Transcript:

Steven Jack Butala:
I’m Steven Jack Butala.

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

Steven Jack Butala:
This is episode number 1,958. And today we are talking about why these mountain towns? Jill and I are actually in-

Jill K DeWit:
Just outside of Aspen.

Steven Jack Butala:
Carbondale. Carbondale, Colorado. Why these mountain town real estate pricing is so messed up, in Jill’s, words. And then how you can ultimately profit from it. So it has to do with taking a look at land values versus housing values and things like that. And then a little bit later on, we’re going to talk about how being a business owner is the only real viable way to create wealth.

Jill K DeWit:
So we are coming to you live… Well not live. But we’re coming to you from right between Glenwood Springs and Aspen, Colorado. I am wearing my Colorado sweatshirt today because I am lovingly supporting the Nuggets, who have just taken the NBA basketball championship title, if anybody knows. It was so fun to be here, in a sweet little local bar in Carbondale, and celebrate with everyone else their win here at Colorado. It’s not technically our state, but right now it feels like it’s our state. It feels like it’s home to us right now. So we’re having a good time. And I’m excited about this topic because this is so fascinating to me. So I’ll save it. I have a lot to share and I’ll save it for the actual show here.

Steven Jack Butala:
Jill and I are in week one, maybe week two, actually, of probably what’ll end up being a three, maybe four month national RV trip. We’re in the center of Colorado right now. And so what we do, we tow a little Jeep around. And what we always do is drive to these little towns and look at real estate, not because we intend to look at real estate, it’s just by default.

Jill K DeWit:
That’s who we are.

Steven Jack Butala:
That’s right. So we figured we’d talk about what we’re finding and where there’s just, we’re looking for opportunity in finding it.

Jill K DeWit:
It’s amazing.

Steven Jack Butala:
Yep.

Jill K DeWit:
It’s really amazing.

Steven Jack Butala:
Each week on the show we answer questions from our Land Academy member discord forum. We review land acquisitions from our weekly member webinars. And we take a deep dive into two land related topics by popular request. I just mentioned those. If you want to sneak peek of what goes on discord, it’s actually really interesting. Go to landacademy.com. It’s free, in kind of a view only mode.

Jill K DeWit:
And also, we pull questions from there, we also pull questions directly from you via texting to us. So feel free to do that. If you want to text us a question that we can answer here, live, or on our podcast. Or just want to get involved in our community, we read them all. The number is 480-530-7383. Check it out. So Michael wrote a question, “I am new and researching counties and zips. But I need funding for whatever I buy. I want to know what size property and what price point on the sell side would be attractive enough for a funder to go in with me and hold my hand in the process. Obviously, the split is negotiable. I’m just looking to learn the process, but make a little as well. Also, what questions should I be asking here that I am not?”

Steven Jack Butala:
Jill’s going to answer this question. But I have to tell you, you have the absolute right attitude. Take it a little slow, learn a lot, talk to a lot of people, funders, see what kind of deals they want to do. I love this question and how it’s worded. And I think you’re absolutely on the right track.

Jill K DeWit:
Well, here’s a good example. I’m looking at a deal right now that you don’t even know about. It’s a buy for $100,00, sell for $300,000. I think that’s a little rich, honestly. That the deal funder who presented this to me said they talked to a local broker, land broker, who thinks they could list it. They thinks they would start listing at 330. So I’m like, all right, I look at it this way. If it all goes sideways. And we bought for a hundred and we sell for 200, are we both happy with that? And I’m like, yeah, I think we kind of would be. So that that’s enough for me to get involved. And it doesn’t even have to be that much. I’m going to say, I mean, here’s the thing. Don’t worry about it, Michael. Because there are so many people of all levels in Land Academy that are very happy to split $5,000 [inaudible 00:04:28] with you. And there’s some that are happy to split $50,000 with you.

Steven Jack Butala:
Absolutely.

Jill K DeWit:
And if you need more experience, and you’re you’re willing to say, “Hey, I realize I’m going to need more handholding here. I’m happy to take less than 50%. I’m happy to take 25%.” Whatever you guys work out. And you just say it like that, I’m open to it. I understand that the more help I need, the more percentage you’re going to want. Because you’re doing the deal with me here too, or maybe more of the deal, then I get it. And that’s exactly the right way to present it. For me… So yeah, so don’t worry about the money part, because there’s all levels in here that that’s really it. Whatever makes sense to you, even. That’s what I’m going to say, then end it on this. If you’re happy splitting five grand with somebody, then you will probably find somebody.
If you say to yourself, “There’s no way I’m going to work that hard for $2,500. Now I need to split at least 10 grand with somebody.” Now you know that’s your starting point, and you should be mailing like that. So that means you want to target properties where maybe you buy for $20,000 and you sell for 40 or 50.

Steven Jack Butala:
Yep. That’s a great place to start.

Jill K DeWit:
That’s a great place. That’s a good sweet spot. And then everybody gets kind of happy with those numbers, and you’re going to walk away with at least probably 10 grand, no matter what else you guy… However you work out the percentages. And that will get you going. Think about it, you do like three or four of those. Now you have 40 grand. Now you can start making some different decisions. Maybe you start looking at different properties. Maybe you don’t need anybody else’s funding anymore. And soon, maybe you’re the bank for somebody else too.

Steven Jack Butala:
There’s people at all levels in our group. There are people at the tip-top who have limitless funding. Jill and I have done some pretty large… Not recently, but large housing, buy for 400, sell for 480 kind of thing. And we’ve got multiple people that are in our group that are asking for more. We do rational splits there. Real quick turnaround time. There’s also people, there’s more people in our group that have an extra $5,000 because they’re buying and selling land, and they want to get into the funding business. So if you need 5,000 to do a deal and you’re going to split 10 or 15,000, there’s lots of people that are real interested in doing that.

Jill K DeWit:
Totally.

Steven Jack Butala:
There’s people in our group that have no intention of ever sending a mailer out. They just want to fund other people’s deals. So you will, no matter what the situation is, you’ll find it.

Jill K DeWit:
They know how smart this group is. That’s the bottom line. Today’s topic?

