Deals Where We Lost Money (LA 774)

Transcript:

Steven Butala:                   Steve and Jill here.

Jill DeWit:                            Hi.

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

Jill DeWit:                            I'm Jill DeWit, broadcasting from sunny Southern California.

Steven Butala:                   Today, Jill and I talk about deals where we lost money. Wow, how can we make that interesting?

Deals Where We Lost Money (LA 774)

Transcript:

Steven Butala:                   Steve and Jill here.

Jill DeWit:                            Hi.

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

Jill DeWit:                            I'm Jill DeWit, broadcasting from sunny Southern California.

Steven Butala:                   Today, Jill and I talk about deals where we lost money. Wow, how can we make that interesting?

Jill DeWit:                            Yikes, I did not realize that's what we were talking about until I'm sitting here right now reading that.

Steven Butala:                   I have to say there are not too many, but man, when we do it, we do it.

Jill DeWit:                            Man, if you're going to do it, do it at what you're safe. You're going to make a mistake, do it at 100 miles an hour.

Steven Butala:                   Exactly right. Before we get into the topic though, let's take a question posted by one of our members on the Land Investors online community. It's free.

Jill DeWit:                            Neal asks, "Hi, everyone. I received a purchase agreement in the mail yesterday that was dutifully signed and filled out. But the offer price was crossed out and essentially doubled. It went from $2,250 to $5,000. At what point do you still reach out to the potential seller to discuss this?"

Steven Butala:                   This happens to us, by the way, all the time. It's better than getting nothing at all, I think. Anyway, go ahead.

Jill DeWit:                            "I have no intention of offering more, but it's worth establishing a relationship since it seems he's interested in getting rid of it? The $5,000 is what he paid for the land years ago. Similar parcels have sold for $6,000 and up. But after sitting around for hundreds of days, I personally would price the property at $4,500 to sell quickly. Have others had success reaching out in these instances? Thanks."

Steven Butala:                   Go ahead, Jill.

Jill DeWit:                            Yeah, we've had this and it's comical. It ties in a little bit with our question from yesterday about what do I do when I have to call him back and change the offer price? This kind of changes ... I understand where the guy's coming from.

Steven Butala:                   Me too.

Jill DeWit:                            He thinks it's still worth what he paid for it. And we all think our ... I say this often around the house and around the office, we all think our asset is priceless, but you know what? It's not.

Steven Butala:                   I wasn't five years old and decided to do a mailer. I came up with this mailer concept in the late 90's, early 2000's because it was solving a huge problem for me. Number one, I don't have to go to auctions anymore. I don't have to go to tax auctions any longer. Number two, I don't have to make cold calls. Number three, I don't drive for dollars. I mean all of those things I've done, and they all suck. All of them. Sending letters out was my way of saying ... it solved like six problems for me. It solved negotiation, so I send a letter off take it or leave it. This is the price, I'm making you an offer. It solved scalability for us. So, I can send out 25 million offers, literally, as easily as I can send out 500.

Jill DeWit:                            Right.

Steven Butala:                   It's just data.

Jill DeWit:                            You can't canvas neighborhoods that fast. It's impossible.

Steven Butala:                   So, one of the things that this person ... not the caller ...

When to Partner on a Deal (LA 773)

Transcript:

Steven Butala:                   Steve and Jill here.

Jill DeWit:                            Hi.

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 gorgeous Southern California.

Steven Butala:                   Today, Jill and I talk about when, or when not to partner on a deal. This never goes away.

When to Partner on a Deal (LA 773)

Transcript:

Steven Butala:                   Steve and Jill here.

Jill DeWit:                            Hi.

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 gorgeous Southern California.

Steven Butala:                   Today, Jill and I talk about when, or when not to partner on a deal. This never goes away.

Jill DeWit:                            That's true.

Steven Butala:                   No matter how large your organization gets, your real estate company, every single time I do a deal that's larger than 100 grand now, we have that talk. I mean, Jill and I are partners. Some version of this is going to happen for your whole career.

Jill DeWit:                            It's true.

Steven Butala:                   Jill and I, obviously we partner every single deal.

Jill DeWit:                            That's true.

