year, so now next year when you look at it, you go, I can either do the same amount of work and increase the value of these properties, right? So I can probably double my money by just going for higher dollar amount properties, or I could do that and then scale back my work, whatever it is. Maybe I want to make the same amount of money, but we’re half as hard.

Steven Jack Butala:
Well, right in the title-

Jill K DeWit:
And that’s okay too,

Steven Jack Butala:
Right in the title is it’s a reverse engineering approach. You have to start with the end.

Jill K DeWit:
Yeah.

Steven Jack Butala:
You have to start what your goal is and work it all the way back and then troll four properties like that and when they come back, when the sellers are calling you and or signing offers, you’re planning. You have an idea of what’s going to happen instead of just seeing what’s… Let’s just see how it goes.

Jill K DeWit:
That’s amazing.

Steven Jack Butala:
That’s the point. You don’t want to do that.

Jill K DeWit:
I’m sitting here thinking about, where else can we do this? If I had any kind of a retail thing, you can’t do that. “Oh, I’m going to work half as hard and pay somebody to do it.” Great, because they’re going to do half the job you do. So we got to think about that and now you got to pay a salary. So that doesn’t work. What if I was even a real estate agent?

Steven Jack Butala:
Yeah, you can’t.

Jill K DeWit:
I know, because I’m the real estate agent. I’m dependent on what I find. I’m dependent on what other people are doing.

Steven Jack Butala:
There’s no cost of goods sold in this business unless you actually buy something to resell it. So in a convenience store, you stock the shelves and then you resell. As you’re reselling it, you’ve got that cost, you have to obviously factor in the six-pack that you’ve just sold and collect the revenue and on and on. In manufacturing, same thing. That’s a cost of goods. You got an order, you got all the cost of goods sold.
The cost of good sold in this business is the actual piece of dirt, which you have complete control over buying because you’ve reverse engineered what’s going to happen to it. You’re only buying it for $30,000 because you are very, very confident and your peers in Land Academy, Jill and I concluded, are extremely confident that you can sell for 60 or 80 or more. So you have complete control over your sales price. Well, reasonable control over your sales price and complete control over your acquisition price. You don’t have to do the deal.

Jill K DeWit:
You have control over your sales price. You either say yes or you say no. Sometimes I say no.

Steven Jack Butala:
And then the variable is-

Jill K DeWit:
I’m like, “Nope. Too low.”

Steven Jack Butala:
… How long do you want to wait? How long do you want to wait to sell the property?

Jill K DeWit:
Yeah, I know what it’s worth. Oh my gosh. That’s a whole nother podcast, by the way. I’ve swapped out brokers quite a bit recently because we are not on the same page money-wise. Their first thing is, “Let’s lower it.” I’m like, “Uh-uh, you’re not doing your job.”

Steven Jack Butala:
Start at the end. Work your way back.

Jill K DeWit:
Yeah.

Steven Jack Butala:
Ask everybody in Land Academy, “Am I doing this right? Does this make sense to you? Is it realistic? Is it unrealistic?” Ask us. We’ll tell you. That’s what that texting number is that we gave you in the beginning. Oh, text us questions. The number again is 480-530-7383. We’re not selling you anything.

Jill K DeWit:
It’s pretty cool.

Steven Jack Butala:
We answer your questions.

Jill K DeWit:
It’s pretty cool. Okey dokey. Now let’s take…

Steven Jack Butala:
A look…

Jill K DeWit:
At one of our favorite land acquisitions from our weekly Thursday closed member webinar.

Steven Jack Butala:
O2O just got a brand new look. Jill and I, if you don’t know by now, own a full-blown commercial printing company called offers2owners.com, and we just completely rehabbed the entire website, and so you can see exactly where you are. Added a ton of features. It makes it a lot easier to get your offers in the mail. We have relaunched, and it’s so popular we’ve had to staff two additional people. Concierge data, where we actually do the whole entire mailer for you, with the exception of pricing it at the end. So check us out. Offers2owners.com.

Jill K DeWit:
Yep.