Steven Jack Butala:
Okay.

Jill K DeWit:
What are you doing?

Steven Jack Butala:
I’m stopping the recording, Love.

Jill K DeWit:
Oh, I didn’t know that.

Steven Jack Butala:
I know.

Jill K DeWit:
Oh, I couldn’t see that.

Steven Jack Butala:
It said stop video.

Jill K DeWit:
Well, can you tell me?

Steven Jack Butala:
Yeah.

Jill K DeWit:
Oh, I’m sorry.

Steven Jack Butala:
It says stop video two and stop video one and all that.

Jill K DeWit:
All right.

Steven Jack Butala:
I’m going to start again. Okay.

Jill K DeWit:
All right. Will you just say it out loud, video stop, or something like that? Because when we’re out…

Steven Jack Butala:
I don’t want to do that because it’s hard on these guys.

Jill K DeWit:
No, no, no. After you stop it, say out or something like that.

Steven Jack Butala:
Okay.

Jill K DeWit:
How you do, please? I don’t know what you’re talking about.

Steven Jack Butala:
Just watch the script, but I will do that.

Jill K DeWit:
Okay.

Steven Jack Butala:
I’m starting.
Today’s topic. Why mountain town real estate pricing is so messed up and how you can actually profit from it. So here’s the little bit of the backstory, and this always happens. We don’t set out to do this, but like I said earlier, Jill and I are dragging this little jeep around in a large RV. So we get the RV tucked away in the RV park, usually. Detach the Jeep, and then we take a look at a map and kind of, Jill and I just sit down and plan out time-wise what little towns we might go to depending on where we are. Whether it’s going to be a fishing stop, we don’t know, or a shopping stop or whatever stop.

Jill K DeWit:
Bike riding.

Steven Jack Butala:
It happens to be that we’re in the center north, well center of Colorado right now, in Carbondale. But at the time of us recording this. And so of course we decided, both of us, we have to go to Aspen. So we drove out to Aspen about 30 miles away.

Jill K DeWit:
There’s a bike path, by the way. I just want to point that out.

Steven Jack Butala:
And I’ve been to Aspen in the past, in the very distant past, a long time ago. And of course it’s all built up now. But what shocked us about this town specifically is that they have property listings, house SFRs, listed for 40 and $50 million.

Jill K DeWit:
That’s like more than beach prices.

Steven Jack Butala:
Yeah. That’s $2000 a square foot.

Jill K DeWit:
That’s like on the coast of Santa Barbara Beach. That’s Montecito on the water beach prices, which I can kind of almost justify.

Steven Jack Butala:
And then there’s neighboring towns all around that area. There’s a little town called Redstone, one called Marble, where literally they marbled… They mined marble for the monuments in Washington DC back in the day.

Jill K DeWit:
Like the Lincoln Memorial.

Steven Jack Butala:
So in those houses, there’s houses there for three, $400,000. You can buy a million dollar house, but you don’t need to. And this is 15 miles away. So really, Jill and I, in the car, had a very long conversation about this and decided to talk about it on the podcast. Who’s buying these houses?

Jill K DeWit:
That’s the whole thing.

Steven Jack Butala:
Why? What’s this all about?

Jill K DeWit:
Yeah, I’m having, so here’s the thing for me. I’m having a hard time justifying it. So think about this. You want to be in downtown Aspen. Well, you don’t want to be in downtown Aspen because it’s busy and noisy. But you want to be in the area where you can get to things. And have some land too, by the way. It’s like these prices are almost not, they’re just almost not even making sense. Who really parks their money there? Why would they do that? What’s the difference between a $4 million house and a $45 million house? Nothing. I can drive 20 miles and find the same house for $4 million, and it’s $45 million there. And my $4 million house might be on a bigger lot.

Steven Jack Butala:
Well, it’s very safe to assume that if there’s 40 million houses in any environment, there’s a market for it. So the question is not how the house is getting used. It’s, for me… And what the hell the house looks like, I could care less. I’ll leave that stuff to Jill. For me, it’s the math. So let’s start with the math. For a $5 million house, your mortgage is going to be around $28,000 after principal interest, taxes and insurance, all of it. At $28,000, an anesthesiologist, because we’re asking ourselves why and who’s using this real estate and what’s the deal? The average, not the top end anesthesiologist makes about $600,000 a year and they can afford a $25,000 a month mortgage with the rational interest rate. I’ve got 6% in here, so great. That’s a market for doctors on vacation. We all understand that as very-

Jill K DeWit:
But by the way, where’s-

Steven Jack Butala:
High end-

Jill K DeWit:
On Vaca… Where’s their primary residence? We didn’t even factor that in.

Steven Jack Butala:
Probably somewhere where there’s hospitals.

Jill K DeWit:
But they’ve got to afford that too.

Steven Jack Butala:
So great. So I’m getting to all that.

Jill K DeWit:
Okay, cool.

Steven Jack Butala:
So yeah, exactly. That’s right. So they’ve got their primary residence, hopefully they have some equity in it already. But how do they get here? Because they have week, it’s a job. So these towns have to have an airport, a commercial airport in general, where you can get a flight in from Los Angeles or from Las Vegas. Or where there’s large markets for people who are employed. At $50 million, I just did the numbers on $5 million. At $50 million you add zero to everything. So now the payment is $300,000 a month. Doctors can’t afford that.

Jill K DeWit:
It’s just silly.

Steven Jack Butala:
Doctors groups can’t afford that. And so that’s not the market. The Fortune 500 CEO, their average salary is $16 million this year. I looked all this stuff up.

Jill K DeWit:
This is cool.

Steven Jack Butala:
They can afford $600,000 mortgage.

Jill K DeWit:
A month. Okay.

Steven Jack Butala:
A month. And this is $300,000 at $50 million. But there’s only 500 CEOs in Fortune 500. And of course the Fortune 1000, and on and on and on. See the percentages go down, the salaries go down. But that’s not a target market. That’s such a tiny little micro market.

Jill K DeWit:
This is good-

Steven Jack Butala:
The average-

Jill K DeWit:
Numbers, I love this. He’s got a spreadsheet here that I’m peeking at. It’s real cool.

