2 Types of Land Academy Members (LA 1391)
2 Types of Land Academy Members (LA 1391)
Transcript:
Steven Butala:
Steven and Jill here.
Jill DeWit:
Hello.
Steven Butala:
Welcome to the Land Academy Show, entertaining land investment talk. I’m Steven Jack Butala.
Jill DeWit:
And I’m Jill DeWit, broadcasting from sunny Southern California
Steven Butala:
Today Jill and I talk about the two types of Land Academy members. Who do you think they are?
Jill DeWit:
Hold on a moment. Let me think of some funny things. The ones over five feet tall, the ones under five feet tall. Just kidding.
Steven Butala:
The ones over East of the Mississippi and West of the Mississippi.
Jill DeWit:
The ones in the Northern hemisphere and the Southern hemisphere.
Steven Butala:
Yeah, that true.
Jill DeWit:
The ones that are in team Jack, the ones that are team Jill. I like that too. The ones that like social media, the ones that hate it and do it because they have to. Social media, how’s that? Those that are computer savvy. I could go all day. Computer savvy or shoot, I’m still trying to figure out what alt-P is.
Steven Butala:
What is alt-P?
Jill DeWit:
Print.
Steven Butala:
Print. The ones who love data and the ones who love sales.
Jill DeWit:
There we go.
Steven Butala:
None of these are what this is intended for.
Jill DeWit:
This has been fun though, I like this. The ones that love the snow, the ones that hate the snow. I know where you fall.
Steven Butala:
The ones who really love land and money is secondary, or the ones who love money first and land is just a vehicle to get there.
Jill DeWit:
That’s valid too. That’s good.
Steven Butala:
Before we get into it, let’s take a question posted by one of our members on the landinvestors.com online community. It’s free.
Jill DeWit:
Anthony wrote. Hello there. One of my first land contract deals has gone bad. The buyer cannot continue making payments. This happens. Boy, does this happen. One problem is that I recorded the contract with the County. I know. It was my first contract deal though. For a small inducement, the buyer will sign a notarized quick claim deed. My question, will having this quick claim deed recorded remove the buyer from the deed? Will this negate the contract? Is another form needed? I would really like to avoid court here and the buyer’s flexible. The state of Oregon, if that makes a difference. Any input would be greatly appreciated. Thanks guys.
Steven Butala:
May I?
Jill DeWit:
Yes, please. I was going to say, “all you.”
Steven Butala:
I’m going to start this off with an anecdotal professional story failure on my part.
Jill DeWit:
I like this. I may get comfortable for a minute now.
Steven Butala:
When I started in this business, I went to a tax auction a lot of years ago, many years ago in the 90s, and bought a ton of property and sold it for cash on eBay. And it had a false sense of security. I had a ton of on my chest. I felt great and made a ton of money. So I went and bought. All this is in our ebook, and I don’t know. These stories are all over our education material. So I got that sense of security. Some of it false, some of it not, for cash sales and auctions and all of it. Buy it at an auction, sell it at an auction for more, how hard can this be? I said, “I’m going to try something new. I’m going to go, I’m going to contact a bunch of real estate agents in the rural areas of Arizona and see if they have any real cheap property like this. I’ll just buy it for cash and sell it on terms.” Because I’m flushed with cash now, after these tax auction sales. Too much cash, actually. Just like today.
Jill DeWit:
Yeah, don’t get me started.
Steven Butala:
I go and buy a bunch of property just South of grand Canyon, really high quality properties, super cheap. $175 a lot. And I packaged them up, because of local laws, in six packs. Which makes pretty nice five or six acre property. And I start selling them on terms. I use, because I don’t know any better, because there’s no land Academy at that time. I’m just like kind of shooting in the dark. I get with a local way up there in the grand Canyon, Mojave County, I get with a local real estate agent. Who’s real familiar with these kinds of things, because people in rural parts of the country have been selling on terms, and seller financing is just a normal way to do things. They keep the banks out of it, which I still agree with.
So we did it like Anthony did it here. We sold it, and exactly what happened to Anthony happened to me. I sold probably 20 sets of these properties online for a thousand dollars down, and whatever it was two or $500 a month. And every single one of them defaulted, which brings me to my… Then we pretty… I met with Jill and I. This is long before I met Jill, but it put a taste in my mouth for cash sales versus term sales. And it never went away. We’re all still cash people now. This is decades ago.
Jill DeWit:
For now.
