Real Estate Business Niches Inside of Land Niches (LA 1604)
Real Estate Business Niches Inside of Land Niches (LA 1604)
Transcript:
Steven Butala:
Steve 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 the sweet valley of the sun.
Steven Butala:
Today Jill and I talk about the real estate business niches that are inside land niches.
Jill DeWit:
Niches inside of niches.
Steven Butala:
Niches inside of niches.
Jill DeWit:
That’s cool.
Steven Butala:
That is the most popular question in Discord right now among-
Jill DeWit:
Is it really?
Steven Butala:
Well, it’s not phrased like this, but…
Jill DeWit:
They don’t know they’re asking it?
Steven Butala:
Yeah. Everybody wants a secret path for some reason.
Jill DeWit:
That’s interesting. I-
Steven Butala:
And so… Go ahead.
Jill DeWit:
I didn’t know we were talking about this. I just know that we talk about this and we naturally fall into this, which is a good… This is all good, positive stuff. Why are you laughing at you?
Steven Butala:
I’m not laughing.
Jill DeWit:
Okay.
Steven Butala:
I’m just smiling in the camera because this is a good topic.
Jill DeWit:
It is. Hey, you know what’s kind of funny?
Steven Butala:
Why are you laughing at me?
Jill DeWit:
Totally.
Steven Butala:
Why are you having a good time?
Jill DeWit:
Well, you’re laughing at me, not that you don’t laugh at me, and that’s okay. I laugh at me. That’s totally fine. Speaking of laughing at each other, do you know what’s so great? I woke up today thinking about… I think the next time we go out in the RV in a couple of weeks, we might start running into some colder weather and maybe snow, and I’m like, “That makes me happy.” I love when we’re outdoors, camping, and we’re around a fire because we need a fire.
Steven Butala:
I love that too and Jill’s referring to cold weather in California where she’s from.
Jill DeWit:
Yeah, like 60.
Steven Butala:
I’m from Michigan and being out in an RV in snow? That’s a sleepless night for me. Sorry.
Jill DeWit:
I kind of love it. I remember one time whatever day we had to come back-
Steven Butala:
Sleepless because of my responsibility as a man, not-
Jill DeWit:
I know. It was April. It was April this year we had to come home and I was like, “Man, we missed the snow. Darn it.” It was like one day. If we’d stayed one more day in wherever we were, we would’ve got snow, and I was very sad, and you’re like, “Thank God.”
Steven Butala:
Once in a while it’s fine, if it’s a light California kind of thing, but 10 degrees below in an RV, no one’s happy.
Jill DeWit:
No, I’m not doing that. No, no. We’re talking a comfy 40 with snow on the ground.
Steven Butala:
Oh yeah, just over freezing.
Jill DeWit:
Yeah, yeah.
Steven Butala:
40 for the night and 70 during the day.
Jill DeWit:
Yeah, something like that.
Steven Butala:
That’s California winter.
Jill DeWit:
There we go. Yeah, in the mountains. That’s true.
Steven Butala:
As if we even remember what the topic is. 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 don’t forget to subscribe on the Land Academy, YouTube channel and comment on the shows you like.
Jill DeWit:
Jen wrote, “Have…” Oh, this is good. “Have any of you ever been asked to sign a termination of restrictions for an area you own land in? Evidently this is for a city subdivision. It’s not an HOA or POA that had restrictions put in place about 50 years ago to prevent new construction. If they get enough site insurers, they can terminate those restrictions and build new housing. I don’t see a downside since it’s to help with growth, but maybe there’s something I’m missing.”
Steven Butala:
I don’t see a downside either, as long as you read the fine print, and Jen’s been with us for a while and she’s very active in Discord and thank you for that. And this is a great question and it only helps everybody. So, thank you for the question. What she’s referring to is deed restrictions, and so, believe it or not, I can buy a piece of property and I can, in the deed, put a deed restriction in it that says something like this. Let’s say I’m a weirdo and I say, “No one was ever going to build on this property because I believe that there’s a spotted owl here and that’s it.” And it’s in there and it’s in the deed, and I convey the document to Jill and she’s hosed forever. She can’t change those deed restrictions, because I said-
Jill DeWit:
Hosed.
Steven Butala:
Is that an ’80s word?
Jill DeWit:
That’s a Canadian word.
Steven Butala:
Is it?
