Jack Thursday - Is it Okay to Bend Rules to Succeed (LA 1726)

Transcript:

Steven Jack Butala:

Jack and Jill here.

Jill K DeWit:

Hello.

Steven Jack Butala:

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

Jill K DeWit:

And I'm Jill DeWit broadcasting from the Valley of the Sun.

Steven Jack Butala:

Today's Jack Thursday. I'm going to talk about when it's okay to bend the rules to succeed. I have several examples professionally and socially. You're either going to love the show or hate it. Like all Land Academy episodes.

Jill K DeWit:

If you know me, I've never bend the rules.

Steven Jack Butala:

Jill's middle name.

Jill K DeWit:

I'm a rule follower.

Steven Jack Butala:

Jill's middle name is-

Jill K DeWit:

[inaudible 00:00:34].

Steven Jack Butala:

There's several, I'll save it for the show. Before we get into it. Let's take a question posted by one of our members on the land investors online community it's free. And don't forget to subscribe on the Land Academy, YouTube channel and comment on the shows you like.

Jill K DeWit:

Dan wrote, "Does anyone have any banking relationships for a lender who would lend on a subdivide?"

Steven Jack Butala:

Dan, I'm going to answer your question, but think the bigger question is, does anybody have any banking relationships to help me succeed in the land business? And the answer is emphatically, no. And if they did, and they were in discord saying I'm an asset manager or a lender for a bank, we have tons of money to lend. I would kick them out of our group, you don't believe. I mean it, Jill thinks it's funny, but I'm not exaggerating.

Jill K DeWit:

All right, that's true.

Steven Jack Butala:

I don't believe philosophically this is me. And clearly maybe not Jill. I don't believe that all these sayings that we've all heard a million times, other people's money and use other people's money. Hahaha, I got somebody to give me money and there's people in our group that are like that. On the other end of that. There's people in every group that are like that. I don't think debt is okay. I just don't, debt.

Jill K DeWit:

Thank you.

Steven Jack Butala:

I don't think it's okay in your personal life to really, to any degree with very few exceptions. And one of them is a primary resident's first position mortgage when rates are really low and the market's doing what it's doing right now. I think that's probably okay. But tertiary debt, which is what I think you're talking about here is a bad idea. That's not to say, "Well great Jack, thanks a lot. So, but I don't have any money." That's okay.

Jill K DeWit:

Wait till you do.

Steven Jack Butala:

There's a massive difference between, no. There's a massive difference between debt and equity financing. I love equity financing, Jill and I provide equity financing all the time. "Oh Jack, it's so expensive. That's terrible." Yep, it is. Equity financing is way more expensive than debt financing. The consequences of defaulting on debt financing will destroy your life for 10 years. The consequences of defaulting on equity financing. When you have a partner with somebody like Jill and I, or many people that are in Land Academy, usually amount to one or two or three phone calls where the person that provided the equity financing. And we've done this many times. We say, "You know what? This deal didn't work out the way we thought."

Jill K DeWit:

We say, congratulations you're out of the deal.

Steven Jack Butala:

Yeah. Tell you what, why don't you throw us the figurative keys and we'll take it from here. And when we do sell it, because we lent you all the money to do it. When we sell it, you're not going to make anything. So I want you to put-

Jill K DeWit:

Not take it back.

Steven Jack Butala:

And I'll tell you what pal, why don't you send out another mailer and you're going to do great. And then it ends right there. Debt, if you want to spend some fun, if you want to blow a couple hours in your lif...