How Income and Property Taxes Work in Your Land Business 2021 (LA 1433)

How Income and Property Taxes Work in Your Land Business 2021 (LA 1433)

Transcript:

Steven Jack Butala:
Steve and Jill here.

Jill DeWit:
Hi.

Steven Jack 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 sunny Southern California and awesome, cool Arizona.

Steven Jack Butala:
Today, Jill and I talk about how income and property taxes work in your land business in 2021. Why? Because all week this week, Jill and I were talked into talking about the most boring things possible in the land business. What’s not boring in the land business, making hoards of money.

Jill DeWit:
Boy, am I excited about this show.

Steven Jack Butala:
If I could write a topic and no one had any say in it, specifically our customer service people, here’s the topic. This is how much money you’re going to make next month. That’s a whole topic.

Jill DeWit:
Oh, this is good. Do you know what mine would be?

Steven Jack Butala:
All you got to do are these three things and that’s it. That’s a whole topic. But no, we have to talk about taxes today.

Jill DeWit:
Wait, wait, wait. I want one. Mine would be, this is how to replace your income times two and cut your hours in half. I will show you.

Steven Jack Butala:
Here’s another one. What to do with all the time that you’re going to have when you’re rich.

Jill DeWit:
Or what boat works best in X conditions?

Steven Jack Butala:
I like those. Let’s take a look in Jill’s garage. That’s another show.

Jill DeWit:
That’s right. That’s perfect. You know what’s funny? Seth did this a couple, like a year ago. Seth bought a new big house in Michigan, right? I don’t know if you saw this, Steven.

Steven Jack Butala:
No.

Jill DeWit:
Okay. So Seth, bless his heart, got a new house in Michigan and he gave a tour of the house walking around like a selfie tour on his phone. And I’m like, this is hilarious. And I bet a lot of people were very intrigued by that though. He went through the living room, the kitchen, you could see the kids’ toys in the corner. It was the funniest thing. And he goes downstairs, like it’s a Michigan basement, and that’s where his office is and it’s really nice, and he shows the layout and everything. And I thought that was funny. So I’m wondering, should we do that, when you talked about the garage thing? We don’t need to see the garage, but I don’t know, maybe somebody would like to see the garage. It’s kind of funny.

Steven Jack Butala:
Yeah. The garage I’m okay with.

Jill DeWit:
Okay.

Steven Jack Butala:
Because there will be 16 not so inexpensive cars in there when we’re done.

Jill DeWit:
We’ll work on that later. Okay. So did you set me up for the question?

Steven Jack Butala:
So 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 a Land Academy member, please join us on Discord.

Jill DeWit:
I got so excited getting off-topic because we’re both avoiding this topic.

Steven Jack Butala:
Actually, I should have said this before we started being negative, but I can save you some money on this episode here, I think

Jill DeWit:
Bob wrote, “Hey, Land Academy folks, we’re wanting to bring on someone per task or on a part-time basis to help us get our mail out consistently. My wife, Carly, and I have scaled our business over the past year and it’s currently more than we can keep up. If you have a knack for data, but don’t like the rest of the business, let me know and we can chat further. Experience with RealQuest, compiling comps, pricing, and data scrubbing is a must. Here’s my cell number. Evan, if you want, you can text me for a faster response. Thanks.” There you go. There’s Bob’s job posting for the board.

Steven Jack Butala:
Bob, I just posted this exact job, exact job on the job board on Land Academy or Land Investors, so touché. If you get a good person, let me know, Bob.
Today’s topic, how income and property taxes work in your land business in 2021. This is the meat of the show. Let’s start with the easy one, property taxes. When you buy a piece of property, I don’t care what it is unless you’re a nonprofit or, yeah, unless you’re a nonprofit that I know of, you’re going to pay property taxes. Did you know non-profits don’t pay any property tax? So if you have a big, huge, massive nonprofit healthcare system, they don’t pay any taxes on all that real estate. Jill, Scottsdale Memorial is a nonprofit.

Jill DeWit:
Churches.

Steven Jack Butala:
So all that prime real estate in Old Town Scottsdale is tax-free.

Jill DeWit:
Yeah. Churches, right? That too.

Steven Jack Butala:
Yeah. Any place of worship, quote-unquote, but those are non-profits. So you can’t have a for-profit church, you’re going to pay tax. So, Jill, all these properties that we own, constantly in a big, huge cycle, do you pay the property taxes?

Jill DeWit:
Nope.

Steven Jack Butala:
Never. Oh, my God. You guys are in the real estate business and you don’t pay your property taxes. Isn’t that a sin? Isn’t that illegal?

Jill DeWit:
No.

Steven Jack Butala:
No, no, and no. You pay the property taxes when you sell it. So when you buy property, if everything’s correct, whether you’d buy it through self-close or through a title, the taxes that are owed on the property should be zero in a perfect world. Often, they’re not. Often, one of the reasons you’re getting a smoking deal is because there’s a bunch of back tax properties and you assume it. So the way property taxes work very simply are as they stay with the property, just like a license plate stays with the car in California.
But in Arizona, it doesn’t, it stays with you. You never sell a car and then that guy gets to keep the plate. Why would you ever keep a license plate with a car? What if you’re a big, huge criminal, do all this criminal stuff, and then you sell your car to Joe Schmo and Joe Schmo gets in trouble? It’s another backwards thing that California does. I’ll never understand it. Here’s another one. Did you know that if you have a pink slip or a title to your car, why they call it pink I don’t know because it’s blue, and there’s no notarization required? I just sold our last boat in California, signed my name, and sent it in the FedEx. Nobody’s checking. It’s just ready for fraud.
Anyway, property taxes stay with the property. So if I sell a property that’s got a bunch of back taxes on it, a house or a piece of land or an office building, and I sell it to Jill, I deed it over to Jill. Congratulations, Jill, you have a massive amount of liability. That’s one of the reasons you have an escrow agent that does a HUD-1, that calls the county, prorates the taxes, make sure everything’s okay. If you do a self-close, you should be doing that yourself, checking on the back taxes.
We don’t pay taxes. We would have to have a full-time person, that tax bills would come, they would research it. We would sign a check, and it would take … So what we do is we just put them in a box, literally in a banker’s box, and when the properties sell, that’s when we take a look at it.

Jill DeWit:
Right.

Steven Jack Butala:
It’s part of the person who sells it his job, is to make sure the taxes are all set up. And sometimes it’s appropriate for us to sell properties and disclose, hey, there’s a bunch of back taxes on this property. We’ll just knock it off the price and then how about you figure it out? And that happens a lot actually for desert-type lower-priced properties. So, if you owe a lot of property, don’t worry about it. But what you never want to do is sell a piece of property without disclosing that. That’s not right. It’s all going to come catch up with you anyway. They’re going to find out a year later when they get the tax bill, the new person, and they’re going to say, “What the heck?” You’re going to cause big problems for yourself.

Jill DeWit:
Yeah. One of the things that you do too, that we do in our postings, which is really nice, you want your buyers to know what their taxes are going to be every year. That’s just a nice thing to do. So if there’s any taxes that are due, if you intend to not do them, put it in there, or let them know too, hey, it’s all going to be caught up at time of transfer. Perfect. Put that in there and then let them know what their annual taxes are going to be, is really helpful.

Steven Jack Butala:
So here’s the other thing, another thing with property taxes. After a certain amount of time, and it’s usually five years, you don’t want to let them lapse five years because then the county is going to start going through a foreclosure process or whatever statutory process or procedure is outlined in that state or that county. And eventually, you could lose the property. So you want to make sure that it’s not that old. And you want to make sure that, in most states, that are all states that I’m aware of, but each year has an amount due.
So you can, but you have to be really careful if you are not paying the entire amount, if there’s three years of back taxes, you really should pay the entire amount or pay nothing because they won’t apply it to the right place. If there’s $2,000 of back taxes and you send them a $500 check, and they don’t apply it to the oldest tax year, they could foreclose even though you’re paying. I’ve seen this. Jill and I have done … Remember that deal, that big house, Jill, we did and that they’re just about to foreclose on it, the county was, with all the palm trees in the back?

Jill DeWit:
Yeah. We had to hurry and get the money in. Yeah.

Steven Jack Butala:
Yeah. Because they were going to foreclose on the property. We had like a week to solve that for her. And that was all mismanaged and not set up right, and we had to really go into the county and say, “Guys, come on. This is it. We’re buying this house. We’re going to solve it all right now.” So there’s some little caveats. If you have any real questions about this, just email us at support@lantaacademy.com, and we’ll help you out.

Jill DeWit:
Right.

Steven Jack Butala:
Now, income tax. Jill is famous for saying, get 10 deals under your belt. Don’t worry about filing an LLC. Just put them in your name, make sure you want to be in the business. And once you knock those first 10 out and it’s profitable for you, and it makes sense and you want to move forward, go get an LLC in some state. It doesn’t have to be in the state that you’re in. There’s no real circumstances that you would ever want to do an LLC in California. That’s for a different show. All of ours are in Arizona for a reason.
And once you have that LLC setup, the IRS and the local taxing authority is going to expect that you’re going to file a tax return the following year, the taxable year. So unless you file some paperwork that says, you know what, I filed the LLC, but now I changed my mind. I don’t really need it or want it. You have to do that in California or else you’ll get charged forever, up to a thousand bucks, probably around a thousand dollars a year. In Arizona, they don’t care. It’s just so dormant after a while that they just turn it off for you if you don’t file tax return.
All right. So now you’ve got an LLC, and you’re making a bunch of money, you got to pay taxes on it. If your LLC is in Arizona and you’re buying a lot of property in California, do you have to pay California tax? Yeah, you do. You are a resident of California. Do you have to pay Arizona tax? My opinion is no. So that gets kind of tricky. Don’t just take my advice. Please, really, I’m going to get email and stuff. If you have five accountants in the room, you’re going to have five opinions about how to do this.

Jill DeWit:
That was going to be my point. You need to find someone that thinks like you, you can communicate, and you work together and it may not be the first accountant that you call. My best advice is, find someone that you know, who has an established relationship with an accountant, they say this guy and I connect, he’s got it all figured out. I mean, he tells me stuff every year and finds things that I don’t even know about kind of thing. He’s good. So someone kind of in the business, in the industry, that I would totally go that route.
And it’s just one of those things. It’s like, I guess, with attorneys and different things too, you just got to interview people and see if they’re a good fit and see how they do things. I’m sure there’s attorneys out there that, not attorneys, but accountants that you may not agree with because you might think, this guy pulls too many things that I’m not comfortable with. I want to make sure I’m paying the right stuff. You wouldn’t go with that guy. You’re probably going to on both extremes. Find the one in the middle that you connect with.

Steven Jack Butala:
I’m assuming too, listener, that you don’t want to pay taxes and that you think this is kind of a wrench in your life and that you disagree with all of it. And I learned recently because of this election year and this COVID, which seemed to really separate the country, you’re either on one side or the other, there’s a substantial number of people, let’s say half, and I didn’t know this, but half of my friends were like this, that believe in paying taxes and that taxes are good. And we have a better life because we pay a lot of taxes, and our roads are at work, and our politicians to get paid. So I just don’t happen to be from that camp. So if you are, you should really not listen to this any longer. You should just go pay as much taxes as you can and pat yourself on the back, have your spouse pat yourself on the back and say you guys are tax-paying citizens, and we love each other.

Jill DeWit:
Okay. Everyone, everyone, everyone.

Steven Jack Butala:
This show is about … And it’s not about how to rip the government off because that’s not what I’m going to say either. This is about how to responsibly structure your company and pay the taxes that are owed and minimize, where possible, within the limits of the law, your taxes.

Jill DeWit:
I got to say, that actually took a lot longer into the show than I thought it was going to be for you to get that out. When I sat down and I look at this topic, I’m like, oh, here we go. This is going to be good.

Steven Jack Butala:
The Internal Revenue Service publishes what’s called the IRC, the Internal Revenue Code. And if you ever seen one printed out, I went to school on this, there was no such thing as the internet back then, it’s two or three inches thick. And if everybody was just a W2 employee, you worked at Walmart, or for a consulting firm, or as an accountant, or whatever, then the IRC would be about six pages and it would say, your tax rate is X. Here’s the graph or the grid. And your employer is going to withhold your money. And at the end of the tax year, you’re going to get a W2. And it’s going to say you get X amount back.
I always want to be a fly on the wall if somebody thought this up. Let’s tax them all. There were no payroll taxes, which is what I’m talking about, before World War II. It all started to fund a war. For a brief period, during the Civil War, it happened too. But everybody said, and that there’s an on both sides said, there’s no way I’m paying taxes. Yeah. It was all funded by property taxes, but that’s the topic for the different story. So some geniuses got together in Washington, D.C., and said we should tax people on the money that they make. We should keep some of their paycheck. This is before paychecks. This is dollars. I know. Well, how are we going to get somebody to file a tax return? That’s ludicrous. Well, how about we withhold their money as they get it, and to make sure that they file a tax return, we’re going to withhold more than they owe. And then we’ll just give it back to a little bit back to him in April. And I guess everybody said, okay, this sounds like a good idea to me.

Jill DeWit:
I’ll take Steve rant 101 for 500.

Steven Jack Butala:
So they had the volume of the Internal Revenue Code, it might be volumes now, I don’t know, is all about people like us, who own small businesses or businesses and the rules for filing these taxes, and when you can depreciate stuff, and when you can’t, and what you should buy and what you shouldn’t buy, and how it gets treated from a tax standpoint, all in the name of making it complicated so you have to hire an accountant. And Jill said earlier, this good accountant that you get along with is going to look at the Internal Revenue Code, they’re going to look at the code, they’re going to look at you, and they’re going to say, “Whatever is ordinary and necessary in this person’s business,” and it that’s the exact phrase, “Is this ordinary and necessary, then it’s a business expense.”

Jill DeWit:
Right.

Steven Jack Butala:
Is it ordinary and necessary for Jill’s cosmetics to be a business expense because we have this show? I would argue yes. Somebody might argue no.

Jill DeWit:
How about my computer, my camera, my lights, my desk, my chair?

Steven Jack Butala:
So there’s all these new opportunities you have to increase your business expense as long as it’s ordinary and necessary. And now I’m not joking, I’m actually really true and honest in saying this. I’m very serious. You don’t want to cheat the government. You don’t need to. You should find things and expand your business in a way that where you can legally expense items that you need to use in your business to keep it going. And so there’s a lot of opportunity. You buy a piece of dirt and you sell it on the internet, there’s all kinds of stuff that needs to happen. You got to get drone shots. You have to maybe hire people from a consulting standpoint to tell you what it’s worth. There’s a lot of things that go on. And so if you’re using half your house as office space, there’s an opportunity there. And on and on and on, these are all legitimate things that need to be documented and put into a system so that it reduces your ultimate taxable income.
Can you do that as those first 10 deals? Yeah, you can, as long as you keep track and you have to file for a … What you’re really running is a sole proprietorship, and that’s from a legal standpoint, that’s got the same treatment or virtually the same for tax purposes, not legal purposes as an LLC. So keep track of all that stuff. It’s actually really easy now to keep track of it because it’s on your bank account. And also, this is my opinion, keep it separate, don’t co-mingle. After those first 10 deals, that LLC can have its own bank account and should. And you shouldn’t use that bank account for personal stuff and vice versa. You shouldn’t use your personal bank account for business stuff, because it’s too hard to keep track.