Jill DeWit:
Yeah. It’s the only time I ever heard that is Bob and Doug McKenzie or something,
Steven Butala:
We’re all serious here, talking about deed restrictions and real estate and making money and just reverts to fourth grade when I get serious.
Jill DeWit:
I’m sorry.
Steven Butala:
Especially in front of the camera.
Jill DeWit:
I do.
Steven Butala:
Why? Is it just too serious?
Jill DeWit:
It’s just how I get through the day. Let me have that.
Steven Butala:
I mean, what would we do if there’s just one of us sitting here?
Jill DeWit:
Could you imagine?
Steven Butala:
It would be Fourth Grade Real Estate by Jill, that’s the name of her show. And it would be Ferris Bueller’s History Teacher by Steve.
Jill DeWit:
Yes, that’s very true.
Steven Butala:
Neither one of them would have listeners. Neither show.
Jill DeWit:
Hey, are you sure? We should try that. I think I would do pretty well. No one would get anything done, but we’d have a good time.
Steven Butala:
If you inherited property or if you buy property, this is one of the reasons that in that long chain of title of all these deeds that pass through owners after owner after owner over long periods of time, you’re supposed to copy and paste the actual description so that you know that deed restriction’s in there, but people don’t do that. So, it’s the title company or the title plant’s job to smoke these things out and say… Which I think they are here. She’s been asked to sign a termination of restrictions. So, I don’t know if that was during the deal or if it was a something afterward, but look, I’ll make it fourth grade, Jill.
Jill DeWit:
Can we just answer the question?
Steven Butala:
Deed restrictions are bad.
Jill DeWit:
Yeah.
Steven Butala:
They restrict use. We’re all about use here in the land business. We’re constantly on a Thursday call looking at people’s deals and saying-
Jill DeWit:
What can you do with it?
Steven Butala:
Can you use it with its intended use. It’s zoned for residential. The size seems okay. The setbacks are okay. The grade’s okay and the access looks great. If, in fact, you can actually use it to build a house on it, this is a great deal. So, it comes down to use and deed restrictions mess with use like nothing else. Would I sign something if I read the fine print that said, “Let’s remove these deed restrictions,” which, by the way, I didn’t know it was possible?
Jill DeWit:
Yes.
Steven Butala:
I don’t know. I’m going to look into this.
Jill DeWit:
I’d say yes.
Steven Butala:
I Googled this whole thing and it’s like there’s nothing out there on this.
Jill DeWit:
There must be a judge and stuff involved with this, like, “All right, if you really want to do this, everybody’s got to be on the same page.”
Steven Butala:
My understanding, and please don’t take this as fact… My understanding is when a property has a deed restriction on it, it’s over, and this is not meant to scare you at all. Don’t add anything to your due diligence list that you… Don’t add anything, and don’t be freaked out.
Jill DeWit:
Maybe something’s changing though.
Steven Butala:
I hope so.
Jill DeWit:
I like to think this is change and this is good, like, “Yeah, that guy was crazy back in 1810. Now we should do this.”
Steven Butala:
Really quickly, I’ll give you a great example in Scottsdale of a deed restriction. Somebody loved trains and they bought a 40 acre property and it’s tied to that comic strip, the Family Circus. That guy who started that and wrote it, his entire career lived in Scottsdale, and they put together a 40 acre property and maybe some of the best real estate that you possibly could have in Old Town Scottsdale. And it’s still a train park and there’s amazing development all around it, and it’s got a deed restriction and I don’t see that changing ever.
Jill DeWit:
Yeah. It’s the Ritz-Carlton that’s going in across the street. It’s hilarious.
Steven Butala:
Yeah, right across the street. Five star resort and it’s like fourteen billion dollars-
Jill DeWit:
And they’re going to hear hoo, hoo, with a little kid train thing going around, with us riding it.
Steven Butala:
And it still costs a dollar to ride the train.
Jill DeWit:
It’s cool.
Steven Butala:
And all of our kids grew up doing it.
Jill DeWit:
Oh yeah.
Steven Butala:
A million ice cream cones I bet we’ve had there.
Jill DeWit:
Picnics in the park.
Steven Butala:
So, it’s hard to complain when the deed restriction benefits everybody, but it just as easily could have been no one is ever going to build anything. It’s a park or worse, it’s a field. Here’s my deed restriction. I hate development. This will never be developed.