Steven Jack Butala:
The average household salary. This is average, of all people, in this country is $130,000. That’s two people making divide by two. They can afford about a $3,000. 25% of that is about a $3,000 mortgage. So again, we’re running the numbers on a $5 million house. If you take a zero away, it’s a $500,000 house. They can almost afford that. It’s just shy of that, actually. So that’s not the market. So who is buying these houses? Well, it turns out it’s us. It’s all the people that own companies, like land investment companies, or small manufacturing companies, or government contractors or large scale cleaning service, or an IT company or… There’s tons and tons and tons of what everybody likes to call small business owners. But I don’t feel like a small business owner at all.

Jill K DeWit:
Not today.

Steven Jack Butala:
If you make 5 million bucks a year… Well, let’s just start out at a million and a half. So the last career path Jill and I did, where we taught career path, we asked everybody in the first, very first module, how much money a year do you want to make? And everybody this last career path was pretty rational. They said, “I’d love to make a million bucks a year consistently.” So at a million dollars a year, you can afford for, Jill, you’re right, one residence, a mortgage of about between 20 and $40,000 a month. Well, that fits right in with that $50,000 mark. And that’s the real market.

Jill K DeWit:
Meaning, well, what’s the… They mean the 500 or the $5 million house? What’s the $50,000 mark? I’m sorry. If I could afford a $20 to $40,000 mortgage, how much is my house?

Steven Jack Butala:
$5 million.

Jill K DeWit:
Okay, that’s [inaudible 00:14:34].

Steven Jack Butala:
The low end is five. It’s five to nine.

Jill K DeWit:
Okay, cool.

Steven Jack Butala:
For one residence, Jill’s right. Okay. Or if you want two of them, so you can get two $4 million houses very, very easily. Any bank with, if you have rational credits, and you have a consistent track record of making a million dollars a year buying and selling land, they’re going to finance that no problem. As a mortgage. But we’re not here to make a million dollars. I’m not. At $5 million a year.

Jill K DeWit:
Income. Got it.

Steven Jack Butala:
Now you have 20% of that disposable income is $100,000 a month. Now you’re approaching a much, much higher number. You can actually, it’s actually $100,000 to $200,000. So you can afford, easily afford, a $20 million house. They’re building these houses for us.

Jill K DeWit:
That’s true.

Steven Jack Butala:
Are we spending it? Jill and I would never do that. Ever. I have a top number on any piece of real estate dollar ever spend it on, and it’s way lower than $20 million. It’s closer to 10% of that. Because they add a benefit. You just don’t get it. So what’s the real deal? So I went, again, Jill and I went and really looked into what’s going on. And here’s what’s happening.
If Jill and I go by a $10 million house that we maybe used five times, we don’t rent it out. We don’t do any VRBO nonsense. In a very predictable way, with a reasonable amount of risk, that house is going to be worth $5 million more in a few years.

Jill K DeWit:
True.

Steven Jack Butala:
And I’ve got this, it’s inflationary. So I’m hedging against inflation because it’s real estate. Plus we don’t go out on the MLS and pay top dollar for anything. We go and buy undervalued real estate.

Jill K DeWit:
True.

Steven Jack Butala:
So this whole market is for us.

Jill K DeWit:
Isn’t that amazing?

Steven Jack Butala:
That’s part one. Part two, and now this is for everybody. And I don’t mean us, Jill, and I. I mean people who buy and sell land, or anybody’s got a small business-

Jill K DeWit:
That’s good.

Steven Jack Butala:
That generates some dough. Part two is what I love about these mountain town markets, even the small ones and the inexpensive ones. The variance, this is all on the MLS.I would encourage you to go out and look at it. Start with Aspen. The variance in the land prices that are on the MLS and the housing prices are massive. So if you see five, $8 million house values in a town like Aspen. And you see a $100,000 infill lot prices on the MLS, you know, you can go and buy those for 25 or 30%. So now you’ve got 30, 40, $50,000 infill lot pricing. And you can probably sell it for $100,000. A hundred to 200, maybe $300,000 and still be well.
With the variance is what I point. The volatility/variance in some of these markets is just amazing to me. It’s rooted in a massive amount of opportunity. And then to pour sugar on top of that, there’s a huge affordable housing issue in a lot of these markets. Because there’s a lot of support staff that’s needed in these places that, they have to drive out of town pretty far, substantially far, to rent a place or own a house. Lots of opportunity there. Mobile home opportunity. And all kinds of undervalued real estate opportunity in these places that have huge disparaging-

Jill K DeWit:
Yeah, it’s interesting. We just, in some of the towns… Not Aspen of course. But some of these little mountain towns that you’re just, like you’re mentioning, they need the experience… Well, they need the cleaners, the waiters, all of the staff to run a resort, run a restaurant, fill in the blank.

Steven Jack Butala:
The small business owners [inaudible 00:18:13].

Jill K DeWit:
All of these services-

Steven Jack Butala:
Bar owners and all of that.

Jill K DeWit:
Service industry stuff, they’re having a hard time affording it, which is really, really interesting. So some of these small towns, I’ve got to tell you, have passed very interesting laws that are allowing things like tiny homes/ RVs on lots in town to at least give people places to sleep. I’m not necessarily… I think we need to do more, obviously, and really come up with some good housing solutions. But they’re trying to be creative and I do appreciate that. That’s the hard part.
So yeah, that’s great. So we’re talking about Aspen. Yeah. Where do all those flipping people work? Where do they live, where they work there, they got to drive. And it sucks. That’s the hard part. And what if the weather’s bad? Now we even have more problems. So it’s just so interesting to me. And I love your chart. And I loved your explaining that. And part of me feels, yay. Oh good. That means that we can do that. But I’m like, why? I don’t, I want to be in that.

Steven Jack Butala:
Jill, I can hear it in the back of Jill’s voice how much this topic and talking about $5 million and $10 million houses motivates her.

Jill K DeWit:
Oh, it kind of makes me mad.

Steven Jack Butala:
It makes her want to sell more for us.

Jill K DeWit:
Well, there is that.

