How Jill and I take on Other Partners for Specific Deals (LA 1830)
How Jill and I take on Other Partners for Specific Deals (LA 1830)
Transcript:
Steven Jack Butala:
Steven and Jill here.
Jill K DeWit:
Hi.
Steven Jack Butala:
Welcome to the Land Academy Show, entertaining land investment talk. I’m Steven Jack Butala.
Jill K DeWit:
And I’m Jill DeWit broadcasting from the valley of the sun.
Steven Jack Butala:
Today, Jill and I talk about how she and I take on other partners for very specific deals and real specific reasons.
Jill K DeWit:
Yep.
Steven Jack Butala:
It’s not just Jill and I anymore.
Jill K DeWit:
Right.
Steven Jack Butala:
We have a huge network. One of the big advantages for us and for you, if you’re a Land Academy member, is other members in the community and we didn’t start this as a money-making venture.
Jill K DeWit:
Right.
Steven Jack Butala:
We started it to get other partners for ourselves, and what we found out over the years of getting partners, maybe for funding, maybe for a bunch of other stuff, it worked out great. There are very serious little micro experts in our group about all kinds of different things, and when we run across these scenarios in our own mailers, we contact them and we do the deal together. I’ll get into it in detail in a minute.
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 I hope you know by now that Jill and I have a company called offers the number two owners.com. It’s a full-blown commercial printing company. We literally send out a million or so mailers on behalf of our members and other people in the industry to send out blind offers to owners. We were very frustrated with other commercial real estate, commercial printing companies, and-
Jill K DeWit:
They didn’t get us.
Steven Jack Butala:
Exactly.
Jill K DeWit:
They didn’t get us and they wouldn’t do a mail merge. So, we solved it.
Steven Jack Butala:
We get you. We know what you want and need.
Jill K DeWit:
Yep.
Steven Jack Butala:
Check it out. Offers the number two owners.com.
Jill K DeWit:
Everything we do, everything we create, is because you asked and we needed to, so here we are. Michael wrote, “Has anyone had a funding partner instruct the listing agent to not speak to you …” What?
Steven Jack Butala:
Yeah, this is pretty funny.
Jill K DeWit:
Okay. I got to read this again. “Has anyone had a funding partner instruct the listing agent to not speak with you about the transaction and tell the title agency to not provide you with a settlement statement listing in your share of the proceeds?” What the heck? “This seems a bit odd, but this is my first transaction with a funding partner so some feedback would be helpful. Thanks.” Oh, you know what, Michael? Don’t do a deal with this person again.
Steven Jack Butala:
I mean, let’s take a couple of steps back.
Jill K DeWit:
Well, I’m a little pissed, but okay. Go for it.
Steven Jack Butala:
This sends up a lot of red flags for me.
Jill K DeWit:
Yeah.
Steven Jack Butala:
There’s a lot of different ways to do a deal with somebody. The traditional way that we do it is this. Someone brings a deal to us. We love the deal and we love the person who brings it to us.
Jill K DeWit:
Right.
Steven Jack Butala:
We write a check for most or all of it and then they go do the deal and they let us know when it’s done and they send us a check. We split the money, whether it’s 50-50, 60-40, or whatever.
Jill K DeWit:
We’re all involved together. We even have like Mike off. This was me. I’m the funding partner. I’d be making you look over the hood one before it gets to me so you make sure it’s right.
Steven Jack Butala:
So, this ends up a red flag to me about the personality type who’s a control freak and needs to, “Well, it’s my money. I’m going to do the deal. Thanks. And you’re going to get your money at the end. I’ll let you know how much.” That’s just a formula for mistrust and all of the basic stuff that you need in a good relationship, which is the same thing that you need in a good business partnership.
Jill K DeWit:
Yeah,
Steven Jack Butala:
That said, I’ve had a chance to digest this. Jill hasn’t so she’s ticked.
Jill K DeWit:
I’m so mad.
Steven Jack Butala:
Because I was mad too when I read this the first time. That said, there’s always a funding agreement or there should be before everybody starts to open escrow and how the deal works and all that.
Jill K DeWit:
True.
Steven Jack Butala:
So, there’s a chance that this funder said, “Thanks very much for the deal. We’re going to split it.” Split whatever, fill in the blank. 70-30, 60-40, maybe it’s even 95-5. I don’t know.
Jill K DeWit:
Or you just get a flat fee.
