Land Academy Show: Real Estate Investment Talk

https://youtu.be/EQ7aYOA5PUU

Ever feel overwhelmed by the idea of consistently sending out real estate mailers? Steven Jack Butala and Jill K DeWit tackle this common problem with practical advice, from automating your process to finding a partner with complementary skills. They then dive deep into the surprising opportunities in today’s construction industry, where high interest rates have created a unique situation: you can buy existing houses for less than it would cost to build them! Learn how to capitalize on this “upside-down” market and why construction costs are the real culprit behind the lack of affordable housing.

This is episode number 2083. Jill and I are going to talk about how to make money in the modern construction industry. We’ve been talking about the four major career choices in real estate that you can make and this is the final one where we’re going to talk about construction and development. This is one of my favorites and one of the hardest to break into. It requires the most money up front but talk about creating equity for yourself. Each day on the show, we answer a question from our Land Academy member discord forum and take a deep dive into land-related topics at your request.

Stanley wrote, “Hi, Land Academy community. I’m having a very difficult time getting into a mailer schedule, as Jack says is necessary all the time. Please share how you all get this done. Thanks in advance.”

Getting into a mailer schedule should be like an auto-pay for your water bill.

I have one idea, though, that makes it better. I know what you do. If it’s hard for you and it’s time-consuming, then do a lot at a time. You know better. You could trust the data for a quarter. Maybe once every three months. It takes you three days to do it but you get into it. It’s 90,000 records or something like that. You pick the areas, download, scrub it, and get all ready. You can slot it in. You could send it all to offer to owners if you want and tell them, “I want 8,000 or 10,000 to go out every week,” or something like that. You could do things like that. At least make it easier for you.

Some people love Mailer Monday. I know people in Land Academy who do it every Monday and they have fresh things to look at and fresh ideas. They got real-time of how it worked over here. They’re going to pivot to this, maybe change this a little bit, or do more of that thing, and send out the next mailer. For a lot of people, it’s hard and daunting. It’s a big process. Do it less often but still have a schedule of that, whether it’s every 90 days or every month. Make it easier on yourself and get it done because you can’t get anywhere if the mail doesn’t go out.

Reading between the lines here, the real root of this question is what do you look forward to in life? I know for a fact, it looks forward to doing real estate deals. Jill doesn’t feel it in the right place in the world if she’s not reviewing a bunch of deals all the time.

It’s true.

I love that. It makes my life easy. All I have to do is send a mail out. I love real estate deals, too. I love that she wants to review real estate deals. It’s not even about the money for us anymore. If we don’t feel right in the world with us, do real estate.

I get in trouble sometimes like, “All you want to do is to get a deal done. What are you doing?” I’m like, “That’s how I am.” That’s a good point. You’re saying what’s important to you and then tie it to that.

If you think about it in your life, take a few steps back and forget about this mailer. It’s the stuff that you hate and love to do. Love the outcome or whatever’s involved in it. The feeling that you get when it’s over or while it’s happening, that’s what you’re going to do. Ultimately, you’re going to do stuff that makes you feel great. I love getting our land deal done and so does Jill. What is some stuff that you hate to do in your regular life?

Clean.

Do you do it?

No.

That’s a great example. She hires it out. Hire your mailer out if you don’t like it.

That’s a good point, too. I was thinking that at one point, do the part that you have to do, pick the areas, and do the trolling. With the minutiae of it, let somebody else do it.

If you’re old enough to remember when you had to pay your utility bills by writing a check and putting it in an envelope, or if you’re old enough to have to go there and pay your water bill and stand in line, that’s an outrage when you think about that. I hated it then. What do I do now? We have auto-pay. I don’t have to do it anymore. Your land career will never work unless you get the mail out and get it consistently out. Like you’re saying in the question, Max talks about it all the time and here I am talking about it again. You got to make it so it’s mechanical and you’re not thinking about it.

I have one other idea. If it’s holding you back, Stanley, think about getting a partner. What are you good at? What do you like to do? “I want to be in this business. I understand it all. I love everything. The data in the mail, I can’t handle it but I’ll answer all the phones, set up a team, and do this. I’m great at due diligence. I can get money. I have money.” Maybe bring in a partner. That’s my other big fallback and there’s nothing wrong with that. You could do well.

We took a question from Chris & Chris. They said, “Here’s our background. We’re 60 days in and we’re excited.” Their background was in math and STEM-related careers. They owned companies. That doesn’t happen by accident. It doesn’t happen by getting up in the morning and deciding what you want to do that day. That is the killer of all success.

You have to get up in the morning and look at your calendar, the one that you populated, not somebody else. Populate the stuff that you have to do that day, week, or month to get to your end goals. Doing a mailer is part of that. If for whatever reason you’re not wired that way, you need to get somebody in your life who is wired that way.

Success doesn't happen by accident. Get up and tackle your calendar!
Share on X

Make some changes.

Get a good W-2 job because that’s about it. Our topic is how to make money in the modern construction industry. I love construction. I don’t like being involved in it but I love the results.

I don’t like hearing it next door but it’s pretty to look at.

We’re in Phoenix and that’s not an accident. We moved here in the early ‘90s and were very quick for a job. We realized how everything was growing by leaps and bounds. The inexpensive housing industry was growing here. We very quickly bought some real estate land, specifically flipped it fast. I realized that’s what I want to do. I was flipping all this land to people who are going to build on it. A construction industry in a high-growth area like Phoenix, Las Vegas, or Miami is amazing. Jill grew up in Southern California, the construction development center of the universe during our childhood years.

It does make me feel good. When you and I drive around, I see areas and it’s positive. There’s money here and things happening. It’s good. I do like seeing it. There are almost limitless career opportunities in construction. At the tip-top, there’s the developer who decides to build a hospital and lease it in the mail. At the very bottom, there’s a kid out of high school who wants to be a bricklayer or wants to be a finished carpenter and gets into a program where they can do that. Every single thing in between construction is amazing.

