How Much Time Do I Really Need to Spend on Pricing (LA 1544)
How Much Time Do I Really Need to Spend on Pricing (LA 1544)
Transcript:
Steven J Butala:
Steven, Jill here.
Jill DeWit:
Good day.
Steven J 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 sweet Scottsdale, Arizona.
Steven J Butala:
Today, jill and I talk about how much time do I really need to spend on pricing?
Jill DeWit:
Oh, What do you think?
Steven J Butala:
No, I think you should take a whole year.
Jill DeWit:
Oh that’s true. I have a few people that are saying, “Yeah, I’m pushing a month.” Oops. Yeah, we’ll talk about that.
Steven J Butala:
We’ll talk all about it and we’re joking around, but I understand. We both understand it, how caught up you can get in this.
Jill DeWit:
You can accidentally spend a month on this.
Steven J Butala:
Yeah. 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 and if you’re already with us, please join us on discord.
Jill DeWit:
Anthony wrote, “I joined an auto pricing service just to see the product. I checked how they price counties and that I have previously mailed. In general, they price way too high. I’ve been mailing counties with a lot of waterfront properties. I find it difficult to come up with good prices, given that a parcel just a few blocks away can go for double and vice versa. Their prices were way too high there also. I don’t think there’s an easy way out for pricing. You have to put in the work, even if it means drilling down past zip codes to map sections. On the other hand, you can get sucked in and go too granular. I sometimes forget that perfect is the enemy of good enough.” That was great Anthony.
Steven J Butala:
Anthony, tell me where to send the check.
Jill DeWit:
Was this in Land Investors or was this in discord?
Steven J Butala:
It was in discord.
Jill DeWit:
Wow.
Steven J Butala:
I responded and a lot of people did too. I actually responded to him and thanked him.
Jill DeWit:
So if you’re in discord, you’re a member. If you’re in Land Investors, you might be both, by the way, you can be either. Sorry. Yeah, this is perfect. This ties right into it.
Steven J Butala:
Well, this was the inspiration for the actual topic.
Jill DeWit:
Yeah.
Steven J Butala:
So we’re right in the pricing module right now, Jill and I, or about to be for career path.
Jill DeWit:
Number two.
Steven J Butala:
And it, for some reason, and I believe this is great, the Land Academy itself attracts technical people or intelligent people, or it’s generally attracts, it seems to me now, technical people with a technical background, but are very comfortable in a sales role too.
Jill DeWit:
Because that’s who we are.
Steven J Butala:
Yeah.
Jill DeWit:
Last time I checked.
Steven J Butala:
I mean, that’s exactly who you and I are so…
Jill DeWit:
That’s what I mean.
Steven J Butala:
Individually and collectively. And so because of that technical background, it’s you can just spend way too much time on pricing. Hey, wait, today’s topic, how much time do you really need to spend on pricing? This is the meat of the show. I can directly answer that question. And it’s a one-to-one association with how new you are at land investing and how much experience you have with Excel and data in general. And if this is brand new and you are not a data person at all, I think a month. Jill was joking about it earlier, might be appropriate or better yet, use a product like Concierge Pricing that we created for people like you.
Jill DeWit:
To speed the process up.
Steven J Butala:
You can go to Offers 2 Owners and check that out there or get somebody like me to do your mailers for you. And if you go through discord, there’s all kinds of people in there that are willing to do it.
Jill DeWit:
Here’s the point. So when you’re new, you need to spend the time, you need to put the time in. And that’s because you’re learning to pick a county at the same time your pricing, you want to make sure you’re picking counting, that the pricing makes sense to you. It’s the properties are what you’re going for, they’re moving. There’s a lot of parts to it. So, right, I was joking. The whole big thing could take a month, especially if you’ve got a W2 job. Let’s just say you spend one or two days every weekend, the equivalent of, to get this done, then this is not nuts because you’re learning, you’re watching videos. You’re like, “I got to go back and learn how to pull this. Or now I got to learn to do a data scrub and I got to do this.”
Jill DeWit:
Okay, now, so there could be a couple of weeks. And also by the way, once you’re doing that, hey, make it count. I would rather you do this for like 10,000 units, not you’re mailing them all at the same time, but I think go bigger than go small. Because if you’re, you know… and just because you have the data there ready to go. Data’s cheap, mail’s expensive. Think about that too. So I’m trying to get my… but as you get going, here’s the rabbit hole I don’t want you to going down is, it’s never done. That’s the problem that comes up all the time, right? People are like, even in career path number one, where we had over half had been with us for years and they had been successfully making big bucks for years and they still think that they need to spend more time on pricing and really… and you want to talk more to that, about…
Steven J Butala:
Well, yeah.