Steven Jack Butala:
“Thanks very much. Stay the hell out of the deal. It’s mine now. And I’ll send you the check when it’s over.” There’s a chance, and so, if that’s the case, I really wish that you would’ve reached out, Michael, to all of us here and we would’ve helped you way sooner than it sounds like the deal’s underway.
Jill K DeWit:
Right. When you were making the arrangements with the funding partner ahead of time. So, if it’s a flat fee, then that’s fine. That would be the only situation. Okay. I’ve calmed down now.
Steven Jack Butala:
We do that. Real quick, Jill, before you-
Jill K DeWit:
Yeah.
Steven Jack Butala:
We do this with multiple people right now. They send us a deal. We love the deal. They say, “This is what it’s under contract for. Here’s a contract. When it’s all done, send me $10,000.”
Jill K DeWit:
Right. And then, I’m doing the work.
Steven Jack Butala:
And then they don’t do anything else.
Jill K DeWit:
Right.
Steven Jack Butala:
Jill and her team, her people, get the deal done.
Jill K DeWit:
So, this could have been that situation. So, Michael, if this was … okay again, now I’m calmed down. So, if this is a situation where you just had agreement with, he’s doing all the work, he found the broker, he found the title company, he’s doing whatever, and he just owes you a flat finder’s fee if you will, management fee, what do you want to call it? “I’m going to give you $10,000 and I’m going to do the rest of the deal and you’re going to get paid out escrow.” I’m good with that. That would be okay. So, just know ahead of time when you go into it. Be real clear on your arrangement.
Steven Jack Butala:
Today’s topic: How Jill and I take on other partners for specific deals. This is the meat of the show. There’s a lot of reasons that we would take on partners in real estate deals, many, many, many reasons. Here’s some of the most popular for us. Money. Somebody needs money. They found a great deal. We always say no good deal should go to waste. So, they find a great deal. They bring it to us. The deal’s great. The person who’s bringing it to us seems great. They seem involved and active and have somewhat of a personality
Jill K DeWit:
And they know what they’re doing.
Steven Jack Butala:
No obvious personality disorders. And so we fund the deal. We go down the path together, they get half, we get half, and we’re all very happy. Another reason would be really geographic-specific knowledge. So, we have a person in Florida, his name’s Josiah in our group, who’s an expert. He’s a wet man’s expert. He’s just an all-around really good guy. He’s very successful in his own right but if I came up with the deal in Florida, I wouldn’t even think of doing it regardless of how small or big I would much, much rather split money with somebody who’s an expert and have the deal actually happen than screw it up myself because I don’t know anything about what’s happening.
Jill K DeWit:
It’s very difficult to know everything about everywhere. Let’s be honest. I’m not even going to pretend to. In our group, probably the one that knows the most about everything in the country is you.
Steven Jack Butala:
Yeah. I certainly know where I don’t want to do deals.
Jill K DeWit:
And you remind me that every day. I’m just kidding.
Steven Jack Butala:
The third reason that you would do a deal with somebody-
Jill K DeWit:
I’m just teasing.
Steven Jack Butala:
Is because not so much they’re more knowledgeable about geography. It would be they’re more knowledgeable about product type. So, very often, people like us or our members send out offers in areas where there’s a lot of oil Wells or gas wells or all kinds of stuff. That can be very, very profitable. In the same manner, deforestation, where there’s a lot of places in this country where wood companies come in and clear out certain types of trees. It’s very, very profitable, and there are people in our group who specialize in it. They’re in our group for that reason. They’re deforestation people in the first place, but then they joined Land Academy to find land more efficiently to go do that. So, if I came up or micro chose to send a mailer where I know that there’s all kinds of deforestation happening, then I would call these people and say, “Hey, what do you think about this deal? If you like it, let’s split it.”
Jill K DeWit:
Our group has gotten big enough, not too big, thank you. I keep a lock on it, but we have just the right amount of people that, whatever you need, there’s probably someone in the group that can help you. And they’ll either guide you for free, just give you some information, tell you who to call, point you in the right direction, lend some experience, and/or, if you want say, “Hey, you want to take this down together?” Jump in with you. We all say this often. It’s way better to go in with a partner, know what you’re doing, and do it right, and get a percentage of something even if it’s less percentage. I mean, I’m not getting the whole profit now. I’m sharing a percentage with this person, but man, what a better outcome versus going in blind or not doing the deal at all because I don’t know what I’m doing.
