So You’re a Land Academy Member Now What (LA 1402)
So You’re a Land Academy Member Now What (LA 1402)
Transcript:
Jack Butala:
Steve and Jill here.
Jill DeWit:
Hi.
Jack Butala:
Welcome to the Land Academy Show. Entertaining land investment talk. I’m Steven Jack Butala.
Jill DeWit:
And I am Jill Dewit, broadcasting from sunny Southern California.
Jack Butala:
Today. Jill and I talk about, so you’re a Land Academy member now, what’s next?
Jill DeWit:
It’s beginning to look a lot Christmas. You don’t like that, I’m sorry. It’s Christmas Eve.
Jack Butala:
I mean, I just said there’s the reason there’s two of us.
Jill DeWit:
All right. One of us is in vacation mode.
Jack Butala:
One of us is a happy person in general and one of us is not. You guess.
Jill DeWit:
Goodness. I promise I will take this topic seriously. I wrote down five notes. I have things I want to cover, but I thought just for a moment, I wanted to celebrate that it’s Christmas Eve. Can I have that?
Jack Butala:
Do you think that all our kids are going to get what they want?
Jill DeWit:
Oh my gosh. Yes. I know they are.
Jack Butala:
Have they ever not?
Jill DeWit:
Oh, I’m sure. I’m sure. But usually they get what they want. It always works out.
Jack Butala:
You think any of them are in therapy over their parents?
Jill DeWit:
Oh, I’m sure. Yes. That is a gift that keeps on giving. Okay, this year kids we’re giving each of you a bundle of 10 therapy sessions to the counselor of your choice.
Jack Butala:
Can you buy that? I will buy that. If you can’t buy that I’m going to start a company for that, ready for next year.
Jill DeWit:
Prepaid therapy for your children, for your spouse, for your best friend. Whoever’s driving you nuts, buy them therapy. This is a Saturday Night Live skit.
Jack Butala:
You can buy a subscription legal advice like this. Why not therapy?
Jill DeWit:
Yeah, why not? Hey, we’re doing it for Land Academy stuff now. We’re doing bundle, work and bundle consulting things. We’re just going to roll in counseling.
Jack Butala:
That’s what this is anyway. A lot of it.
Jill DeWit:
Exactly. That’s awesome. Okay.
Jack Butala:
Before we get into it, let’s take a question posted by one of, which won’t top Jill’s comments there, posted by one of our members on the landinvestors.com online community. It’s free.
Jill DeWit:
Anthony wrote, “My understanding is that raw land qualifies you or qualifies for a 1031 exchange.”
Jack Butala:
Any type of real estate does.
Jill DeWit:
Thank you. “Anyone here ever use this?”
Jack Butala:
Yes.
Jill DeWit:
“It seems like you could roll up some very expensive ranch or something and delay the taxes owed on the flips that you’ve got there.” And then John wrote, are there more than one comments or just one?
Jack Butala:
No, it’s just John because he answered the question perfectly.
Jill DeWit:
So I’m sure there’s plenty in there, but we picked you, John. John wrote, “We’ve done a ton of 1031s, but mostly in the apartment space. The basics you need are define a 1031 intermediary. You have 180 days to close on the transaction, 45 days to identify and then 135 days to close. And there’s a specific way you have to identify the properties.”
Jack Butala:
That’s right.
Jill DeWit:
“When you 1031, you need to have a whole intermediary hold the funds. You can never touch the money or it will blow up the exchange.” At the end of the day, it’s more complex than this, but it can be a great tool for deferring taxes. They do have costs associated, so depending on the profit or may or may not make sense. You can always reach out= if you have any questions. That was very nice of John to share.
Jack Butala:
At least 1031s, I haven’t done one in a lot of years, they cost at least $1,500 to do. So here’s the idea, you buy up, in Anthony’s case, you buy a ranch, you take $200,000 out of your savings and you buy it and you sell it for 400,000. You don’t want to pay taxes on that $200,000 gain at all. So you do a 1031, you identify another ranch and now your money’s in. So you’ve got $400,000. You take that, you buy a ranch, a 1031 it, and you own a $400,000 ranch now, sell it for 800 and you 1031 that 800 and on and on and on. And until at some point, when you want to use the money, you’re getting taxed on it. Or if you want to put it into a trust or whatever, there’s a lot of caveats.