Jill DeWit:
That is the one, if you take away one nugget, just take away that. Set it up. And then at the end of the year, when you’re talking to your accountant and he says that should really be over there, and that should be over there, you make those changes next year. And that’s easy.

Steven Jack Butala:
Right.

Jill DeWit:
That’s really good advice.

Steven Jack Butala:
Here’s a good bit of advice from somebody with some gray hair.

Jill DeWit:
Not me.

Steven Jack Butala:
Jill and I take, in every company that we have, we have a few of them, a few dormant ones like everybody, a few dormant LLCs and a few very active ones, a couple that are very, very active, the main companies, in those LLCs, we take a salary. And it’s nothing to write home about, but it’s a W2 salary where we pay payroll taxes, as we should. Let’s just call it an industry-standard salary, she and I, and we all shook hands a long time ago that it’s equal, it’s the same amount. And so there’s withholding, the state of Arizona because everything’s in Arizona gets paid, and we file a tax return. And we never get money back because at the end of the year, the land that we buy and sell and the offers to owners, revenue and expense, and all this stuff, when you put it all together, we owe taxes.
So the money that we would’ve gotten back gets charged against the amount that we pay.

Jill DeWit:
Right.

Steven Jack Butala:
But you still … The state and the feds are bent on withholding. And I have personal friends who have committed suicide over not paying payroll … They owned restaurants and stuff, and just said, “I’m not going to pay my payroll taxes.” They’ve got all these employees. For decades, never paid payroll taxes, and somebody showed up at their door. So you do not … And with ADP and companies like that now, it’s all automatic. Go ahead, Jill. It’s too easy.

Jill DeWit:
Now you’re going dark. I don’t mean to scare you. So, rewind. Rewind. It’s okay, I promise. You know what?

Steven Jack Butala:
I’m sorry, Jill.

Jill DeWit:
You have shared so much good information already. I should have cut you off a few minutes ago. Just kidding.

Steven Jack Butala:
No, I don’t think you are now.

Jill DeWit:
No, yeah, I’m not. This is a Friday show. [crosstalk 00:21:10] I want everyone to have a good weekend. I don’t want anybody to be panicking. So it’s the beginning of a new year. We’re trying to set you up right. Don’t worry, you got this. And happy to be doing this today. Five days a week, you can find us right here on the Land Academy Show.

Steven Jack Butala:
Join us next week for another interesting episode. You are not alone in your real estate ambition. Just get some good professional advice. There’s tons of free stuff out on the internet. There’s podcasts like this devoted to this whole thing, so just get some good advice.

Jill DeWit:
There you go. Thank you for tuning in. We hope you find our content valuable and we do appreciate your support. If you haven’t already, please check out our YouTube channel and hit the subscribe button, and give us feedback on the shows you love. We are Steve and Jill, information …

Steven Jack Butala:
… and inspiration …

Jill DeWit:
… to buy undervalued property.

—————————————-

If you have any questions or comments, please feel free to email me directly at steven@BuWit.com.

The BuWit Family of Companies include:

https://BuWit.com

https://offers2owners.com

https://landinvestors.com

https://landacademy.com

https://landpin.com

https://parcelfact.com

https://countywise.com

https://deedperfect.com

https://ownersdata.com

https://houseacademy.com

I would like to think it’s entertaining and informative and in the end profitable.

And finally, don’t forget to subscribe to the show on Apple Podcasts.

NEW Land Academy Job Board (LA 1432)

NEW Land Academy Job Board (LA 1432)

Transcript:

Steven Jack Butala:
Steve and Jill here.

Jill DeWit:
Hi.

Steven Jack Butala:
Welcome to the Land Academy Show, entertaining land investment talk. I’m Steven Jack Butala.

Jill DeWit:
And I’m Jill DeWitt, broadcasting from sunny Southern California.

Steven Jack Butala:
And me from Arizona.
Today, Jill and I talk about the new Land Academy/Land Investors job board. I am personally ridiculously excited about this. There’s not one lick of sarcasm or non-truth to what I said.

Jill DeWit:
I know.

Steven Jack Butala:
I have long, long said the most challenging thing in any business, including this, is staffing.

Jill DeWit:
Yup.

Steven Jack Butala:
We’ve got a huge group of people that know this business, and they’re entrepreneurs. I’ve actually posted jobs up there myself.

Jill DeWit:
Yup. Three of them on there right now are ours. Three of the job postings are for some part of our company.

Steven Jack Butala:
If you’re a member or even not a member, and you’re looking for a job in this industry, we are hiring.

Jill DeWit:
Mm-hmm (affirmative).

Steven Jack Butala:
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 a Land Academy member, please join us on Discord.

Jill DeWit:
Nick wrote, “What’s the best way to handle a potential seller who refuses to accept or deny the amount of the offer, but insists on me sending her the comps of how I came up with the offer, before any further conversation? She wants to sell, but won’t say anything about the offer price without comps. ‘I send dollars, not comps,'” in quote, Nick wrote.

Steven Jack Butala:
That’s my little comment. I send dollars, not comps.

Jill DeWit:
That is so funny. Sometimes, Nick, people get a little confused about who you are or what you do. I’ve had that. I’ve had people, four from mailers from years back, calling me and asking me questions like I am the county. What the heck?
They get kind of demanding too. I’m like, “What are you talking about?” “Hey, I need to know what you guys show for this, that, and this.” I’m like, “Well, how the heck do I know? I just sent an offer to buy your property.”
The first thing I would do would be to educate her on who you are, and what you do, and what you’re happy to do. I would just stand firm, honestly, Nick, on this one. I would say, “Look. My name’s Nick. I own nicksLand.com. Check me out. There’s me. Yep, that’s me with my dog. There’s my wife and our baby,” whatever it is, “camping. We buy and sell property. I sent you an offer. If it works for you, great. Please, sign it, send it back. If it doesn’t, I wish you all the best.”
“But I need comps. I need comps.” “You know what? You could reach out to maybe …” I guess now I’m talking myself out of it. She could reach out to a local agent. Maybe that’s what you should say. Let’s be honest. “You can reach out to a local agent. They could probably help you with something like that.”
Now, we do run the risk of her reaching an agent, and the agent saying, “Oh, I can sell it to you for this.” You know what? Then let them do that, honestly. But most likely, especially if it’s a small whatever property, the agent’s going to go, “You’re who? You want what? It’s how much? No. I’m sorry. That’s not what I do.”
She’s probably going to really hit a wall. If it’s a smaller property, like less than $10,000, a lot of agents, “Do I want a commission on $10,000? Am I going to make 600 bucks, maybe a thousand, when I’m doing deals where I can make 50,000? It’s not going to be worth my time.” It’s probably going to go like that.

Steven Jack Butala:
If your seller knows the word comps, which stands for comparison values, by the way, you’re not going to do a deal with them.

Jill DeWit:
That’s true.

Steven Jack Butala:
They have a bunch of experience in real estate. They want a current comparison value driven price. That’s not the business we’re in.

Jill DeWit:
It’s true.

Steven Jack Butala:
We’re in the check cashing business for real estate, or the title of business for cars. We’re interested in buying property from people who just don’t want it anymore and don’t want to go through the hassle. So comps? No. I send dollars, not comps. That’s how I answer this question.

Jill DeWit:
Exactly.

Steven Jack Butala:
Today’s topic?

Jill DeWit:
[crosstalk 00:04:34]

Steven Jack Butala:
Today’s topic, yeah, you think somebody who wants to get a loan on … They need some money, and they want to get a loan on their car, like a title loan. You think they’d go in and start haggling and saying, “No. No. This car is worth $50,000 or $8,000”? No. They just take what they take, and that’s it.

Jill DeWit:
That’s the most interesting thing. I’ve never had anyone say that to me.

Steven Jack Butala:
Me either.

Jill DeWit:
I think you’re right. I think that’s just their way of pushing back. You know? “Look. You either want to sell or you don’t. We’re not going to do this dance. I’m not going to provide comps. I don’t work for you. If you like my offer, fine. If you don’t, I wish you all the best.”

Steven Jack Butala:
Today’s topic, the new Land Academy/Land Investors job board. This is why you’re listening. I am ecstatic to have posted a job up there, personally, for someone to help me do these mailers. Jill, you said right before we turned on the mikes, you’ve got job postings up there too?

Jill DeWit:
Mm-hmm (affirmative).

Steven Jack Butala:
What are they, just for fun?

Jill DeWit:
One is land selling for LandStay, our company, to help with that, getting properties posted, really, that’s a lot of it. I can’t keep up. The staff can’t keep up right now.
The other one is Land Academy, helping … Someone who is in our world, who’s maybe a member, maybe related to a member. I don’t know. They know what’s going on, and they can answer some questions and just help field some of the people that are interested in joining Land Academy, that kind of a thing.

Steven Jack Butala:
Good.

Jill DeWit:
They don’t need to be … If they’re doing deals like me, then this is not the right thing, because you’re making way more money doing deals, obviously.

Steven Jack Butala:
Yeah.

Jill DeWit:
But if you understand this and you don’t want to do deals … Maybe you just want to be a part-time thing on the side, and just help people, answer some questions, tell them where to get more information, nice things like that. Maybe even posting maybe even in other … Not just taking calls, but answering emails, and responding in some of the places that we have blogs and stuff posted. That would be awesome too. Or people reached out to us, like LinkedIn.

Steven Jack Butala:
This is a fantastic opportunity, …

Jill DeWit:
Mm-hmm (affirmative).

Steven Jack Butala:
… if you’re a Land Academy member or not, to get involved, maybe make some money on the side while you’re getting mailers out and learning the business.

Jill DeWit:
That’s true too.

Steven Jack Butala:
I see it as a win-win.

Jill DeWit:
I agree.

Steven Jack Butala:
We’ll see how much interest there is. It’s only been up there for a day, and we haven’t talked about it, so we’ll see.

Jill DeWit:
Yeah. I agree.

Steven Jack Butala:
Shortest episode ever.

Jill DeWit:
Well, here’s the thing. No. This is not only for us, but it’s for our members too. We all have needs. You and I are fortunate enough that we have each other, and we fill a lot of gaps.
A lot of our members, it’s them. They’re a one man show. Their spouse, partner, whatever is taking care of the family, running the house, job, whatever. They don’t have someone else and they need help. It’s a great way, too, to fill in those little pieces, like, “Oh, my God. When I ever have to call to get things recorded, it slows me way down. If I could find someone that could just take the paperwork part off of me, or posting property, or even answering the phones.”
We all have PATLive. Maybe they need help calling back people, that kind of a thing. PATLive doesn’t do that. Helping with due diligence, helping keeping everything in order.
There’s so many things that we need in this business that I know there’s other members, and I’ve saw other people on there posting jobs, to help them. It’s great. My goal here, I’d love to … If we can all get one property posting guru, something like that, we can all benefit.

Steven Jack Butala:
That’s how I see this happening too. If you’re just a total data geek, like I am, and you get it, and you’ve got macros written, and you love that part of the business, but the other parts of the business not so much, you can see yourself doing that full time for 10 or 15 people. I think that’d be a fantastic job description.
I personally would love that job. If I could do 20 people’s mail, the data part of it, and the research, and the red, green, yellow test, and soon as I’m done with one, just move on to the next, I think that’d be cool.

Jill DeWit:
Yep. Excellent. I’m excited too.
What is a job board not for? We didn’t talk about that. Would you like to explain what it’s not for?

Steven Jack Butala:
Airing your political opinions.

Jill DeWit:
That’s funny. I hope you see this as LinkedIn for Land Academy. It’s that kind of [crosstalk 00:09:32]

Steven Jack Butala:
No. You know what? I’ve said this a hundred times. We have a great group of people in all these forums that we have. Some of them are public. LandInvestors, itself, .com is public. The amount of spam that we get is so minimal. I can’t remember the last time I’ve had to say, “Hey, this is just not the place to talk about that.” Discord too. Discord’s in real time and everyone behaves. This is a really good group of professional people with a pretty good sense of humor.

Jill DeWit:
I agree, completely agree. This is the shortest one ever.
Happy you could join us today. Monday through Friday, you can find this right here on the Land Academy Show.

Steven Jack Butala:
Tomorrow, the episode on Land Academy Show is called How Income and Property Taxes Work In Your Land Business, 2021. You are not alone in your real estate ambition.

Jill DeWit:
Okay. I’m excited about that one. This is going to be a Stephen show.

Steven Jack Butala:
Yeah, it is.

Jill DeWit:
We divide up things in our world. There’s things that fall on my side of the sheet, and there’s things that fall on Steven’s side of the sheet. Income and taxes, personal and professional, fall on Steven’s side of the sheet, because one of us has a degree in accounting and one of us does not. And one of us hates accounting.

Steven Jack Butala:
Next week … Somebody asked me, on Discord earlier today, to do a whole show on Puerto Rico. If you don’t know this, you should check this out on Google. If you live in Puerto Rico, if you move to Puerto Rico and become a Puerto Rican citizen, and all that that requires, you do not pay federal income tax, period. If you have a corporation, you pay 4% income tax to Puerto Rico, for the privilege of being there, instead of 50% tax in California.

Jill DeWit:
Yeah.

Steven Jack Butala:
I have personal experience with people and their siblings that are very, very wealthy that live there. Jill and I will do a whole show on it. Not tomorrow. That’s just income taxes. I’ll talk a little bit about it tomorrow. But that’s fun. Not paying taxes, that’d be cool.

Jill DeWit:
Hey, need to send out a few thousand offers to property owners, like we do? Check out offers2owners.com. No setup fees, free mail merge, and exceptional service. We should know, as it’s our company. Give offers, and the number two, owners.com a call today.
We are Steve and Jill.

Steven Jack Butala:
Information …

Jill DeWit:
… and inspiration.

Steven Jack Butala:
… to buy undervalued property.

—————————————-

If you have any questions or comments, please feel free to email me directly at steven@BuWit.com.

The BuWit Family of Companies include:

https://BuWit.com

https://offers2owners.com

https://landinvestors.com

https://landacademy.com

https://landpin.com

https://parcelfact.com

https://countywise.com

https://deedperfect.com

https://ownersdata.com

https://houseacademy.com

I would like to think it’s entertaining and informative and in the end profitable.

And finally, don’t forget to subscribe to the show on Apple Podcasts.

Start to Finish Documents Needed to Buy and Sell a Parcel of Land (LA 1431)

Start to Finish Documents Needed to Buy and Sell a Parcel of Land (LA 1431)

Transcript:

Steven Jack Butala:
Steve and Jill here.

Jill DeWitt:
Hi.

Steven Jack Butala:
Welcome to the Land Academy Show, entertaining land investment talk. I’m Steven Jack Butala.