Steven Jack Butala:
And want to buy better real estate and sell for more.

Jill K DeWit:
Yeah.

Steven Jack Butala:
And I love that that motivates you, because it motivates me. Not that we’re ever going to do anything about it.

Jill K DeWit:
True.

Steven Jack Butala:
We’re not. We’re in our sleepy little class A RV, and it’s just fine for us.

Jill K DeWit:
You know what’s nice about it? Just knowing what’s possible. That’s the bottom line. You just spelled it all out. And that’s really who it’s for. Because I did leave that the other day going, “Who the heck can afford this stupid stuff?”

Steven Jack Butala:
Well, did that kind of explain it?,

Jill K DeWit:
Yeah. Now I got it. It really, it’s like it’s us. It’s kind of designed for us. I’m like, sheesh. But I’m not necessarily sure we should be doing that, just because we can afford it. That’s the point. Love it.

Steven Jack Butala:
Recording stopped. I’m going to start right here.

Jill K DeWit:
Oh, so audio keeps going and video does not.

Steven Jack Butala:
That’s correct.

Jill K DeWit:
Now I know. Don’t we still clap? We don’t have to clap anymore.

Steven Jack Butala:
Naw, those guys are smart. They can.

Jill K DeWit:
Okay.

Steven Jack Butala:
Thank you, Alex.

Jill K DeWit:
Okay, so where are we starting? I’m sorry. Hold on a moment. Okay.

Steven Jack Butala:
Let’s take a look at one of our favorite land acquisitions from our weekly Thursday member webinar. Jill, you have something to share about our new career path dates?

Jill K DeWit:
Oh, I do. Thank you for bringing that up. We have just announced Career Path seven and Career Path eight, which are our last two sessions that we will be having this year for 2023, for career path. What is career path? It is an advanced… Actually it’s our highest level advanced, in personal, taught by us, small capped coaching program, if you will. It’s designed for someone that wants to make this a career. Whether you are coming from another industry and you’ve had other companies. You know how to run companies and manage people, and you just want to make land investing your thing now. Or you’ve been working your way up, you started, you’ve done deals, you know what you’re doing. You’re like, now I’m in it. Now I know this is what I want to do.
Anyone who wants to make this a career career path, this is for you. It will be at the end of September. It goes, there’s eight weeks starting at the last week in September. We have Saturday sessions as well as Wednesday sessions. So lots of amazing flexibility there, by the way. Where can you find out more? Go to Landacademy/career path, and you can see all the details. You can schedule a call. You can fill out an initial application there. And if you have any questions, always just send a note to support@landacademy.com.

Steven Jack Butala:
There’s usually between 20 and 40 people in the career path sessions. And they range from people who’ve never done a deal to people that are make $6 million a year and want to make 10. And so you’re surrounded by people that have a lot of experience, jill and I included.

Jill K DeWit:
Yeah. Well this one will have 40 cap. So we’re going to do 20… Like 15 to 20 people on Wednesday. 15 to 20 people on Saturdays.

Steven Jack Butala:
Okay, good.

Jill K DeWit:
That’s all we’re doing.

Steven Jack Butala:
Good.

Jill K DeWit:
Because we want to give you the attention that you deserve. Period.

Steven Jack Butala:
Let’s take another question posted… But my point is, if you want to be in a room full of people that are making a lot of money buying and selling land, this is the best place.

Jill K DeWit:
Oh yeah.

Steven Jack Butala:
Let’s take another question and 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:
Sid wrote… Oh, but first we have a comment here, and then we have a question?

Steven Jack Butala:
Yep.

Jill K DeWit:
Okay. But first we have a little note from a sweet member named Sid. He wrote, “My partner and I were fortunate enough to purchase 160 acre ranch last January with the help of a couple of investor friends. The purchase price was $765,000, plus another $15,000 for our contractor to clean it up and mow all the pastures. We closed about two weeks ago at $1.15 million cash. Biggest check I’ve ever had in my account. And my partner, [inaudible 00:23:43], couldn’t believe this could be a business after all. I love it. We are now back to normal size acreage, but always on the lookout for an elephant to wander through. I love that.

Steven Jack Butala:
Sid was just in our most recent career path.

Jill K DeWit:
It’s amazing.

Steven Jack Butala:
Good job, Sid. He was real vocal on Discord too.

Jill K DeWit:
Totally. Love it. Okay, so here’s our question. Daniel wrote, “Hello, I am new here. And I’m looking at a 12.37 acre commercial property. Local realtor says it’s worth anywhere between a hundred and $150,000. The commercial land is heavily wooded with no permits on record, but in a fantastic location off a major highway. There are nearby houses. The seller wants $75,000. Would a funder buy it at $70,000 and go through the county process and get the permits to ensure that we can sell it around 150? There’s an expired listing on the property for $200,000 back in 2020. Is getting permits to add value a common way to do this before selling?”

Steven Jack Butala:
No.

Jill K DeWit:
Yeah, I have a lot to say, too.

Steven Jack Butala:
Go ahead.

Jill K DeWit:
Okay, so here’s the thing. Okay, wait. The seller wants 75, so I’m not sure where the 70 is coming into. You think you can talk him down five grand. Not sure how much of a difference that’s going to make if he’s at 75. If it’s been listed for 200, and he’s always in his head taking 75, why is it not sold yet? So I have a lot of questions.

Steven Jack Butala:
Turns out I’m not going to have to help you at all.

Jill K DeWit:
No, no, no. My 75 is like, I wouldn’t even pay that now. It’s like, shoot, if he knew he would take 75 and he hasn’t got 75 yet. But he listed it for 200. It’s just all of these problems going on. And by the way, who is this local agent that’s hanging in there with nothing for 200, when he knows the seller would take 75? I think at the end of the day, if he had the right broker, he would’ve listed it at 85 knowing the seller would’ve taken 75, and it would be sold right now. So what does that mean to me? Well, that means I want to buy it for 25 and sell it for 75. So I don’t think there’s a deal here at all.

Steven Jack Butala:
Look-

Jill K DeWit:
And I’m definitely not doing anything for it.