Steven Jack Butala:
Let’s take another question posted by one of our members on the Land Academy Discord online community. Again, if you want to sneak peek, go to landacademy.com. It’s free.

Jill K DeWit:
Christian wrote, “I have a question about appraisals. If you buy a property for much less than its market value and then go into a contract with a buyer getting financing and there’s an appraisal required, will an appraiser see the original purchase price and have an issue? The property is selling from market value. Just wonder how appraisers see a much lower prior purchase price from just a month ago. Also, the property only needs to appraise for what the loan amount would be, correct? They don’t actually care what the purchase price is as long as it had appraises for the loan amount or more. Thanks.” That’s a good question.

Steven Jack Butala:
I love question and I have a story to tell.

Jill K DeWit:
Okay.

Steven Jack Butala:
Back in the day, around 2009, 2010, it was very difficult to sell land because of the huge economic downturn that was happening and the massive devaluation of real estate that happened over the spread of maybe three years. In fact, Jill and I had to retool our entire land operation and we began and traveled down this path and ended up successfully buying houses in a very blue collar area of Phoenix for 20 to $40,000 in selling them for 60 to 70 to $80,000. Same business model, different product, and we adjusted and it ended up doing very well.

Jill K DeWit:
Different property type, yeah.

Steven Jack Butala:
We had two back to back properties that were financed by different lenders. One was HUD or FHA, the federal government. Federally insured loan, and another one was just a private lender like Bank of America. They weren’t exactly those lenders. Well, the federal government was, I’m just saying Bank of America. It wasn’t that lender. It was a commercial bank.
The appraisal came back with the commercial bank. Of course, we bought it for, I don’t know, 40 and probably selling it for 80, let’s say. And the appraisal came back at 80. Really quickly. With the FHA deal, the appraisal came back for our purchase price and it stuck with the property for six months.

Jill K DeWit:
Interesting.

Steven Jack Butala:
So we had to hold the property for six months, put it back on the market and quietly say amongst ourselves, let’s say, not in the listing. And we weren’t loud about it, but FHA and HUD were not going to be a lender on the property again.

Jill K DeWit:
Cash.

Steven Jack Butala:
It depends very much on a lender. This is a very intelligent question, and actually it’s something that I don’t think we’ve ever talked about it. Or cash. Those houses were never cash.

Jill K DeWit:
Yeah.

Steven Jack Butala:
They’re always 3%.

Jill K DeWit:
We bought cash.

Steven Jack Butala:
Bought it for cash. Sure.

Jill K DeWit:
Yeah.

Steven Jack Butala:
So it depends on the lender. Incredibly depends on the lender, and it seriously depends on the appraiser.

Jill K DeWit:
Right.

Steven Jack Butala:
So you ask the appraiser before, “How much does the purchase price…” I’ve always wondered, what if you inherited the property?

Jill K DeWit:
Right. Well, here’s the funny thing too because you know this would never happen, but we would pass properties back and forth among companies, really for a dollar or $10. I have filled out, not kidding, Arizona affidavit of property values and what’s the value? $10. They’re not going to say, “It’s worth $10,” so we know that doesn’t count.

Steven Jack Butala:
Every property that I’ve ever had appraised as a buyer, and they’ve all been houses that Joe and I have purchased where we had financing, which I think is about two.

Jill K DeWit:
Right.

Steven Jack Butala:
Our entire lives together.

Jill K DeWit:
Exactly.

Steven Jack Butala:
But in my previous life, buying a primary residence, the appraisal came back at exactly the number that I was purchasing. I’ve always wondered that.

Jill K DeWit:
It’s funny. How does that happen?

Steven Jack Butala:
I just don’t think that’s okay.

Jill K DeWit:
I agree.

Steven Jack Butala:
It’s a racket.

Jill K DeWit:
It’s stupid.

Steven Jack Butala:
And this is why I developed this out of frustration, and I can say the same crap about real estate agents and escrow agents and survey people.

Jill K DeWit:
Oh my god, title companies. Don’t get me started.

Steven Jack Butala:
All of it.