Steven Butala:
What did I have to do to undo this property? Well, here’s the deal. There’s two types of ways to sell terms property. And please, if you’re… Please listen to this sentence. Every single state’s different, wildly different. But there’s two basic concepts and they call it a different term, but it’s two basic concepts. There’s a land contract, which means I sell a piece of property to Jill, we sit down over a cup of coffee. We fill out all this stuff, the terms. She gives me 500 bucks. I get a copy of it. She gets a copy of it, and we part ways, and she starts insuring her land. She makes payment for $200 a month until she doesn’t, and there’s a paragraph-
Jill DeWit:
Clause.
Steven Butala:
… or a clause in the contract that says, “if you’re 30 days late, it’s over. All the money that you’ve paid, I keep it, and I get the land back. There’s nothing, it’s over.” There are some States that won’t allow this. I’m not sure about Oregon and all, I can’t say it. I’ve never done a terms deal in Oregon, that I can recall. And that’s the real way to do this.
The other way is the deed of trust way. And most States do it, which is what I think happened here with Anthony. Which is kind of… And again, every state is different, but this is how you buy a house. There’s a deed of trust or a deed gets done, and it gets recorded with a lien on it. Just like you buy a car. I’m going to put a bunch of money down on my car. And then right on the title of the car, it says, “bank of America is a lienholder on this, and that’s it. Then you redo the title at the very end, when all the payments are made and submit it to the DMV, and you own the car free and clear. It’s the exact same way.
Just like you buy a house. Here’s the deed, Jill and I are on the deed. And there’s a lien holder of XYZ bank, bank of America, let’s say. When it’s done, the deed gets expunged. That gets expunged, you own the property, and in the deed there’s no lien. So If payments stop, then there’s a foreclosure proceeding that has to go on, literally. It’s a legal action, and it’s expensive as hell. Everybody hates it. So Anthony’s in that situation. You don’t want to do that. And check these laws long before you even send out mail, or consider doing this.
Jill DeWit:
That’s the big point, we by design… Not by design, but we are very careful going into it, knowing what we’re trying to do out of it. I would never go into a state going, I’ll figure it out later. I might do terms, I might do this, I wouldn’t even accept it. You need to know ahead of time. If that’s your end goal, and you just want to have a bunch of people making payments and doing it the easy way, which is not nuts. A lot of people do it great, and they love it. And they don’t mind the work. When people fall off, they take the property back. It’s part of their whole process.
Steven Butala:
It’s part of their business model.
Jill DeWit:
Exactly. They just know that that’s fine. I know I’m going to lose a bunch of people, and I get that. That’s okay. I resell the property. I keep the photos. I know how to turn it back on. I deal with it again. I don’t care about that. But you need to know going into it. And pick the right States.
Steven Butala:
I could do a whole… We could do a week on term sales. There are certain properties that are ideal for this. There’s certain properties that don’t work.
Jill DeWit:
I’m at the point… Hopeful with Anthony, that you made enough money on the deal that I would be calling an attorney to make it so much… I would be calling an attorney right now to make it easy on myself.
Steven Butala:
That’s right. Me too.
Jill DeWit:
And I hope that this person’s already paid me $5,000 towards the property, so I could easily afford the attorney. And I’m just going to go, Hey, at least I made a couple grand on it in the end. Now I’m going to raise it… When this is all done, I’m going to sell it for cash and not touch Oregon again.
Steven Butala:
Or like Jill said, if you’ve got 5,000 bucks out of the deal, let’s say he paid a couple thousand, it’s going to cost you probably 2000 to undo this.
Jill DeWit:
That’s what I think.
Steven Butala:
Then maybe you just decide, I’m just going to keep doing this over and over again. At some point, like we had probably… Here’s the real math, here’s the truth time on this. Probably 50 to 80% of the people who buy property on terms will not… The contract-
Jill DeWit:
They fall out.
Steven Butala:
They fall out. One of my concerns was, when I started selling on terms was, well, are they going to come back and say, “I want all my money back.” That’s never happened to me. Never.
Jill DeWit:
true.
Steven Butala:
You don’t what happens? They just go dark. They walk away.
Jill DeWit:
It’s true. They’re more scared. They’re more scared that I’m going to come after them, because they are obligated to pay me X amount of dollars a month. They’d rather just say, “can we just call it? Can I just walk away?” Like the old days, when you defaulted on something, you just like, can I just give you the keys? And you leave me alone. I don’t want you to ding my credit. They’re more worried about that. And I feel bad. I was trying to work… I wish there was a way to work with them. My last thought is with this, Anthony, can you work it out with the guy? Is there a way that… I don’t know, COVID times. Can you reduce the payments, cut them in half? And now he’s paying that much longer. Then you don’t have to do any of this stuff and just let it ride out. That would be my other thought.