Construction is amazing! So many career opportunities, from developer to bricklayer.
Share on X

Here’s the thing. I put Modern Construction in this title for a reason. We’re in this little bubble. This is the second or third time in my career that it’s happened where we are buying constructed assets for substantially less than the replacement cost. Jill and I came down from the mountains and looked at houses regularly in certain places that are $100 to $200 a square foot, including the land. Most of the time, we’re looking at assets where the modern current land cost meets or exceeds the actual cost of that entire completed project. An old house, let’s say.

We're buying houses for less than replacement cost! It's a weird, opportunistic market.
Share on X

It’s weird because interest rates are so high. It’s the time to take advantage of that. For us as investors, we take advantage of what’s happened and what is happening with construction. Construction is so expensive. Look at the MLS. You can buy a finished product for $200 a foot where it would cost $400 to 500 without the land to replace it. When you think about that, especially if you’re comfortable with money and numbers, spreadsheet that out and make it part of your trolling effort. It’s staggering.

Based on what you’re telling me, I want to clarify here, I’m in the modern construction industry, which is a little bit upside down, as what you’re describing.

High interest rates equals opportunity! Find properties for half their replacement cost.
Share on X

It’s expensive as hell to build something.

That’s what I’m saying. How do I make money?

It’s by looking for property that is half of the replacement cost of something new. You don’t have to look very far.

Do I rehab it?

It’s up to you. It’s the same old story. You want to get as much bang for your buck as you can. You want to find a circumstance where someone has to or wants to sell it below its market value.

Can I do it with mail?

Yeah.

I’m not asking for myself. You’re hilarious.

Where did my girl go?

I was asking you strategic questions for a reason. I know the answers.

Let’s use houses as an example. You can buy a completed, remodeled house in a neighborhood that’s acceptable to you for $200 a foot and it costs $400 to replace it. If it’s $400 in sticks and bricks construction costs without the land, you’re winning. It’s upside down like that because interest rates are a disaster. They’re so high. It happens so quickly. We went from 3% to 7% or 8%. That’s the result of printing too much money, inflation, and monetary policy. For whatever reason, our politicians don’t get it.

Guess how we know all this?

We’re capitalizing on that. That’s my answer.

Thank goodness we know how to buy things cheaply. Unless you’re in this every day, you don’t see it happening. You could accidentally be like, “I got this. Is the cost to build $100 or $200?” I remember an easy $100 to $150 a square foot. Now, it’s different.

It was $100 in replacement cost.

That’s what I’m trying to say. If you have not been paying attention and you try to step back into this and do it, you’re going to be like, “What just happened? What do you mean it’s $450 a square foot to build it?” Stuff changed.

Inflation and mortgage rates cause that. The results of it are what people love to talk about in the lack of affordable housing. It’s not because of evil landlords. Everybody loves to blame landlords and people moving from California into other central states and jacking up the price or everything. That’s not the case. When you go from 3% to 7%, no one can afford it. Bringing a bunch of equity in from another state doesn’t help but it’s not the real culprit. The real culprit is monetary policy.

Inflation and high rates are the real culprit behind the lack of affordable housing.
Share on X

Thank you.

There are a ton of ways to make money with construction. If you’re new and want to get into real estate, join a construction crew and watch a house go up. I did that for one summer. I don’t know how exactly but I’m sure it shapes the choices that we’re making. One of the things I learned about construction is it’s hard and grossly over-regulated in my opinion in most places, especially in cities. Regulation is very expensive. It also keeps people from dying off of balconies but there’s a happy medium. Join us next time for five more interesting episodes. You are not alone in your real estate ambition. We are Jack and Jill, information and inspiration to buy undervalued property.

https://www.youtube.com/watch?v=5pUorESDquw

Tired of real estate agents, brokers, and title companies taking a huge cut of your profits? Steven Jack Butala and Jill K DeWit  expose the often-overlooked world of real estate service providers and how they impact your bottom line. They break down why so many people get stuck in the due diligence phase and offer their unique perspective on title insurance. Plus, learn how technology is disrupting the industry and why it might be time to ditch those real estate agents for good.

This is episode number 2082. The topic we’re going to talk about is real estate agents and the real estate service industry as one of your career options in real estate with vigor. I love talking about real estate agents.

Calm down. I know you’re excited.

We’ve been talking about your career choices in real estate. Now, we’re going to talk about the service industry in general and all the career choices and the people who are involved in completing real estate deals, managing real estate after it’s been rented out, and all kinds of options for you where you can add some value. All kidding aside, people who are good at it add value to the people who are the stakeholders.

Here’s the thing about this. All the people in the service industry have chosen, probably subconsciously most of them, to not be stakeholders, shareholders, or owners/risk takers. It does not take any real money compared to being an owner to be a real estate agent, mortgage broker, lender, title agent, property manager, or janitor. It takes you showing up with a resume saying, “Please, hire me. Give me your money. I would like to stand and get in the way of you effectively doing a real estate deal unless you perceive my participation with some value,” which is almost never the case. Unless you’re a janitor. We all appreciate you. How can we do a show about real estate agents without ranting?

It’s funny. “Where are my choices, Mom and Dad? Am I going to be a janitor or a real estate agent?” “Janitor.” It is good. I’m not pooh-poohing it. It’s solid.

Here’s an anecdotal story before we take the question. I lived across the street. We were young. We had babies. All of us in this one street raised our kids for the first few years of our lives. One of the guys across the street was a mortgage broker. I love this guy. We had a great relationship. We were young dads. We were out playing with the kids when everybody got home all the time. At some point, we found out what each other does for a living.

He told me all about being a mortgage broker over beer and the reality of it. He was always trying to get us a better rate but what he was doing was finding a bank that would pay him the most to originate a loan. He was getting in the way of my effective success, whether it was a primary residence or anything. In my opinion, if you talk to a property manager and you have a bunch of apartments, they’re going to tell you why they’re the best in the industry to manage those properties.