Jill K DeWit:
Oh my gosh, is a racket.

Steven Jack Butala:
That’s why after a decade of massive frustration and buyers and sellers, because I wasn’t the buyer or the seller, I came up with this business model.

Jill K DeWit:
Tried to remove them all.

Steven Jack Butala:
And I did away with everyone. Every single person that’s involved in the process except me, the buyer, and the seller.

Jill K DeWit:
And the seller.

Steven Jack Butala:
And we didn’t used to, but now we get title agents involved. It’s because we are buying assets that need title insurance. But geez, we put the screws to them too, because we have a transaction coordinator. Can’t put anything past her. She’s been in that business for 30 years.

Jill K DeWit:
Exactly.

Steven Jack Butala:
So the questions at the end are, “Also, the property needs to be appraised for what the loan amount would be, correct?” No, the property needs to be appraised for the sale price because there’s going to be a down payment involved. So it’s not just the loan amount. Used to be if you’re going to buy $100,000 property and I’m going to take an $80,000 loan out, used to be that you could get an appraisal for 80 grand and lender would be like, “I don’t care.” But no, that’s not the case anymore. They want your skin in the game and they want the property to not be overpriced. The second question at the end is-

Jill K DeWit:
Oh, I have one thing to add after this.

Steven Jack Butala:
Yeah.

Jill K DeWit:
Oh, well, you know what? I was just going to add on is the way that we typically buy and we sell is I’m not going for top retail or resetting the market, by the way. So if I’m buying something for $20,000 and I’m selling it for $70,000, it’s worth it because it’s probably worth 80 or 90. So for someone to really get it appraised at $70,000, everybody feels good about that.

Steven Jack Butala:
Mm-hmm.

Jill K DeWit:
Thank you.

Steven Jack Butala:
That’s right.
Today’s second topic is your ideal land transaction explained. What I really mean by this is the first thing in marketing that you learn about, marketing online specifically, is creating a model. It’s called an avatar. Creating a model of your customer. What age is your customer? What part of the country are they in? Maybe they’re an airline pilot, maybe they’re a nurse, maybe they’re an accountant. Who is that customer that you are trying to attract for whatever product you’re going to deliver or service?
Well, the same thing needs to happen in a land deal. You need to really create that perfect kind of land deal to get you to that year-end goal that we talked about earlier. Let’s take a look at another one of our favorite land acquisitions from our weekly Thursday member webinar.

Jill K DeWit:
Oh, I thought we were going to talk about the whole topic.

Steven Jack Butala:
Oh, sorry, I should have said that. Yeah, you’re right.

Jill K DeWit:
Are you all done?

Steven Jack Butala:
No.

Jill K DeWit:
That was it. I was so… Well, that was a big, big script oops. Who’s in charge of the script? I’m so confused.

Steven Jack Butala:
By the end of this year, we will have done our 2,000, 2,000th freaking podcast.

Jill K DeWit:
Wow. And you think he’d get it down.

Steven Jack Butala:
That I could read a Microsoft Word document on a screen below a camera.

Jill K DeWit:
Oh my gosh, that was so good. I’m like, “Well, that was our topic. You got three sentences. See ya.” That was great.

Steven Jack Butala:
Oh my God.