Steven Jack Butala:
That’s really what it is. What ends up happening in these specialization scenarios is that we do deals that we would normally not do because it’s outside of our comfort level or, more importantly, it’s outside of our risk level.
Jill K DeWit:
Right.
Steven Jack Butala:
So, if we can remove most or all of the risk by hiring an expert and splitting the deal with them where they have skin in it and they care about it and they’re Land Academy educated, what’s better than that?
Another example is, and this is very rare, but we’re piloting or trying a program right now with a person that is a very seasoned commercial real estate investor and is a very intelligent person. And seems to have all the well-rounded skills. He does. He’s both a Jack and a Jill. He’s done it on his own for quite some time, but he’s never really sent out mailers. So, we’re testing that with his name on it. He’s getting calls back and he’s putting deals into a CRM and it seems to be working really well.
Why would you do that? Why wouldn’t you guys just do it all yourself? Here’s why. Because we’re at a point in our career where, if we have three or four or five of these types of people that are doing most of the work, we’re putting in half the money, they’re putting in half the money, we can do that many more deals, diversifying our risk, and reaching out into markets that I know are out there. There are so many untouched land markets it’s silly in this country. Unfortunately, there are 10 or 15 or 20 counties that come up on the internet.
Jill K DeWit:
Are you talking about secret county lists and stuff like that?
Steven Jack Butala:
Yeah. Secret county lists.
Jill K DeWit:
I hate that. That’s dumb.
Steven Jack Butala:
If you hear about a-
Jill K DeWit:
It’s great I don’t mail there.
Steven Jack Butala:
If you hear about a county a couple of times on … “Where should I send mail to land?” If you Google that and you hear about a county like Costilla County, Colorado is one, three, or four times in different areas, do not send mail there.
Jill K DeWit:
Then, that’s where you don’t go. Congratulations. The secret county list is everywhere that no one’s talking about.
Steven Jack Butala:
The secret county list is something that you only understand for your reasons.
Jill K DeWit:
Right.
Steven Jack Butala:
Maybe you did the Red Green Yellow Test. It all makes sense. And it’s some obscure county no one’s ever heard of, and it makes sense to you.
Jill K DeWit:
Perfect. I agree.
Happy to join us. Five days a week, you can find us here on the Land Academy Show.
Steven Jack Butala:
Tomorrow’s Jack Thursday, and I’m going to talk about five things your father never told you about real estate. You are not alone in your real estate ambition.
Jill K DeWit:
Well, I’m going to listen to that one. I’m excited. I’m curious. Let me think here. Five things your dad never told you. Are you saying your dad?
Steven Jack Butala:
So, this is what I think we should do because Jill doesn’t know what these topics are before we sit down and record them.
Jill K DeWit:
Not often.
Steven Jack Butala:
It would be fun if-
Jill K DeWit:
Clearly.
Steven Jack Butala:
We both go in our corners here, and tomorrow, we talk about the five things because I know your dad was in real estate.
Jill K DeWit:
Yeah.
Steven Jack Butala:
That he never told you that are really true.
Jill K DeWit:
Okay.
Steven Jack Butala:
I’m going to do the five things my dad never told, and hopefully, between the two, it’ll probably be ten things.
Jill K DeWit:
Oh, it’s going to be funny.
Steven Jack Butala:
Then, maybe somewhere somebody who’s listening to this might get something out of this.
Jill K DeWit:
Oh, good. With 10, maybe you’ll get one takeaway from that.
Hey, thanks for tuning in. By the way, we would love to connect with you on Clubhouse, and guess what? We’re on Clubhouse tomorrow. So, you can join Jack and I live every first and third Thursday of the month at one o’clock Pacific Time. Was it one o’clock?
Steven Jack Butala:
Yeah.
Jill K DeWit:
Or is it noon?
Steven Jack Butala:
I think it’s at … no noon.
Jill K DeWit:
Noon.
Steven Jack Butala:
Yeah.
Jill K DeWit:
Excuse me. Noon Pacific Time. I had to think about that. Back up. So, first and third Thursday of every month, noon Pacific Time, you can join us live on Clubhouse. So, go on there, download the app, find us, and follow us and follow the Land Investing Club, and you’ll see all the details right there. And you can set up little reminders so you won’t miss it.
Steven Jack Butala:
We are Jack and Jill. Information.
Jill K DeWit:
And inspiration.
Steven Jack Butala:
To buy undervalued property.
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