Simplifying Your Acquisition Process (1069)
Simplifying Your Acquisition Process (1069)
Transcript:
Steven Butala: Steve and Jill here.
Jill DeWit: Good day.
Steven Butala: Welcome to the Land Academy Show, entertaining land investment talk. I’m Steven Jack Butala.
Jill DeWit: And Jill DeWitt, broadcasting from sunny Southern California.
Steven Butala: Today Jill and I talk about simplifying your acquisition process. Seems like a silly little topic, but who doesn’t want stuff to be more simple?
Jill DeWit: I agree. I want to have more of a conversation. Is that okay?
Steven Butala: Yeah.
Jill DeWit: I’m just kind of changing it up right now, because I know we talked about that, so, thank you. Yeah, who does not want things to be more simple? I agree.
Steven Butala: Before we get into the topic, and before I make a butthead out of myself talking about marriage and stuff like that, let’s take a question posted by one of our members on the landinvestors.com online community. It’s free.
Jill DeWit: All right. James asked, “I’m thinking of buying a few 40 acre parcels surrounded by BLM land. I went to check out the properties. There’s dirt paths that lead to them, but there are signs that say no motorized vehicles. Has anyone tried to get permission from the BLM to drive over these trails? Not sure if I should offer a really low price for these, or just not even do the deal.”
Steven Butala: Okay, so this is a great question. It’s something I’ve run into personally, not super, super recently, but I’ve also talked to some of the advanced Land Academy members, and they’ve run into it also. This is, for sure, an attribute to this property. It’s not a bad thing. It makes the properties that you’re looking at incredibly unique. So on the onset of it, especially if you’re brand new at this, you’re like, “Wait a minute, I can’t take a car into my property?” As Jill knows, and most of the … if you’ve done a few deals or have some experience, there’s people that want to buy rural, vacant land to just get away from it all in the craziest possible way. The more creative you are about satisfying what they want from a customer standpoint, the more successful you’re going to be.
Steven Butala: What you need to do though is contact the BLM to get like a hundred year ingress-egress rights. Hopefully the person before you, the seller, has done that. We all know working with the government’s pretty tough and frustrating. But I’ll tell you my personal experience with getting a least easement, I’m not exactly sure what the … I think it’s just ingress-egress. Least ingress-egress is ridiculously simple with the BLM and very cheap. It’s like you can get like a 99 year lease.
Jill DeWit: Okay. So I have a couple things to say.
Steven Butala: Jill’s just-
Jill DeWit: I’m just letting you go, and then I want to say-
Steven Butala: When do you not let me … just let him go. Let him go.
Jill DeWit: I know. I always just let you go. Let him go.
Steven Butala: Eventually he’ll be done.
Jill DeWit: Exactly. Okay. That’s all beautiful, Steven. That’s the legal way to do it. I have a couple things to say. First of all, why aren’t you just checking out the property? Isn’t it a whole lot easier to ask for forgiveness instead of permission?
Steven Butala: You know what, that’s the reality of it.
Jill DeWit: So do I really want to draw some attention to the fact that I’m even out there in the beginning? Heck no. Am I going to sneak out there and do what I need to do? Yeah. Just to check it out. Oh yes. All day. I’ll drive right past that sign. So no one knows that-
Steven Butala: Well, it’s a little two track trail.
Jill DeWit: Right. Well or that, you know, whatever. Like are we talking about on a motorcycle, are we saying?
Steven Butala: I don’t know. You know what, Jill’s right now that I’m thinking about this. Go ahead. Go ahead. It’s your turn to just go off.
Jill DeWit: Okay, thank you. I’m a fan of A, who’s going to know unless you draw attention to it, and let’s not draw attention to it.
Steven Butala: Yeah, don’t build a skyscraper out there.
Jill DeWit: Yeah. You know, we’ve sold many properties in like, you know, big properties in West Texas and I’ve had this conversation with many buyers, which is kind of a version of, “Look, if you’re not going to put a casino on there, is anyone really going to know what’s going on?” And you know, be legal obviously, don’t abuse it, but you know, you could probably do a lot and be under the radar kind of thing. So I look at it like that. So while you’re checking out the property, don’t think about it too much. And then that goes back to … Seriously, we go back and forth to this ourselves. Am I right?