Jill K DeWit:
I’m like, what the heck? Okay, so let’s go back. Let me just see if I can save this. Here’s how I think of my ideal land transaction explained. So he’s right. It starts with thinking about who’s your buyer and queuing things up. You know who my buyer is? The majority of the people buying the property. That’s who my buyer is. So when you’re trolling, this is how I see it, and you’re going on Zillow, you’re looking at areas, you put in five to 20 acres, maybe five to 10 acres. Let’s just narrow down a little bit. And you put in anything selling between 70 and $80,000 because you’re going to try to buy them for 20. These are all great. And you’re trolling around and you’re seeing areas that have a lot of yellow dots because that means they’re sold.
That’s your buyer. Who are those people in that area? So for me, I’m simplifying it, starts with my ideal land transaction. I want it to be easy. I want it to be hard. I’m not here to reset the wheel. I’m not here to buy the most beautiful rock climbing property for the small niche of people that want to buy and own their own rock. They’re out there, but it’s not as many as everybody with an RV that can roll upon it and love it or hunt on it or fill in the blank. So it starts with that. So you pick it. This is my notes that I wrote to myself. My ideal land transaction is pick it, mail it, buy it, be ready, meaning have it ready to go, and market it, and beautifully, and make it easy because it should be.
So many times people come to us with properties that have all these flaws and they’re trying to overcome these flaws. I’m like, why? Doesn’t make you any more of a land investor. It doesn’t make you any more special or important because oh, I can pound my chest that I got through this, I got through that, and got through that. Well, I’m over here doing a lot less work and making the same or maybe even more money because I’m turning more deals in the same time that you’re taken to undo some of these issues and problems. So my ideal land transaction is just that. Beautiful, simple, everybody loves it, I’m in an area that’s not too busy and also part of my be ready was while I’m buying it, I’ve got my agent picked out who’s going to sell it. I’ve got photos, I’m ready for it. It’s all just kind of unfolding perfectly. That’s how it should be.

Steven Jack Butala:
I started in real estate in the early ’90s, brokering nursing homes. Very, very, very specific. Very specific product type, and there was a finite database about that back then. 12,000 properties that were skilled nursing facilities in the entire country. What did I do? I manually input them into a database, contacted every single one of them and found out who was interested in selling. They were largely, and still are, largely mom and pop run. Believe it or not, my clients were publicly traded or on their way to be publicly traded nursing home companies and they had to buy deals. They lived and died by their acquisitions, both the number of acquisitions and the quality of their acquisitions. So what did I do? Extort the hell out of that. I made it work to my advantage.
Excuse me. So I had an interview sheet and I would talk to the director or the vice president of acquisitions at each one of these five companies, and I would say something like this. “How many beds? What’s your ideal bed?” Some nursing homes are real small. They’re 20 or 30 beds. Some are really big, 300 beds. They would usually say, “120 beds with one single nursing station instead of two because the staffing’s better,” and go on to create a profile of their ideal transaction.

Jill K DeWit:
Cool.

Steven Jack Butala:
And then have me go contact all the sellers

Jill K DeWit:
That had that exact type.

Steven Jack Butala:
Yeah.

Jill K DeWit:
Mm-hmm.

Steven Jack Butala:
And so it made it easy. I did a lot of deals and made a lot of money.

Jill K DeWit:
Did you find a certain percentage of them, like more than 50% wanted the same thing?

Steven Jack Butala:
Yeah.

Jill K DeWit:
Okay, so that makes it even easier. So that way then, if you knew that the majority of the people wanted between a 100 and 150 beds, one to two nursing stations, whatever it was-

Steven Jack Butala:
120 beds, one nursing station, a skilled wing. I don’t need to go into it.

Jill K DeWit:
But then you could go out and probably find 10 and then queue it up to all of them.

Steven Jack Butala:
Oh, God.

Jill K DeWit:
And let it be first come, first serve.

Steven Jack Butala:
Yeah. That would be the fastest way to kill your career. We’re getting off track here.

Jill K DeWit:
See, I didn’t know that. I’m asking some questions because I don’t know.

Steven Jack Butala:
You don’t want to have eight clients and heaven bid against each other. They’ll never take your call again. You need to represent the person.

Jill K DeWit:
Well, hold on a moment. I do that with my sellers. I don’t do one seller at a time and say, “Are you in or are you out?”

Steven Jack Butala:
You represent yourself. There’s no chance of you losing yourself as a client.

Jill K DeWit:
Oh, excuse me, I forgot. You were a real estate agent.

Steven Jack Butala:
Yeah.

Jill K DeWit:
My bad.

Steven Jack Butala:
I was a licensed Michigan real estate broker.

Jill K DeWit:
Forgot. I forgot who I was sitting next to. Yeah, I’ve never had that role.

Steven Jack Butala:
The point to this silly story that Jill just wrecked is they defined their ideal transaction. Did they come off of it? All the time. It’s 120 beds. It’s a singles nursing facility, but it’s-

Jill K DeWit:
You cue it up.

