Steven Jack Butala and Jill K DeWit discuss Case Study 5, which features a young, outgoing Californian who generates six digits flipping land in a single county. They offer him valuable advice on how to successfully buy small houses and land even while going nonstop with his grind.

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Case Study 5: Six Digits In A Single County

Discord Question

This is episode number 2058. We are talking about case study number five. This person is a young outgoing Southern Californian generating high six digits flipping land in a single county. Maybe two counties and he’s fun to be around. Every time we talk to him, he’s driving around. He has a dynamic personality. The deals that he brings to us for our review and in general because all these case studies are former career path people. He seems to be able to understand the math of this and then some. Each day on the show, we answer our questions from our Land Academy member Discord forum and take a deep dive into land-related topics at your request.

Joseph wrote, “Folks, someone wants to pay me $20,000 in cash in person for a property that I’m selling and that is the asking price. This seems sketchy to me but as someone who used to run an all-cash business, I understand what it’s like to have money burning a hole in his pocket. I also understand that there’s fake cash out there that people try to use and you better believe I bring my verification pin to closing. Can anyone come up with other reasons not to do a cash sale? Has anyone encountered this before?”

Around two sides of the fence here. On both sides of the fence. Please check to see if there’s an IRS implication for every single thing that we do as business owners as citizens of this country. Being a former accountant, the first thing that enters my mind is what the Internal Revenue Code says about this. Chances are they are going to say you are required to do some reporting about this transaction, number one. Number two, you could never do an escrow. This is not an escrow sale.

There is an IRS implication for every single thing we do as business owners and citizens of the country. Share on X

We had the escrow office and started counting out cash and piles on the desk. Can you imagine?

They would never accept that. They will never accept cash in a deal. Too bad, but that doesn’t matter. This would be a deal or you were preparing a deed for property that you want to convey to this new person. You’d have to have a long conversation about what you want to convey, what day and fill out all that stuff, and create a document, sit down, and then very quickly take his cash and hand him this executed deed over and that’s it.

Preferably not a McDonald’s.

Who doesn’t want $20,000 of cash in their closet, by the way? No one. Everybody wants that.

The bummer is I have no trouble with the cash part of this. Not at all. I will take the cash. I understand the issues but it’s the stupid legal stuff that stops us and it’s dumb, but you have to pay attention to that. We don’t want you to get into any big trouble. Don’t want any audit coming your way.

I know for sure this is reportable. This is income.

I wonder if there’s an amount you can do up to $10,000 or something that you can do this.

One of the first things that comes to my mind is that you can go to the bank and your bank account and withdraw $10,000. I think the number is $13,000 now without any reporting by the bank. As I understand it. Banks are not required to report anything but cash and cash transactions are the federal government, are their bane of existence. They chase this. This is what money laundering is all about. The cash is very focused on right now.

When we started this business, we had people coming to us all the time with precious metals, jewelry, and all kinds of things. This was several years ago for me. That was not tracked or was not as big of a concern as it is now. Be careful. If you can test a $100 bill for that authenticity, you are way ahead of most of us.

It’s a pen. A little pen that makes sure it’s real.

I have never seen this before.

You have never worked a little retail job with a cash register then have you.

No. Have you?

Yes. It was a lot of years ago.

They had a pen.

Yeah, there’s a pen that you dip on the paper. Next time we are in Staples, I will show you the little pen. I will find the little money pen.

Case Study Number 5

This topic is case study number five. This guy is amazing. He runs around like a crazy person. He goes and sees every property that he buys and sells. He loves mobile homes and small houses. He buys and sells land. He’s very often the example of what to do when Jill and I have former successful transactions that we reviewed in our Thursday call.

He brings good ones.

What comes to mind when you think of this guy?

