Transcript:

Steven Jack Butala:
Jack 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:
I’m Jill DeWit, broadcasting from the Valley of the Sun.

Steven Jack Butala:
Today Jill and I talk about how small is too small in your land transactions.

Jill K DeWit:
I have two things. I want to talk about the deals that I do, and I want to talk about the deals that you should do.

Steven Jack Butala:
That’s great. And I’ll tell you right out of the box here, this changes all the time. A regular deal for us used to be buy for $500 and sell for 1500. That was like a standard deal for us for a lot of years. And certainly not anymore.

Jill K DeWit:
Because they were every hour.

Steven Jack Butala:
Yeah.

Jill K DeWit:
That makes a difference. Isn’t that funny? Wow.

Steven Jack Butala:
Stick a question posted by one of our members on the landinvestors.com online community. It’s free. I hope you know by now jill and I own a full-blown commercial printing company called Offers 2 Owners, the number two owners, to get offers into owner’s hands that you’re sending out to buy their property. We started it a lot of years ago out of frustration because we couldn’t get the service and attention that we needed from an outside vendor. So we started our own. And fast forward today, we do almost a million offers a month. Sometimes, we actually go over a million offers going outbound a month. Check out support@offers2owners.com.

Jill K DeWit:
Will wrote, “Going through the six As. And right now, I’m looking at access. I have an opportunity on a property that is at the end of a dead end road. So there’s access. It’s a small lot 0.6 acres. This is good. It’s over half acre. So how much should I be worried about the fact that it’s a dead end road, that it’s only one lane wide, but it’s paved right up to the property, but not beyond it.” Are you kidding? I love that.

Steven Jack Butala:
Yeah. Zero. You should worry about it zero.

Jill K DeWit:
That’s the best possible scenario. I’m like, “Who wouldn’t want that road ends at my house?” No one’s going there, unless they’re going to my house. First of all. I don’t have the through traffic and the noise and that kind of a thing and it’s paved. I’m like, “That would be the seventh A,” which is asphalt.

Steven Jack Butala:
Don’t keep saying that.

Jill K DeWit:
I know. I’m sorry. We’re joking about that one. That was a career path inside joke, but I think it’s awesome. What do you think?

Steven Jack Butala:
Dead end roads are great. The only con, or downside, to having a dead end road property is that the signage, the for sale signage that you put up, might not be as attractive because you’re not reaching as many people as you possibly can to sell it. But from a livability and a buy-ability standpoint, everybody loves dead ends.

Jill K DeWit:
Totally.

Steven Jack Butala:
Do you know that it’s not politically correct to say dead end anymore?

Jill K DeWit:
What?

Steven Jack Butala:
No through traffic or what… I don’t know. Dead end is just a… I read this is a while ago, like a year ago.

Jill K DeWit:
What? Well, who is that possibly offending?

Steven Jack Butala:
I don’t know, Jill. Whoever it’s offending, I don’t know. I don’t know what they would be upset about. The word dead, maybe.

Jill K DeWit:
What?

Steven Jack Butala:
I know. I knew you’d have that extra… That-

Jill K DeWit:
Okay. Are you making this up?

Steven Jack Butala:
Nope. No. All the news signs you see, it says no through traffic.

Jill K DeWit:
Wow. That’s hilarious.

Steven Jack Butala:
Today’s topic before Jill gets all-

Jill K DeWit:
How much money is that going to cost?

Steven Jack Butala:
Exactly. Today’s topic, how small is too small with land deals? This is why you’re listening.

Jill K DeWit:
Okay. So first, we need to talk about your deals and then we’ll talk about my deals. So how small is too small? You know what? There is a number, but it’s unique to you. But there’s some things that you need to know when doing small deals, like Jack just referred to. There’s lots of people like to buy for 500 and sell for 1500, like, “Woo-hoo. I tripled my money and I did it overnight.” That’s great. And I agree with that/however, the quality of the properties are not as great obviously. And the sellers are a whole different customer.
Think about this one. Who’s writing a check for $1,500 and who’s writing a check for $15,000 and who’s writing a check for $150,000? These are all very different customers. And the more money they’re spending, the easier they are to work with, I got to tell you. They’re professional. They’ve done their homework, they’re not asking silly questions. And they’re not going to ask for a refund on $150,000 because they did all their due diligence before they got to that point. And they wired the money or however you’re doing it, usually through escrow at that point. So we don’t have to think about that.
But the $1,500 people, that can be hard. And like Jack said, you’ve done a lot of those deals. How many of those people wake up and go, “Oh, my kid took my credit card.” Or I’ve even dealt with that back in the day. I was way, way, way back in the day. We did a lot of auctions online and they’re like, “Oh, my toddler had my computer.” Really? Your toddler’s on your computer bidding on an land auction. I’m not sure how that would happen, but wow. You have a brilliant toddler.
So there’s just weird things that people come up with because, again, it’s a different customer. But as you’re starting out, getting your feet wet, I understand that. I understand a lot of people started there because, I’ll tell you why, a lot of people start with other Land Academy offshoot education programs. Let’s just say that.

Steven Jack Butala:
That’s a nice way to say that.

Jill K DeWit:
There you go. And those Land Academy offshoot education programs might be preaching doing smaller deals because that’s all the money you have. You don’t have to do that. But maybe you did that and you got your feet wet. But then you found your way to us. That’s very, very, very common. I’m like, “All right, I’m done doing these small deals now. I want to make this an empire. This is my career. This is going to be my life. I’ve tested it.” And then, they find land academy me because we’re the ones that are on the bigger deals and helping you get to that level. Because that’s who we are. So, again, there’s nothing wrong with that, but you don’t have to go there if you don’t want to. Or when you’re ready to switch, you just do it. I’ve said for years, “Add a zero.” $500 can be $5,000 tomorrow.