Steven Butala: We go back and forth. Jill and I constantly, especially recently on these deals.
Jill DeWit: Yeah. We have constantly been going, “Wait a minute. Why are we looking into this this much?” This has never been our core thing and this is why we have bought and sold properties that are probably worth way more than we sold them for because we didn’t look into them that much and guess what? We didn’t care and our buyer won. So don’t spend too much time on it.
Steven Butala: Price, like he here, as he says, are getting really, really low price for these properties.
Jill DeWit: I would not go get this ingress-egress thing. If I know something about it, I might pass it on to the buyer and go, “Look, I did five minutes of research. Here’s what’s possible. Here’s the phone number. This is where I left it. I wish you all the best. It sounds like it’s possible. And then again, I’m pricing it this way because I’m not doing that work.”
Steven Butala: I mean, I would celebrate the fact that this has adjacent BLM land. I would celebrate that in the title.
Jill DeWit: Because no one can build on it. Great.
Steven Butala: You know, everybody loves to buy, have that house at the end of the block that’s on the back of a golf course or federal land or land that’s not going to be developed. And that’s what you have here. So this is a celebration situation, and it’s even better if you got a really low price.
Jill DeWit: Exactly. I mean, again, I like that. Tell them, tell them. I use this all the time. It’s priced this way because I’m not doing X. If you want me to go do X, I sure can, but now the price is going to change because that’s going to entail me to do a whole lot of work. I’m not kidding. And every time I tell a buyer that they go, “Oh, nevermind. Got it.” Like, if you really want me to go and hire the guy to go out and walk it and survey it and put the pretty stakes in the ground, I sure can.
Steven Butala: The pretty stakes?
Jill DeWit: Yes.
Steven Butala: The pretty orange steaks.
Jill DeWit: Yes, exactly.
Steven Butala: I asked somebody recently on that topic. You’d think, this is 21st century, with all the technology. I asked a very credible source, is there some type of Google Earth version of getting a survey? We can stop this site visit, take three days to get out there, put the pretty stakes in the ground. The answer is no. You still have to do a survey out there.
Jill DeWit: I mean, we can do pretty … It depends on what you’re going to do for it. For your buying and selling purposes, if a guy just wants to really know where his line is, and it’s 40 acres, so we’re not going to accidentally get on the neighbors, so it’s not that big of a deal. He can walk it himself. Well, you know in personal fact, we have all the GPS coordinates, so I could pretty much stand there and know I’m in the right spot.
Steven Butala: Yeah. I mean we’re way off topic here, but surveys, that’s if you’re going to build something.
Jill DeWit: Right, but that goes the same with this BLM thing. Don’t go too far.
Steven Butala: Surveys are always incident driven. You don’t want to ever, in my opinion, to say, “You know what? I’m going to go survey this property.” It’s just you want to do it if a lender’s asking you to do it-
Jill DeWit: It’s a waste of your time.
Steven Butala: … if somebody, like there’s a builder that’s involved that wants to see if they can put a subdivision out there. It’s not just something that you do for fun. Oh, there’s my lot line. Got it.
Jill DeWit: Exactly. All right.
Steven Butala: Today’s topic. This is one before the show says, “Look, we’ve got to keep these shows moving. There’s too much go back and forth talking.” Now we’re eight minutes into the show, we’re about to actually do it.
Jill DeWit: Well then we’ll do a three minutes show.
Steven Butala: Today’s topic, simplifying your acquisition process. This is the meat of the show. This is not a long topic for me. I love simplifying stuff. I think most guys do. And I’m not sitting around saying women want to complicate things. I’m just saying everybody loves simplification. Actually, Jill, honestly all kidding aside, that’s one of the things I love about you-
Jill DeWit: Thank you.
Steven Butala: … that’s very different from you than a lot of people I’ve known, male or female.
Jill DeWit: Thank you. I do want to get it done.