Steven Jack Butala:
But commercial property even, especially if it’s in a great location, and you’ve got it posted where you should, like on [inaudible 00:26:03] and LoopNet and all of that, there are people… Commercial property is being going to be sold to one of two types of people. Number one, the end user. Somebody wants to build a building, a spec building. Maybe they manufacture parts for airplanes or something like that, or there’s a distribution center. But anyway, the user, the company that the owner of the company is going to use the property, it’s not as common anymore as it used to be.
It used to be you have to own the real estate lot back in the day. It’s just not… Off balance sheet companies, off balance sheet real estate is how companies, big companies do things these days. This debt, which brings me to buyer type number two, which is a real estate person like us. So they would build a warehouse and lease it to Amazon or lease it to that person or whatever. And usually on a spec basis, $50,000 on a 12 acre incredibly well located property makes no difference at all. And so what Jill said, I’m backing up what Jill said. You’ve got a broker saying it’s worth a hundred to 150,000 and an expired listing for 200 grand.

Jill K DeWit:
Yeah.

Steven Jack Butala:
It would’ve been sold.

Jill K DeWit:
I goofed on that one. I realize now that was from 2020. But still, yeah, you’re right.

Steven Jack Butala:
$50,000 is peanuts compared to what the rent factor is going to generate for that person. And so if somebody wanted it, they would’ve bought it. So I think it’s way overpriced. But we’d have to look at it to see. We could really give you a great opinion if we looked at it. Which is what we do on the Thursday calls. Would you do this deal?

Jill K DeWit:
I hope he does bring it up on there.

Steven Jack Butala:
The final point is, we never, almost ever do anything to the land to before we resell it.

Jill K DeWit:
Can I say why?

Steven Jack Butala:
Yeah.

Jill K DeWit:
Because we’ve tested that. And every time we do it, we kick ourselves. Why did we bother doing that? I got to tell you-

Steven Jack Butala:
What if you pull permits for the wrong thing? An he needs a 30,000 square foot warehouse instead of a 300,000 square foot.

Jill K DeWit:
Yeah.

Steven Jack Butala:
And they have to go through the process anyway.

Jill K DeWit:
How do you know what someone’s going to want? You really don’t. You just have to buy it really cheaply and sell it inexpensively, so your buyer can go off and do whatever they want. And properly convey, here’s what’s possible. I haven’t done it, but I know you can go this direction and this direction or this direction. That’s the best way to sell this thing.

Steven Jack Butala:
I agree.

Jill K DeWit:
Thank you.

Steven Jack Butala:
The point here, and it’s… Daniel, I know you’re new, which is great. Welcome, by the way. It’s very hard for some people, and this is a compliment actually, very difficult for people to realize that all we do is buy and resell. We don’t improve. What Sid did in that comment earlier was great. I mean, he hired somebody to clean the ranch up. Which was probably all overgrown and whatever. So you could, for 15 grand, go out there and do it to make it presentable the same way you might paint your house to resell it, to make it a little bit more presentable after you used it.

Jill K DeWit:
So it sounds like, it sounds like we’re eating our words a little bit because Sid did it and it worked.

Steven Jack Butala:
That’s not really an improvement.

Jill K DeWit:
That’s not true.

Steven Jack Butala:
That’s just clearing weeds.

Jill K DeWit:
True.

Steven Jack Butala:
It’s not going to-

Jill K DeWit:
So they can still see what’s possible.

Steven Jack Butala:
The permitting process is going to take you a year.

Jill K DeWit:
Good point. You only want to make sure people can access it. And that might have been really what Sid did, made it so someone can drive out there and access it. And I understand that.

Steven Jack Butala:
You’re on your way though.

Jill K DeWit:
Yeah.

Steven Jack Butala:
Good for you.

Jill K DeWit:
He’s good.

Steven Jack Butala:
Recording stopped. Restarting now.
Today’s second topic is called, how being a business owner is the only viable way to create real wealth. This topic is an extension of our first topic. I want to drive this point home. If you are bent, the way Jill is, and I have always been, just wired to create wealth for yourself, you’re not going to do it in a W2 job, even if you’re an anesthesiologist. And the chances of you becoming Michael Jordan, pretty slim. About as slim, in fact, maybe slimmer, than being a Fortune 500 overpaid CEO.
So forget about those things. For the rest of us who are breathing in and out reality every day, start your own business. And I don’t care what it is, I don’t care if you want to make airplane parts out of your garage. And I know somebody who started a business like that. Jill and I do, and he’s multi… He’s doing extremely well. He’s a lot older. And it took his whole life, but it paid off. And so starting your own business is the own only real way to create wealth. What’s creating wealth? What is that anyway, what does that mean? Well, here’s a very brief, probably boring, less than 30 seconds. Because Jill’s going to kick me under the desk if I go more than 30 seconds.

Jill K DeWit:
I don’t care.

Steven Jack Butala:
Way description of what this means. In accounting, there’s an income statement and a balance sheet. On your income statement, it’s how much money you make. So that’s what it’s called. I bought a property for a hundred thousand bucks. I sold it for $200,000. I deduct my expenses. How much mail did I send out? I had to buy a computer. And on and on and on. And I’ve got a bunch of money left. At the bottom of that income statement is how much money I have left. I pay my taxes on it, and then I shove it over to my balance sheet. And my balance sheet, when I start out, is zero. Well, now I’ve got ballpark $75,000 on that balance sheet and I go do it again. Run it through the income statement. I generate $75,000 again, now I have $150,000 of wealth. This is the way it’s been going on since before the Civil War in this country.
It’s basic accounting. So now you’re creating wealth for yourself. What happens when you’re an anesthesiologist and you make half a million dollars a year, you’ve got a bunch of money left over. You spend it, you spend it. You get taxed into oblivion on that, and the W2 tax rates are atrocious. If you have any money left over and if you talk to any W2 employee, almost none of them do. You shove it into your balance sheet. Usually at that, it’s in the form of a savings account or a retirement account, or a 529 for your children, or on and on and on. It’s very, very difficult to accumulate wealth any other way than being a Fortune 500 CEO, or Fortune 1000, Michael Jordan, or us.