Jill DeWit:
I was thinking of a deed restriction that would kind of be cool and I can see this, like buying the lot next door or buying the lot in front of you or behind you, whatever it is, so it doesn’t block your own view. That’s not nuts.
Steven Butala:
No. I mean, I don’t know
Jill DeWit:
Or just, you own it. I guess you don’t have to restrict it, just own the lot and don’t build on it. I would-
Steven Butala:
I’m going to get a lot of emails for saying this. I’m very pro development, and I think that things that stop that, and within reason, like traffic, like Los Angeles traffic, or dramatic lack of water, I understand lack of development because of that. But I do think that responsible development, I’m all for it.
Jill DeWit:
Thank you.
Steven Butala:
Jill came off her fourth grade thing. Today’s topic, the real estate business’s niches inside of land niches. Niches inside of niches. This is the meat of the show.
Jill DeWit:
So, yeah, I had to, because I had to keep the show moving along. In my head. I’m like, “Don’t make any more comments about it, because it’ll open up a whole nother can.”
Steven Butala:
When you are in the real estate business as an investor, or let’s just say in the real estate business to make money, you have so many choices. You can become a real estate agent. God help you, but you could become a real estate agent, and sometimes people do that just to realize that, “Oh, I don’t want to be a real estate agent. I’m representing this guy who was buying an office industrial complex. I’d rather be that guy.”
Steven Butala:
And, in fact, that’s my story. I started out as a commercial real estate broker and very quickly learned that I don’t want to represent people, I want to be the guy being represented. And so that’s one way into the business. Another way is buying a 40 acre property for $4,000 and selling it for 12 and then doing that over and over and over again in some rural area in the country. So, that’s a niche, the land niche, the real estate agent niche. Well, we’re all in the land business here, going on seven years, I guess, with Land Academy, and everybody’s asking what the inside track is now in the land niche. So, it’s a niche inside a niche.
Jill DeWit:
Yep. I love it. So, well, land is already a niche. That’s one of the things I thought was so funny when we were talking about this topic. People used to think like, “Oh, wait a minute. You’re land people? Wow. What a niche.” Yeah. We are land people, but then when you really think about it, you can have niches inside of niches. And I was thinking, there’s two ways that I look at this. And it’s all good, by the way. This is why I want to talk about this. The more you specialize in something and get to know something and become a pro at it, the easier it’s going to be for you. Some of these niches too, I see people doing, there’s not a lot of competition because no one can A, figure it out or B, wants to figure it out.
Steven Butala:
That’s land.
Jill DeWit:
That too, that’s land. So, you could look at it like there’s property niches, like zoning or use or a size or even an area. So, those are some niches. Maybe you’re the north-east pro. Anything over 20 acres in the Northeast part of the country, that’s your niche. That’s all you do and you do it well and you know all these things about it and you have a buyers’ market that you’ve collected over the years. That’s a great niche.
Jill DeWit:
The other way to get into this is you have a seller niche or a buyer niche. With the seller niche, I think of maybe you’re dealing with sellers that nobody else wants to deal with. Everybody wants a seller that’s happily paying their taxes. Everything’s current. Everybody’s alive. Everybody’s well. That’s the thing, especially when you’re new, I want you to start with that. Don’t go crazy here. I want all those easy things while you figure this out and then you can start backing into it and making changes, but maybe become that probate niche. Maybe become the guy that undoes interesting… Dream it up. Fill in the blank.
Steven Butala:
I have a list of niches when you’re ready.
Jill DeWit:
I’m ready. He’s sitting on his hands.
Steven Butala:
No, I’m not just going to make it easier.
Jill DeWit:
Okay, good.
Steven Butala:
You can specialize in dead ownership. A lot of lawyers do that. Somebody dies, they own a property. They die with a will. Their kids automatically assume, “Oh, I got dad’s land over there.” That’s not the case at all. You have to go through all kinds of stuff, but if the guy died with a joint tenants with his kids, then they do own the land. So, there’s these legal niches. That’s a good one, lot of money to be made there. Lack of access property. Massive niche. If you are specialized, and there are people that do this… I don’t know of one yet in our group, but I’m waiting.
Steven Butala:
There are local people who specialize in buying so-called landlocked property or accessless property and then they go figure it out. Legally, this is all legal. Legal niches. They go figure it out. They get to the owners. They put a plate of brownies on their neighbor’s porch for 18 days straight until they sit down and say, “Yeah, I need access through this property and it’s not going to affect you at all.”