Jill DeWitt:
And I’m Jill DeWitt broadcasting from sunny Southern California.

Steven Jack Butala:
Today, Jill and I talk about start to finish documents that are needed to buy and sell a parcel of land. Again, this is a requested topic by our customer service staff because a lot of people are asking about it.

Jill DeWitt:
I’ll make it really easy. I promise. You know what’s funny? I made some notes here and I’m thinking about what are all the documents? It sounds like, “Oh no, this is going to be hard,” but it’s actually very easy and there’s not a lot. And I’ll explain each and everyone and let you know what’s important.

Steven Jack Butala:
Good. 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 a Land Academy member already, please join us on Discord.

Jill DeWitt:
Kyler wrote, “Has anyone had a title company refuse to handle your closing because the purchase price is three times lower than the assessed value? Only two title companies in this county and they said they can’t do it. Never heard of this. With that said, if anyone knows a normal title company in Northern blank state, please refer them.” That’s the stupidest thing I have ever, ever heard. Could you imagine?

Steven Jack Butala:
I responded to this. I actually responded to this and what I said, I’ll say it here again. I’ve been dealing with this in some way my entire career, whether it’s a know-it-all title company or real estate agent that gets wind of the deal and says, “You know what? For that, I’ll buy it,” or, “Hey, I can even do better than that,” or somebody’s sister-in-law says, “What do you mean you’re selling that property for 10 grand. I’m happy to buy it from you for that. Don’t give it away,” so this is part of this business and it needs to be accepted and dealt with. And probably you just need to accept it.

Jill DeWitt:
It’s amazing. It’s almost like I want to say to the title company, “Oh, I’m sorry. Excuse me. What should I be buying it for? What the hell? You shouldn’t be involved in it at all.” It’s like-

Steven Jack Butala:
In small counties, I know this from personal experience, all the title agents talk to each other, regardless of the company that they work for. The people at the county talk to the title companies. If there’s HOA’s anywhere, they all talk to each other.

Jill DeWitt:
All of four them.

Steven Jack Butala:
And date each other. Really I mean it. They’re married to each other or their sister works there or something crazy like that.

Jill DeWitt:
I would just like, go find an attorney then. Go rogue, find another way to do this. If you need title insurance, do you even need title insurance, Kyler? I would maybe get the deal done and then after the fact. That might be the way to do it, close the deal, get it done then saying, “Now let’s get title insurance.”

Steven Jack Butala:
That was exactly my final point like, is it really that necessary?

Jill DeWitt:
Mm-hmm (affirmative).

Steven Jack Butala:
Get it. Buy it. It’s over. Now get insurance and you don’t need to do that at a local company. You can cross state lines on that. Today’s topic are start to finish documents needed to buy and sell a parcel of land. This is the meat of the show. Start us off Jill, what’s document number one?

Jill DeWitt:
Okay. The first document in our business is a combo document. It goes out in the mail. It’s a cover letter, introducing ourselves and our mailer and a purchase agreement with the offer price. So that’s it. It’s mailer/offer, which includes a purchase agreement. Do you want me to keep going?

Steven Jack Butala:
Yes, please. So they sign the document.

Jill DeWitt:
Mm-hmm (affirmative). They send it back.

Steven Jack Butala:
We sign it.

Jill DeWitt:
They take that purchase agreement. They accept our offer. They sign it. They scan it back to me, take a picture of it. I don’t care. I have a copy back now. I can do two things. I can open escrow with that document. I don’t need a book to do this, and I’m going to go through this two ways. I’m going to do self close and then a broker. So don’t worry about it. I got a couple of things, or the escrow way. So the first way is that it sends back to me, and then I can open escrow or I can just close myself. So what’s the documents going to be needed is going to be a deed. That’s kind of it.
I’m talking to him on the phone. I’m figuring out when we want to do the signing. I’m going to be happening to sending them a cashier’s check with the notary, however we’re doing that. That’s not the important part. It’s the documents. So the next thing’s a deed and I’m going to do the deed. It’s going to get to them and the person’s going to… they’re going to sign it. The seller’s going to sign it. It’s going to come back to me and I’m going to go get it recorded. And the only other document I have really is sometimes along with the deed depending on the state, might be an additional P-Corp or some kind of affidavit of property value. There might be an additional document that goes along with the recording, just because they want to keep track of sales prices for the treasurer, for assessment and things like that. They want to know, I don’t know, just tracking the transaction. So that’s it.

Steven Jack Butala:
So it’s just as easy as titling your car?

Jill DeWitt:
Mm-hmm (affirmative). It really is.

Steven Jack Butala:
So if you could create in a word processor, the actual title, and there wasn’t a form to get your car title in your name when you buy a car, that’s as easy as this is.

Jill DeWitt:
Mm-hmm (affirmative).

Steven Jack Butala:
People ask me, every time I get interviewed on a show, 99% of the time, Joe’s with me, they say, “How’d you get into this and how would you buy and sell land and sell it on internet? It’s strange. What happened?” And my answer is, I was involved at the early part of my career in the most complicated real estate transactions you can possibly imagine, buying and selling hospitals and post-acute hospitals and nursing homes and stuff, and their paperwork and the amount of time, and the lawyers that are involved is insane. It would kill the deals. So the pendulum swung all the way back and I consciously started looking around for the easiest transaction to do and Jill just described it.

Jill DeWitt:
Mm-hmm (affirmative). Now, if there’s a broker involved, it’s going to be all the same forms, but times 50. Maybe not 50. Maybe 20, let’s just say because they have all their disclosures and it’s the funniest thing. Every now and then, someone will go, “What the heck?” And I go, “Yeah, you’re right.” There’s even now COVID disclosures that you have to sign for rural vacant land. We’re not even talking to anybody. We’re not seeing anybody and nobody’s touching anything. No one is in the same space. But even though apparently just on the phone, I can catch COVID. I don’t know. It’s stupid, but you still have to find, sign those stupid forms. It’s just a formality. And it’s because brokers are like real estate agents. They’re required to do all these documents, whether or not they apply. And then the same thing with escrow, the documents that I described are the core documents that are required. That’s all that’s needed. All the other fluff is their stuff to make their company [inaudible 00:07:32], their president [inaudible 00:07:33]. It’s part of the escrow requirements. I don’t even know if that’s even… Whatever. Or just the state. Really it’s all around title insurance with the escrow company. That’s really it. So what would you like to add?

Steven Jack Butala:
Jill, when you become a real estate agent, nobody thinks about this for some reason. You go to a class, you take a test, you pass it, you find a brokerage to hang your license on so to speak. You pay probably four to $5,000 at this point for education and association fees and all kinds of stuff. And then as soon as that gets all approved and you physically hang your license on that person’s wall, that broker’s wall, you have opened yourself up to an incredible amount of liability. No one tells you this. They don’t tell you in school about it. They don’t tell you your broker’s never going to sit you down and say, “Wow, you now have to do all these forms,” and they’ve dreamed it up. The local real estate agents, Department of Real Estate in Arizona, it’s ADRE. They’ll dream up new stuff just like this COVID thing that Jill’s talking about.
So in a lot of ways, it’s like getting married. There’s all this stuff. When you’re married, there’s real and implied contracts. Nobody signs anything. You sign a marriage license in the recorder’s office. There’s massive legal and financial ramifications to doing that. No one tells you that. Nobody ever told me that and I’m writing a book called, Stuff Your Father has Never Told You. And believe me, I talk all about that in a chapter about this is… I get that you love this girl. I get it completely. I’m in love with the girl too, but I’m not sure that you understand what you’re getting yourself into and I really wish somebody would have sat you down and explained it like I’m about to.

Jill DeWitt:
Thanks babe.

Steven Jack Butala:
But she loves me. I don’t need a prenup. Mm-hmm (affirmative). Famous last words.

Jill DeWitt:
Exactly. Nothing’s going to happen. This is forever. Oh my gosh. Could you imagine? And now we’re pregnant. Isn’t that great? Oh, don’t get me started.

Steven Jack Butala:
We owe it to the world to do a show on this.

Jill DeWitt:
Yeah. That would be so good. Let’s see. Why undoing a marriage and undoing a contract or something… I don’t know. Why buying a house is easier and better? I don’t know.

Steven Jack Butala:
I have experience on doing both real estate deals and marriages. It’s tough.

Jill DeWitt:
Yeah, you’ve done more than me on both of those, so you are the expert. Oh, that’s funny.

Steven Jack Butala:
Did you cover the second way now?

Jill DeWitt:
Well, the second way was like just broker. It’s really just real straight broker stuff. It’s like the same core documents really apply, but put your helmet on. It’s just probably a drinking word, but… and every broker is going to have their own way of doing them in different forms, even if they’re in the same state. Just don’t worry about it. What you really need to know going into this is just reading things, paying attention, watching, and anything you don’t like, don’t sign or cross it off. That’s what we do all the time. People don’t know that. I think that’s one of the things that you and I talked to all the time. Some of our bigger transactions, we sit and read them. We cross things off. We initial it like, “Oh, heck no,” and things that they just don’t apply. They don’t even make sense.
So you need to know that you have the power and the authority to do that. When there’s a broker, here’s a huge one. Broker’s will, the way we buy and sell properties, I’m usually not… I’m definitely not representing anyone. I’m representing myself and no one’s representing me. So when brokers slide that in there, I’m like, “Hmm, well…” because maybe usually, it’s when I’m selling a property, I will have buyers come forward and there might be a broker involved and they want to get in there and get more money and make it look like they’re representing me. And I’m pretty adamant saying, “No. No. You’re not representing me. I’m representing myself here.” And you have the power to say that and sign it accordingly. So I just want you to know that.

Steven Jack Butala:
It’s called dual representation. And I’m not saying this to you Jill because you know this times 80. I’m saying it to everybody else. Dual representation some lawyer’s bright idea of making sure no one gets sued. If I have a real estate agent, there’s a listing agent who has a property and this happens to Jill and I once in a while, especially with houses where we just find a deal that we know is undervalued, but it’s listed. We will call the listing agent. Never ever bring my own real estate agent in. That’s another person that doesn’t need to stand in the way of me getting a deal done. And every single one without exception, checks that dual agency box where they’re going to represent us and they’re going to represent the seller that they have listing with, so that now I can’t sue them if something goes wrong because they’re representing everybody, not just me or not me.
And Jill and I have just, I don’t know why, we agree on this stuff. Jill and I agree on like 98% of this stuff all the time. I don’t think that. Philosophically, I have a problem with that. You’re going to represent me and get in my corner with me or you’re not. Either way is fine. I mean, if you’re not, then that’s going to be a negotiation target. I just think that’s the way the rule is, the world is I mean.

Jill DeWitt:
Mm-hmm (affirmative). Exactly.

Steven Jack Butala:
Jill, I know that one of your peeves is an endless request for documents by an escrow agent.

Jill DeWitt:
Yes. I can’t take it.

Steven Jack Butala:
So what did they ask you for? I’m not sure you covered that first time around, like what documents do you have to provide an escrow agent or a title agent?

Jill DeWitt:
Well, proof of who you are. Sometimes copies of IDs, maybe proof of funds if it’s a cash thing. We often buy and sell property in company names, so they do want to see some of the incorporation document, so they know that even though I’m putting it in the name of an LLC, that I have the authority to sign. I’m trying to think what else, but it’s sometimes endless and it’s stupid stuff. Like one title company will handle a scanned image back of the HUD-1 and one will require a wet signature, I’m like, “Okay, what’s the difference?” It’s really not. It’s just how they do it. And sometimes it is down to that agent. They’ll be agents in the same office that do things differently and that’s just how they were trained. And it’s probably appropriate. Scanned images are fine, but one just says, “Nope, I need hard copies. That’s just who I am.” Fine. And you have to deal with it.

Steven Jack Butala:
But nine times out of 10, it’s okay. That’s the exception because you’re kind of painting a gruesome picture here.

Jill DeWitt:
Oh, I’m sorry. I didn’t know. Okay. I didn’t mean it like that. No, don’t worry. Just read it, know what it is, and the little things, I just sign them and I don’t care. Like the COVID thing, I giggle. I sign it and I giggle like, “Yep. I promise every time I’m going to be on the property with the person, which I never will be. I will have a mask on and stand six feet apart.” If I need to sign this for you, I’m happy to do that. It’s hilarious.

Steven Jack Butala:
So what do you do? On my desktop right now, I have all the closing documents for each company. So make it easy on yourself. 90% of them should be in there. Maybe they’ll ask you for some weird stuff. The weirdest one that I get is you have to prove, please send the articles of incorporation for the bylaws that say you own the company, Jill owns the company, who can sign. Are you the managing member? They need those documents sometimes. If it’s in a trust, they need a copy of the trust. So just have it all in one place, really easy at your fingertips, so when they ask for it, you can zip the file up and email it to them. That’s the way to do it.

Jill DeWitt:
And that’s what we do. And the nice thing is to, if you’re doing a couple, if you’re like us and you’re working in one area and you’re buying a lot of things through escrow, and you’re going to get a nice established relationship with somebody and they don’t need you to provide it every time, it’s great. They have it. It just makes every deal go faster and smoother and often cheaper. So make sure you ask for these investor rates because of those reasons like, “Hey, we’re doing 10 deals together this month. You guys need to cut me a break.” Yeah, it’s good. Happy you could join us today. Five days a week, you can find us right here on the Land Academy Show.

Steven Jack Butala:
Tomorrow, the episode on the Land Academy Show is called Our New Land Academy Job Board. You are not alone in your real estate ambition. I am personally excited about the Land Academy land investors job board.

Jill DeWitt:
Yeah. Hey, I’m sorry. I didn’t mean to like scare people. Was it bad?

Steven Jack Butala:
No. It’s just a little salty because you can’t help it because after this many deals, we all had a teacher in high school… for me, it was social studies. The guy was just ready to retire. I mean, he just didn’t want to be there. And so I think when you teach the same course material, listen to me talk about course material five days a week for 25, 30 years, I think at the end of that, you’re like, “Yeah, I don’t care about World War II anymore. I just don’t care about talking about it or teaching it.”

Jill DeWitt:
I don’t want to be that guy.

Steven Jack Butala:
That’s all right, so you’re a little saltier like, “Yeah, you got to do this and you got to do this. [inaudible 00:18:04]. One person wants it this way.”

Jill DeWitt:
Got it.

Steven Jack Butala:
The truth is, listener, Jill doesn’t do any of this stuff at all. She’s got a whole staff that does it probably because she’s salty about it.

Jill DeWitt:
No, and it’s not that bad. It’s really not that bad. I really don’t want to get the point across is it’s very easy when you really sit back and look at the documents, and truth time, you really only need a deed. Let’s cut to the chase. Do I need a purchase agreement? No. Do I need the stuff in their hands? No. Do I need it in writing? I could meet you in Starbucks. We could have a phone call and I’ll say, “I’ll give you a thousand dollars for that,” and you say done, and you and I meet in Starbucks, you sign the deed and my notary’s right there, and I hand you a thousand dollars. Now we’re done. So we could really get it down to one document. So don’t worry and don’t stress about this. And for those of you that are part of Land Academy, that’s why we’re here and we won’t let you fall that far.