Steven Butala:
Term sales were great for this type of situation. If you live in a rural area already, understand land, and understand the little area that you’re in, we do deals with people just like this all the time. We buy all their property that they’ve accumulated. You live there, and you get it. You know the County, you know the people at the County and all the stuff. You can buy property and sell it on terms to Johnson over there, or Jack over here, Jill over there. Get the payments, and they don’t pay. And it’s like you have a personal relationship with it. Probably your cost of personally living there is very inexpensive, if not close to zero, because it’s a rural area. Maybe you live in a mobile home or something like that. And you just want like five to 10,000 bucks a month in payments. You’re not afraid to answer the phone, because you know Sally, Jill and Jack over there. They’re going to be late this month again. And you worked with them and say, “that’s okay, I get it.”
Jill DeWit:
And don’t forget your $15 late fee.
Steven Butala:
That’s how term sells. We have people in our group that are very successful, and they’re very… I mean, to them making five or $10,000 a month is a fantastic living and a great life. It makes me jealous, that situation.
Jill DeWit:
Why? Why are you jealous?
Steven Butala:
I just think it’s great to get your cost of living down and almost nothing. Enjoy a rural life, collect five, 10 grand when your whole cost in life is maybe 2000.
Jill DeWit:
Well, it’s a little late for that now, sir, isn’t it?
Steven Butala:
Sometimes-
Jill DeWit:
We haven’t even got to the show, by the way.
Steven Butala:
… you’re in a social relationship with a woman or a man, that’s just not on the same page of that. And they want to live in a $20 million house on the Pacific ocean.
Jill DeWit:
You know what? I am a little bit country and a little bit rock and roll, so I can do both.
Steven Butala:
Before this turns into a family meeting, today’s topic, two types of Land Academy members. This is the meat of the show. I’ll end the suspense. I have been told by our awesome Land Academy staff, who run everything, that they’re seriously noticing that there’s this offshoot of Land Academy members that have no intention of ever sending out a mailer. And that they need their own product site. They need their own subscription type, because they are interested in hooking up with people who, like us, who send the mail out, understand it, do all the work and just funding them. So I’m happy to report Jill and I are briskly. Well, not us, they are. Our Land Academy staff is going to put together a specific membership-
Jill DeWit:
A nice product.
Steven Butala:
… a membership type for that. Where you don’t want it to get educated, you don’t need access to the education. You only really need access to the people in a more direct way.
Jill DeWit:
And the deals.
Steven Butala:
And the deals.
Jill DeWit:
The people and the deals. And we understand that.
Steven Butala:
And funding them, and choosing.
Jill DeWit:
Like Jack said, we’re not going to mail shame you. That’s not what that’s about. I don’t know what we’re going to call it. I would love to call it the investor package or the investor group, or something like that.
Steven Butala:
Or the lurker.
Jill DeWit:
Because that’s really what it is. The lurker. I don’t know about that. I’m trying to make it a positive thing. Not like a creepy thing.
Steven Butala:
I don’t think lurking is-
Jill DeWit:
Are you on the creepy baggage? Could you imagine?
Steven Butala:
On the radio you used to say, “long-time listener, first-time caller.” Just a listener, somebody who enjoys the Thursday webinars and they just want to be a lender.
Jill DeWit:
We’ve always had them. And they just said, “I didn’t read it, whatever. I just paid that to get with your group. I didn’t read it. I didn’t watch any of that.” That’s fine.
Steven Butala:
That’s fine.
Jill DeWit:
I can rattle off their names right now, because we’ve done deals with a lot of them. Because they come to us like, Hey, I’ll fund that. I’m like, all right, let’s talk about that.
Steven Butala:
There’s a lot of intrigue about, what? You send a bunch of mail out, you get all these responses and then there’s these fantastic deals. There’s a lot of people that are typically older in our group, that have tons of money and a lot of time. They want to get involved, but they don’t want to do the whole data piece. I get that. I completely get it. There’s all kinds of stuff in my life, where I don’t want to do any work, but I’ll pay for it.