Steven Jack Butala:
Buy for 5,000, sell for 15,000.

Jill K DeWit:
Right.

Steven Jack Butala:
Absolutely.

Jill K DeWit:
And then buy for 5,000 should be really quickly buy for 50.

Steven Jack Butala:
Yep.

Jill K DeWit:
Those are my numbers. So now, we’re transitioning into my world.

Steven Jack Butala:
Me too.

Jill K DeWit:
So I don’t do those deals anymore. Truth, I just don’t. I’m not going to spend… Because I’m going to spend at least the same amount of work, maybe more work, struggling to sell a $1,500 property versus I’m not even trying to sell the $150,000 property. I have a broker doing it for me. Think about that one. So that’s why it’s even easier and arguably more fun.
Now let me take it to the next level. “Okay. That’s great, Jill. But I don’t have the 50K.” Well, guess what? I do, as do many people in Land Academy. Right now, today, I don’t really have a good number on it, but I’m going to tell you. There’s a healthy percentage of people in Land Academy, some that are only in Land Academy to fund deals. They have no desire to send out any mail on their own. They’re only here in our community because they know how smart you are and how savvy you are at finding these deals. Because you learn from the pros and they are just sitting there waiting to fund your deals and just cash out with you on the end.

Steven Jack Butala:
No matter what you choose… And you should choose all of the above, I think in the beginning or at least after your 10th deal, and see which one fits for you. But they all have one thing in common. They’re undervalued, where the perception of the property when you put it up for sale after you bought it, is that it’s undervalued for what the current market is in the area and the whole thing.

Jill K DeWit:
Hopefully, you priced it that way. I want you to price it that way.

Steven Jack Butala:
Let’s not lose sight of that. But none of this works if you buy overvalued property. It only works if it’s undervalued. The pros to selling cheaper property and making less money are it sells faster. It’s just common sense. More people have $5,000 than have $500,000. That’s just how it is. Also, there’s a lot more properties that are smaller and cheaper. So there’s a chance that you’re going to buy more deals and flip more property and really sharpen your skills on the whole thing.
The cons are, it’s obvious, again, you’re not making as much money per deal. There’s a balance. We’ve found a balance over the 20 years where buying a property for $500,000 and selling it for 1.5 million. That can happen. We’ve done that. I’ve done that. It takes a really long time. It’s usually commercial property. The due diligence periods are very, very long. There’s usually financing, almost always financing involved, and there’s a lot of moving parts in. That type of customer is very easy to deal with. But they have a lot going on in their life. They’re usually doing multiple deals right now. Maybe they’re a home builder. There’s just a lot of stuff going on. That’s not for me. I mean, we could easily do one deal a year like that and not work that hard.

Jill K DeWit:
Well, that’s bucket whatever. Is that bucket three?

Steven Jack Butala:
It’s bucket three. So it’s harder. It’s harder. So the in the middle is buy for 30 or 40 or 50 and sell for 80, 90, 100. We just bought a property for $30,000 and sold it for 80 and we were all jumping down about it. And it went fairly smoothly without… Not flawlessly, but fairly smoothly. So, again, it’s not hard to fit in anyone’s schedule one deal a month, making 70 to $80,000 at all and make an incredibly good living very, very quietly and just kind of found your… And also, there’s enough meat on that deal so you can go get funding.

Jill K DeWit:
Exactly. Completely agree. I love it. Then, whatever level you’re at, I want you to don’t let yourself hang out there too long. I think get comfortable. If you spend six months in a year at one price point, I’m good with that.

Steven Jack Butala:
Yeah, me too.

Jill K DeWit:
But if you’re going over a year now, I want you add a zero.

Steven Jack Butala:
Yep.

Jill K DeWit:
And I think a lot of people are happy in the $5,000 range, and you could do the same thing in the $50,000 range. I love it. I promise they’re out there. And if you’re in Land Academy, you know how to troll. Or you’ve watched some of my videos, you know how to troll and you know how to sit back into it and look at the whole map of the country and find areas where things are selling over $100,000. And so you can back into where to send mail and how to make it easy for yourself.
And of course you have us. You have our whole community. You have all the support that… We’ll help you. We won’t let you make a big flaw. You know what I mean? As long as you ask. You have our Thursday calls. You have us. We’ll make sure, as best we can, give you another pair of eyes so you make good decisions on those. Love it. Happy you could join us today. Five days a week, you can find us here on the Land Academy Show.

Steven Jack Butala:
Tomorrow, the episode on the Land Academy show is called The Pros and Cons of Partial Land Ownership. You are not alone in your real estate ambition. Yeah. Why would three people own one property? There’s tons and tons of reasons. Jill and I are two people and we own all kinds of property.

Jill K DeWit:
Right.

Steven Jack Butala:
When there’s 30 people, that’s a different story. We’ll talk about a little bit about that tomorrow.

Jill K DeWit:
That’s really funny. It’s good. Thank you for tuning in. Like I was mentioning on the show, Jack and I are really aware that not a lot of you have even 100 grand lying around to buy land and do these deals. Those are great numbers, Jill, but that’s okay. Don’t worry. We fund many, many member deals, us personally. And we love doing that. So check out landfunding.com. And as I mentioned too, just within Land Academy, there’s so much money. I haven’t done a survey in a while to see how much money’s flowing around, but I do that now and then. So check out support@landacademy.com if you have any questions and we will get back to you.

Steven Jack Butala:
We are Jack and Jill. Information…

Jill K DeWit:
And inspiration…

Steven Jack Butala:
To buy undervalued property.