What’s funny is he hasn’t expanded his footprint very much. He happens to be in an area that he’s in. He knows it at the back of his hand and there’s so much deal changing all the time of all the different property types that there’s so much to choose from. He will never get bored, and we have talked about that. Back in the day, there were counties that we did that I’m like, “I could retire in this county. I could never leave this county.” For example, in Dallas County Texas, or Fort Worth, you could do all your deals. What if you do two good deals a month? Twenty-four deals a year, you would be like, “You are right, Jill. I could stay in one county, a healthy county in Texas that’s growing.” That’s my whole business model. It’s like what he does. What’s unique about him is he was never afraid of money. Never afraid of how much things cost. He assesses a property that sells for $50,000 the same way he assesses a property that sells for $500,000. That’s a different thing. Big deal. It’s all the same stuff. He’s getting into it and he has a history of solving problems.

He’s Fearless. Nothing stops him.

He’s like, “I got this probate attorney. I used him a year ago. He solved this. I will bring him in on this one. I know this. I learned about this little nugget of information as I moved into this type of property.” I’m like, “What?”

Dynamic Personality.

He asked questions and he’s not annoying. He has good, intelligent, and smart questions and lately, he hasn’t asked a lot of questions. It’s like, “I’m doing this deal anyway.” What-do-you-guys-think questions. Like, “I just want your feedback because I already know how it’s going to go, and I already did three over here, but I was curious about your take on it,” is usually how it’s going because he will bring a deal up or like, “Good because I am closing tomorrow.” I’m like, “This is great.”

There are some huge advantages to operating in 1 or 2 counties in a metropolitan or outside of a metropolitan area. We see that as a recurring theme and career path where people will come in and he’s one of them. I already have this operation. I already have this thing. I joined the career path because I’m not sure I’m buying real estate correctly or I could use an improvement on how I’m buying real estate. He’s that candidate.

One of the huge obvious advantages is you get to know the place well. Jill and I are like that in two separate states. There are a couple of counties, specifically there’s not much that could go on there that I’m not going to be able to know exactly what it’s worth. For property comes back and when I can say yeah or nope very fast because I have decades and so much data of where things are growing, where they are not, and why, and he is taking that through a great place for himself.

It’s very logical once you are doing that with some type of real estate, for him it was houses to convert that to land or converted to mobile homes or strip malls, or whatever because you know the area so well. We have had that happen many times with people who come in with a career path we never heard their names. They are not part of Land Academy. They know about us. They read the show. Maybe it’s a real estate agent. In a lot of cases that happens. I’m a successful real estate agent. I should be buying these properties and reselling them.

For myself not helping somebody else.

All these people, but this guy specifically, whatever he goes and does, he’s going to be amazing at it. He doesn’t know how to fail.

There’s usually a tweak. Everyone has left. Not one person has ever said, “Thanks a lot. That was a waste of time. I didn’t get anything out of it.” No way.

I never heard that in my life.

If anything, we have got people now. They are coming back for a third time, but we have two-timers for sure back into the career path every session. It was a few years ago. You got me from $250,000 a year to $500,000 a year. I have been hanging out on $500,000 a year. Now I want to go here.” I know that there are some tweaks to my system that need to be made, and I know that there are some new things that we look at here that I can do. I just know if I had the right partner, I could take this to the moon. If that’s the one reason you are thinking about doing that too and that’s in the career path.

That’s a super interesting point because we started this when Jill and I started Land Academy, we were doing real estate deals together at least 5 years before that and then I have been doing it for 30 years. When we started Land Academy, we were immediately met with that account work. We were constantly having to prove the concept to people. We haven’t proven a concept to anyone in years and years.

Nobody asked that anymore.

What they are saying now is exactly what Jill said and it’s, “Yes this works. Yes. I made a couple of $100,000 last year. I’m having real trouble going from $180,000 a year to $500,000.” It feels great not to have to explain to myself why this proof of concept is long gone. It works. You just got to do it.

What do you mean you send out mail and they call you back and you buy the land and then you mark it up and you sell it online? At least for double.

I would say that too. If I was 22 years old and somebody said, “This is what you do.” Just what you said.

I would go, “What do I know? We have only done $16,000 deals. We are still testing it. We will let you know when we hit $20,000. Maybe then we will know it’s a real thing.” That’s good.

Episode Wrap-up

Join us next time for five more interesting episodes. You are not alone in your real estate ambition.

We are Jack and Jill. Information.

Inspiration.

To buy undervalued property.