Steven Jack Butala:
Early in my career, I would meet people at the Maricopa County’s recorder’s office. And they had this one person in there was a notary and I would bring the deed, the person would sign it, sign her notary book, she would stamp it and we would get it recorded. And this is in all of, count to 60. It took that long to do the entire thing. This is before fingerprinting and all of that. Talk about an easy deal. Then, you just hand the person a cashier’s check.

Jill DeWitt:
How great is that? That was smart. That’s good. If you need access to any sort of ownership or property details, including phone numbers and FEMA overlays, check out neighborscoop.com, created by investors, that’s us, for investors like you. We are Steve and Jill.

Steven Jack Butala:
Information-

Jill DeWitt:
And inspiration-

Steven Jack Butala:
To buy undervalued property.

—————————————-

If you have any questions or comments, please feel free to email me directly at steven@BuWit.com.

The BuWit Family of Companies include:

https://BuWit.com

https://offers2owners.com

https://landinvestors.com

https://landacademy.com

https://landpin.com

https://parcelfact.com

https://countywise.com

https://deedperfect.com

https://ownersdata.com

https://houseacademy.com

I would like to think it’s entertaining and informative and in the end profitable.

And finally, don’t forget to subscribe to the show on Apple Podcasts.

What is HOA and Why it Matters in Land Investing (LA 1430)

What is HOA and Why it Matters in Land Investing (LA 1430)

Transcript:

Steve:
Steve and Jill here.

Jill:
Hi.

Steve:
Welcome to the Land Academy Show, entertaining land investment talk. I’m Steven Jack Butala.

Jill:
And I’m Jill Dewitt broadcasting from sunny Southern California.

Steve:
Today, Jill and I talk about what is an HOA, and why does it matter in land investing? I hate them. Who doesn’t?

Jill:
I know. Who wants more people involved telling you what you can and cannot do with the property that you own. By the way, they don’t own it, you do. So I have a lot to say about this.

Steve:
I do, too. I have to tell you, I’ve always had this weird fascination with somehow requesting that clinical psychiatrists or psychologists do a dissertation on certain topics. And this has always been one of them. What psychologically makes someone choose, forget about the money, [crosstalk 00:01:02] make someone choose to start an HOA? Which I get, because you make some money. But more importantly, why do you seek out to live in an HOA or seek out some type of a land where there’s more rules, not less? Is it better that we have more laws in life or less laws?

Jill:
I was just thinking that. Working at an HOA has got to be like the IRS. There’s really no reason anyone’s going to call you happy. They’re calling you to find out what’s the stupid rule, or why did I get fined?

Steve:
What’s that movie, when the kids were little? It was a cartoon about the bunch of animals are living in the back of the woods, and they in they’re all hibernating. And they woke up out of hibernation and there this massive subdivision where they used to live?

Jill:
Yep.

Steve:
What’s it called? Hedge …

Jill:
I forgot, and they went through the fence.

Steve:
Over the Hedge.

Jill:
That’s right.

Steve:
Over the Hedge. Yeah.

Jill:
Okay.

Steve:
And there was this character in there, this woman who was the classic real estate agent/president of the HOA. And they took it to extremities where she would measure the length of everybody’s lawn and then send them notes. Do you remember that?

Jill:
No. I mean, I do remember that movie, but I don’t remember it in that level of detail that you have. I do not recall. That is so flipping funny. I love it.

Steve:
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.

Jill:
Kristen wrote topic idea. Why do responding sellers have property with no physical access, or in a flood plain, and what to do about it? Oh, why do responding sellers have property with no physical hazards or a flood plan? What to do about it? I know new sellers shouldn’t be buying these, but it’s pretty much all I’m getting. Yeah. I like that. That’s a good idea. Can we do that one day and really dive deep into it?

Steve:
Yeah, we can dive deep. I can give you the 32nd overview here, too, if you want.

Jill:
Go for it.

Steve:
Sellers almost always don’t know about their property. They’ve inherited it. They’ve never seen it. I mean, back me up here or correct, Jill, probably 80% of the time, they have no idea about the property. Sometimes they live adjacent to it and that’s a different story, so they don’t know. No physical access can be remedied. It’s not that complicated. You just need to get the right people involved and make sure that there’s a ton of profit margin on it, because it takes a while. And if there’s a process, then it’s possible. The floodplain scenario, they’re not going to know. It’s only relatively new to land ownership that we can click on these FEMA maps at places like Neighbors Scoop, and just within seconds, see if the property is in a flood plain.

Jill:
Right.

Steve:
So even two years ago … I mean, even now, if you go on to fema.gov and try to find out if a property … it’s a big, huge, massive process. So, that’s not their fault at all. And what do you do about it? You just work through these things where you adjust the price. And I’ve said this a lot of times on the air, there’s people in every market, in my opinion. There’s some old crusty guy that knows everybody, at the County or in the cities that a county’s in, and he can get access to property. He’s made a career out of buying so-called landlocked property and getting access. And everybody hides when he walks into the County building. So you need to find that guy. He might buy the property from you is what my point is.

Jill:
That’s very true.

Steve:
Today’s, topic, what’s an HOA, and why does it matter in your land investing? This is why you’re listening. What is an HOA, POA [crosstalk 00:04:47] Jill?

Jill:
So HOA, homeowner’s association, POA, property owners association, LOA, land owners association. They’re the people, if you own a house, they have the CCNRs, the covenants conditions and restrictions, that tell you what paint colors, how high, when you need to mow your lawn, when the garbage container can be out and how long, how many, if any, you could have cars in your driveway, can an RV be out front, you name it. So what’s interesting is people don’t realize that that can happen with a piece of dirt. They think it’s all with a house, in an established subdivision, keyword, meaning established. But it can still be in these other type of subdivisions, commonly, and it could just be a landowner association. They might have a gate out front, or they maintain the roads, and make sure that the fire department can get through there, things like that. Or even … not really involved in utilities, just access kind of things, because the rest is separate. Do you want me to keep going or do you have some comments?

Steve:
Yeah, absolutely.

Jill:
Okay.

Steve:
And when you’re done, just let me know and I’ll talk about the financial benefits to the person who set this all up.

Jill:
Okay. Yeah. They’re the one that’s benefiting, so yeah. So yeah, how does it start? So someone buys 40 acres or 10 acres, whatever it is, they subdivide it up, decide they’re going to have an HOA or a POA or an LOA. They’re going to make rules. They’re going to make sure that anyone that buys or sells property in this area is going to be required to meet these conditions. I know there’s a whole formal process and you can talk about that, about how it has to be established, how it has to be managed, how the money has to be accounted for. It’s not like I’m just going to go do it down the street. I know there’s legal things you have to do, and it varies, I’m sure, by state.
So here’s the big picture. Well, that’s great, Jill. Now I understand what this is. They’re already sounding bad. So what does this matter to me? You need to know this as an investor in flipping a rural vacant land, like us, even Invalots. This might come with a property. How do you spot it? Usually when I’m looking through the property details and I spot a subdivision, I’m going to go dig and go, Uh-oh, we’re in Sherwood Forest acres. That’s going to be a little indication, because it’s been … all right, I’m in an area now. It’s got a fancy name to it. I owe it because I’ve missed it. You miss it once and you won’t miss it again. You just Google it and see if there’s an HOA, a quick call the County. They can tell you if there’s an HOA. Those are the best ways to find out real quick, if there’s an HOA.
Then, if there’s none, great, don’t worry about it, move on. If there is, Uh-oh, now I need to have reach out to them, get ahold of the document. And I want you to do this way before you buy the property too, because you just need to know what the conditions are. You don’t need to dig deep into it, but you might need to know like, gosh, is there a time limit to build? That’s going to affect my buyer. Are there big transfer fees? That’s going to affect if I even want to buy it. And when I sell it, how much does it cost to change the name on it? What are the fees? Is it a monthly or quarterly or annual, because that can rack up to a lot. I’ve seen some as low as $30 annually, great, no one has a problem with that, to as high as $300 a month. Now I got someone to say.
I’m only spending $5,000 on a property and it comes with $3,000 a month, because there’s a boat dock at the end. This is going to change things, so I just need to know. And the big picture is the whole point. They’re trying to maintain whatever standards for that community, like I described. I don’t necessarily think it’s a bad thing. You just need to know what you’re getting into. Now, this is personal. Let me talk. There’s a personal side and there’s a non-personal side. So in my business, I don’t think it’s a bad thing. It’s going to make sure that you don’t have the property next to you littered with, fill in the blank, old bathtubs or cars on sticks. I want to have a nice looking neighborhood.
Even if I’m buying a couple acres, I want everybody who’s driving into my ranch, it to look nice. So, that kind of thing. And I like the gate. Maybe the gate looks fancy and it, whatever it is, and I liked that they maintain the roads. There’s other things like that. Or there’s a boat dock or things that I get to use. I’m like, now it’s worth it kind of thing. It can be a positive. Now, personally, and I know Steven too, I don’t really want people telling me what I do at my house. And our primary residences are in neighborhoods that I don’t have to worry about it anyway. I know we’re all on the same page, so it’s never … my neighbor is not going to have a purple house, so good.

Steve:
I mean, it’s a deal breaking issue for me on a personal level.

Jill:
Right.

Steve:
I would not ever buy a house in an HOA community.

Jill:
Right. Go ahead.

Steve:
Here’s the thing, you’ve got to ask yourself are more rules or less rules better? And depending on how you answer that, and hopefully answer it really quickly, you’re going to know if you’re an HOA person or not. The math is, the financial part of it is this: if you buy a big piece of property and subdivide it down, and you say, Hey, can you buy this property? We established an HOA for 25 bucks a month, you got to pay it, we’re going to maintain all the roads. You don’t have to worry about that. And we’re going to put water in and do some other stuff.
In the beginning, I think it’s a pretty positive thing. But after 20 years of nobody’s really maintaining the roads anyway, the person who really wins on these things is the HOA establisher.

Jill:
Right.

Steve:
In Phoenix, they have these little areas of Phoenix that are … they’re called something. California has got this too, but they’re not incorporated. There’s no government office where you can go there. The city of Ahwatukee, Jill, there’s no city of Ahwatukee. It’s part of Phoenix, it’s just called that.

Jill:
Right.

Steve:
Versus like Paradise Valley, which is … there’s a place. You go there, there’s a post office there. If you want to build something, you go to planning and zoning. And so there’s an efficiency. Over the course of my real estate career, I’ve heard people really complain about how much local government there is and how unnecessary it is, especially back East. There’s a million counties in one tiny state that are so close to … it’s just too much government, it’s over governed. And that’s really what I think goes on with most HOAs, not all of them. It’s not hard to do the math. Subdivide a property, you’re going to end up with a thousand lots, twenty-five dollars a month.

Jill:
Right.

Steve:
That’s 25,000 bucks a month coming in, just to blade some roads with an old guy on a tractor. I mean, it’s a pretty good deal for the person who subdivides it, [crosstalk 00:12:15] if you can sell the lots it’s.

Jill:
That’s true.

Steve:
So on the flip side, I’ve lived in buildings when I was younger and worked in accounting and there were HOAs in there, like a condo building, a high rise condo building. I’m not so sure that those types of HOAs are bad.

Jill:
Right.

Steve:
If everybody’s got the same type of window treatments, the building looks good. If everybody in the whole beautiful downtown sky-rise building had different window treatments, and there were allowed to play their music as loud as it goes all night long, nobody wins there.

Jill:
Exactly.

Steve:
Usually, it would be neat playing the music, back then anyway.

Jill:
We know how that go. Exactly. That’s cool.

Steve:
The world would be a better place, in general, without HOAS. And if you completely disagree with that, I bet I know which political party you like.

Jill:
You know what’s funny? You know what, Steven? I would love to see how many new HOAs are even popping up. I wonder. I’m super curious what the builders are doing now for the new areas that they’re creating, because I wonder if it’s a thing of the past. I see it as a sixties, seventies, eighties, maybe eighties. I mean, what do you think that it was at the height that people were doing this?

Steve:
I got to tell you, Jill, I don’t think that anybody does subdivision now without an HOA.

Jill:
Shucks. Darn.

Steve:
Like Anthem, for example, is just a massive Del Webb community, or what’s the place, Verato. Tens of thousands of houses and there’s an HOA there. And I will tell you this as an anecdote, Jill and I have a super good personal friend who also is our real estate attorney in Arizona. And he told me that anytime anybody, a subdivider goes, subdivides property, develops it, starts and HOA, he said, without exception, there’s a class action lawsuit because the lawyer will … Did you know this?

Jill:
No.

Steve:
It’s so easy to contact these people and say, did you know that this person who subdivided this stuff is about to really take advantage of you? And they did this and this, and they probably promise you all this stuff. And they have no real intention, because, check it out, over here they did another one and the same thing happened. And I got all this money for everybody that was participating in this class action lawsuit. Then, this is how they get paid. They win the suit or settle out of court usually, and then all the HOA fees go up.

Jill:
Yep.

Steve:
And that’s how the lawyer gets paid.

Jill:
Shucks. That’s awful …

Steve:
What kind of world do we live in?

Jill:
That’s awful.

Steve:
Yeah. It’s truly, truly sneaky and terrible.

Jill:
Yeah.

Steve:
I couldn’t sleep at night terrible.

Jill:
No, that’s a whole nother discussion, and that’s sad. Who’s married to that guy? And how much fun is he? What does he do to the kids?

Steve:
I just think there’s people that think you have to lie and sneak and do bad stuff to make money.

Jill:
I don’t get it.

Steve:
It’s too bad.

Jill:
It’s really too bad. You’re right. Happy you could join us today. Five days a week, you can find us right here on the Land Academy Show.

Steve:
Tomorrow, the episode on Land Academy show is called, Start to Finish Documents Needed to Buy and Sell a Parcel of Land. You are not alone in your real estate ambition.

Jill:
Okay.

Steve:
You know how sometimes we label the weeks, like acquisition week, or sales week, or get to know your partner week. This is boring topics that people requested week.

Jill:
That’s what I was going to say. This is all sounding like one big throw up from customer service. All of their emails are going to re-reply with watch episode X. I’m not answering this question again.

Steve:
My Gmail account is connected to the Land Academy Google presence.

Jill:
Yeah.

Steve:
And somebody just yesterday, went onto our Google location, where our offices are in Arizona, and clicked on it and gave us a review. Did you see this?

Jill:
Is it the one I’m thinking of?

Steve:
And the review said this, “These two ding-dongs have a YouTube show where they have fun and talk about real estate and everything, but you don’t really learn anything and none of it’s real. One-star. Bang.”

Jill:
Oh. That’s hilarious. Okay. All right.

Steve:
Okay, whatever. You’re right about the ding-dongs part, but I hope you actually are learning something.

Jill:
That’s really good. Hey, if you’re interested in learning more, because that’s what we do, about us, check out landacademy.com.. Don’t drive there like the other guy for houseacademy.com. We provide the education, tools and support you need to be flipping properties like the pros. You go.