Steven Butala:                   Sometimes we buy property, and put them in one of Jill's companies. Sometimes we put it into one of my companies. We have companies together. Depending on where we want the liability to fall, but then sometimes we don't put up the money.

Jill DeWit:                            That's true.

Steven Butala:                   Probably about on ... I don't know, 50% of the larger deals.

Jill DeWit:                            Right.

Steven Butala:                   We don't put the money up.

Jill DeWit:                            Exactly, and so we're doing partnerships.

Steven Butala:                   Somebody else does, and we split it. Yeah.

Jill DeWit:                            I think this is really timely too, because a lot of our members are at that point. Well, a lot of our members get there, but they have a really good mailer, too.

Steven Butala:                   Yeah. They run out of money.

Jill DeWit:                            Yeah, that's it. This actually comes up a lot. And this is what I think takes up the majority of our deal board in our online community. It's the thing in the backend for our members, where they can partner on deals, and find deals, and share deals and-

Steven Butala:                   It's a huge benefit to Land Academy that-

Jill DeWit:                            It's so cool. Just having access to each other-

Steven Butala:                   We never talk about it-

Jill DeWit:                            Yeah. So we talk about it-

Steven Butala:                   Let's talk about it today.

Jill DeWit:                            On the one-off, so now we'll talk it about on the show. Thank you.

Steven Butala:                   Before we get into it, though, let's take a question posted by one of our members on the Land Investors online community. It's free.

Jill DeWit:                            Veronica asks, "I've been studying since January, and sent out my first mailers mid-May. My focus has been Tennessee, and the county I picked apparently has a lot of price differences within the county. After talking with a local realtor and looking at sold comps, I overpriced two properties from sellers I'm in contact with."

Steven Butala:                   That's okay. Jill's going to have a lot to say about this. Because I overprice. I do the mailers in our organization, and I overprice stuff sometimes.

Jill DeWit:                            Yeah, sometimes that happens. That's okay.

Building Your Real Estate Team (LA 772)

Transcript:

Steven Butala:                   Steve and Jill here.

Jill DeWit:                            Hi.

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

Jill DeWit:                            I'm Jill DeWit, broadcasting from sunny Southern California.

Steven Butala:                   Today, Jill and I talk about building your real estate team.

Building Your Real Estate Team (LA 772)

Transcript:

Steven Butala:                   Steve and Jill here.

Jill DeWit:                            Hi.

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

Jill DeWit:                            I'm Jill DeWit, broadcasting from sunny Southern California.

Steven Butala:                   Today, Jill and I talk about building your real estate team.

Jill DeWit:                            Oh boy. You know what? I love this topic.

Steven Butala:                   Really?

Jill DeWit:                            Because hiring is just so ... I'm being sarcastic, right?

Steven Butala:                   Who wrote this stuff?

Jill DeWit:                            I ... I ... ugh. Let's be honest. Every person out there who listens, who has any capacity and you're ever related in hiring, whether it's for yourself or your company or whatever, you know what I'm talking about. It's hard.

Steven Butala:                   I just had lunch-

Jill DeWit:                            So hard.

Steven Butala:                   With an old neighbor of Jill and I's from Paradise Valley. He has a company that staffs IT people. This is what he's been doing for years and years and years, very successfully apparently.

Jill DeWit:                            Right.

Steven Butala:                   This is what his new business model is, because people call him that own companies, they call him and they say, "Yep. My staff just walked out. My IT staff walked out."

Jill DeWit:                            Help.

Steven Butala:                   "I need to hire some staff, and lickety-split because we've got deadlines and the whole thing and the guys before the people I'm about to hire, they jacked this thing all up with passwords and we can't get in there." His new model is, "That's fantastic," if he believes in the business model, if he believes in what they're developing, he says, "That's great. I'm gonna charge you my cost, but I want 20% of your company now." That's how bad it is.

Jill DeWit:                            That's crazy.

Steven Butala:                   That's how nuts this is.

Jill DeWit:                            It's like holding them hostage.

Steven Butala:                   That's how hard it is to hire good people.

Jill DeWit:                            "I'll give you one good tech guy, but it's gonna cost you."