Fraud is rampant with rental property managers because they’re collecting the rent. Imagine you have a 100-unit apartment building and it’s $2,000 a unit. They’re collecting all this revenue for you and convincing you the whole time that they are necessary because, without them, you could never collect that amount of rent. It’s a full-time job and maybe they’re right. They convince you to collect the rent. They have control of the money.

They tell you who paid and didn’t pay.

Every month, it’s hundreds of thousands of dollars. It takes a very special type of person who has to keep their hands out of that pot and correctly account for all of it. I’ll leave that at that.

Thank you.

Each day on the show, we answer a question from our Land Academy member discord forum and take a deep dive into land-related topics by popular request.

Zeb wrote, “Hi, all. How much time do you spend on deciding if you will buy the property when the signed purchase agreement or seller’s response ‘yes’ comes back from the mail?” Do you want me to go?

Yeah.

I talked about this, as a matter of fact, in the career path. I talked about due diligence phase 1 and phase 2. Phase 1 is quickly the eight days. I’ll tell you, Zeb. I’m five minutes. If you’re brand new, I’m going to say 15 to 30 minutes on a deal. You’re going to keep getting better and better at it. You’re going to look at and go, “Access, check. Attribute, check.” It’s all the A’s that you know.

Once it passes that, say I had 10 phone calls or 10 purchase agreements, 10 people are interested and we have a number, I go through all 10. I spend 5 minutes on those 10 sp it’s less than an hour. Two of them passed my test. I’m like, “I’m going to dig into these two.” I’m going to revert to phase two due diligence, which is I’m trying to find something wrong with them.

I’m like, “Does it all checkout? These are good to go. Let’s double-check the math and zoning and make sure it can do what I think it can do. Let me double-check if everybody’s alive and I can buy this thing.” Double-check if the price is good. I made a good decision and I still want it. Look what’s going on in the area. Do I want it? Hopefully, one or both of those are going to say yes. I need to hurry up and open escrow because I don’t want them to change their. I get them to purchase.

My question when we were talking about due diligence in the career path is, “Who here enjoys due diligence?” No one raised their hand, except Jill.

For me, that’s when the deal happens. I see it and know it. I’m like, “This is good. I love it.” I approve it. We get a bot.

There’s a reason people don’t like due diligence and this is my opinion.

Why?

It’s because in the back of their head and deep in their soul, they don’t have the confidence that Jill has and the decision that they’re ultimately making, there is to buy it or not buy it. They think that they’ve missed something. This is the difference. I know that I miss something but if I’m buying it and it’s so cheap, I don’t care. If you buy a property that they believe is retail, a $100,000 piece of land for $20,000 and a bunch of stuff goes wrong, you sell it for $40,000 at a deep discount. I built an entire business and a career on that lack of due diligence, let’s call it.

People are afraid of it too because they don’t have the experience yet but fortunately for them, we do. Fortunately for you, you can ask us every Thursday. That’s one of the nice things. I wish I had that myself. I’m sure I was nervous back then but I didn’t know how not to be. I’m like, “Whatever it is, I’m going to make it work.” 1) I had you. 2) Price. It didn’t take long. After three deals in the area, I know what I’m doing. I know what’s a good one and not a good one.

You have to do 100 transactions and not get burned by having it work out how you want. You start to believe in yourself. I use 100 as an arbitrary number. For some people, it’s ten. For some people, it never happens.

That’s sad.

Due diligence is a massive reason I believe that people stay out of this business.

They get hung up there. A lot of people are afraid. The mail doesn’t even get out because they’ve got to answer the phone, make the decision, and then buy something. For some people, that is scary but not for us.

I look at due diligence as a pain in the butt and it kills more deals than it should. If you review a transaction with due diligence longer than you should, at some point, you’re going to kill the deal.

If you keep digging, you’ll find something.

Every single deal. With the primary residence, if you don’t like the way that the kitchen table is set up, you’re not going to buy it.

“It’s North-South facing, not East-West facing. I can’t buy it.” That’s what you’re going to go with?

We didn’t start this way but all I look at is the money. I could care less about everything else. I want to know that it’s so cheap, we can’t lose, and then I’ll buy it, whether it’s the greatest thing in the world or the worst asset ever. We have both in our portfolio. It’s all about the money. In this episode, we’re going to talk about real estate agents and the real estate industry in general. This world is packed, full of people in the real estate service industry who want a piece of your real estate transaction.

Right from the beginning, there are real estate agents who want 6% of your real estate deal, whether you’re on the buy or the sell side. Let’s eliminate them. Done. We’re going to send out a mailer and talk to sellers directly. No real estate agents are involved. The world is packed, full of all kinds of people in the financing industry. There are two types of people who lend money. There’s tertiary debt and secured debt. Credit card people have unsecured debt.

Eliminate the middlemen! Send mail, talk to sellers directly. No real estate agents involved.
Share on X

Tertiary debt, they love to issue it. They love to charge you as much as the law will allow. Why? It’s risky. There’s nothing except the person who is backing the loan that you’re making. With real estate, you get the actual piece of real estate as collateral or backing, plus the person who’s loaning the money is on the hook most of the time unless it’s a non-recourse loan.

People love to lend money on real estate and lend as much as possible. People who are mortgage originators or brokers love to do it too because they get paid upfront with huge amounts of money. To originate a real estate loan, they get paid by the actual lender. They want a piece of your real estate deal. I’m going to eliminate them. I send the mail out. The seller calls me and says, “Yes, I want to sell my land to you.” “I want to buy it. We are going to pay cash.”

I like this game.

No more lenders and real estate agents.

Who’s closing the deal?

“If you want to do it real fast, I can get you a cashier’s check. There’s a notary that’s going to show up. No more title agents or escrow agents.” Scratch.

Want to do a deal fast? Cash eliminates lenders, real estate agents, and title agents. Done!
Share on X

You can take that out.