Steve:
We are Steve and Jill.

Steve and Jill:
Information.

Jill:
… and inspiration to buy undervalued property.

—————————————-

If you have any questions or comments, please feel free to email me directly at steven@BuWit.com.

The BuWit Family of Companies include:

https://BuWit.com

https://offers2owners.com

https://landinvestors.com

https://landacademy.com

https://landpin.com

https://parcelfact.com

https://countywise.com

https://deedperfect.com

https://ownersdata.com

https://houseacademy.com

I would like to think it’s entertaining and informative and in the end profitable.

And finally, don’t forget to subscribe to the show on Apple Podcasts.

Post Transaction Communication (LA 1429)

Post Transaction Communication (LA 1429)

Transcript:

Stephen Jack Butala:
Steve and Jill here.

Jill DeWit:
Hi.

Stephen Jack Butala:
Welcome to the Land Academy Show. Entertaining land investment talk. I’m Stephen Jack Butala.

Jill DeWit:
And I’m Jill DeWitt broadcasting from sunny Southern California, for me.

Stephen Jack Butala:
And Arizona.

Jill DeWit:
Anyway.

Stephen Jack Butala:
Today Jill and I talk about post-transaction communication and we’re also trying out new software. So we’ll see how this goes.

Jill DeWit:
Exactly.

Stephen Jack Butala:
Sometimes it’s appropriate, I think, when the deal is all done to talk to a seller. And when a buyer buys property, it’s appropriate post transaction to talk to them too. Jill is going to tell us all about it. Although my personal opinion is that it’s not that common, but we’re going to find out from the expert. 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 a Land Academy member, please join us on Discord, which is getting more popular by the minute. I’m happy to report.

Jill DeWit:
I saw you in there just a little while ago. Lucas wrote, after five months, 4,000 letters, and five completed assignment deals, I finally got a deal that I was able to self-fund and now it’s under contract to sell. It feels great.

Stephen Jack Butala:
It’s a beautiful way to say it’s working.

Jill DeWit:
Exactly. My offer was for a property that was already listed. The seller and I couldn’t agree on a price. However, he had a tiny parcel in a nearby county that he was also wanting to get rid of. It was so tiny that I wasn’t sure if anything could be done with it, but it was right downtown in a nice community directly off main street. City zoning allows for trailers and modular homes, so I went for it.
We agreed on a price. Closed quickly. I put it up for sale. I put up a for sale sign and it was under contract to sell within a week. Never even had time to get my posting online. Bought for $3,800 and sold for $9,000. Now I have enough cash to go back and try some deals that I missed from my first mailer. Again, I owe a debt of gratitude to this community. Your examples, keep us going. Thank you. How cool is that?

Stephen Jack Butala:
It’s kind of a mic drop posting.

Jill DeWit:
Exactly. So it wasn’t really a question. It was really like, hey, here’s my story. I love it. I’m so glad, how great is that [crosstalk 00:02:39]

Stephen Jack Butala:
Congratulations Lucas, that’s fantastic seriously. I’m very conscious now, Jill of the words that I use, because yesterday we had our Thursday webinar and some of the members reported… Our regular members reported to us that they have a side drinking game going on because it’s kind of at night, based on the words that Jill and I say probably too often. So I just said fantastic and I know that’s one of the drinking words.

Jill DeWit:
Yep. Okay. Everyone now you got us started. Now we’re going to come up with our own drinking game.

Stephen Jack Butala:
Yeah. [crosstalk 00:03:20] I mean, this airs at 3:00 PM. So I hope there is not that much drinking, but if you’re listening to this at nine o’clock, as Jill says, drink yourself silly.

Jill DeWit:
Yep. Exactly.

Stephen Jack Butala:
Today’s topic, post-transaction communication. This is the meat of the show. So like I said, in the intro, Jill, when do you think, is it appropriate? Or do you have communication right now with anybody that consistently they like to do as a friend, that you’ve done a deal with either on the buyer or the seller side.

Jill DeWit:
Yes.

Stephen Jack Butala:
You really do?

Jill DeWit:
Only one and it’s a personal transaction. That’s the only reason why.

Stephen Jack Butala:
Like a primary residence?

Jill DeWit:
Yes.

Stephen Jack Butala:
You’re not going to tell us?

Jill DeWit:
And she happens to be the lender. So right now she’s my best friend.

Stephen Jack Butala:
Oh, it’s not post-transaction or post down.

Jill DeWit:
No, but okay. Post-transaction? I’m trying to think here. I’m going to go with no, if I can’t think of anybody. I’ve had many, many, many that want to be my friend that have said come on over. Even transaction. It’s things that we’ve bought, not even that we’ve sold. Because I’m communicating with them, usually on the buy side. I’m talking to the sellers and getting the deal done. And they have wanted to have long-term friendships with me and invite you and me over for dinner and things like that. It’s very sweet. But most of the time? No.

Stephen Jack Butala:
That’s exactly what I thought you were going to say. I think that most of those are…there’s only a couple of benefits that a real estate agent or a broker can provide in general, I think for a land or a house deal. I’m not talking about commercial because I think that’s a whole different thing. And one of them is taking ornery sellers and ornery buyers and separating them and not allowing them to communicate until it’s over. So if they communicate at all, when it’s over.

Jill DeWit:
Did you just say ornery? Like angry ornery?

Stephen Jack Butala:
Just, you know how sellers can be or buyers can be, or you know how we can be. We can, it’s like, [crosstalk 00:05:31] especially at this point in our career where it’s like, I go into every deal saying, you know what, just give me a reason not to do this. Even though it’s really profitable. It’s like, just say the word, my finger is on the trigger.

Jill DeWit:
I personally, some of the reasons I have people staff in place is because don’t let me talk to that guy because I will get mad and we’re not going to get what we want out of it because he’s being a stinker.

Stephen Jack Butala:
We just terminated a deal. We talked about it a couple of weeks ago where we had netted half a million bucks on those properties.

Jill DeWit:
I don’t care.

Stephen Jack Butala:
And you know what, it’s not worth it.

Jill DeWit:
Nope.

Stephen Jack Butala:
It’s not worth getting yelled at and cursed at and stuff.

Jill DeWit:
Well, it’s like on our weekly member calls, when we’re talking to…everybody has a “would you do this deal” segment. They bring in some deals that you have to take a step back. And we’re usually saying your time is worth more than that. Usually it’s money-related, but it also can be just stress and hassle related that I would argue that you don’t need to do that deal that bad. That guy’s going to be a jerk and drag you through this transaction and call all the shots and make you jump or whatever it is. And it’s just like that’s not how you roll, which you shouldn’t be. I would move on to the next person.

Stephen Jack Butala:
So here’s my next question. How much communication is too much communication during the deal? Or is there such a thing?

Jill DeWit:
There is such a thing. I, as a matter of fact, I have one right now, totally serious. She called me on…see as we’re recording, it’s Friday. We spoke Monday and Tuesday. Wednesday and Thursday are email days. And now it’s Friday. I haven’t heard for her, thank goodness, because I kind of told her–back off. So, I’m the seller of this property. She’s all excited. She’s telling me her story. She’s going through a divorce and her brother is going to buy this property with her and he wants to get all involved. She came on hot, asked for a purchase agreement. I did it quickly Monday morning, sent it to her and there we sat. And then now here come the due diligence questions. And I’m like, everyone, everyone, everyone.

Stephen Jack Butala:
Good for you.

Jill DeWit:
Right? I just said here, I very politely, instead of saying Google it, which I could, which I said, I’m going to be really nice. I said, here is the phone number. Here is the people. Call the County and spend weeks and weeks and weeks, if you want to talking with them about it. And I had to two times. It took two times and then she got it. I finally said, we’re not doing anything until you’re ready. We’re not doing anything until you’re ready. You need to call them. You can go drive out there whenever you want. You can roll around on it if you want. I don’t care. So have at it. Talk to the County. Blow up their email, blow up their phone, let me know when you’re all done. And I’m actually glad that how I ended it was, I said, I’ll know you’re ready when you sign and return the purchase agreement. That’s it. And she got it the second time. She got it.

Stephen Jack Butala:
You think she’ll sign it?

Jill DeWit:
I’m not sure. I’m on the fence. She could either be an amazing pain in the ass tire kicker, which there are a lot out there or she could be legit. I’m just going to sit back and wait. But no matter what, I mean, it really wasn’t a whole lot of time. It was like a phone call here, a phone call there, a couple emails and that is it. And then I made my point that there’s nothing to talk about. Like I said, everything I told you is in the posting and here’s a phone number to call for everything else. If you’re in great. If you’re not, don’t bother.

Stephen Jack Butala:
So interesting. We’ve both been doing this for so long. You can tell right away, if somebody…there’s just so many reasons people want to call you during a transaction. And I think more than half of them are just for reassurance, either on the buyer or the seller side. And I’m not…that doesn’t work well with me.

Jill DeWit:
So, I entertain like one or two phone calls. I’m totally set up prepared for that. Like you just said, making sure we’re here. We’re going to follow through. Is everything as stated? Because they just found it online. I mean, that’s the bottom line too. This one is on the MLS. So they found the MLS. They want to call and make sure, is it still available? Are you who you say you are? How would this transaction go down? Like that is not on the MLS. So I totally entertain that, but we don’t need really much more than that. Once we have that conversation, I clearly state, this is everything I’ve got. I clearly state, I’m not going to meet you there. Knock yourself out. I have a lot of interest. I’m not going to…when you’re ready, then we’ll talk. And then that’s it. But so yeah, I don’t. If there is too many phone calls, that is just a huge red flag. And that’s where I’m going with this person, so that they’re teetering on too much communication and I’m like, you’re not real.

Stephen Jack Butala:
You and I are buying a primary residence right now. And the amount of conversation and communication that’s going on in that deal, I think is grossly over the line.

Jill DeWit:
Totally.

Stephen Jack Butala:
Because we put a previous property under contract, which fell out of contract for inspection reasons. And there was no communication with that. Everything was fine. So I think…do you think it’s the personalities involved?

Jill DeWit:
Yes. Because I know it’s not us.

Stephen Jack Butala:
Yeah. We’re not…we’re the constant. You’re right. They’re the variable.

Jill DeWit:
I wonder…one of them…well, I’ll tell you for sure, I think one of them really was wanting to be our friend and I think that is really sweet. Actually, when I say our, I mean my friend. So I actually am kind of making a friend in this transaction. So, that’s really cute. But no, it’s funny. You’re right. We’re the constant, they’re the variables. So some people just pick up the phone. I don’t know if it’s age or gender or how they were trained, but some people like to have a lot of communication. I’m even learning that a little bit right now with a new employee that we have that reports directly to me. She’s trying to figure out and test the water with me. She’s not really understanding. Because I’ll go dark for three days. I’m like, you know what you’re supposed to work on, you don’t need me, kind of thing. We’ll email and we have stuff that we communicate online and that’s it.

Stephen Jack Butala:
I’m a huge fan of communicating. I know exactly what you’re talking about. Communicating through the calendar. Like this is an event, even if it’s a reminder, here’s everything you need to know. And that’s about it.

Jill DeWit:
Right? Exactly.

Stephen Jack Butala:
We’ve gotten this far. I think over-communication kills a lot of stuff, including relationships.

Jill DeWit:
Are you explaining to the masses why you’re sitting in one state and I’m sitting in another?

Stephen Jack Butala:
No. I don’t know. Is there something you want to tell me?

Jill DeWit:
No.

Stephen Jack Butala:
We’re communicating right now? It seems fine. I don’t know. You never really know.

Jill DeWit:
I will say this. It’s good to be missed.

Stephen Jack Butala:
Well are you missed?

Jill DeWit:
I am. Well, no, I miss you.

Stephen Jack Butala:
Oh, okay. I miss you too.

Jill DeWit:
That is what I’m saying. I hope you miss me. I’m not quite sure.

Stephen Jack Butala:
I think that’s a great place to end this.

Jill DeWit:
Okay.

Stephen Jack Butala:
Of course, I miss you.

Jill DeWit:
Happy you could join us today. Five days a week, you can find us right here on the Land Academy Show.

Stephen Jack Butala:
Tomorrow the episode on the Land Academy Show is called “What is an HOA and Why Does it Matter in Land Investing?” You are not alone in your real estate ambition. Homeowners association or land owners association is what a [inaudible 00:14:14] stands for.

Jill DeWit:
Her POA. I’ve seen that one too.

Stephen Jack Butala:
Oh yeah.

Jill DeWit:
Property owners association. So, there’s a lot. We’ll explain.

Stephen Jack Butala:
Here’s a hint, they’re just as evil in land as they are in houses. Isn’t it interesting? Certain personalities love them. Most people just can’t stand it. We’ll talk about it tomorrow, I guess.

Jill DeWit:
If you need access to any sort of ownership or property details, including owner phone numbers and FEMA flood overlays, check out NeighborScoop.com created by investors–that’s us–for investors–that’s you. We are Steve and Jill. [crosstalk 00:14:56] Good enough.

Stephen Jack Butala:
Try it. Let’s try it again.

Jill DeWit:
Okay.

Stephen Jack Butala:
This is practice for the software.

Jill DeWit:
Okay. One, two, three. We are Steve and Jill [crosstalk 00:15:06]

Stephen Jack Butala:
You hesitate. Let me go. Ready?

Jill DeWit:
Okay.

Stephen Jack Butala:
We are Steve and Jill. Information and inspiration to buy undervalued property. [crosstalk 00:15:17]

—————————————-

If you have any questions or comments, please feel free to email me directly at steven@BuWit.com.

The BuWit Family of Companies include:

https://BuWit.com

https://offers2owners.com

https://landinvestors.com

https://landacademy.com

https://landpin.com

https://parcelfact.com

https://countywise.com

https://deedperfect.com

https://ownersdata.com

https://houseacademy.com

I would like to think it’s entertaining and informative and in the end profitable.

And finally, don’t forget to subscribe to the show on Apple Podcasts.

Red Green Yellow Test for Picking a County Explained (LA 1428)

Red Green Yellow Test for Picking a County Explained (LA 1428)

Transcript:

Steven Jack Butala:
Steve and Jill here.

Jill DeWit:
Hi.

Steven Jack 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 beautiful central Arizona.

Steven Jack Butala:
Today, Jill and I talk about the Red Green Yellow Test for picking a county explained. We don’t have a lot of dart boards in our office. We don’t do a lot of guessing about real estate and whether we should buy it or sell it or where we should send a mailer.

Jill DeWit:
I wouldn’t mind a dart board in our office, but for a different reason. Here’s what I think about what this person told me.

Steven Jack Butala:
There’s some politicians I’d like to put on a dart board-

Jill DeWit:
There we go. That would be nice.

Steven Jack Butala:
… But we’ll talk about that later. 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.

Jill DeWit:
Mitch wrote, “Hello. So my first mailer did not get the response I was hoping for. I mailed one acre properties in Mojave County, Arizona targeting Meadview-

Steven Jack Butala:
Meadview.