Jill DeWit:
I see it primarily for the bigger… So for you, you’re doing the work, you’re sending the mail and you want to hook up with these people. How’s this going to benefit you? They’re looking for the bigger deals. And a lot of them are House Academy deals. I’ll tell you that’s… They want North of a 100,000.,I would say. Gosh, it must’ve been a year or two ago. I put together an email. Some of you remember this. I sent out a mass email to everybody saying, “who’s got money and how much money? What’s your comfort zone? How much money do you want to spend per deal? How much money do you want to outlaid in total? And what kind of person do you want to be aligned with? Are you happy to help someone who needs a little thing?”
“Or you just say, ‘I want to be a 100% hands off. I am only the bank. Then if you have any other things like types of properties or regions or things that you’re more comfortable with, whether it’s houses or land, or things like that, ranches.” And I sent an email, I got a mass response, then I shared it with our… I put this email together. This was closed inside Land Academy, this was not for the public. I sent it out to all the Land Academy members. And it was like… When I put everybody’s names and their address… Names, phone numbers, and emails, so everybody can kind of reach out to each other. It was like a little quiet phone book of cash who [crosstalk 00:15:38].
Steven Butala:
Can you imagine what happened from that? Because Jill and I are famously-
Jill DeWit:
I know.
Steven Butala:
… on the front-end of everything. Then it’s like, you just never hear from them again.
Jill DeWit:
Exactly.
Steven Butala:
Because they’re so successful.
Jill DeWit:
They hooked up and off they went. But I wonder if we should… Maybe that should be a thing when we start this group again. We should almost refresh that list, because a lot of people have more money now. I think some people were kind of like, I’m going to put down this number, see what comes back. I may not want to tell everybody exactly how much I have in my checking account or my bank account.
Steven Butala:
Well, there’s new technology that’s very secure and closed, that will allow members to deal with members.
Jill DeWit:
True.
Steven Butala:
That was what stopped us in the past, is you just can’t send an email out like that. It just gets shared everywhere.
Jill DeWit:
That’s true.
Steven Butala:
And pretty soon all kinds of crazy stuff happens. So there’s a software piece of this, where we will implement it and it’s closed.
Jill DeWit:
It’s true. It’s going to be awesome. So those of you listening that want to… You want to fund more deals, we’re going to have something for you. Those of you who have been… I’m sure there’s people that are like, you need to see it. It’s one thing to hear us talking about it and saying, “yeah, people have all this money.” Okay. Who are they? What have they been doing? When you have access to it and you can really pick up the phone and call a guy named Bob Austin. And he’ll say, “yeah, I will place up to a million dollars. What have you got?”
Steven Butala:
And these are the types of deals that I’m really comfortable with. We love Texas. We can’t stand Utah, or whatever it ends up being. Everybody’s got a sweet spot deal scenario, even us. Not necessarily the same as partner’s sweet spot deals.
Jill DeWit:
That’s true. [inaudible 00:17:18] even different. That’s very true. We do different deals and it’s funny. I would argue that… Don’t shoot me here. Well, let’s see. Who do you think of the two of us is the one more comfortable spending big dollars?
Steven Butala:
Me.
Jill DeWit:
Really? I thought you were going to say me.
Steven Butala:
I’ll tell you there’s a profile. When I immediately know how much it’s going to sell for, I’ll happily give up more money than I should.
Jill DeWit:
That’s hilarious.
Steven Butala:
And she won’t. She’ll just [inaudible 00:17:47].
Jill DeWit:
I tried to get it down, but I’m not afraid of writing big checks. Now, I’ll tell you. Up to $500,000, I’m very comfortable. Okay, that’s true. North of $500,000, we’re getting in the millions. I’m like, okay, hold on a moment. I need to do a little more due diligence. But you know what? That’s maybe that’s a female thing. Because I will have to make a very good calculated decision, and then I have to make a good gut decision. And that’s a total chick thing. But it will not fail.
Steven Butala:
I agree with [crosstalk 00:18:22].
Jill DeWit:
It will not be wrong.
Steven Butala:
I need to see a really similar comparison values, both sales and active, multiple comparison values. And I need to be at 50% of those price-wise, and then I’m in. So it’s not a dollar amount for me. I need to see, all right, I know what I’m going to sell this for and how long it’s going to take. And if I’m at half of that, then I’m in.
Jill DeWit:
Half my day is being an investor and looking at deals for Land Academy deal funding. I’m sure many of you are like, why the heck is Jill asking this? There’s a reason. So if I come back to you with some really good questions-
Steven Butala:
Give us an example.
Jill DeWit:
I’m really serious about it. I need some good comps. I want last six months in this area, links to those comps of solid… It looks just like it.