Jill K DeWit:
My turn?

Steven Jack Butala:
Yep.

Jill K DeWit:
Well, thank you, sunshine, for that beautiful-

Steven Jack Butala:
I don’t mean us, Jill and I, I mean land investing people.

Jill K DeWit:
Thank you for that beautiful-

Steven Jack Butala:
How boring was that?

Jill K DeWit:
I don’t know. I don’t know what even to call that. So anyway, here’s what I want to talk about this. Okay, I look at this like, okay, we’re talking about this money. We talked about in the first part of this show about who can pay for these dumb houses. Is it even worth it? And then you realize, oh, that’s me. Maybe I can afford it. Do I even want to do that? So I look at it like, let’s all take a step back here. My whole point is having a nice life. This is my goal. And I hope it’s your goal too. And there’s so many things going on in the universe right now that my head is still spinning. Every day I get up and I read the news, and I’m more confused than I was the day before.

Steven Jack Butala:
Me too.

Jill K DeWit:
I’m not kidding. I’m like, so do we go to the office or do we not go to the office? Are we doing this? Are we not doing this? So I work for myself. Well wait a minute. How come the DoorDash guy doesn’t get to work from home? But I’m working from home. I expect DoorDash not to work from home. My mechanic can’t work from home, but I want to work from home. And Elon Musk says nobody gets to work from home. So I’m like… And I thought… And I love Elon Musk. Maybe now I don’t like Elon Musk. I don’t know. It’s so confusing right now.

Steven Jack Butala:
You have to decide, yeah.

Jill K DeWit:
Here’s what I think. What kind of life do you want? And I know what I want for me. And I want to live a nice life. I want to have a lot of fun. I want to travel. I want to be outdoors because I flippin’ love this. I love land. I love looking at land. I love taking adventures. And the only way I can do this is to be my own boss. And the best way that I’ve found to be my own boss not have to work that hard is buying and selling something that doesn’t take a lot of time, but brings in a lot of money. That’s it. I can’t have a si…
What if I had my own restaurant? I couldn’t be doing this. If I was, fill in the blank, the manufacturing thing. I couldn’t do this. I even know a lot of really hardcore, very, very successful house flippers. They can’t do this. Because there’s always an emergency where they got to be there to tackle it. Because nobody showed up and it’s on them now. They physically are tied to these locations. That’s the whole thing. So what a beautiful life we’ve carved out. And I’m just telling you this because I want you to know this is possible.
And what’s great about it is when you find something that you can buy for $20,000 and sell for $50,000, and do it once a month and live on $30,000. Yeah. It’s a pretty easy, nice, sweet life. I want you to know that’s possible. I still haven’t found anything else. And again-

Steven Jack Butala:
No, neither have I.

Jill K DeWit:
We’ve tried. Boy have we tried to, I mean all kinds of interesting industries. Oh my goodness. What’s funny is we gave up that location thing. So we would be, we’ve tested this, knowing that we’ll give up the location. We’ve got to be here to do it. But do we get the same returns that we can get? And we can’t. I can’t find anything. So this is great. And I’m not willing to do the stock market thing, especially that. I can’t stomach it and I don’t think, I really can’t get the same returns.

Steven Jack Butala:
I’ve looked at that 15 different ways and there’s a risk factor in all of that that doesn’t meet my criteria.

Jill K DeWit:
And I can’t count on it like I can count on this. I can’t wake up tomorrow… You could buy the best stock in the world. And then next thing you know there’s an earthquake in that country, and it’s something like that you can’t account for. That’s with our land, and all over, and how well we spread it out. It’s the greatest thing.

Steven Jack Butala:
So I hope you buy into this. Step point one here. My point is, you will not create any substantial wealth in your life, in general, by buying rental properties. The only way that you really create wealth doing that is by when you resell it. Because you buy a 10-year-old apartment building, lease it, maybe clean it up, allow pets, raise the rent, rental rates. This is all going to take years and a lot of crying.

Jill K DeWit:
Like two year.

Steven Jack Butala:
Multiple years, you’re going to raise rents. Nobody likes that. And you’re selling on a cap rate. Probably the same cap rate that you bought it, but there’s a higher rental rate. And your fixed mortgage is the same. That’s a long way to go. Property management, managing other people’s stuff. You can go get 500 management contracts, if you’re somebody like Jill, pretty quickly and create an amazing amount of wealth for yourself. And so my big point here is you have to be a business owner to create any real wealth. And especially if you want to do it quickly, which we all want to do.

Jill K DeWit:
That’s true.

Steven Jack Butala:
Her point is, and it’s a frosting on my point, is how many opportunities do you have where you don’t have to be present?

Jill K DeWit:
Yeah. It’s just extra.

Steven Jack Butala:
A manage your team of people. If you’re a property manager, you’re going to be running around all day. Stuff’s blowing up. Your day is packed with fires that you have to put out.

Jill K DeWit:
You’re married to your phone. I don’t want that.

Steven Jack Butala:
So I’m not saying buying and selling the land is the only way, it’s the way that works for Jill and I. And I think there’s other opportunities out there.

Jill K DeWit:
Oh yeah.

Steven Jack Butala:
Just my point in this, if you’re listening to this, my point is to motivate you to understand that having a job is not an exit. And being a Fortune 500 CEO, or Fortune 1000, probably for most people, certainly not me, is not an exit. And playing professional basketball is not either.

Jill K DeWit:
This is good. Let’s think of other occupations that would not work for us. Jockey. Nope, couldn’t do that.

Steven Jack Butala:
Anything that requires a tremendous amount of attention and intelligence is not going to work for me.

Jill K DeWit:
You could have gone the race car driver. That might have worked.

Steven Jack Butala:
Yeah, I’m not good enough. I tried on two wheels. I tried that. It’s just, I just didn’t have it.

Jill K DeWit:
Okay, let’s see, what else? A vet? I can’t stomach that. No, I’m not doing that.

Steven Jack Butala:
Think about the number of people who want to be a race car driver, and then the number of people who actually are.

Jill K DeWit:
True.

Steven Jack Butala:
Then think about the number of people who want to be a land investor and actually are. And it’s a much, much, much tail end, bigger number.