Jill DeWit:
Okay.
Steven J Butala:
I say this all the time. I’ve said this on the show. I say it often, probably too often, up until about 18 months ago, maybe 20 months ago, I would pick a county, pretty much just pick a county. I would go in and kind of eyeball the whole thing. And I would price it at a one price per acre and I would send the mail out and we did great. We’ve done 16,000 deals this way, almost 16,000. So it’s not… it’s important to price. It’s important to do this correctly, if you want to do it with any longevity or as a career. And it’s important to take it seriously because we now have the tools.
Steven J Butala:
The only reason we changed in the last 20 months is because of the way data tree is and with the way geocoding is, it was not as prevalent or easy or cheap as it is now, ever. And it’s only going to get better. The data is only going to get better and you can price even better, but does it really matter? A guy named Chuck in Career Path yesterday said, “When you get granular pricing and you get down right down to the nitty gritty, what you’re removing from your mailer is a potential for any home runs”
Jill DeWit:
That’s true. We had a guy talking about doing line by line by line. And that was the whole comment, I loved that.
Steven J Butala:
Yeah.
Jill DeWit:
I love that. I just don’t want you to get hung up. People get hung up on it. And if you get hung up on it, your mailer’s not going out. If your mailer’s not going out, you’re not buying any property. And then you’re certainly not selling any property. And then you’re standing there going, “Well, I’m 90 days in and I still working on pricing this one county and now I’m going to start second guessing my county choice.” Like, no, get it going, get it moving.
Steven J Butala:
The only reason, the real reason that a mailer’s going to fail, is because you didn’t do one or number two, you priced it so low that everybody… and this happens, I’ve done that. I’ve actually wasted a hundred grand one time on a East Coast-based mailer, that was West Coast prices. This is years and years, decades ago. And so, I understand.
Jill DeWit:
And before me.
Steven J Butala:
Yes, I was waiting for you for [crosstalk 00:07:22].
Jill DeWit:
Before me and I could kind of… that’s my other thing. I can kind of solve some stuff on the phone.
Steven J Butala:
Yeah. Yeah, you could have back then.
Jill DeWit:
Mm-hmm (affirmative).
Steven J Butala:
So spend a rational amount of time, this falls into every other task that’s involved with Land Academy. Spend a rational amount of time on it, but put it in your calendar and give yourself a deadline and when it’s done, it’s done.
Jill DeWit:
So here’s what I do. Like, here’s an example of, I want to see if you have something like this, like I tell people, “I want on your level one due diligence, I want your goal is to get it down to five minutes or less a property.” Okay. What is level one due diligence? The mailer goes out, the guy calls back, the seller calls back, they agree on your price, you hang up the phone. I want you to get it to five minutes to go do even I want to buy the property? And what does that mean? I do the five As .
Steven J Butala:
That’s a great idea, Jill. I love this.
Jill DeWit:
So you’re going to start, it’s going to be 15, 20 minutes when you start, time yourself. And your goal though is to get it to five minutes a property and then you’re going to be less than that. You’re going to go, “Nope.” You’ll know right away, you’ll get really speedy on your due diligence because you’re reviewing a lot of deals. You don’t have time to do all this. So do you have a version of that for pricing? Like, start with a month and now your goal is three weeks and now your goal is one week and now your goal is one day. Like what’s the ultimate? I’m asking you.
Steven J Butala:
Oh.
Jill DeWit:
Because you’re the pricing pro. The question is how I have for due diligence, I say, I want you… you’re going to start, it’s going to be 20, 30 minutes of property, I get that. But your goal is going to be get it to five minutes as fast as you can. What’s your… you’re saying, let’s say on pricing starting with a month.
Steven J Butala:
If I follow the exact instructions in the Land Academy programs and I’m doing a data tree based mailer, zip code based mailer, that’s been geocoded. By the way, all that, what I just described, will get you to the point where you have a retail price per acre in your pricing, in your mailer. At that point, you need to decide what percentage below retail you want to offer that zip code. So if you have $1000 an acre, you’ve found that for sale prices, look, there’s no way I can do this and really explain how to do this within this, on this 15 minute-
Jill DeWit:
Oh come on.
Steven J Butala:
15 minute episode.
Jill DeWit:
We’ve got lots of time. We have a month, I think pricing, just kidding.