Jill DeWit:
… Meadview, and I didn’t get much response. Luckily I was able to purchase three properties, but all were from the same seller. Other than that, I had only two calls come through, one being a hate call. I understand that this county is a highly competitive market, which could be the reason I didn’t get much response. However, I’m concerned that my pricing was way off and this is the reason I didn’t get any takers. I priced my property at $652 per acre. Now I’m getting ready to send another mailer to Santa Cruz County, Arizona targeting Rio Rico’s zero to two acre properties, and I was wondering if someone could give me any advice on pricing so I can hopefully get more response.”

Steven Jack Butala:
Oh, you’re going to get some advice from me in a second here.

Jill DeWit:
I’ve been waiting for it. I’m holding back, I know. “I know this is more of an art than a science, and I need to fail to learn, but I’m worried my whole thought process on pricing is inaccurate. Thanks in advance for any advice. Mitch”

Steven Jack Butala:
Mitch, this is not personal. I’m only responding to what you’re saying here to help everybody who’s listening to this.

Jill DeWit:
But put your face mask on.

Steven Jack Butala:
Yeah.

Jill DeWit:
Put your helmet on.

Steven Jack Butala:
Not going to use your name. I’m just going to assume that you’re just somebody. This is not personal. You cannot send a mailer out for $652 for a piece of property and expect to get anybody to respond. You just can’t. Those days are gone. They were gone in 1975.
Mojave County in Arizona is the county that I chose to, as an example, in both of the programs both the Cash Flow From Land Program and then Land Academy 1.0. 2.0 is about infill lots, so I used another county and I say, all the way through the programs, please don’t mail Mojave County. Please don’t use this. I’m only using it as an example. It’s not the place to do this. Meadview itself is becoming a subdivision of Las Vegas. In fact, Jill and I just bought a mobile home there. I don’t know when. It was like three days ago. We paid 5,000 bucks for it; it’s worth 40, on a one acre property in Meadview.
Santa Cruz and Rio Rico, you just stop. There’s 3,144 counties in this country. There are 13 counties in Arizona. They are grossly over-mailed. The same thing with Nevada. We have these Thursday calls and I have never been so proud as the last probably five calls that we’ve had. People are mailing counties that I’ve never heard of, and they’re killing it. They’re killing it especially on the East coast. This goes for everybody. Stop it with Arizona. It’s over… And he even bought three properties. So it’s not like you’re not going to buy property. You will buy property, and you’ll sell it and you’ll do well. It’s just, I don’t know what this obsession is with Arizona, Jill, do you?

Jill DeWit:
I just think that people see it as an easy place to start. And that was his first mailer and I get it, but take it to the next level. I like what you just said, go rogue, get creative. This is the whole reason that we did Land Academy is to teach you what are the triggers? What do you look for? How do you know this is going to work in this part of X state? You have it all right there. I want you to get out of your comfort zone and I want you to try some stuff like that. And you’ll have so much more fun and so much more success-

Steven Jack Butala:
Yeah and so much more success.

Jill DeWit:
… when you’re in an area that no one’s even heard about, and you’re over there quietly killing it.

Steven Jack Butala:
If this was a video, if you could see the video, if this show was we could enable screen share and all that, I would show you what’s for sale in Mojave County and no one that’s listens to this would ever think about mailing there again. It would never pass the Red Green Yellow Test, never, which is what I’m about to talk about. That’s all I have to say.
Today’s topic, the Red Green Yellow Test for picking a county explained. This is the meat of the show. In the program, and the reason that this comes up now is because Jill and I are going through the step-by-step going through the Land Academy Accountability Group. And this is the chapter that we’re on. So people are having a lot of questions about it. I’m looking at it with a fresh set of eyes over the last… Because I designed it all and put it all together for presentation. We’ve been using it forever, but for presentation in January of ’19. And that was a year ago and-

Jill DeWit:
Two years ago.

Steven Jack Butala:
Two years ago, and lot’s changed. There’s a lot more data available, so let me run through it.

Jill DeWit:
It’s even better now.

Steven Jack Butala:
Yeah, yeah.

Jill DeWit:
That’s the best part.

Steven Jack Butala:
It’s amazing, actually. There are now two Red Green Yellow Tests. I will present then the second one; nobody knows this. This is the first time I’m talking about that. The second one.

Jill DeWit:
I didn’t even know this.

Steven Jack Butala:
Yeah. There’s one for urban counties because there’s so much data available now and one for rural counties. The rural counties one has not changed. It involves this. You’re mining data all over places in the internet to get number one, the statistic: days on market. Number two: new list to sold. So theoretically, in a rural county or even an urban one, if 10 properties get listed this month and 10 properties are sold this month, it’s 100%. So you’re going to mine data on certain places in the internet to try to find that. That would be green. 100% is green and days on market in general, you want to be below 50. That would be green. If it’s 80 to 100, yellow. For a new list to sold, when you start to get into 400% where there’s four times more property listed than sold on a month-to-month basis-

Jill DeWit:
It’s too high.

Steven Jack Butala:
… That’s an indication to me that there’s just too much property and that’s what would happen in Mojave. Mojave would be… I should run the numbers just for fun on all the Arizona counties and no one would ever send mail again.

Jill DeWit:
Right.

Steven Jack Butala:
And then the last one is, geez, I’m drawing a blank.

Jill DeWit:
Is it the universe of property?

Steven Jack Butala:
Yes. The universe… Thank you.

Jill DeWit:
You’re welcome. I pay attention.

Steven Jack Butala:
That’s kind of makes me attracted to you when you…

Jill DeWit:
Thank you.

Steven Jack Butala:
In the universe of properties in a county or a zip code, what percentage are listed? And this is where Mojave would fall off the cliff. It would fall into the Grand Canyon, which is ironic because that’s where the Grand Canyon is.

Jill DeWit:
Grand Canyon is.

Steven Jack Butala:
You want a very small number of property listed as a percentage of all the property in the county or zip code, whatever you’re testing.

Jill DeWit:
Right. It doesn’t look like a mass exodus from that area.

Steven Jack Butala:
If you look, go to realtor.com or Zillow or Redfin, and you pull up Kingman, which is close to Meadview, what we’re talking about here, you’re just going to see… It’s going to look like chickenpox. There’s going to be so much property for sale. So this works for any county anywhere in the country. It works for New York County where Manhattan is. You can do it with any product type that where you have a subsection, like if there’s land. It works fantastic for houses. This is all we teach in House Academy. House Academy, there’s not a dart board in the same zip code where you’re running House Academy, from a pricing standpoint and everything.

Jill DeWit:
It’s even easier.

Steven Jack Butala:
If you’re an OCD weirdo and you can’t stand the fact that there’s a lot of variants and testing and you never really get to the bottom of it in land, go buy and sell houses with House Academy, which you get in our whole program. It’s all comes with it. And I think doesn’t it?

Jill DeWit:
No, it’s separate. That’s okay. That’s why I’m here.

Steven Jack Butala:
Get to know your company, Steve.

Jill DeWit:
That’s okay.

Steven Jack Butala:
But yeah, there’s pricing for every house and it’s just it’s very, very tight. So that’s the Red Green Yellow Test. You’re mining this data for all the sources. So what’s changed is not how we look at this property. That’s been the same for as long as I’ve been doing this, we look at the same stuff. What’s changed is the availability of data. And so Redfin itself, not Redfin data, but Redfin itself has this amazing download function where you can get days on market for a… if they cover the county. And this is when now I’m talking about the urban Red Green Yellow Test. If it covers that county, you’re going to know exactly what’s happening from… and where to send mail. And I’ll end with this. This only works, this Red Green Yellow Test…
And it’s free by the way, once you learn how to do it… You need a subscription to some stuff, but you get all that with Land Academy. This only works if you pit a couple of counties, or four or five or six counties, against each other. So if you took all 13 counties in Arizona and you lined up the Red Green Yellow Test, one or two of them would be… If you did choose to mail Arizona, which I really discourage you to do. You’re going to see that, oh, this one’s probably better. Or this one clearly should never, ever get mail again. There’s just too many properties for sale. It’s permanently done. In California, if you do that, you’re going to find, let’s say you take the central part of California, there’s probably… There’s a lot of counties in Texas, too, same thing. And line the counties up, it’s going to show you exactly where to send mail. Smack you in the face exactly.

Jill DeWit:
Yeah, it’s amazing. We didn’t have this when we started. This is so good that we have this data and especially I love the stats and the numbers that we have at our fingertips now with really accurate comps and sale prices and transfer dates and all kinds of things with land. That’s the best part. It was a lot of doing our best back then and we made it work.

Steven Jack Butala:
And here’s the amazing news. I guess I’m not going to end on that. When you pick a county that’s covered by Redfin, the prices are in there too. So you’re taking that first step toward achieving that first step of pricing, which is what our property’s for sale, the price breaker, and the sold price breaker. See, that’s in that dataset. This is all free.

Jill DeWit:
Yep. I concur. Happy you could join us today. Five days a week can find us right here on the Land Academy Show.

Steven Jack Butala:
Join us next week for another interesting episode. You are not alone in your real estate ambition. Was that too harsh?

Jill DeWit:
No, no.

Steven Jack Butala:
I just want to drive that Arizona point home.

Jill DeWit:
Yeah, people need to hear it. Just stop it. Stop it, we want you to succeed.

Steven Jack Butala:
Jill and I are done.

Jill DeWit:
And we want you to be succeed. I’m sorry. Hey, if we get a little animated or we get a little strong here, it’s because we’re looking out for you and shaking you. It’s like a girl. I’m shaking a friend saying, “Stop dating this man.”

Steven Jack Butala:
Yeah. You don’t want to. I’m like, no, I don’t think you should shake girls.

Jill DeWit:
Oh. I didn’t say baby.

Steven Jack Butala:
Well I don’t think…

Jill DeWit:
Oh, I can shake a girl.

Steven Jack Butala:
A girlfriend.

Jill DeWit:
I can grab my girlfriend and shake her and say, “Stop dating this man. How many red flags do you need?” We have one girl. Her name is Lindsay, and I love her. She’s a sweetheart. She’s like, “Oh, I’m a red flag magnet.” She’s like, “I know it.”

Steven Jack Butala:
I know, why does she? I noticed that about her.

Jill DeWit:
I know. She admits it. She’s got this fireman that she just cannot shake. The sex must be fantastic.

Steven Jack Butala:
Really?

Jill DeWit:
That’s all I can think about. Yep. I don’t get it. But anyway, and she knows it. I’m like, “How’s red flag guy?” She says, “Yeah, I know. I’m going to see him this weekend.”

Steven Jack Butala:
What?

Jill DeWit:
I know. So anyway. It’s funny.

Steven Jack Butala:
You know men are baffled by this.

Jill DeWit:
Yeah.

Steven Jack Butala:
This whole topic men are like, “I don’t understand why you would ever even talk to that guy and let alone date him.”

Jill DeWit:
Well, hold on a moment. We know men that do the same thing too. And they’re like, “Yeah, yeah, you’re probably right.” And I’ll leave it at that.

Steven Jack Butala:
Yeah. That’s true I guess.

Jill DeWit:
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, hit the subscribe button, and give us some feedback on the shows that you love.

Steven Jack Butala:
We are Steve and Jill.

Jill DeWit:
We are Steve and Jill.

Steven Jack Butala:
Information-

Jill DeWit:
And inspiration-

Steven Jack Butala:
… to buy undervalued property.

—————————————-

If you have any questions or comments, please feel free to email me directly at steven@BuWit.com.

The BuWit Family of Companies include:

https://BuWit.com

https://offers2owners.com

https://landinvestors.com

https://landacademy.com

https://landpin.com

https://parcelfact.com

https://countywise.com

https://deedperfect.com

https://ownersdata.com

https://houseacademy.com

I would like to think it’s entertaining and informative and in the end profitable.

And finally, don’t forget to subscribe to the show on Apple Podcasts.

Good Bad Ugly About Land Sales on Terms (LA 1427)

Good Bad Ugly About Land Sales on Terms (LA 1427)

Transcript:

Steven J. Butala:
Steve and Jill here.

Jill DeWit:
Hello.

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 awesome Central Arizona.

Steven J. Butala:
Today, Jill and I talk about the good, the bad and the ugly. About land sales on terms. You can sell a property for cash, buy for $50 sell it for $100 or you can sell it on terms, buy for $50, $10,000 down, $1000 a month until you pay it off.

Jill DeWit:
Right.

Steven J. Butala:
Who doesn’t want to have more money in their bank account? Who doesn’t want to talk less on the phone and listen to [inaudible 00:00:40] get to know your tenant.

Jill DeWit:
We’ll talk all about that and more.

Steven J. Butala:
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 a Land Academy member, please join us on Discord.

Jill DeWit:
Greg wrote, this is a long one, bear with me. “Hi everyone. Love to get your feedback on this one. I have a desert junk property in New Mexico, bought it for $1,600, six months ago and it’s not selling. I’m about to unload it at $3,200 to a fellow and I haven’t signed any papers yet.”

Steven J. Butala:
I don’t know how that’s losing or failing, but okay.

Jill DeWit:
I know. And that’s not junk to me.

Steven J. Butala:
We don’t use that word.

Jill DeWit:
Exactly. “A couple of days ago, a guy called me claiming to be an attorney and offered to buy this parcel from me for $2,000. Claimed to have tracked me down from the previous seller. I told him I wanted $3,800 and he proceeded to tell me that this property was subject to a quite a title that he and his family were working on. Something about it being sold incorrectly 50 years ago.”

Steven J. Butala:
Lies.

Jill DeWit:
Wow. That mean?

Steven J. Butala:
All lies, [inaudible 00:01:48].

Jill DeWit:
Yeah. “I thought that was strange that he offered to buy it, combined with a quiet title information. I gave him my address and told him he was welcome to send any claim or action my way, but I haven’t received anything yet. It’s only been a couple of days.”

Steven J. Butala:
This is the last you’ll ever hear of this.

Jill DeWit:
“So my question is, should I say something to this guy who now wants to buy it, should I say nothing since I’ve seen nothing in writing, or should I not sell it and sit on until I hear something from the quiet title guy? I don’t want to mess. I’m thinking to just sit on it, low value, not a finance problem for me, instead of risking a sale and an unhappy customer. Happy to hear your advice, Greg.” I know what I’d do.

Steven J. Butala:
Go.

Jill DeWit:
Ignore the call. It’s amazing that he even found you and tracked your number and everything. I don’t believe it too.

Steven J. Butala:
I’d chill for about a week.

Jill DeWit:
Okay.

Steven J. Butala:
And I wouldn’t… And then I might… I would actually research. With resources that we have at Land Academy, you can go look at the chain of title.

Jill DeWit:
Sure.

Steven J. Butala:
Here’s the thing about New Mexico-

Jill DeWit:
Do your homework and make sure.

Steven J. Butala:
Specifically New Mexico. Long before I met Jill. I was on the auction circuit in my car, in my SUV, six months a year. And I spent a lot of time in New Mexico going to auctions and buying property and selling it on the internet. And every third auction that I would go to in New Mexico, someone would stand up right before the auction and give us a big, long speech about how we’re terrible Americans and we stole all this property from Mexico. And how dare we buy any land in New Mexico. That’s what this is related to. This is some kind of meeting that either native Americans or Latinos have organized and there’s to call them land owners and something like that. I’m not making a judgment about this. Either way, I’m just informing about anyone who’s listening to this.