Jill K DeWit:
You know what’s great about this, too, is? What we do. And we didn’t have to grow up in it. Think about the drummer we were talking about the other day in, I can’t remember what country. He started playing drums and he was two years old and people say, I don’t even remember his name.

Steven Jack Butala:
I don’t either.

Jill K DeWit:
But they say he is the most technical drummer of all time. But he started at age two. Well, that ship has long sailed. Say you want to be a Stuart Copeland level, you can’t start now. Well, you could. But you’re not going to be that good.

Steven Jack Butala:
Probably not.

Jill K DeWit:
You needed to start a long time ago.

Steven Jack Butala:
Yeah.

Jill K DeWit:
Fortunately in our world, you can start late and have a good life and a nice income. Whoo, Good thing.

Steven Jack Butala:
Jill and I, behind closed doors, have long said this sentence to each other. And it comes up often in all kinds of contexts. If you can’t live on 5,000 bucks a month, something’s really wrong. So of course we have the different life now. We live on much more than that, but we lived on $5,000 a month long before we started Land Academy. Before, when we joined forces in the real estate downturn around 2008. Happily. We took some saved up money, both of us, and bought a old town… For dramatically reduced price. An old town condominium, old town Scottsdale.

Jill K DeWit:
Townhouse.

Steven Jack Butala:
Lived in there, lived there-

Jill K DeWit:
For a while.

Steven Jack Butala:
For a couple of years together and had a rip roaring blast.

Jill K DeWit:
Yeah.

Steven Jack Butala:
Mortgage free. I don’t know if, some months, we probably didn’t even make five grand Buying and selling land, and doing some other stuff.

Jill K DeWit:
Had the lean times.

Steven Jack Butala:
And then created some wealth. Just like I know it’s, I’m putting my money where my mouth is started really kicked up. I found out what Jill was capable of, sales wise, and kicked up my acquisition process. She kicked up her sale process. And we created a huge amount of wealth really quickly.

Jill K DeWit:
True.

Steven Jack Butala:
It allowed us to start Land Academy, which was massive time-consuming, and a huge amount of expense that we had nothing to show for for years. So you can do it.

Jill K DeWit:
And don’t be afraid of it. I was going to say… I’ll end on this, for me. Because this is a common topic in career path. A lot of people in career path are like, okay, I’m ready… We’re ready to be at your level. That’s why we’re here. Or even just in Land Academy. We’re here to learn what exactly how… But that’s what Land Academy is, by the way. All Land Academy is is us sharing how our own businesses run. So you can copy it and cookie cutter it and do it for yourself.

Steven Jack Butala:
Make it for yourself.

Jill K DeWit:
That’s it. That’s Land Academy. And then Career Path is taking it even now, like all right, we understand the basics. Now we want to bring it home. That’s Career Path. But one of the things that we talk about a lot is, okay, now, hiring, it’s one thing for myself to make this income and do it on the side. That’s one hurdle. We got to overcome that. Then the next hurdle is, I quit my job. Now I’m living off this and my wife doesn’t work too. We’re all, we’re living. This is great. And then the next hurdle is, wow, now I’m going to, I’m going to bring on employees, or a staff, or something else that I’m going to contract, that’s going to… Which is Land Academy Pro. Anyway, more about that later. So I can really be the owner and do all that. And it’s scary. These little things can be scary. And I’m here to tell you, don’t worry about it. And that’s a whole ‘nother show. We can talk about that.

Steven Jack Butala:
Well, that’s the reason you surround yourself with people who’ve already done it.

Jill K DeWit:
True.

Steven Jack Butala:
If they’re scary.

Jill K DeWit:
Yeah. We’ll get you there. That’s why you’re listening.

Steven Jack Butala:
Recording stopped.

Jill K DeWit:
Next time, we should stop it right there. He’s going to do a natural stop anyway. I just thought of that. We’ll fix it for next time.

Steven Jack Butala:
No, we won’t.

Jill K DeWit:
Okay.

Steven Jack Butala:
Alex will tell me what to do.

Jill K DeWit:
Okay.

Steven Jack Butala:
Let’s take a look at another one of our favorite land acquisitions from our weekly Thursday member webinar. Jill, you have something inspirational to share?

Jill K DeWit:
I do. As you and I were driving around in the last several weeks, it hit me. I don’t know if it hit you first or hit me first, but I realized I was born to do this. Well, you and I were talking about, you were like, do you realize-

Steven Jack Butala:
You can tell Jill and I have, we’ve been in the car together a lot.

Jill K DeWit:
A lot, a little too much. Here’s the good news. The good news is we have a nice new class A. We have all of the Air Force One. You guys know what this is. It’s so we could hook up our Jeep with all the Blue Ox and Air Force One. That’s what we’ve got. So we can tow our Jeep so we can travel in the same vehicle. Here’s the bad news. We travel in the same vehicle. So for a while, if you were listening to us last year, you remember in the fall we picked up a Jeep. And I lovingly drove that thing 5,000 miles home behind you because we didn’t have all the setup yet. We had to get the rig-

Steven Jack Butala:
We kind of missed each other.

Jill K DeWit:
Yeah, I was really kind of not okay.

Steven Jack Butala:
Not anymore.

Jill K DeWit:
I was going to start my show back there, Jill from the Jeep. It was really kind of cute. So that was, we were talking about that. Anyway, so yeah, we do spend a little too much time together, but that’s a whole, that’s another problem. Anyway, but we were talking about, both of us at young ages saw the potential in real estate. So that’s a whole, that’s one little piece of this. It’s one thing to know that there’s money to be made in real estate. I grew up in Orange County, in Southern California. Duh. My dad was a pilot. Flew Don Cole around for a while. Many other people that he chartered and flew for. It was amazing.

Steven Jack Butala:
It’s funny that you’d think anyone knows who that is.

Jill K DeWit:
Well, there’s one person listening right now, and it’s my mom. Just kidding. Can I just go with it anyway.

Steven Jack Butala:
Have you ever noticed that people from Southern California say things and they expect the entire world to know what they mean.