Steven Butala:
That’s what I want.
Jill DeWit:
And this one didn’t even have the shed that we have on it.
Steven Butala:
Yes. That’s what it seems to me.
Jill DeWit:
That’s the kind of stuff… So I think that some people are wondering, why am I asking that? Like I was saying, I’m taking you seriously, if I come back with more questions. There’s some that I’m just not comfortable, because I just don’t know the area at all. And some that I needed to have a little more… I needed you to have a little better marketing plan for me, something… I’m not sure how it’s going to sell. And I don’t want to plop down $85,000 and have it sit for six months. You and I staring at each other going… And I go, why didn’t it sell? And you go, I don’t know. Kind of thing.
Steven Butala:
That’s the worst case scenarios.
Jill DeWit:
I know.
Steven Butala:
We have property like that, that’s still around. The best case scenario for us is, yeah, we’ve done 12 of these already. This is how we’re going to sell it. Bank, this is how we sold those 12 and how long it took. We just don’t have any money. We are so successful, we don’t have any money. That’s what we want.
Jill DeWit:
That’s the best. You’re not…
Steven Butala:
Any money left is what I mean.
Jill DeWit:
Because, I have had advanced members make mistakes. So I have blindly trusted some people, I’ll just be on truth time. I blindly trusted some people, because I thought, all right, they know what they’re doing. So sure, here’s the money. Now they gave the property back to me. I’m like, yeah. They’re like, I made a mistake. I’m like, yeah, thank you, no kidding. So now it’s on my plate, kind of thing. I want to make sure we’re all going in the right direction. But anyway, my point is, I love being an investor. If you’re in that group, this is for you. And boy, do we have the people, and boy, do we have the deals.
Steven Butala:
The deals.
Jill DeWit:
I am constantly getting feedback from brokers I don’t know, telling me how smart the Land Academy community is and how they like getting phone calls and doing deals with us and for us.
Steven Butala:
Surprise. Education matters.
Jill DeWit:
Well, the right education. It’s not just that, we really are not just saying, Hey, go figure it out. Do this, do that. There’s so many facts.
Steven Butala:
This is how you do it. These are the questions you ask. You’re not a superstar until you’ve done at least 10 deals. Just follow the program and you’re going to do great.
Jill DeWit:
How to evaluate deals.
Steven Butala:
How to say no.
Jill DeWit:
exactly. Anyway, this should be a commercial, but it’s awesome. Happy you could join us today. Five days a week, you can find us right here on the Land Academy Show.
Steven Butala:
Tomorrow the episode in the Land Academy Show is called scaling at your own pace. You are not alone in your real estate ambition.
Jill DeWit:
This is a hot topic, because-
Steven Butala:
It’s a huge topic.
Jill DeWit:
… so many of our members love it. Have been with us for several years now. And they keep hitting the ceiling, their own ceiling.
Steven Butala:
Or the scaling thing.
Jill DeWit:
Scaling. They’re hitting their own ceilings like, what just happened? Okay. I hit that goal. Now, I need to regroup and work on the next goal. So they’re scaling up their businesses.
Steven Butala:
It’s a good point. When does it all end?
Jill DeWit:
I don’t think it does.
Steven Butala:
It never ends.
Jill DeWit:
No. It only end when-
Steven Butala:
It doesn’t for us.
Jill DeWit:
It only ends when you call it. When you say, all right, I’m good. I’m tired.
Steven Butala:
You know what ends up happening? This happens to me every single time I hit a ceiling that I target. Another product rears its head out and says, well maybe you could do it with this product type. Maybe strip malls. I haven’t sent a mailer out. I pat myself on the back. I’m down to the last part of this bottle of scotch. Maybe I should try this with strip malls or whatever. I don’t specifically mean strip malls, but whatever’s singing to you at the time. And then it becomes this whole five-year thing again.
Jill DeWit:
There you go. You obviously love it. And that’s okay. That’s what we do too. Thank you for tuning in. We hope you find our content valuable and we really appreciate your support. If you haven’t already, check out our YouTube and hit the subscribe button.
Steven Butala:
Comments and suggestions help us to create the type of content you’re here for. Hitting the like button on your favorite episodes helps to support our channels algorithm, engage your interests for future shows. We are Steve and Jill.
Jill DeWit:
We are Steve and Jill.
Steven Butala:
Information.
Jill DeWit:
And inspiration.
Steven Butala:
To buy undervalued property.
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