I wrote this on a bar napkin many years ago. I was so tired of flipping nursing homes. As an acquisition person, there are so many people involved. The federal government and state government had to sign off on it. I finally philosophically looked at the bottom of a scotch glass and tried to figure out how to get everybody uninvolved. This is the model I came up with.

You did great. Keep going. We own it so we got to sell it.

That’s what Facebook marketplace is for or any other place on the internet like a fixed price MLS company. On the sell side, because all kinds of real estate agents want to get involved in that, so they want 6% of your real estate deal. Nope, we’re going to sell it ourselves. You’re left with a buyer and a seller. On the sell side, you’re the seller with the new buyer. That’s it.

It’s lovely. It makes me happy. That’s my warm and fuzzy thing.

If you look at Indeed or anywhere else where there are people who are hiring new employees, the real estate industry is packed. It’s full of opportunities to manage real estate. They all have one thing in common. It doesn’t cost anything to get in. It’s a job.

Can you think of one thing that you eliminated that is necessary?

No. You need title insurance but that’s only if you have a lender. All of us got juked there. Title insurance, like most insurances, is a sham. Title insurance in particular as an insurance product is a joke.

Title insurance, like most insurance, is a sham. Title insurance, in particular, as a person's product, is a joke.
Share on X

Collecting on a title insurance policy, because they made a mistake, is harder, I’m going to argue. Let’s say you got in a car accident and you get from your automobile insurance. They will pay. The other guys, good luck.

I’m not knocking it completely because it’s a huge employer.

I don’t mean to pooh-pooh people and all this but all this stuff I could do myself. I could do all the checking that they do and write my own little thing. I’ll put a sticky note on the deed and say, “Jack, I’ll guarantee everything I find I stand behind like a title insurance policy.”

All kidding aside, it’s a great way for somebody who wants to get into the real estate industry as an investor like us to learn. Someone’s going to pay you. Theoretically as a real estate agent, a property manager, or an escrow agent, or whatever else is involved, learn. That’s great. In the back of your head, you’re sitting there saying, “I’m learning. I’m going to give it myself. I did this. As a commercial real estate broker, I have to learn so that I can be on the other end of the phone. I want to own stuff but I’m completely broke because I’m 22 years old.”

A great way to learn real estate investing is to work in the service industry first. Get paid to learn!
Share on X

Maybe a title agent would be another thing too. “I’m going to watch all these deals get done, learn everything about it, and watch how much money these people are making. I see it so I’m going to go do it myself. I see how they got the funding. This guy put up the dough for this guy. I didn’t know that was possible. I can go do it myself.” That would be great.

This is all going to change the technology piece. I’ll end on this. The technology piece is banging on the real estate service industry’s door with blockchain. Several years ago, Microsoft set out to change the way people buy and sell houses. With how much money real estate agents and everybody makes, it’s a joke that almost 10% of the real estate deals that you do, and let’s say it’s a primary residence, goes to other people.

Technology is changing the real estate service industry. We don't need to give away 10% of a deal anymore!
Share on X

We don’t need that. Maybe a lot of years ago we did when we had no access to the properties that were for sale. You had to drive around and look for signs. You could make an argument for that but that’s not the case anymore. Join us again where we discuss how to make money in construction, specifically modern construction in the construction industry. You are not alone in your real estate ambition. We are Jack and Jill, information and inspiration to buy undervalued property.

https://www.youtube.com/watch?v=TOxJy24lwbc

Is the real estate flipping model the key to unlocking financial freedom? In episode 2081, Steven Jack Butala and Jill DeWit dive deep into the world of real estate flipping, shining a spotlight on the highly profitable and often overlooked niche of land flipping. They break down the pros and cons of this career choice, highlighting its profitability and accessibility while emphasizing the importance of data analysis and a disciplined approach. Jack and Jill share personal anecdotes and insights from their extensive experience, offering valuable advice for aspiring land flippers and contrasting this “unsexy” but effective strategy with the more traditional, and potentially problematic, “fix and flip” model.

This Is episode number 2081. We’re going to talk about the pros and cons of being a real estate flipper, in our case, land. We’re talking about career choices that you have in real estate and it’s a vast, massive, multi-billion-dollar industry that probably touches your lives multiple times a day. You just don’t think about it or talk about it.

Real estate is a vast, massive, multi-billion-dollar industry that probably touches your lives multiple times a day.
Share on X

It touches my life.

Does it touch your heart?

Every day. It just pulls on my heartstrings. I tell you. It really does.

It’s so much fun to talk about real estate with you. In all the years that I’ve known you, I don’t think we’ve covered maybe 1% or 2% we really should be talking about all the time.

That’s a very good point. What do normal people talk about? I’m not sure.

They talk about how much they love each other know and how successful their kids are.

How great things are going, how they love their landscaping and there’s nothing they would change at all in their home or their appearance.

Did you see As Good As It Gets with Jack Nicholson?

Of course.

They’re in the car on the way somewhere.

That dumb little dog.

The two people are sitting there saying, “Life is terrible and people are idiots.” He says, “Stop the car.” He is just mentally ill and says, “Are you kidding me? There are people right now and they have noodle salad and beautiful conversations and complement each other. It’s us. We’re the problem.”

I don’t remember that part, but that’s good. We are the problem sometimes.

We’re noodle salad less landlord talk. That’s what I say.

I would like a noodle salad. Thank you.

Anyway, we’re going to talk about real estate flipping. Each day on the show, we answer a question from our Land Academy member Discord forum. We take a deep dive in land-related topics by popular request.