Somebody, whoever takes the money out to use it personally, out of that entity, it’s going to get taxed on. It might be your kids. It might be your spouse, surviving spouse. There’s a lot of ways to do it. It’s not practical for how Jill and I buy and sell land because here’s why and here’s the takeaway from this. If you’re a tax person and you understand this, you already know, but if you’re new, please listen. 1031s are for people who are passive investors, according to the IRS. So he said he did it with apartments and that makes sense. He’s probably not a full-time apartment guy. He’s got a bunch of money in it with some other people. Maybe he’s a doctor, maybe he’s an accountant. We don’t know. But he files a tax return, he’s got a career over here. He throws a bunch of money into a pot with some guys that keep going and keep going and keep going.
Jill and I have ton of friends that do this and they just 1031 their way up to a certain value. And they together pull the money out, pay the taxes on it and live happily ever after. It’s a very common story. And it’s a great way to do that. We don’t do that because this is our life. We are taxed from an ordinary income standpoint. So when we buy a 10 acre property and sell it, it’s alongside of 50 other ones. And then we’ve got these education companies. So you as an investor, if you are regularly selling property, even if you have a job, this is going to be classified, it should be classified as ordinary income for you. Especially if it’s in an LLC, it’s a regular thing that you do. I don’t think there’s any reason to 1031. That’s my opinion. It’s complicated, but you need to know about it.
Jill DeWit:
Thank you.
Jack Butala:
I had this exact conversation at a party about three months ago, there was a guy who owned a chain of restaurants there, there was me in who doesn’t do 1031s and there was a guy who does ton of 1031s, that’s all he does and he’s got another like detective business. And the conversation, me and the detective business guy are like I said, “So you just 1031-ing your way up to 10 million bucks. Then you’re going to exit.” And we had this, it was a back and forth thing. And the restaurant guy, his jaw was on the ground. He’s like, “What do you mean that you have a side business? You’re going to 1031 your way.” And he’s just, he’d never heard the word 1031 before. So my point is now you’ve heard it. And now you don’t have to be that restaurant guy. You can say, “Oh yeah, I know about the 1031.”
Jill DeWit:
Okay. Or I never want to own a restaurant anyway.
Jack Butala:
What’s the catch? What’s the catch to 1031-ing? Nothing, it’s a lot of work. It’s like everything and it’s worth it.
Jill DeWit:
Thank you.
Jack Butala:
Today’s topic, so you’re a land Academy member. Now what? This is why you’re listening.
Jill DeWit:
For the record, I hate talking about taxes and even including this. So that’s why I’m like, moving along.
Jack Butala:
Good. This is your show now.
Jill DeWit:
I’m not picking on you. No, I’m not picking on you, it’s just like, it’s one of my pain points. I’m sure there’s nobody here that loves talking about taxes, so I’m not alone, but, and it’s stuff that you’re right, that you do need to know, but I’m just like, ugh, it’s hard.
Jack Butala:
That’s why you have me.
Jill DeWit:
I understand. Yeah, we divide up some of the responsibilities, all of the responsibilities, not only in our personal lives, but in our companies and he’s the account, he deals with the taxes, that kind of stuff. And I’m a lot of the other things like the insurance and the making sure this is set up and that’s set up and it’s interesting.
Jack Butala:
If I have to talk about insurance I’m going to die.
Jill DeWit:
Yes. There we go. So the top, this came up because every month we have new members joining Land Academy, which is awesome. And we have developed so many tools and resources that it can be a little bit overwhelming. The minute you join things start dropping into your inbox. You’re like, here’s the program, here’s login for this. Here’s login for that and you’re like, I don’t know what to do. And so I want to address this and just tell you how to take a step back and breathe and we’ll help you.
So, first thing you want to say is you have a new member guide that’s going to easily explain to you, that’s one of the first things you get when you check out, what everything is and what it’s used for and how to log in and how to get support. So I want to tell you that. Use that, use that. That’s your number one resource is that new member guide. Go there.