Jill DeWit:
Your experience based on what happened.

Steven J. Butala:
That this is a real thing and I have never… There’s nothing that’s ever come with … How many properties have we owned in New Mexico?

Jill DeWit:
Oh my gosh, thousands.

Steven J. Butala:
Right. Nothing’s ever happened like this. And why would you pick on a $2,000 property and why is this guy offering money? If he’s going to do a quiet title action, then do one.

Jill DeWit:
Yeah.

Steven J. Butala:
Then file the papers for a $3,800… $2,000 property, really? You’re going to go through all this legal stuff? No.

Jill DeWit:
Yeah.

Steven J. Butala:
If it was a $20 million ranch or something like that, and I got a call like that, I would get a lawyer.

Jill DeWit:
Well, you’d be going through escrow and doing all the right stuff.

Steven J. Butala:
Yeah. Chain of title is going to tell you what’s going on.

Jill DeWit:
Weird.

Steven J. Butala:
You could pull all this up and end it. I would.

Jill DeWit:
Exactly. It doesn’t come up very often, like you just said, but sometimes these things are, and… Glad you have your guard up and you’re paying attention.

Steven J. Butala:
It’s a good unique question.

Jill DeWit:
Good job, Greg.

Steven J. Butala:
Today’s topic, The Good, The Bad, The Ugly about land sales on terms. This is why you’re listening Jill, go.

Jill DeWit:
In the last couple of weeks on the Land Academy Ladies Group call. Everything you want to know about terms. We have all levels of people on my group. So we had two girls, Anne Marie and Jen, and they put together great presentation based on their experience on term sales. So everybody can know exactly that’s the good, the bad, and the ugly. One has 92 properties on her books. One, I can’t remember how long, but they’ve been doing these for several years. One, for sure came from another land group, Atlanta Education Group who focuses more on terms. Even when you talk about it, the $10,000 a month club, cashflow from land $10,000 a month for life is based on terms. That’s true. Because we have done and no longer do terms deals anymore.
So, we talked all about this and it was funny because the presentation unfolded with basically in information dump, if you will. You need to be aware of this, you need to know this, this is what a land contract is, you have to do it this way, you have to that way, you can file it here, you can file it there, some you don’t have to file, this is why you would do it without a foreclosure. And then it comes to… That’s all the paperwork involved, right? So there’s a lot. I’ve got see people write too. And I’m watching and letting this play out and I’m watching people’s eyes gloss over because it’s like-

Steven J. Butala:
Like mine right now?

Jill DeWit:
A lot. And then they’re going into payment things. Here’s how you can take payment. Here’s you don’t take payment in the night. And each time I’m interjecting truth time, like, “Hey, everybody needs to know that’s not… they don’t bite.” There’s a lot of payments out there at places that don’t legally allow you to take land payments, but people do. And I have to warn everybody, be real careful because if they catch up with you, they can keep your money, they can hold your money. That you’re doing stuff against what they technically allow. Here’s the ways to work around that, whatever. So we’re like, okay. And then we’re going onto what is really going on as far as … So here’s what goes on as far as customer service and with these customers. And what it’s like to take payments from $99 a month customer versus a $250 a month customer kind of thing that they’re making those payments.
I don’t think anybody’s taking anything like you talked about with the $1000 a month. That’s just not there. And what they share too is a couple of them. I think both of them had to hire and take on extra staff to manage the book keeping, the accounting, the chasing, the customer contact, the phone calls, like “My payment’s going to be late. I need this, I need that.” And kinds of things. So we went all through the end and at the very end, what happened was two things. One of them said, here’s what I would tell you. If I had to do it all over again and if you’re brand new right now, I wouldn’t do this.

Steven J. Butala:
Just like marriage.

Jill DeWit:
I wouldn’t start with terms the sales, number one. And number two said, I’m getting out of it right now. I’m actually starting to go back. One of them was selling… One of them was reaching out to the actual seller saying, hey, I’ll give you a 10% discount if you want to make it whole and just pay for it out right now.

Steven J. Butala:
This is free, priceless advice, Jill.

Jill DeWit:
And the other one said, “Really, you’re only doing 10%? I’m doing 25%.” So I’m offering them a 25% discount on the property if they want to just make it whole and give me the cash. Because here’s the reality. Here’s the numbers. So you’re buying these properties for a couple thousand dollars and you’re selling them. This is kind of what their MOS and they’re buying for three to $5,000 and they’re selling them at $20,000. You can do that on these terms sings. It’s a couple of hundred dollars down.

Steven J. Butala:
These are real numbers.

Jill DeWit:
A couple hundred dollars a month for a long time. I came up with what they said, we don’t really want to go over five years. That’s getting out there. Not like… it’s not like a mortgage for 30 years. We don’t want to do that. And these people make these payments. And so you can see how you can get. So you got 92 of these. We could all do the math and they’re paying $100 to $200 a month. That’s pretty good monthly income. Even if half of them don’t pay, we can all live on that. But you have to bring on the extra salary and the headache and the processing and all of that and the paperwork to do that versus just cash. I can do the same thing, buy for $5,000. I sell it for 12 and I’m out in 30 days.

Steven J. Butala:
Great numbers.

Jill DeWit:
I don’t have to wait all that time. And so it’s just… I didn’t know until the end that their presentation… I was very happy and proud that they said, hey, it is a lot. This is the whole point of this presentation. If you want to do this, you need to know all the ins and outs and details. And I wouldn’t start there. Do you have any… what do you want to fire away?

Steven J. Butala:
I have done tons of terms deals. Probably thousands of terms deals. Most of them before Jill.

Jill DeWit:
That’s true. I inherited some.

Steven J. Butala:
Right. And they’re real fast. You can sell them real fast. Everybody loves them for the first month. You can sell it the first day on Craigslist if the property… It’s only really good for property that… They’re going to go see it. If they buy at terms property, they’re going to go see it unlike cash, sometimes they never go see it. My experience in all the terms deals I ever did. One of them, one single property got conveyed. They all rescind. They’ll pay for six months and then you never hear from them again. Is that such a bad business model? I always felt kind of unethical about it. In some cases in the beginning I tried… I paid the money back because we were doing… There was one specific subdivision where I bought a ton of property and sold it on terms. And I knew I was new, the subdivision I was there. So there was a little bit of a different story, but in the end, everything that Jill just said is right. It’s very difficult to manage people. And that’s the end of the sentence.

Jill DeWit:
Yeah it is.

Steven J. Butala:
You don’t have to manage people at all with the way that we do it here. And the way that our members do it.

Jill DeWit:
Especially if you do it in big numbers. You could be in this business very successfully, not having a staff, buying everything through escrow and selling everything through an agent.

Steven J. Butala:
It’s almost like you buy.

Jill DeWit:
That’s your staff.

Steven J. Butala:
Yeah, exactly. You buy apartment building and then… What’s the first thing you do when it’s an institutional, classy apartment building that the owner.

Jill DeWit:
Property manager.

Steven J. Butala:
Yeah, let’s enjoy it. You have a property manager. The owner usually never even sees the property. They just send their property manager out there to make sure the cap rate works and that they’re going to be able to sell it for… in addition… They’re going to get to raise the rent. That’s all the owner cares about. I’m going to raise the rent in any year and I’m going to resell it for the same cap rate. So as long as you buy it right, you don’t ever talk to the tenants. You can’t do that on term sales here as well you can. It’s what Jill just said, you have to hire some people. And they’re going to get burned out. People get yelled at. It’s not for me.

Jill DeWit:
It’s just not an easy road. And so my thing is, I understand people. It’s like, do you want to go this with your bank balance? Every month you get a little ahead, little head, little head, little head for all that work versus… Or you could hockey stick it, which I prefer to see.

Steven J. Butala:
Here’s true time. Here’s why I never considered doing term sales. Here’s why I did, because I was in that… I taught Mark Podolsky how to do this. And he loved term sales. He’s a total sales guy. He’s not… As math and all the data part of this is not his thing, but he sells. And so he could deal with these people that… He could deal… He would love to just sell the property the first week. And he loved it. He loved back then 40 acre properties in Nevada. There’s just nothing there. And so we went in, created a spot… Thousands of acres, created a subdivision, bladed the roads in literally, and then started selling on terms and did very well, extremely well. So I’m looking at that going… what am I doing over here? And it turns out this is a better way.

Jill DeWit:
Yeah. Now we have how many years to compare. So it’s just a lot of work. Happy you could join us today. Hold on a second. You went down a little too far.

Steven J. Butala:
I’m sorry.

Jill DeWit:
That’s okay. Five days a week. You can find us right here on The Land Academy Show.

Steven J. Butala:
Tomorrow. The episode on The Land Academy Show is called The Red, Green, Yellow Test for picking a County explained. You are not alone in your real estate ambition.

Jill DeWit:
So tomorrow I get to zone out a little bit.

Steven J. Butala:
Yeah.

Jill DeWit:
And take a little bit of a break.

Steven J. Butala:
Yeah.

Jill DeWit:
Okay. I look forward to that. Hey, do you need to send out a few thousand offers to property owners like we do? Check out Offers 2 Owners. It’s offers the number 2 and owners.com. No setup fees, free mail merge, and exceptional service. We should know because it’s our company. Give offers to owners a call today.

Steven J. Butala:
[crosstalk 00:14:09]. Information.

Jill DeWit:
And Inspiration.

Steven J. Butala:
To buy undervalued property.

—————————————-

If you have any questions or comments, please feel free to email me directly at steven@BuWit.com.

The BuWit Family of Companies include:

https://BuWit.com

https://offers2owners.com

https://landinvestors.com

https://landacademy.com

https://landpin.com

https://parcelfact.com

https://countywise.com

https://deedperfect.com

https://ownersdata.com

https://houseacademy.com

I would like to think it’s entertaining and informative and in the end profitable.

And finally, don’t forget to subscribe to the show on Apple Podcasts.

Simple Ways to Improve Your Land so it Stands Out Online (LA 1426)

Simple Ways to Improve Your Land so it Stands Out Online (LA 1426)

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 awesome central Arizona.

Steven Butala:
Today, Jill and I talk about the simple ways to improve your land so it stands out online. I was just thinking about Arizona and yesterday we were talking about how happy you are, because you’ve got a personal assistant and everything.

Jill DeWit:
Oh yeah.

Steven Butala:
I could be not be more happy in my life then right now. I know this is like the happiest I’ve ever been. Yeah.

Jill DeWit:
Really? Really?

Steven Butala:
Arizona rocks.

Jill DeWit:
Because you’re not in California?

Steven Butala:
Yes, that’s part of it. Yeah, Jill. That’s part of it.

Jill DeWit:
Okay.

Steven Butala:
And I just feel understood here. And I feel like there’s camaraderie and the people that are here want to be here and they believe in everything. In California, since March, half the people you talk to are disgusted and they can’t leave. We’re fortunate that we could leave.

Jill DeWit:
I know.

Steven Butala:
And it’s too bad because they have family and jobs or whatever or businesses. We have a really good friend who owns, two friends, who own a bunch of restaurants and they’re really struggling. And they’re real upset with the way the decisions that are being made. And we’re just so fortunate that we’re not subject to that. So I’m happy too. It’s not just you.

Jill DeWit:
Oh good. I’m glad.

Steven Butala:
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 a Land Academy member already, please join us on Discord.

Jill DeWit:
Chris wrote, “I’ve been a member since July 2020, and I have yet to send out a mailer. I had several unforeseen events happen that drain the bank account, but I’m now at a point where I’m ready to send out a mailer and pick a county. My question is if I only have $5,000 to $10,000, would it be better to buy several cheap desert properties or send out a mailer in a more expensive, less competitive area and use LandTank to deal fund? By doing the latter, I would be using the $5,000 to $10,000 to solely send out mailers and buy data. But on the other hand, it may be better as a beginner to send out my first mailers to an inexpensive desert area and fund the deals myself so there’s less risk for my first few properties. Any advice or thoughts?” I know what my answer would be and I bet it’s the same as you.

Steven Butala:
We have the exact same answer on this. Go ahead.

Jill DeWit:
Go big. Use it on the data. You use it on the mail. Don’t worry about funding the deal. I’ll buy it.

Steven Butala:
You need to forget about… Think of it like this. You’re never going to pay for a property, but what you need to do then is find some great property at fantastic prices.

Jill DeWit:
Get to know the area.

Steven Butala:
Your job for the next six months, Chris, is to understand data, get into the whole mailer part and understand how to answer the phone and generate some great real estate deals. Forget about the money. I truly, truly mean that. I just had a consulting call with a guy that said they have limitless money for this. They joined the… they actually… He scheduled a-

Jill DeWit:
Consulting.

Steven Butala:
… consulting call with me and at the end of the call, and I said, “This is how you mail. This is what you do with urban counties.” The whole thing. And I said, “I got to tell you, man, I don’t believe we’re ever going to send out a mailer at all. I don’t think you’re actually paying attention. And I think you’re making so much money as a lender, as a partner to other Land Academy members, why would you?” And he said, “Thank you. That’s kind of what I wanted to get out of this because I’m feeling bad about I joined Land Academy and never sent the mailer out.”

Jill DeWit:
So what? You’re here for the access for people like Chris.

Steven Butala:
Chris, I’m telling… I have never been more serious about a topic on this show, ever. Forget about the money. Just find great real estate deals and call Jill and she’ll fund them all.

Jill DeWit:
There are tons of people in our group that are here just for the access to people who have no intentions.

Steven Butala:
More and more now. Right.

Jill DeWit:
Yeah, because they know how smart this group is. And they know this group will not fail. So that’s what I say. And here’s the reason why, Chris, because here are your two choices. Let me spell this out. You spend, I don’t know. So you have 10,000 bucks, right? You spend $2,000 all in to do the data and everything to buy eight properties, eight $1,000 properties. You’re going to flip them at least double, so 8,000 bucks. Now you have 16,000 bucks. Okay. And that took how long? Because you had eight properties that you had to market, sell, get the pitchers on, do the deals when you buy them, all that stuff. Versus you take the same amount of… You spend the $10,000 bucks-

Steven Butala:
Or 5,000. Whatever. Yeah.

Jill DeWit:
5,000. Let’s just say 5,000.

Steven Butala:
Five’s good.

Jill DeWit:
Keep five in the bank for the next mailer. Spend 5,000 bucks. You’re going to spend… You’re going to get out 5,000 units of mail.

Steven Butala:
10,000.

Jill DeWit:
Really. Exactly. And you’re going to pick up… And I want you to target like… Buy it for $10,000 to $20,000 because they’re worth $50, $60,000. You pick up three of them, if that, I mean, you do it… You go really conservative and you really be careful. And you’ve got the best ones on the planet.

Steven Butala:
Jill’s doing math. Watch out.