Chris and Chris wrote, “Hello, everyone. We are Chris F. And Chris P. We joined Land Academy about 60 days ago and have been digging into the content for a while. We are very excited that our first mailer hit offers to owners on Tuesday. We were very fortunate to find the Jack and Jill partnership right away with each other. Chris F. Has a degree in Mechanical Engineering and an MBA and is very analytical while also being generally fed up with the corporate world. I, Chris P., come from a background in customer service operations, call center management and sales. I have a degree in Mathematics.” I was going to say it sounded just like me until the last part. This is great. “I have owned several businesses over the last few years and have completely fell in love with the Land Academy model earlier this year. Chris F. Also has started some businesses in the past, so both of us are entrepreneurs at heart.”

Good for you, guys. No real question here. Congratulations.

You guys are going to kill it. I’m excited.

I’ll say this to both of you and obviously to everybody else. If you get yourself into a mailer schedule, there’s no way. I was thinking about this when I chose this question. We all have lives. We’re all doing stuff all day, whether it’s personal, professional or whatever, but if you set yourself on an automatic mailer schedule with offers to owners, so I don’t know, 10,000 units go out every month or 2,000 a week or however you decide to do it, you start to not have choices except to answer the phone and do real estate deals. It’s a lot like, “We’re out of toilet paper. I got to answer the phone because there might be a real estate deal there.” It just becomes part of your life. I thought about that with us because that happened to us a long time ago. Now just real estate deals are in the fabric of our lives together.

That’s part of the problem.

I’m really not joking about it.

It’s funny. I’m thinking of a touchy-feely commercial along the fabric of our lives.

The real estate deals of our lives.

It could be a soap opera. Go ahead. It is a soap opera. Good. Congratulations. I’m glad you guys are here.

You guys are smashing it. I don’t think I could design a better background for two people. This episode’s topic, the pros and cons of the real estate flipping model. Come back to the spreadsheet, it’s got to work on paper first. There are two ways to create equity in real estate. Number one, you buy something, a piece of real estate, and clean it up and make it better. Add to it, construct it, deconstruct it, do something to it. It enables you to sell it for more.

The sum and purchase price, the sale price for you, purchase price for somebody else is higher than the sum of what you put together. The acquisition cost and the improvement cost, that’s number one. The most popular, thanks to HGTV. Number two is what we do, flipping, and we do it with land. We buy a piece of land for 20% or 30% of what’s what it’s worth, fully knowing there’s some probably in the bitter end on each deal, some unknowns and we resell it for more. Usually, it’s about twice what we paid.

We buy for $30,000, sell for $60,000. Usually, we end up trying to buy for $30,000 or $40,000 or $50,000. We target $99,000 and it ends up being less than that most of the time. If I look back on the 16,000 deals that we’ve done, it’s almost double. If I just add it all up, we have doubled our money really as it goes.

Especially a lot of them were, we did triple, so yeah.

We’re talking about different types of careers you can have in real estate. This is by far the most profitable and the easiest to get into. The learning curves is the least steepest.

The learning curve is the least steep in flipping land. It’s the easiest to get into.
Share on X

I’m trying to think of the cons. You did a good job describing the pros. I would say some of the cons are the way to do it and win is you pay cash so you need to have money saved up. A lot of people don’t have the dough.

Also, partner with money.

Correct. I’m trying to think what else. That’s the only one.

I don’t have any cons.

I hear you saying it’s an easier model, but I would argue that there’s still a learning curve there, so I’m not sure because when we put into the mailer scenario, we’re not trolling the MLS and just grabbing something and then turning around and reselling it kind of thing. There is still some education and a lot of analytical work that you put into this.

There’s a right way and a wrong way to do it, just like everything else. We’ve been forced over the years because of lack of success to revert back to using a data model that tells us what to do. Just take all the emotion and feeling out of it for the most part.

That is the best way.

Look at data and it tells you where to send mail, and whether or not to do the deal.

How to price it.

If that’s a con for you, then this isn’t the place. It’s not a con for Chris and Chris up here. A degree in Math and a lot of customer service and engineering. Also, former business ownership experience.

Some of the cons, like I’m thinking of the flipper thing, too. We covered, here’s how you make either buy it cheap and you already have equity in it the day you own it no problem or you do something to it. Those are the two options.

Improve it.

We do it with vacant land and by do and improve it, which I think we covered 99.9% of the time. The answer is no, we do not improve it. We just buy it great and move on because that’s who we are. Some call it disorder. I’m going to call it an asset. I’m going to call it an attribute. You can call it a disorder. You think of like, “You guys are just glossing over this whole HGTV and those guys look like they’re doing great. Can we talk about that model?” I don’t even want to think about all the things that can go wrong.

That’s an improvement model.

True. It is lumped in there. I want to talk about it because I think that’s where everybody gets all excited. They don’t get excited in what we do. I’ll never forget years ago, it was early Land Academy and I talked to a guy one summer and I’m like, “What are you doing?” He was asking me all these questions. I’m like, “You’d be a great fit.” He’s like, “I don’t know about Land Academy. I don’t know if this is for me.” I’m like, “What are you talking about? You are doing all this stuff. Look how much energy and time it takes you. You just described to me how you can’t take this trip and go with your family to Europe because you got to sit around and babysit this flip because you’re not sure these contractors are showing up. I don’t have to do that.”

He goes, “Jill, it’s just not sexy to me.” That’s what he said. That was one summer. I can’t remember what it was. Maybe 2017 or something. 2018, here he comes. He’s like, “I’m over it,” because my answer was, “My bank account is sexy and I can go to Europe.” He is like, “Yeah, okay, whatever.” One year later, here he comes and said, “You’re right. I’m done. I can’t take it. I want a different life. I want to make just as much money if not more and I can have the time with my family. I don’t have to babysit a contractor showing up or be there when something goes sideways and they open up and find mold.”

Commercial real estate where I cut my teeth is packed full of self-absorbed people who spend too much time looking at themselves in the mirror. When I started in commercial real estate, right out of school, while I was in accounting, I had a boss who was driving around and had new suits all the time. We all had to inadvertently choose a specialization and I immediately chose healthcare because it was so prevalent and easy to do deals and specifically ultimately went into buying and selling nursing homes. Least sexy freaking real estate type there ever was. Everybody looked at me. It was just my skillset and it worked out really well for me because it kept everybody out.