Steven Butala: You’re all about get it done. Get it done on time. Make sure it’s done right the first time. That’s a big thing with you.
Jill DeWit: Yeah, it is a big thing with me.
Steven Butala: Get it through fast. Get it done fast and then let’s go have a drink.
Jill DeWit: That’s exactly right.
Steven Butala: And that’s exactly how I am.
Jill DeWit: I don’t need to think about it, feel it, love on it, celebrate it. I’ll celebrate the bank account and I celebrate that stuff.
Steven Butala: So this was, the root of this topic came out of me working with a developer to create an incredibly efficient brand new 21st century version of our CRM. So we’ve been using an old sequel version that I had developed a long time ago. I spent a quarter of a million bucks on it.
Jill DeWit: Like 2005 or something.
Steven Butala: Yeah, technically that is 21st century. But anyway, we’re updating the whole thing in Air Table to be used and beat up and abused by our acquisition staff and sales staff. So then we can perfect it and create an additional sequel version and then probably distribute it for Land Academy members, some version of that. I’m not sure how it’s going to go yet. So these topics this week, this is acquisition week. These topics this week came out of that. And because the developer that I was working with, as always, or that I am working with, she’s on staff with us. We got our signals crossed a little bit and she created this incredibly complicated like 92 step acquisition process because I think it was just, you know, she interviewed me and said, “Well when you buy a piece of real estate, you got to do this, this, this, this, this, this.” So every single one of those tiny little things in the due diligence step became like a status, when in fact there’s really like five statuses in the whole thing.
Steven Butala: So don’t get caught up in that engineering left brain. You know, I sit down at my desk. Oh, that’s a new status. I turn on my computer. Oh, that’s a new status.
Jill DeWit: That’s a new status.
Steven Butala: Get coffee. That’s a status. So I know you wrote some stuff down, Jill. What would you say to somebody who’s trying to simplify their acquisition process?
Jill DeWit: I was going to say, it can be overwhelming in the beginning. You know, we joke about it, but it’s true. We make it look easy. We really do. And there are a lot of steps. And where I was coming at it is when I talk to people and they’re like, “Whoa, just I want to be an investor.” Okay, now I’ve got to buy a property. And then I’ve got to market property. I’ve got to sell property. And then they really just go, “There’s a lot that goes into this.” Yeah, there really is. So just talking about the acquisition process, it seems like a lot, but it’s not that bad when you really just sit down and talk about the process and the steps. So I was thinking like nail it down or break it down into real basic steps.
Jill DeWit: So acquisition involves really picking a county, sending out the mail, buying the property, recording the property, because that’s acquisition. I own it. We can forget about the rest right now. So then when I always think of two … So, all right. You can wrap your head around that. Then break it down even further. What’s going to go into picking the county? There’s probably 10 things maybe. And then getting the mail out and then picking the properties, doing your due diligence and buying the properties. Think about all these different steps. I’m trying to just kind of get you thinking about it and get you practice to making your own, basically your SOP, your standard operating procedures. That’s what you should be doing when you’re new as far as simplifying it.
Jill DeWit: And as you do this and make these steps, you’re going to make your own procedures and guess what’s going to happen? You’re going to have your own hopefully training videos and outline when you’re done, so you can train the next guy. Because hopefully when you come up from all this and you decide, you know what, I want this to be my business now. Now I’ve done 10, 20 deals, I know what I’m doing. Now I have a whole process down. Now I’m going to put somebody in place for the parts that I’m not needed or I don’t like or I’m not good at kind of thing.
Steven Butala: Or you’re sick of.
Jill DeWit: Or you’re sick of, right.
Steven Butala: In my case.
Jill DeWit: Exactly. And then later on, you’ll do like what we’re doing. Then you get it into a whole big system, like we use Air Tables. Sometimes we use [Jura 00:12:19] and then there’s other products out there that work. There’s no one fits all, one program fits all. Just whatever sings to you. Whatever you can customize and make your own that makes sense to you. Some people use spreadsheets forever. You know they’re not doing that many deals and it works for them and that’s okay.