Steven Butala:                   So I said, "You know," I said this, "Can we take two steps back here, and what's the problem?" He said, "It's just pure supply and demand. No matter how bad of a developer you are right now, there's a job waiting for you tomorrow if you walk out of the one you have."

Jill DeWit:                            That's hilarious.

Steven Butala:                   It's like that for not just IT.

Jill DeWit:                            Can you imagine? Wow. Well, what other jobs do you think?

Steven Butala:                   I've got a feeling this whole show is gonna be a big rant, on both of our parts.

Jill DeWit:                            I want to hear after this what other occupations you think is the same, that you could be fired for stealing tomorrow-

Steven Butala:                   Health care.

Jill DeWit:                            And get a great job on Tuesday.

Steven Butala:                   Health care. I think if you're a nurse you can work anywhere you want tomorrow, or if worse comes to worst,

Choosing a Property Investment Niche (LA 771)

Transcript:

Steven Butala:                   Steve and Jill here.

Jill DeWit:                            Hi.

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

Jill DeWit:                            And I'm Jill Dewitt, broadcasting from sunny southern California.

Steven Butala:                   Today Jill and I talk about choosing a property investment niche. Like what are some of the niches of right off the top of your head that you can think of?

Choosing a Property Investment Niche (LA 771)

Transcript:

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Real Estate Investment 505 Your End Game (LA 770)

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:                            I'm Jill DeWit, broadcasting from sunny southern California.

Steven Butala:                   Today Jill and I talk about Real Estate Investment 505: Your Endgame. All this week it's been 101, 202, all the way through to 505. This is it. You're long past quitting your job.

Real Estate Investment 505 Your End Game (LA 770)

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:                            I'm Jill DeWit, broadcasting from sunny southern California.

Steven Butala:                   Today Jill and I talk about Real Estate Investment 505: Your Endgame. All this week it's been 101, 202, all the way through to 505. This is it. You're long past quitting your job.

Jill DeWit:                            This is the fun part.

Steven Butala:                   Yeah. This is where you're planning ... You're standing in front of spreadsheets saying, "I got a bunch of dough in the bank. Everything's going great. I got the right people in place. How am I going to just ... What's my true exit on this? Do I want to hand this down to my kids? Do I want to sell part of it? What's really the deal here?"

Jill DeWit:                            "Am I really going to ever retire?"

Steven Butala:                   "We're cranking seven or eight digits a month or a year in real estate," like we are. "What do I want to do? Do I want to do a podcast and share it with everybody?" No, you don't want to do that. Trust me. "Do I want to give back?" We'll talk about it in a minute.

Before we get into that, let's take a question posted by one of our members on the LandInvestors.com online community. It's free.

Jill DeWit:                            Okay. M asks, "The title companies are driving me crazy with their long close." Yes, that can happen. "A few properties I'm buying through a couple of title companies are now in one month wait and counting and still nothing is happening. When you contact them, they're polite and they say, 'We're still waiting for title report.'"

Steven Butala:                   Lie.

Jill DeWit:                            "My question for you guys is what is your strategy to make sure the seller doesn't change his mind in this never-ending wait?"

Steven Butala:                   Time kills deals.

Jill DeWit:                            Yeah. "I know, I know. They signed the purchase agreement, but believe me ... But, I believe they can back off from the deal any time if they want to." That's true. "I am thinking about sending this seller a check for $300 or so to keep him committed. What do you guys do?"

Steven Butala:                   Well, I think that we have never had a problem ... or, in very recent years, I should say ... have a problem where a seller backs out.

Jill DeWit:                            Right.

Steven Butala:                   If they back out and we got to pay him to just keep him in the deal or anything like that. I think there's different ... Jill, you know what? You're very qualified. What would you do on that?

Jill DeWit:                            Okay. Here's my experience. My experience is the seller doesn't usually back out, the buyer backs out. When I say buyer, sometimes it's me.

Steven Butala:                   Yeah. I mean us.

Jill DeWit:                            Exactly. That's what we're saying. I've had those, where it was just like, "You know what? You guys don't have your ducks in a row, and I have this money ..." Basically, when we allocate funds for acquisitions, it's kind of burning a hole in my pocket. If it's taking you too long, and this is often what happens, I'm working on one deal and three more easier ones come along over here.

Steven Butala:                   Better ones.