Nobody wanted it. That’s nice. Don’t you want to do an office building?

That’s what it was back then. Office buildings were how you got a date. “See that office building? I leased all that space,” or, “I own part of that office building.” I guess that gets you a girl. I don’t know.

Not now.

I went from long-term care real estate to land and got the right girl. The sexy thing doesn’t even register.

That’s the thing, you have to really take a good look at it and go, “What’s important here?”

You have to take a good look and know what's important.
Share on X

“That’s great, Jack. There are pros and cons of flipping. Why doesn’t everybody do it?” Here’s why. It costs money upfront.

As anything does.

No, I disagree. This is a good segue. In the next episode, we’re going to talk about real estate agents and the real estate service industry. Here’s a spoil alert. It costs nothing to get into these professions where you effectively get your fingers in someone else’s real estate deal. Namely, Jill and I’s deal. You are not alone in your real estate ambition. We are Jack and Jill. Information and inspiration to buy undervalued property.

https://youtu.be/LcfpDWdL4Ms

Ever wondered if the landlord model is the right path to real estate riches? Become a savvy real estate investor! In episode 2080 of The Land Academy Show, Steven Jack Butala and Jill DeWit explore the landlord model, weighing its pros and cons to help you decide if it’s the right investment strategy. They analyze real-world case studies, including their own, to reveal the pitfalls and truths of generating passive income through rentals. Discover why single-family homes may not be the cash cows you expect and explore more profitable options like multi-unit buildings and triple net leases. Tune in to learn how to avoid common landlord headaches and maximize your returns in the real estate market.

This is episode number 2080. As promised, we’ll talk about analyzing the landlord real estate model. It’s probably one of the most popular ways for new people or anyone to make a bunch of real estate. We’ll look at a personal case study that Jill and I have and some of our friends’ case studies. Where can you take this if you are organized and have the right personality type to be a landlord? Not many people do. Everybody starts out thinking they’re going to be a great landlord but nearly everyone I know hates it.

Everybody starts out thinking they will be a great landlord, but nearly everyone hates it.
Share on X

“I’m going to be twenty-something in college. I’m going to buy the house and rent out all the rooms. It’s all going to be easy and great. No one’s going to miss a payment. Nothing’s going to get broken.”

“No one has pets.”

“No one’s going to have a party.” That’s good.

We talked about your career choices in real estate. You have a lot of choices. Each day on the show, we answer a question from our Land Academy member Discord forum and take a deep dive into land-related topics by popular request. Jill, let’s take a question.

Jared wrote, “Pricing question for you, rock stars. It’s been noted many times in the past that the general pricing discount guidance of 20% to 30% of retail doesn’t hold for particularly large or valuable properties. I know it’s not an exact science but at what acreage/retail value would you start moving closer to 50% of retail as has been previously suggested?”

Thank you, Jared. We’re not picking on you but Jill and I have an internal saying that I’ll share with you. All conversations lead to pricing. We don’t say it fondly. Here’s a big overview. You’re going to establish what we call a retail price per acre in a ZIP code, county, or whatever you choose. It might be $1,000 an acre. That’s what’s listed for sale and that’s what’s sold. It’s a finite, accurate, no opinion, and no emotion figure.

If you look at everything that’s priced for sale and sold, and you come up with a number like $1,000 an acre, what we have done with a huge amount of consistent success, both Jill and I, and people who take this seriously in Land Academy, has sent out mailers for $200 to $300 an acre. That’s 20% to 30% of retail, exactly like you said, with success. For some reason, and I’m not picking on you, that’s not enough. We’ve been doing this for years. That simple explanation of what I said is not enough. Why is it not enough? Why do we perpetually and continually talk about more detail than what I said?

There are always new people in the group and they’re always learning. We’re always changing it. There are always new and better ways to do everything. There are always new tools or perceived tools to make it easier. People are hoping for an easy button and exact science. “I know it’s not an exact science but can you give me the percentage?” You negated what you said.

You have to feel your way through it, unfortunately. Every market is different. It’s silly but true. There’s so much that goes into it. You have to look at what’s active and what’s happening in selling in this area over here. Think about the East Coast and West Coast. Think about the beach and the deserts. It’s so different. You can’t always apply it. Things and days on the market are going to play. What’s happening in the area goes into play. The size of the property’s going to play.

I say this with love. This is why I chose this question. The reason that people want more is that they have this perception, “If I price my mailer differently than 20% to 30% of retail,” let’s say 50% of retail like Jared said, “I will do more deals.” That’s incorrect. It works that way with houses but not with land, and here’s why. People choose to call Jill back when we send a mailer out because they are sick and tired of owning a piece of land that they have never seen. They want the money instead of the land. They don’t care anymore.

They’re experiencing some type of life event like kids going to college, spouses passing away, and moving across the country. It’s all kinds of things that we’ve all experienced in life where we could use $20, $30, $40, $50, $80, $180,000 of cash infusion for something that’s in the garage essentially and being unused and unwanted. They might get an offer from us for 50% of retail. It might be 30% or 20%. They’re going to say yes.

Let me run this by you. Think about your primary residence. It doesn’t matter what you get in the mail. What if someone offered you twice what it’s worth on your primary residence? 1) You’re going to question it and go, “That can’t be right.” 2) You’re going to go, “I don’t want to sell.” Unless you’re in that life event situation, you’re going to go, “Maybe I’m wrong about what it’s worth,” but you know. You think your home is worth $1 million and they send it to you for $2 million. You’re going to go, “Something’s up here. I don’t think this person gets it.” You’re not going to call them, act on it, or go, “Ka-ching.” You know what’s going on but you don’t care.