Jill DeWit:
Totally. Anyway, you buy three of them at 30,000… Actually, I fund them. There’s three that we’re buying, 10,000 bucks a peach, so it’s $30,000 in my money. We’re going to sell them at 50,000 each so there’s $150,000 and we’re splitting that. So what’s 150, 120… You’re making $60,000 minus your $5,000 investment. Instead of making $16,000, you made $45,000 or whatever it is. I did the math wrong. 55.

Steven Butala:
This is why we started Land Academy. This question. I couldn’t be more serious about anything. We started Land… People would say, “Why did you give up the secret? All you guys had to do is just never tell anybody.”

Jill DeWit:
Don’t tell anybody. Exactly.

Steven Butala:
“Don’t start the Academy, just go buy and sell property.” We have made a hundred times more money and done a hundred times more deals than we ever would have if we didn’t start Land Academy. Because it’s easier to leverage money than time. So now we have a bunch of people like Chris that need money, that are smart people. Send a mail out, we’re funding it. We can do 50 deals in a day. We can’t do 50 deals in a day, but you know.

Jill DeWit:
Exactly. And you know exactly what to do, Chris.

Steven Butala:
Yep.

Jill DeWit:
It’s awesome.

Steven Butala:
Submerge yourself into the education and the Thursday call. And eventually, in the second quarter, we’re going to release a program where we walk you right through the process, if you need it. Doesn’t sound like you do. Today’s topic, simple ways to improve your land so it stands out online. This is the meat of the show.

Jill DeWit:
What processes are you talking about that we don’t already share?

Steven Butala:
Like I said yesterday, we’re going to release a product called Land Academy Classroom. It’s not free.

Jill DeWit:
Oh, that different one.

Steven Butala:
If you need that, you know…

Jill DeWit:
If you really want your hand held. Yeah. Tight now, we have… Basically land Academy is self study. It’s 15 to 25 hours, somewhere in there depending if you watch them all, of content, then… Which you can do on your own like before. And then now we’ve started to do some accountability groups for kind of motivation. And then we’re going to do like a really whole handholding…

Steven Butala:
I wouldn’t call it that. It’s just an immersion. It’s an immersion if you really want to ensure your success and, again, some people are not self study people and that’s okay.

Jill DeWit:
And that’s it. That’s okay. You’re right. Okay. So simple ways to improve your land so it stands out. This is a result of a talk that we actually did yesterday.

Steven Butala:
Tell us the story, Jill.

Jill DeWit:
Okay. Last week with Land Academy Ladies we, at the end of every week we always pick what do we want to talk about next week as a group. And I put together some content or somebody in the group, if they’re better at, puts some content together and then we present it and we all talk about it. It’s great. So we picked for this week right now, as this is airing, we picked to do cheap and easy ways to make your property stand out. What can I do? What can I put on it? Is really what it is.
And I said, “All right, I’m going to put this whole thing together and I’m going to come up with my ways.” And I have said, “Every single one of you need to come up with at least one cool, unique, cheap, fast way to make your property stand out. What would you put on it?” So that’s what we’re going to talk a little bit today. And you and I are… This came from you, by the way, and you kind of explained it going into this where when you scroll down the internet right now and you find, say, you’re looking in XYZ County in Texas-

Steven Butala:
Or Maricopa County. Where we’re sitting in right now.

Jill DeWit:
… Colorado, or whatever it is. Doesn’t matter. The pictures can all look the same. It’s like, “Wow. I can’t tell this lot from that lot. Is that the same mountain in a different picture?” Or like, “Yeah. I’ve seen that bush before.” Or, “Yep. I know what a cactus looks like.” Everyone kind of thinks you’ve got to have… You want to… It really, especially if you’re in a market where there’s a lot of like kind property, I would definitely pull this out. If you’re the only one that has… You’re one of three people that are selling property in this area, kudos to you.
You found a great county to work in. There’s three of you and you’re the cheapest, so we all know what’s going to happen. But what if you’re in an area and this is something too, what if you have a property you’re like, “Oh shoot. I did invest in some property. I didn’t realize how many people were… there’s what’s available in this area. How am I going to move this property?” Well, you might need to do something cheap and easy and fast to make yours stand out and then you’re going to sell it. Some of my ideas are… Do you want to add before I dive in?

Steven Butala:
No, you’re doing a great job. It’s like you drank a couple cups of coffee.

Jill DeWit:
You’re feeling good. No, it’s my new assistant. I’m a new person. I’m a new person because there’s a lot of crap that I don’t have to do. It’s the greatest thing.

Steven Butala:
I’m happier too, because Jill’s happy. We all know that saying.

Jill DeWit:
Well, here’s… So I’m going to give you my list and then I have a funny story and then we’ll talk more. So I made a quick little list of things and I am more than… I’m going to be adding. I know with my groups, what they come back with. So things like put a stupid shed on there. It may not be great. It doesn’t have to be brand new. Doesn’t have to be a beautiful $4,000 Tuff shed kind of thing.

Steven Butala:
Don’t, in fact, don’t do that.

Jill DeWit:
Yeah, not that.

Steven Butala:
Don’t do a $4,000 Tuff shed.

Jill DeWit:
Find one on Craigslist.

Steven Butala:
Yeah. And see if they’ll deliver it.

Jill DeWit:
Exactly. Someone on Craigslist for 500 to 1,000 bucks. Somebody’s got one. You could see one, maybe you could see it behind me. Yeah, you can. See what’s behind me right now in this picture? If you can tell. Something like that. Someone’s going to be selling one at some point and getting it out of their yard,

Steven Butala:
Go to the free section of Craigslist. There’s always sheds on there. Free if you pick it up.

Jill DeWit:
And you could TaskRabbit someone to pick it up. You could TaskRabbit it for a couple hundred bucks saying, “Dismantle this, put it in your pickup truck, put it over here, reassemble it, take a bunch of pictures.” Couple hundred bucks. Done. They would do that. They can do it in a couple hours. You get into it. You are so good about the mobile homes. I’ll let you explain that. Show an RV. Do you have an RV? Do you have a camper? Pull it on there.

Steven Butala:
There’s $1,000 RVs on the internet all over the place that are falling apart. Look, don’t put anything nice out there, because somebody will steal it. Put just an old RV, chain it to something if you need to and write the description, that’s like, “Hey, I bought this property. I just put this RV on it, to tell the truth, to make it look different. I don’t know if the RV works. Whatever is there, it’s yours-

Jill DeWit:
You get it.

Steven Butala:
… you figure it out.” You can put a container. There’s a person on the East Coast in our group who’s famous for putting containers on property. And this is her statement is, “There’s container on the property and I’m not sure what’s in it. Whatever it is, you can have it.” You’re going to sell that property in two days.

Jill DeWit:
Well, everybody loves a tiny house thing and a lot of people are turning containers into tiny homes. You can say, “I got you started. The container’s there. Show up and now make it a home. I got you going.” Someone will love that.

Steven Butala:
Here’s another thing. There’s always… In these rural markets, I’ve never purchased property in a rural market where there hasn’t been a used mobile home dealer somewhere close by. Call that person, tell them you want to buy the worst mobile home that they have, the one that’s in the back that they can’t get rid of and you want them to deliver it and you’ll give them a thousand bucks.

Jill DeWit:
Somebody’s got somewhere they’re replacing it.

Steven Butala:
You’ll sell it. You’ll sell the property in a week. And make sure you tell him and you’re loud about it. It’s not in the fine print. That you put it on there intentionally. It’s not connected to anything. You don’t know if there’s water there. You don’t know how the septic situation is. All you did was just drop a mobile home on there. It is not connected to anything and nothing probably works in there.

Jill DeWit:
Someone’s going to love that.

Steven Butala:
They love that. It’s a challenge. If you’ve ever talked to a man in your life that… I will take that challenge.

Jill DeWit:
Totally. The harder it is, the more I want it.

Steven Butala:
And if it’s cheap and all that, then it just makes sense to them. It stops that question of what’s wrong with it. It’s so cheap.

Jill DeWit:
I was even thinking of like you have a beautiful property that has a stream in the back. Hire somebody to go out there to pitch a tent, take some pictures, build a little fire. How cool? That would be dreamy to me to go… If I pulled up a property and I saw the tent there and the fire going and a chair and maybe even someone’s feet, with the fishing pole in the water. I’d be like, “Oh, I got to have this property.” And it didn’t… I mean, I just hired someone to go out there with their own tent. I didn’t buy anything. A couple hundred bucks to do that. So what I was going to share-

Steven Butala:
A woman in a bathing suit wouldn’t hurt either if you’re going to do that.

Jill DeWit:
Floating on a raft.

Steven Butala:
With a Budweiser in her hand.

Jill DeWit:
Cowboy boots on. A bikini and cowboy boots.

Steven Butala:
Keep going, Jill.

Jill DeWit:
Now, we’re going… Now, that might be over the line. That’s not… Oh my gosh. A bikini, cowboy boots, sitting in a canoe with like…

Steven Butala:
You’re doing this, not me. I just said one phrase.

Jill DeWit:
Yeah. That might cost more than a couple hundred bucks. I can’t believe you. Oh gosh. All right. That’s what I hadn’t thought of.

Steven Butala:
I don’t see that on your little notes there.

Jill DeWit:
No, that’s not on my list. No, but here’s my story I was going to tell you. I want to paint this picture. The girl that I have found locally to that, truth time, who does my hair. She’s the cutest thing. She’s in her twenties. She has a horse. She loves horses. She’s just doing this on the side until she figures out what her grand plan is. And she was talking about driving around the horse in the back of her trailer and our truck and what she’s doing. And she’s like, “I’m about to buy…” She doesn’t really know much about me or what I do. So I thought this was so funny that she’s sharing this story.

Steven Butala:
This is a good story, Jill.

Jill DeWit:
Wow. So she said, “My friend just did this.”

Steven Butala:
I’ve never heard this either.

Jill DeWit:
Yeah. “My friend just did this and I’m going to do it too. I’m looking for a cheap, rundown, crappy camper. I know I can go up to 27 feet. Something like that because that’s what I can tow behind my truck. And I’m going to just gut the thing and make it my home. That’s what I want to do.”

Steven Butala:
I mean we should film this.

Jill DeWit:
She’s like-

Steven Butala:
Can we film this?

Jill DeWit:
“My friend just did this, am I…” I’ll ask her. Yeah, of course when she gets…

Steven Butala:
Would she film okay?

Jill DeWit:
I don’t… Yeah, she’s cute.

Steven Butala:
Okay.

Jill DeWit:
Well, we have different definitions of cute apparently. So leave it at that.

Steven Butala:
If we didn’t, I’d be worried.

Jill DeWit:
Okay. So she said, “My friend just did this. She gutted it, painted it all white. Had to redo… Put these cool new black fixtures in there, all this stuff. And it’s adorable.” She’s like, “I want to do this and I want to make it my own.” I’m like, “Good for you.”

Steven Butala:
Is there some way we can go see your friend’s… The next time you talk to her?

Jill DeWit:
Oh, and see what her friend did?

Steven Butala:
And just take some pictures and share them with everybody.

Jill DeWit:
Yeah, yeah.

Steven Butala:
Talk about the… No big. Just interview her in front of it and just talk about the numbers.

Jill DeWit:
Yeah, just talk about all the [crosstalk 00:16:15]. No problem.

Steven Butala:
Probably didn’t cost her 5,000 bucks for the whole thing.

Jill DeWit:
Right. She’s like, “I want to do this.” And so then my head is going, “Well, okay. She’s going to need a place to put her camper. And that’s where I come in.” That’s what we do. We are Land Academy. We have the land, you bring the camper kind of thing.

Steven Butala:
You know what? I’m going to do a show. I just read a very lengthy detailed article that the state of Arizona put out called Boondocking and it’s legal here. If you did that in California, they would run you in the prison system.

Jill DeWit:
Oh my gosh. Yeah.

Steven Butala:
But boondocking is legal… There’s some serious rules, you can only be in one spot for a certain… I’ll do a whole show on it.

Jill DeWit:
I do know that usually there’s restrictions. I shouldn’t say usually. I don’t know. Sometimes. Because you’re proving me wrong. But sometimes you just have to… No matter what, you just have to check with the county and find out how long can I put something out here? Sometimes it’s indefinitely. Sometimes they’re like up to whatever six months is, you have 179 days. And my joke… Like at a time. So I’ve talked to people about this in the past with buyers. I’m like, “Here’s the deal. 179 days. So you need to move it off. Take some pictures that you moved it. And then we can put it back on for another 179 days.” You think I’m kidding? It’s like at a time like, “Well that’s easy.” So there’s ways to work around that. And if no one’s complaining, you’re fine too. What’s so funny?

Steven Butala:
You, because you have to work around everything. It’s not a… I’m telling you the rules are so attractive in Arizona that, I mean, maybe you could just follow the rules and everyone’s happy.

Jill DeWit:
I did follow the rules. At a time. You just talked about how the men want the crappier the better. I want the more rules… No it is, I actually like working around rules because that’s my sense of accomplishment. I’m like, “Just tell me I can’t do something. Watch me.”

Steven Butala:
Jill, you can’t make a million dollars this month.

Jill DeWit:
Oh. That ship sailed a long time ago. Uh-huh,. All right. I think I’ve made my point. 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 the good, the bad and the ugly about land sales on terms. You are not alone in your real estate ambition.

Jill DeWit:
That’s going to be fun and funny because I have an in-depth thing because we did that on my Land Academy Ladies group, we talked about this. We have two gals who’ve been doing terms deals. One of them has 92 on her books right now, 92 properties.

Steven Butala:
Oh my gosh.

Jill DeWit:
Uh-huh (affirmative). And I’m not going to share any more than that, but-

Steven Butala:
I want to hear about this.

Jill DeWit:
Yeah. So they had a lot to say about this. Like I didn’t even have 92 at a time-

Steven Butala:
92.

Jill DeWit:
… because I couldn’t stomach 92.

Steven Butala:
That’s a lot.

Jill DeWit:
It is.

Steven Butala:
That’s a lot of money coming in. It’s like owning a 92 unit apartment building.

Jill DeWit:
Uh-huh (affirmative). Oh yeah.

Steven Butala:
That you don’t have to pay any expenses on.

Jill DeWit:
Exactly. So we’ll share about that. If you need any sort of access of ownership or property details, including owner phone numbers and FEMA flood map overlays, check out neighborscoop.com. Created by investors, that’s us, for investors, that’s you.

Steve and Jill :
We are Steve and Jill.

Steven Butala:
Information-

Jill DeWit:
And inspiration.

Steven Butala:
… to buy undervalued property.

—————————————-

If you have any questions or comments, please feel free to email me directly at steven@BuWit.com.

The BuWit Family of Companies include:

https://BuWit.com

https://offers2owners.com

https://landinvestors.com

https://landacademy.com

https://landpin.com

https://parcelfact.com

https://countywise.com

https://deedperfect.com

https://ownersdata.com

https://houseacademy.com

I would like to think it’s entertaining and informative and in the end profitable.

And finally, don’t forget to subscribe to the show on Apple Podcasts.