Steven Jack Butala:
But it didn’t have a Medicare wing to it. Well, that’s fine. We’re going to-

Jill K DeWit:
Yeah, you didn’t say that.

Steven Jack Butala:
Well, you started talking.

Jill K DeWit:
I know you. No, no, no, no, no, no, no, no. I mean they didn’t say that. Not me.

Steven Jack Butala:
I did a lot of deals. So what you want to do in your land situation is create that avatar. Create the what the perfect property is for you and why, and it better involve what Jill just said. Who you’re selling it to. Again, we’re starting from the end. The end of the entire real estate deal for you is when you sell it, when you sign your name.

Jill K DeWit:
Like today.

Steven Jack Butala:
Sign the deed, just like Jill did today, and in your head, you should be saying some version of, “The person who bought this property is exactly who I thought was going to buy it for just about the price that I thought we were going to sell it for, and I bought it for a hell of a lot less.”

Jill K DeWit:
Yeah.

Steven Jack Butala:
So create that avatar. It might be farmland. You might like that. It might be like Dan earlier with this question, duck hunting property that isn’t buildable at all.

Jill K DeWit:
Right.

Steven Jack Butala:
He’s just going to sell it as duck hunting property. There’s all kinds of very specific avatars that you can target and do very, very well with. Jill and I fell backwards into, a couple years ago… More than that, a few years ago, into an incredibly priced property that only had the single use, which was to build a motel on it.

Jill K DeWit:
Yeah.

Steven Jack Butala:
And boy, we made a ton of money on it. It wasn’t in our avatar. We just looked at it and said, “We have to buy this.”

Jill K DeWit:
Mm-hmm.

Steven Jack Butala:
And so maybe what’s involved in your avatar is the greatest financial real estate land deals you can possibly… And then any use. And then because you’re great at marketing, you can find a specific use property. You can find a database full of people just like nursing homeowners or people who need to buy it and work it backwards that way. My point is, you don’t want to just see what happens.

Jill K DeWit:
True.

Steven Jack Butala:
If you’re brand new and you’re like, “Well, where do I start?” I don’t know, if I want to buy hotel property, nursing homes or farmland.

Jill K DeWit:
That’s a good point.

Steven Jack Butala:
Spend a ton of time asking those questions in Discord. Utilize your peer group that we’ve created. Ask those questions on a Thursday call or happy to answer those. I love answering those questions. And do a lot of research. Find out. Google some stuff. Google some crazy stuff. What’s the most profitable type of land?

Jill K DeWit:
I always go with what’s the easiest? I got to be honest with you. I’m serious. Why wouldn’t I? I don’t want you to fail.

Steven Jack Butala:
See, what you see as easiest is different than what some people say is easiest. I have to tell you, I agree with you.

Jill K DeWit:
I don’t want a special use, have to undo this probate thing. What? I’m not going to seek that out. No.

Steven Jack Butala:
A lot of it’s geo geography based. If you are going to mail Wayne County, Michigan, which is downtown Detroit, inner city Detroit, you’re going to get a lot of very, what I will call non-economically viable infill lots. If you want to get a duck hunting property in Wayne County, Michigan, that’s not going to work. So this is my point, through all this research, it will come to you that the vast majority of the properties in Western Washington state are recreation properties. They’re not to be developed for subdivisions. So a lot of the geography helps you down this path and if you’re new, you’re going to have to spend, just like Yuri did earlier, a year learning, and then the next year you’re probably going to make two or three or $400,000 if you want to. If you work it right.

Jill K DeWit:
Exactly. Let’s take a look at another one of our favorite land acquisitions from our weekly Thursday member webinar.

Steven Jack Butala:
Jill, you have something inspirational to share?