Here’s the cherry on top of this concept. They don’t know what it’s worth and they don’t care. They never did. They never wanted it. 9 times out of 10, they’re not the person who decided to buy it. They inherited it or some other things are going on. $30,000 or $20,000 doesn’t matter to them. They just want to get paid when they close escrow. It’s the situation that we’re after, not the actual piece of real estate. It’s a life situation. Jill has nailed it. This does not apply to houses in any way. Most people know what their house is worth. It applies to land. They would much rather do a deal with somebody like sweet Jill on the phone who takes their calls and asks about their kids and dogs.

Follows through and gets it done.

Puts her money where her mouth is. They would gladly accept 20% to 30% of the actual retail value from somebody like that versus a curmudgeon like me on the phone who’s going to pay 50%. The whole process is awful if it’s going to happen at all. Jill and I can’t tell you the number of real estate all over the country. We get offers and Jill sometimes calls them back but it’s just silence.

I sign them and send them back to see what happens but it’s just silence.

Please don’t have this perception, Jared, and all the population. When it comes to land, offering more will not yield a higher percentage of success.

When it comes to land, offering more will not yield a higher percentage of success.
Share on X

Thank you.

Let’s take a look at the landlord real estate model, which is hugely profitable. Everything in real estate like everything in life has to work on paper first. I’ll bring this down to a real simple decision-making for the landlord model and then we’ll look at some of the more complicated, complex ones where you can make some dough. Visualize three houses on a block. They all look the same. One house costs $30,000 because it’s all a mess. One house costs $130,000 because it’s clean and nice in its original state. One costs $330,000 because somebody went in there and cleaned it all up.

They all command about the same rent. Which one are you going to choose? You’re going to choose the cheapest one. When you calculate a cap rate, you want that number to be as high as possible. Your rent is high and your acquisition price is low. You get two huge benefits from being a landlord. Number one, you get a median income. As fast as you can rent it, you get that monthly income. Hopefully, it’s more than what your costs are every month.

It better be or you did it wrong.

You also get the huge benefit of balance sheet equity increasing year over year. For the longer that you own the property, theoretically, in most places in the country, you’ve got this massive asset at the end. The huge reward at the end is when your heirs sell the property that you put into place, collect money on, and pay off the mortgage theoretically. You then have this asset. That can work well or it can seriously backfire on you, which most of the time, it does backfire. People don’t look at it in a spreadsheet or paper first. This landlord model is grossly misused and overused in my opinion. Here’s how a landlord model works for us.

You’re even talking about if all goes well. You haven’t even talked about all the things that could go wrong and do go wrong.

Let’s look at the money first and then we’ll talk about the social piece.

It’s not the social piece. It’s the money piece. If you think every single one of your tenants is going to pay on time every month for the 50 years that you own this, you have another thing coming.

That’s what I would call social.

I don’t call it social but okay.

If you’re going to go buy a house and rent it out, chances are you’re going to go get a mortgage. You’ve reduced your failure percentage possibility times to 80. If you buy a piece of property for cash, do nothing to it, spend not a single dollar, or rent it out to somebody who’s a nurse and the property is within walking distance of where she works, you have increased your success tenfold.

This is the stuff that people don’t talk about ever in this model. You have to set your cap rate in the beginning, set a lease rate that goes up 2% to 3% every year automatically, and set up auto-pay. What Jill’s about to talk about is all the stuff that can go wrong and it does go wrong. Make sure you calculate it in Excel or however you do it. It’s a few hundred dollars a month if everything works right.

You’re making a few hundred dollars a month?

Yeah, if they pay on time, they don’t destroy the place, they don’t have sixteen Great Danes, and on and on. As a landlord model, the SFR or Single-Family Residence, a freestanding house, is the worst asset you can possibly implement financially in that model. It’s too expensive to operate. All kinds of things can go wrong with the real estate.

You only have one door, which is not the best plan.

Here’s how the landlord model works well. You buy into a group from an equity standpoint class A apartment buildings that have 40 plus units. The per-door cost that you’ll refer to is closer to hopefully between $20,000 and $50,000, not $300,000. The rental rate is about the same. Hopefully, it’s in a good location and all of that. Everybody’s rents are going up 2% to 3%. After five years, you go through a lease-up. After eight years, the amount of revenue that’s coming in is way different than when you bought it. You resell it at a similar cap rate. That’s how being a real successful landlord works.

You can do the same thing with triple-net leases. McDonald’s and most of the fast food chains that we’ve ever seen are on a triple net model where somebody owns the building in a triple net lease. The restaurant pays for everything, including the real estate taxes. They pay for everything no matter what goes wrong. It’s a fantastic model but what you end up doing is having a cap rate that’s so low that is almost equal to the bond yield. That’s how low it is. It has super low risk but super low reward.

Here’s the takeaway from all this. Being a landlord is not passive. There are too many people on the internet who say, “That’s the greatest thing ever. Buy a house, fifteen houses, and a small apartment building.” You set it and forget it. That’s never the case. We have a very close friend who owns hundreds of SFRs in the Western part of Phoenix. He started this many years ago. Our kids were in preschool together. He’s been doing this for that long.

Being a landlord is not passive. Many people say, “Buy 15 houses, a small apartment building, and just set it and forget it.” That’s never the case.
Share on X

He does not have a property manager. He manages all his properties. He’s a former mechanical engineer so he’s got that weirdo personality. He drives a car that’s probably old and makes several hundred thousand dollars a month. He capitalized the entire scenario correctly with a family member who put in tens of millions of dollars at once right up front. He didn’t put any of his money and he operates the whole thing. It can work but I do not and I don’t think Joe does either with that personality type.

“Here’s how we do it all backward. Ask me how many doors I own that are sitting there. I rent one here and there to family and friends and then I undercharge them.” We’re doing it all wrong. The good news is we paid cash for everything. We had other plans for them. It’s not my thing. I can’t do it.