Jill K DeWit:
To know what that is.

Steven Jack Butala:
Yeah. Oh, at Orange County, where the hell is Orange County?

Jill K DeWit:
I said Southern California. Were you not listening?

Steven Jack Butala:
Who the hell is Don Cole? Why would I… I grew up in Detroit, I don’t know who that is.

Jill K DeWit:
Well, I’ll tell you. He was a major developer in Orange County, in Newport Beach, and Irvine around the way.

Steven Jack Butala:
Thank you for telling us. I appreciate that.

Jill K DeWit:
Do you need me to tell you where Irvine and Newport Beach is?

Steven Jack Butala:
Yes.

Jill K DeWit:
Oh, well that’s Southern California.

Steven Jack Butala:
Yes. In relation to Disneyland, because that’s what everybody knows.

Jill K DeWit:
Oh, great. Okay. 20 minutes south.

Steven Jack Butala:
Thank you.

Jill K DeWit:
On the five, let’s say. Do you need more than that?

Steven Jack Butala:
No.

Jill K DeWit:
Oh, okay. Got it.

Steven Jack Butala:
It’s close to Disneyland on the coast.

Jill K DeWit:
Okay.

Steven Jack Butala:
That’s where it is.

Jill K DeWit:
Okay. All right. There we go. I can show you. All right. Anyway, so back to that. So my point is, I grew up in this area watching all of this stuff being built around me. And I always knew, wow, there’s money to be made in real estate. So that’s the side note. But later on, I didn’t know how much I would love land. That’s what’s so funny. So one of my first, actually, my first real full-time job that afforded me to move out on my own, which is working for some developers.
And I didn’t even then know how much I loved land. I loved the work. I thought I just loved this environment. And I was learning to read blueprints because they were building things on the land and leasing it out. It was really interesting. But I didn’t know until now that we’re just driving around. I just love looking at it. I love getting out and standing on it. I love riding our bikes. I love the smells. I love the trees. I love the sounds. I love the wildlife. And I love acreage. So I know that at some point, every time we find a really beautiful big piece of land that we think we could keep for long term, I get an offer and I end up selling it. But someday.

Steven Jack Butala:
But the motivation there to buy it at that price was all in your soul.

Jill K DeWit:
Oh yeah.

Steven Jack Butala:
It’s in mine too.

Jill K DeWit:
I just love it. You know what it is. Because if it all goes sideways, I have all of this great land. Which is, by the way, we’ve been there before. Lord knows we’ve been through recessions before, even together, that we know how to… We buy it so well. And if I have to sell it for less than what I thought I was going to sell it for, that’s okay. I’m still making money and keeping food on the table. That’s the thing here. But my point is I just love this. I love land. I love driving around. I love looking at it. I never get tired of it. It’s amazing to me. I can stand on any piece of dirt and find something beautiful about it. I don’t care where it is or what it is. I’ll find something great about it.

Steven Jack Butala:
I love land. I mean, we’re in the middle of the Rocky Mountains right now.

Jill K DeWit:
Yeah.

Steven Jack Butala:
Both of us, our jaw dropped-

Jill K DeWit:
This is a little-

Steven Jack Butala:
Every morning.

Jill K DeWit:
Overly dreaming.

Steven Jack Butala:
Until the sun goes down. We’re like, I can’t believe we’re land people. We also are, no, we don’t necessarily dislike creating a ton of money for each other.

Jill K DeWit:
Yeah. How about you? Do you have something, Land Plan dot comish you want to share with us?

Steven Jack Butala:
Yeah. My title today is Pinching Pennies on Your Way Up to Fortune. Is that good? Well, here’s what I think. And I can tell you from personal experience, Jill and I, I made a small fortune, got cut down to size during the 2008, 2009 recession. Jill and I joined forces and rebuilt it all. And I can tell you that saving money, personally. So not… Driving a real old car, I think is a great idea. Not having a mortgage and not paying rent, because you own real estate that you can live in these situations. And pinching pennies on a personal side is very, very smart. Pinching pennies on a business, from a business perspective, is a really bad idea. I think that there’s several comments from very new people in Discord about sending out 400 unit mailers to test everything. And I want to be really clear about this. This is a really bad idea.

Jill K DeWit:
I agree.

Steven Jack Butala:
And I’ll be, full disclosure, Jill and I own the printing company. So that where you, well, offers to owners, where people send these offers out. And it’s not 1% of what I’m saying is profit motivated. Because we have tons of customers in offer 020 that send out 10 and 20,000 unit mailers every single month. So your 400 unit mailer versus a 4,000 unit mailer a month isn’t going to change anything at O20. So that’s not financially motivated for me to say this. But spending money on a 400 unit mailer to just make yourself feel okay is not a good plan. You are not going to get the results that you want. It’s going to discourage you and you’re going to feel like you wasted money. You want to send out, at least, I think in the beginning, 5,000 units. Not pinching pennies on this. Buy a piece of property, resell it, and the light bulb will go off your head.
The light bulb’s going to go off over your head about how this is what you want to do for the rest of your life. Or you’re going to say, the five components to this thing suck and I don’t want to do it anymore. And either way, you won. But if you send out a 400 unit mailer, nothing’s going to happen. And you’re going to get very, very discouraged. So pinching pennies on things… All businesses have this. If you start a convenience store, you’re going to have to go buy a ton of inventory, sign a big huge lease or buy a building, set up racks. And there’s all kinds of upfront expense. There’s no business that I know of that has so few upfront expenses than buying and selling land. And so if you’re so budget conscious that you can’t send out, consistently send out 5,000 units a month. I understand that. We’ve all been there. This is not the right time for you to do this. I don’t want you to fail.

Jill K DeWit:
I agree. Thank you. That was awesome. Hey, by the way, don’t forget. You could reach us for questions and help simply by texting 480-530-7383.

Steven Jack Butala:
Join us next Wednesday for another interesting episode. You are not alone in your real estate ambition. We are Jack and Jill.

Jill K DeWit:
We are Jack and Jill.

Steven Jack Butala:
Information.

Jill K DeWit:
And inspiration.

Steven Jack Butala:
To buy undervalued property.