And so now on a bigger scale, all right, great, Jill, I got the new member guide. I scanned it. I’m staring at these programs. What do I do? First thing I want you to do is get involved in the community. These are your people now. So I am your resource and all the other members are your resource. There’s somebody that’s one month ahead of you. There’s somebody that’s six months ahead of you. There’s somebody that’s three years ahead of you. They are here and happy to help because someone helped them. So get involved, get in the online community, be on the calls, start asking questions. And that’s going to already right there calm you down.
Jack Butala:
We are so different.
Jill DeWit:
Oh really. I can’t wait to hear yours. I’m going to go through mine and then we’ll get to yours. Okay?
Jack Butala:
Yeah, go ahead.
Jill DeWit:
This is funny. Next thing I want you to do is start watching the education. And I want you to do it quickly, but not don’t. I mean, you want to, we have had people that said, like you’ve binge watch a show. I’ve had people say that, “We binge watched Land Academy education stuff.” So you don’t have to do it in 23 hours or whatever it is. I don’t know what it all adds up to, but I want you to get through the programs. And I want you to do it.
Jack Butala:
23 hours is accurate. It is.
Jill DeWit:
I’d like you to do it in, gosh, a week or two, like a couple hours a day, maybe a couple on the weekend, whatever you can do, get through it even because your first time you need to get through it to understand everything. And then you’re going to go back through stuff that you need more information on, or it didn’t really make sense. Or now I’m using that. Now I’m going to go back and go, oh, okay. I need to figure out due diligence or whatever it is. Get through it all. So I want you to do that.
Step three, you’re getting involved. You’ve watched education. I want you to make a plan, on paper, with deadlines. I’m going to pick a county this weekend. I’m going to price a county this weekend. I’m going to have my mailer 2020 this weekend.
Jack Butala:
There’s my only difference to what Jill’s saying. I know you’re not done.
Jill DeWit:
Correct.
Jack Butala:
I would put a plan together right from the beginning.
Jill DeWit:
We’ll get to you in a minute.
Jack Butala:
Okay. But it involves calendars. Heavily involves calendar.
Jill DeWit:
Exactly. So threes get the plan going. Number four is what should be the number one thing on your plan, is get the stupid mail going. You have to get the offers out in the mail. All the extra things, the tools and all that stuff like that, you don’t need to be a pro at Neighbor Scoop. You don’t need to be pro at whatever. You don’t need to spend a month learning Core Logic, Real Quest Pro, that will all fall into place. Just get the mail rolling.
And then my fifth thing is don’t stop. Now I’m happy to hand the mic over to you.
Jack Butala:
Here’s the good news. This is not an insignificant question. It’s a very, very good one. And especially if you’re new, if you’ve got some real estate experience then that’s congratulations. So if you own another business, there’s a lot of, it’s mostly organization. It’s not content that I think that oh my God, what do I do? Here’s the thing. The good news is this, in January Jill and I are launching products, new products to address this. Number one, an accountability group, a weekly accountability group, which we haven’t had before. People have had to start their own or seek it out.
And Jill and I know exactly what it takes to be successful at this. If it’s not obvious by this time, just please know that. And we’re going to run the accountability group at least in the beginning ourselves, because we need the feedback from you. And it’s going to go like this. There may be 10 people or 20 people in the accountability group. We’re going to go around the table, the virtual table and say, “Where are you in your career? And how can we help?” And we’re going to take notes. The first person says I’m brand new and I’m completely confused. The second person says I’m making a hundred thousand dollars, but I want to make a million. And everything in between. And so we’re going to tailor it. And then the next week we’re going to say, “How’d you do?” We’re going to say, “Good. You need to watch chapter one, two, and three. Second person, you need to hire an assistant and we’ll talk about it next week.” So there’s a lot of help coming. There’s that.
We’re also launching, which I think is going to be incredibly successful and we joked about it earlier, a traunch of personal training sessions that Jill and I will provide you. And this is way more geared toward people who are well developed in the business. They just want to scale it, really scale it in a big way. I mean, you could use it, if you just inherited a bunch of money or you’ve got a rich wife or aunt, you could use it in the beginning soon, we’ll help you with that. So we’re launching these products to address this exact topic. And I don’t believe that anyone else has these top products and that’s one of the reasons that we’re doing it too, because we’re real concerned that you’re going to learn this stuff correctly. And we’re very, very aware, Jill, or as parents and just people in the universe that some people learn differently. Some people are not self, they don’t do well with self study. I happen to do well with self study. Do you? Would you rather be in a group?