Steven Butala:
And so there’s a lot of niches you can do within the land business, but my favorite is this. Special use property. When you look at all the types of rural land or land in, let’s say, a small rural town… Rural towns are becoming really, really popular with the COVID stay at home and the prevalence of working at home on the internet. And you’ll find that they’re pre-zoned. And so you’ll find, in a lot of cases, in rural towns, areas where they allow and encourage mobile homes to be owned on that land. So, it’s mobile home land or light industrial land to be a future… Or a commercial property in a small little town that’s kind of defunct. There’s some boards on the buildings. There’s huge opportunity there. So, special use property, special use land specifically, inside of the Land Academy and what we teach there, there’s… Jill and I, this is my favorite right now. We buy tons and tons of mobile home designated property all over the Southern part of the country, east and west.
Jill DeWit:
Isn’t that funny? I’m just thinking now it’s not going to be, “Oh, you’re a land guy.” Now it’s going to be like, “All right, what kind of a land guy?”
Steven Butala:
Yeah.
Jill DeWit:
That’s kind of cool. That’s where we should all go.
Steven Butala:
I could talk about this for a long time. I don’t think that you should do this if you’re new.
Jill DeWit:
No.
Steven Butala:
Forget it. You should follow the Land Academy.
Jill DeWit:
Do the five As and don’t veer from that, and then this will happen.
Steven Butala:
If you’re regularly making more than six digits a year buying and selling land and you have either quit your job or you’re about to quit and you can support yourself and your family, continue to do that. This is my dad recommendation. Continue to do that. Don’t change a thing and add another business line, potential business line of revenue over here.
Jill DeWit:
Perfect.
Steven Butala:
Keep the bread and butter going and add a specific use type thing that you might work, and you might have to go through two or three of them before you find the one that works for you.
Jill DeWit:
Just like men.
Steven Butala:
Yeah, yeah. Just like-
Jill DeWit:
You might have to go through two or three of them.
Steven Butala:
You might have to go-
Jill DeWit:
Till you find the one that works for you.
Steven Butala:
Two or three kids, until you get the right one.
Jill DeWit:
No. I like men. Thank you. I’m keeping all the kids. 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 on the Land Academy Show is called When To Do Your Own Work. You are not alone in your real estate ambition.
Jill DeWit:
It sounds like cheating off of somebody else’s test paper.
Steven Butala:
Boy, that’s not what it is at all. Here’s what the concept came for this show tomorrow. We are renovating a house that we live in and it’s not a heavy renovation. I would call it serious decorating. We’re not moving walls or changing plumbing or electricity or anything. We’re just changing cabinets out and countertops and putting new floors in. It’s gotten to the point, and I’ll get into great detail about this and how it affects your land business, that no one really wants to do any work. They’ll walk around with a clipboard, take a look at some stuff and say, “Yeah, that’s great. Paycheck please.”
Jill DeWit:
Or, “Yeah, that’s wrong.”
Steven Butala:
Or, “Yeah, it’s wrong.”
Jill DeWit:
Yeah, that is wrong. That does look bad.
Steven Butala:
Wow, jeez. Thanks for calling. What are you going to do about it? How about you put some knee pads on and fix it? We’ll talk about that tomorrow.
Jill DeWit:
Oh my God. I’m going to put a sign on the front door, “No entry allowed without knee pads and some kind of tool.”
Steven Butala:
Look, I’ll talk about it tomorrow, but-
Jill DeWit:
You better enter with a paintbrush or a tool and knee pads or you’re not getting in this house.
Steven Butala:
Check your clipboard at the door.
Jill DeWit:
Yeah.
Steven Butala:
I’m guilty of this. All right? There’s times where I say, “I’m not doing that,” even though I eventually ended up doing it.
Jill DeWit:
Yeah, and by the way, would you like to park closer or should I bring the valet out and I’ll park your car for you?
Steven Butala:
I know, man. It’s the world we live in now.
Jill DeWit:
I know. It is, it’s weird. Anyway, thank you for tuning in. We hope you find our content valuable and we appreciate your support. If you haven’t already, please check out our YouTube channel and hit the subscribe button.
Steven Butala:
We’re Steve and Jill.
Jill DeWit:
We’re Steve and Jill.
Steven Butala:
Information…
Jill DeWit:
And inspiration.
Steven Butala:
To buy undervalued property.
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