Steven Butala: Of course this is all covered in an incredible amount of detail in our education programs, but here’s the overview, and I broke it down into five numbers. Number one is acquisitions. Number two is … or number one, I’m sorry, is pre-acquisition, like the mail process and all of that. Number two is actual acquisition process.
Jill DeWit: New opportunity is what we call it. So number one is the pre-acquisition. Number two is actually new opportunity.
Steven Butala: Yeah. New opportunity means, hey, this person responded and we really need to look at this as a potential candidate. Right?
Jill DeWit: Exactly.
Steven Butala: That’s number two.
Jill DeWit: Three, I have to think about this.
Steven Butala: Three is …
Jill DeWit: The acquisition, isn’t it?
Steven Butala: Purchasing it. Yes, that’s correct. Three is going through the actual acquisition process. Every deal is different. Sometimes you want to buy them just by doing a deed and do we call a notary close. Sometimes you want to go through title. If it’s houses you want to go through title on every single deal. Number five, sorry, four is sales, the actual sales process, you know engineering and sales.
Jill DeWit: Six is completed, or five is completed sale.
Steven Butala: You know, now that I’m thinking about it, three is engineering.
Jill DeWit: We’re getting them all mixed up.
Steven Butala: So number one is pre-acquisition, like the mail. Number two is the actual acquisition process, purchasing the property.
Jill DeWit: It’s true.
Steven Butala: Number three is engineering or marketing. We use those terms interchangeably internally. Number four is sales. Number five is-
Jill DeWit: The completed sale.
Steven Butala: .. the completed sale.
Jill DeWit: And six is-
Steven Butala: And then six is canceled. And so you always want to keep track of the canceled sales. What you’ll find is that for a lot of reasons, just transactions don’t work. Sometimes the people who are on the deed are deceased and you’re talking with their children and then there’s a bunch of stuff that’s got to go on before we can actually do it, and we deem that it’s not worth it. Sometimes the seller changes their mind. We change our mind. We look at the property, we were like, “Yeah,” but you don’t want to throw it away.
Jill DeWit: Taxes too high.
Steven Butala: So we assign them to completed sale or canceled sale, sorry. And every couple of years, we go back in there, there’s thousands and thousands and thousands of properties because things change. Maybe we take on a paralegal or something that can undo some of these legal issues really easily for us. That’s actually happened, is happening now. So now we’re reviewing all these canceled sales that we’ve had for years and creating deals out of them. So those are the five. There’s really five.
Jill DeWit: That was like our whole big process.
Steven Butala: And then there’s little sub steps in there.
Jill DeWit: That’s what we’re talking about right now.
Steven Butala: Again, it’s beyond the scope of this form, you know, audio video form here.
Jill DeWit: Right. Well that was my whole point of this whole thing was those sub steps. To simplify your acquisition process, think about the big steps, break them down as sub steps, break them down even further. Next thing you know, you have a manual and you’re on your way.
Steven Butala: That’s it.
Jill DeWit: And then you have a process.
Steven Butala: You have to have a process.
Jill DeWit: You’ve got to tweak it for awhile. You might go, “Oh, I need to move that before that because I missed it here. Oops, I forgot one. I got to throw that in. I forgot to check taxes. I forgot to check this.” Whatever it is. You’ll tweak it a little bit. And after 10 or 20, you got it down and it’s not that bad.
Steven Butala: You good?
Jill DeWit: Yeah.
Steven Butala: We know your time is valuable. Thanks for spending some of it with us today. Join us next time for the episode called how to get over the fear of buying property.
Jill DeWit: Yeah, we answer your questions posted on our online community found at landinvestors.com. It is free.
Steven Butala: You are not alone in your real estate ambition. I love talking about acquisitions. I mean it.
Jill DeWit: Me too.
Steven Butala: That’s what this is all about.
Jill DeWit: I know. You’re cute. Wherever you’re watching, wherever you are listening, please subscribe and rate us there. We are Steve and Jill.
Steven Butala: We are Steve and Jill. Information.
Jill DeWit: And inspiration.
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