Jill K DeWit:
Yeah, I was thinking about this week because last week was our Land Academy Ladies monthly get together and as you and I were talking about it afterward, I realized, holy moly. This is Land Academy Ladies 2.0, by the way. 1.0 was a couple years ago and then I stopped for a year, year and a half. It was getting to be a lot. I felt like we weren’t moving where we wanted to go. It was felt like it was getting a little stale, I’ll just say. Seriously. And so we stopped. Bur what was funny was later on, looking back at that group, every single woman that showed up and really contributed in that group went on to do really, really well. But I didn’t realize it at the time.
So here we are again. We just started in 2023 Land Academy Ladies 2.0 now, and I can already see such a difference and I can’t figure out why. I mean, I don’t have a real concrete answer, but some of the ladies in this group are just amazing and the topics that we’re talking about, the way we’re coming at it, maybe part of it is me. I’m re-energized and I’m excited about it and I can’t wait to see what some of these gals are going to do. I already know what some of them are going to do. There’s one in there in particular who’s in Career Path that just is-

Steven Jack Butala:
She’s killing it.

Jill K DeWit:
She is, and I don’t even think she realizes. She comes up with all these questions like, “Okay, look at this.” What’s great about her is, M is your first initial, she asks questions, she asks really good questions, she takes notes and she acts on them. In between office hours and our call, she’ll say, “Talked to the seller. I got that done, that done, and I’m waiting for a call back.” Because she’s just on it.

Steven Jack Butala:
She has no ego.

Jill K DeWit:
She’s not afraid.

Steven Jack Butala:
That’s what it is about her. She has no ego and no pride, which I think are two amazing qualities.

Jill K DeWit:
I think she’s got pride.

Steven Jack Butala:
She mechanically goes through the motions of buying and selling land and asking for help all around her when she doesn’t-

Jill K DeWit:
Doing a great job. But she’s asking smart questions though too. That’s the thing. She really thinks about it, puts thought into it.

Steven Jack Butala:
How did I imply that she wasn’t asking smart questions?

Jill K DeWit:
I’m just saying she asks a lot of the right questions. So I just want to make sure I’m giving her extra love because I appreciate that. Because you know why? There’s people that ask a lot of questions and then it gets to be redundant. Like the same questions.

Steven Jack Butala:
Oh.

Jill K DeWit:
You know what I mean? They don’t learn from things. She’s really good at asking a question, learning from it, and then asking a better question after she’s moved forward and done these six things, which is really, really good. So maybe that’s why… This is my topic, please.

Steven Jack Butala:
I’m not saying anything. If you’re listening or watching to this, have you noticed that I’m just doing nothing? I’m getting in trouble for it. “This is my topic, please.” What did I do?

Jill K DeWit:
There were some zingers in there. I’m like, “I didn’t imply anything.” You’re good. But the point I just want to talk about for a few minutes was who you are. And my group is pretty small right now. I’m a little surprised at how small it is. Land Academy Ladies, in case you were not sure, is for any female person who is involved in the Land Academy company, whether or not you are the direct member.
So if Jack was the member, I’m his partner slash spouse, whatever kind of thing. I’m not the direct member, but I’m helping the business and I’m doing things too. You are welcome to join Land Academy Ladies. All I have to do is send a note to support@landacademy.com and they will get you the invite. We meet once a month on Tuesdays, couple hours after the advanced call. Jack, now I would love to hear what you have informational to share with us today.

Steven Jack Butala:
My contribution today is called the right and the wrong ways to save for retirement. Two case studies and one of them is ours. Guess which one, the right way or the wrong way is ours.

Jill K DeWit:
I’m not going to guess. I’m not saying anything

Steven Jack Butala:
I belong to or I subscribe to, I don’t know what to call it. It’s not a group, it’s just an information source on the internet.

Jill K DeWit:
Therapy.