Jill DeWit:
I like self study. I blow through it. I get through because I go faster than the group.
Jack Butala:
What I think people get tripped over their own feet in self study is they go too fast that it’s not a schedule. I can’t do anything without a schedule. So I think the first thing you do, even before you go on to land invest, chances are they’re on Land Investors already, before they made that decision is get out a blank piece of paper or do it in Microsoft 365 Outlook and say, “Today, I’m only going to do this one thing.” I’m going to watch these three chapters. I might watch them 16 times. I might watch them three times. That’s it. Then I’m going to put a couple of entries in Land Investors tomorrow or next week or whatever however, your schedule permits. I’m going to watch these next three chapters. And I’m going to ask some questions if I need them.
Or I’m going to ask the questions, I’m going to find a, let’s say some version of a sponsor on Land Investors and I’m going to get to the bottom of whatever, fill in the blank, because everybody gets hung up someplace. I’m not very good at sales. I’m better at the data piece. So I was always hung up with sales until I met Jill. And maybe that’s what needs to happen with some people. So I say the first thing you do is sit down and schedule stuff out. So at a comfortable pace. And so then when you’re done with the whatever that thing in your calendar said on that day, you can chill out. You don’t have to freak out and binge watch something 23 hours and not really learn it because you’re red-eyed with caffeine.
Jill DeWit:
So what happens is I think a lot of people do that, Jack. That’s great Jack. Well, let’s all be real. People say I’m going to do an hour a day and then they don’t. And now it’s Sunday and they have seven hours to watch. So it’s before even that and I agree with you, you got to hold yourself accountable. If you miss a day, pick up where you left off. It’s okay, stuff’s going to happen. Please try to keep pushing through.
I want to talk about two things I see people do that will cause them to fail. So you are aware of them and you watch for them. Number one, preconceived notions. You come into this saying, “Oh, that’s stupid. I know a better way to do this. That doesn’t make any sense to me. Who would want that rear property way out there?” Something like that. And I know this from other members that said I had to get out of my own head. That was the biggest thing for them. I have a lot of people have said I had to get out of my own head. And that’s the truth.
So me what’s interesting is I never had this issue because when I found you and you found me, I was a sponge, I’m like, “Teach me.” I’m like, “Teach me Yoda. What do I need to know?” I was like all excited. I’m like, I know this concept. I understand. I know my dad did some investments and Lord knows I grew up in Orange County, I watched crazy money being made. I didn’t know all the little details and you’ve taught me and I was happy to learn.
Jack Butala:
My response to meeting you was, great now I don’t have to do that part of it.
Jill DeWit:
Thank you. So that’s one. Get out of your own head, trust us and hang with us. And then number two is the other one thing that we just kind of address that people do, that they fail, is it really just take no action. They stare at it or, and they don’t do anything or they’ll overanalyze picking a county. So now it’s six months and they still haven’t picked a county. You can’t do that. You got to push yourself. I love it.
Jack Butala:
I like the calendar part.
Jill DeWit:
Okay. Happy you been join us today. Five days a week you can find us right here on the Land Academy Show.
Jack Butala:
Tomorrow the episode on the Land Academy Show is called Getting That First Customer. You are not alone in your real estate ambition.
Jill DeWit:
Today is Christmas Eve.
Jack Butala:
I thought it was yesterday.
Jill DeWit:
Nope. That’s today. This is Christmas Eve. It is the 24th. Pretty darn cool.
Jack Butala:
I guess we’re airing a show on Christmas.
Jill DeWit:
I guess we are. Thank you for tuning in. We hope you find our content valuable and we appreciate support. If you haven’t already, get on over to YouTube, find my new show and hit the subscribe button.
Jack Butala:
What is your new show? You’ve said that a couple of times now.
Jill DeWit:
Property Flip with Jill Dewit.
Jack Butala:
Excellent.
Jill DeWit:
Thank you.
Jack Butala:
And your 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 interest in future shows. We are Steve and Jill.
Jill DeWit:
We are Steve and Jill.
Jack Butala:
Information.
Jill DeWit:
And inspiration.
Jack Butala:
To buy undervalued property.
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