Steven J Butala:
The whole thing results in pricing land and identifying the price, the retail price per acre for sold and for, for sale property. Let’s say average of that is $1000 an acre. And how much do I want to spend? And I have to make that decision. Do I want to price it at 20% or 70% or 50%? That takes five minutes.
Jill DeWit:
Okay. What’s my goal? Let’s just say I’m-
Steven J Butala:
If you’re brand new and you don’t have a job at all. This should take you, I would spend with all the education and everything, I’d spend maybe 20 to 40 hours on it a week.
Jill DeWit:
Thank you. That’s kind of what I was saying. All right, there we go.
Steven J Butala:
If you do have a job, break it up into four hour chunks on the weekend or eight hour chunks on the weekend. And so it should take you whatever.
Jill DeWit:
A couple weeks.
Steven J Butala:
Two to three weeks would be great. If you on your second mailer, that time will be-
Jill DeWit:
Cut in half.
Steven J Butala:
… cut in half. If you use the Concierge mailer products, you’re going to send out your request and it’s going to come back, I don’t know what their timeframe are, a couple of days and then all you’re going to be responsible for is that percentage. It’s 1000 bucks an acre, I’m going to offer $500 an acre at 50% or whatever. Oh, great Jack, how do I determine that? How do I determine 20%, 40%, 80%, 50%. You go in and test it. You go in and say, if I got this, you test for reason. And the first time you do it, in each zip code, take one or two properties, pretend that it came back signed, the offer that you… do I want to buy it for this much? And can I sell it? How fast are properties selling in that zip code?
Steven J Butala:
That’s what the red, green, yellow test is for. It’ll tell you, oh, in this zip code, everything sells in eight… we just reviewed something, a career path and picked a county randomly, that somebody just yelled out and they have nine days on market in that county for all real estate. That’s exciting as hell. So in that case, I would probably price a lot higher than 20% because I know I can sell it fast. So there’s a lot of things that go into it that are in our education, on that Thursday call and in Career Path and all kinds of places in the Land Academy area. And so, but I think the whole point to this episode is, there’s a disproportionate number of people that expect us to be perfect and believe in their soul that if they don’t price this right, that it’s going to fail.
Jill DeWit:
Correct.
Steven J Butala:
There’s a massive, massive margin of error in pricing to still get one or two deals out of a mailer and make a ton of money. The math is ridiculous.
Jill DeWit:
And how do you solve that? Answer your phone. No, I think I’m kidding. I’m not kidding.
Steven J Butala:
I know you’re not kidding.
Jill DeWit:
No, don’t let it go to Google Voice, whatever it is and leave a message with the correct information.
Steven J Butala:
Well, you can have the best price mailer there ever was and if no one’s answering a phone live to respond to these mailers and ask the right questions and tee it up for somebody like Jill or you or whoever is doing your stuff, it’s not going to work.
Jill DeWit:
There you go.
Steven J Butala:
Pricing’s irrelevant if you don’t answer the phone.
Jill DeWit:
Correct.
Steven J Butala:
And then return the phone calls and create a deal for yourself.
Jill DeWit:
Right and that’s a whole nother episode.
Steven J Butala:
Yeah it is. These sellers are innately skeptical as I would be if I got something like that. And they’re calling back to just see if you’re a rational, trustworthy person and you need to be. And then they might sign it or they might negotiate it.
Jill DeWit:
Exactly. That was perfect. Happy you could join us today. Five days a week, you can find us right here on the Land Academy Show.
Steven J Butala:
Tomorrow the episode in the Land Academy Show is called, Fixed Price NLS Versus Listing With An Actual Real Estate Agent. You are not alone in your real estate ambition. Another popular topic this week, for some reason.
Jill DeWit:
Mm-hmm (affirmative). Lots of selling going on.
Steven J Butala:
Yes.
Jill DeWit:
That’s the whole thing.
Steven J Butala:
Hottest market.
Jill DeWit:
I love it.
Steven J Butala:
Hottest market I’ve ever seen right now.
Jill DeWit:
That’s a common thread in our community and it makes me so happy like, “I’m almost out of inventory. What are you guys doing? Buying more? Isn’t this great?” That’s the best problem to have. If you need access to any sort of ownership or property details, including owner phone numbers and FEMA flood map, overlays, check out parcelfact.com or neighborscoop.com, created by investors, that’s us, for investors like you. We’re Steve and Jill.
Steven J Butala:
We’re Steve and Jill. Information-
Jill DeWit:
And inspiration-
Steven J Butala:
To buy undervalued property.
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