Steven Jack Butala:
It’s the equivalent of, if you’re old enough like me to know who Dear Abby. Dear Abby would have a column in a newspaper and people would write in and say, “My husband’s the biggest jerk there ever was and I don’t know what to do,” And she would give them advice. It was mostly social stuff like that. This very specific, let’s call it a column, it’s not, it’s an internet website resource, is all about financial advice. And this person wrote in and said, “Help, I’ve saved $5 million toward my retirement and I’m heading into retirement,” and absolutely going to be a victim of the required minimum distributions that are associated with all the investment vehicles that he’s accumulated. 401k, Roth IRAs, and on and on and on.
Because he was a lifetime educator, either a teacher or an administrator, and I’m not sure. I’m sure the school districts for wherever he worked were matching his 401k. He was getting amazing tax advantages on the way in so that he wasn’t being taxed on the money that he was making by putting it in these investment vehicles. And at the same time, she was getting unknowingly feed to death by the people who have signed contracts with these school systems’ Wall Street.
So he didn’t have to pay taxes on the way in, but Wall Street people continue month after month after his contributions were taking fees and still are taking fees. So at his retirement age of 65 or 67, I can’t remember in the article, he’s now ready to take money out and he only can take a little bit out. The government tells him how much he can take out and it’s taxed.

Jill K DeWit:
Sucks. Sucks. He created a situation where he has a very few choices. He has all this money, supposedly did it all right, and he’s a victim of RMD, required minimum distribution. That’s case study one. So he’s going to get pounded. You know what the columnist answered? Well, you have a very bright 20 year future ahead of you in giving your money away.
Because then it’s not taxed.

Steven Jack Butala:
This boils my blood.

Jill K DeWit:
Was that the whole point?

Steven Jack Butala:
This boils my blood, this topic.

Jill K DeWit:
Yeah.

Steven Jack Butala:
You, listener, like us, either own a business or you’re on your way to owning a business where you make tons of money. You deduct your expenses first, like your own salary, the people who work for you, marketing, mail costs and on and on and on. And then what’s left, your net income, gets taxed. So we have a lot of control over how much tax we pay, unlike this poor victim of 401k and on and on and on. We own our own businesses and so we are going to pay our taxes up front and we are left with all kinds of after tax money because we buy and sell tons and tons of land. We buy some, we have choices. We can buy three deals every year or 30. We can spend a ton of time on this or not spend a ton of time on it.
We have complete control and we have piles and piles and piles of after tax money sitting in vehicles, which I deem to be risk-free. Checking accounts that have a high yield interest rate, certificates of deposit, and most importantly, more freaking land. What’s better than have a bunch of land that’s for sale? When it comes in, it comes in. So you don’t have to be one of these victims. This poor guy probably was the greatest teacher there ever was. Hopefully he’s got awards on his shelves for being the best teacher ever. He just didn’t really spend a lot of time researching about money. That’s what this is for.
That’s what Man Plan is for. If you don’t know about manplan.com, this is the kind of stuff we talk about, regardless of what your age is, we have not launched it yet, but go there, sign up, so you don’t have to go through this kind of crap in your life, regardless of your age. That was a rant. I should have said that beginning

Jill K DeWit:
Noted. When the elbow came my way when I started to ask one question, noted.

Steven Jack Butala:
Oh, did it?

Jill K DeWit:
Yeah. That’s okay.

Steven Jack Butala:
Oh, that was automatic. I don’t even recall that.

Jill K DeWit:
Oh, thanks. That’s great.

Steven Jack Butala:
Do you have any questions, Jill?

Jill K DeWit:
Nope. Nope, not at all.

Steven Jack Butala:
Are you enjoying the piles of after tax cash that you have for your retirement?

Jill K DeWit:
I’m doing just fine. I’m not worried about anything.

Steven Jack Butala:
Half of the piles of cash, you’ll generate it.

Jill K DeWit:
Thank you. Yeah, I’m pretty good at that.

Steven Jack Butala:
If you have a question or if you’d like us to answer on air or you need any help getting involved with our community, text us at 480-530-7383. We read every single text and if we like your question, we’ll get it on the air.

Jill K DeWit:
Love it.

Steven Jack Butala:
Join us next Wednesday for another interesting episode because you are not alone in your real estate ambition.

Jill K DeWit:
We are Jack and Jill.

Steven Jack Butala:
We are Jack and Jill.
Information.

Jill K DeWit:
And inspiration.

Steven Jack Butala:
To buy undervalued property.