Here’s why it doesn’t work for Joe. This is a real example. A long time ago, during the real estate downturn around 2009 in full swing, Joe and I bought a property in a pretty questionable neighborhood for $25,000 bucks and it was nice. At that time, it was worth $120,000. We looked at each other and said, “I did very easy math. We can sell this for $80,000 this week.” We have $25,000 into it. We don’t have to do a thing to it, not even paint it. How many months would it take of rent for us to make up that $80,000 minus $20,000? That’s $50,000 or $60,000, and it was years.

We both look at each other and say, “I’m not waiting years to get a return on this. I want it now.” That’s why we’re flippers and not career landlords. Do we have stuff that we rent out successfully? Yeah. Are either one of us ever excited about it, want to duplicate it, or make it a huge business? Nope. It’s all personality type. Join us again where we discuss the pros and cons of real estate flipping. Jill and I have made tens of millions of dollars doing net over the years. I feel qualified to talk about what’s good about it and what’s bad. You are not alone in your real estate ambition. We are Jack and Jill, information and inspiration to buy undervalued property.

One of the most effective ways to win big in real estate is to understand the career choices available in this space and fully understand its ins and outs. Or perhaps you can dabble in all of them in some way? Steven Jack Butala and Jill K DeWit present the four career choices you could embark on in real estate and what you can expect to achieve in each one.

I’m Steven Jack Butala.

I’m Jill DeWit and this is the Land Academy Show.

This is episode number 2079. Today is Monday. We’re talking about the four career choices that you have in real estate all week this week. We’re going to take each day, Monday through Friday, and talk about each of these choices. Today, we’ll do a little bit of an overview. I have to admit that I sat down and wrote this barebone script like I do every single week for John and me to do our podcast. I didn’t fully realize, I guess I haven’t thought about it lately, how much of an impact the real estate industry has on all of us all the time every day. I guess we don’t think about it.

I do.

Are you thinking about real estate all the time?

I do, actually. We know it’s interesting in two parts. To answer your question or follow up on your comment, I should say I do think about it because I’m always thinking about where people are living and why they’re living there, For so many people on the planet, where they can afford to lay their heads at night dictates where they are. It often will dictate their career.

People make career changes so they can afford to have a “fill in the blank” house or something like that. There’s a lot that goes into this in our lives. The other thing I was going to say is are you going to bring math into this? I’m sure you’re going to discuss good and bad. Here’s what you could make and here’s what most people make, and here’s what a lot of people make kind of thing. There are different levels of all of these.

Here’s some maths to begin with. If you look at what you’re daily budget is or the budget of anything, there are three things on the top that are very expensive. We’ll start with all of our personal budgets in our lives. Number one, and not necessarily in this order, is real estate. You have a mortgage, rent, or whatever. That in of itself tells you that if a lot of money is coming out of our pockets every month, it’s going somewhere. We’ll talk all about where it’s going. Number two, real estate, healthcare, and education are the three largest budget items that we all have. It’s what the governments have. Those are the three largest items for the government.

Hold on a moment. I know a lot of people that have cars in there. I’m not saying that it’s good or bad. I like your math better. I know a lot of people who are upside down and they do cars. I’m sure you know this. Cars, real estate, and fun. Seriously. This is why the world is upside down right now. I’m not kidding. If you go on Facebook or social media, it looks like cars, entertainment, real estate, and then food and clothing. Somewhere at the bottom is education and healthcare. They are way low.

They are optional. Education and healthcare are optional.

I’m not trying to say that. For someone who’s 21 years old, that’s very true. We may know some people like that.

Real estate is an expensive option for a lot of people now, especially in a big city. You can stay on the sidewalk and that’s free. Where did this go, Jill? We always count on Jill to take us to a place that is completely unintended on the show.

Thank you for saying unintended, not saying unimportant. I thought that’s what you were going to say. All right, back to it.

Here are the four. We’ll talk about it on Monday, Tuesday, and Wednesday kind of thing. On Tuesday, we’re going to talk about the landlord model. That’s an obvious choice when you buy a house or buy something, you rent it, and there are some huge benefits. Depending on your personality type, there are pros and cons to all of these things.

On Wednesday, we’ll talk about the real estate flipping model, which is our preferred model and it’s what Land Academy is all about, and how Jill and I take it even a step further. In the back of my head, every time I look at any type of business model with anything, I think how fast and easy is it. How fast and easy is it for me to create equity for myself? In flipping, I don’t think anybody can deny it. It is the fastest and the easiest.

We have to tell you, we’re not talking rehab. We’ll fill you in more.

We’ll talk about that on Friday. On Thursday, we’ll talk about the real estate service industry. All the people that are involved in trying to get their fingers into your real estate, real estate agents, everything from handyman. The are too many to mention. We’ll mention them all on Thursday, for sure, but mortgage brokers and actually, mortgage companies, title agents, real estate managers, people who manage rental portfolios. There’s a huge service industry that keeps people employed, surrounded by the real estate deals that you do.

You can choose to get involved in that and make some dough for yourself. On Friday, finally, the modern construction industry, which means developers, contractors, subcontractors, and construction workers. By the way, it’s my favorite. Where would we be with that construction worldwide in the universe? Where would we be about without it? We’re not heavily involved in it, although we are involved in it, and Jill and I’ll talk about that on Friday. It’s not the fastest way to make money, but you can create some amazing equity for yourself and feel good about it. Each day on the show, we answer a question from our Lan Academy member Discord forum. We take a deep dive into land-related topics by popular request. Jill, let’s take the question.

Modern construction is not the fastest way to make money, but you can create some amazing equity for yourself and feel good about it.
Share on X

Davon wrote, “Hello, Land Academy team. My goal is to be more precise with the records I’m pulling. After selecting a county and applying filters for vacant land, I’m left with over 1,000 records, which is great. However, I need to manually move certain parcels. For example, those that can only be identified visually such as actively farmed land. This required the record count to be under 1,000. The problem is that I was being charged $100. I have to export at least 1,000 records at a time. That’s a free Land Academy thing, by the way, but I’m able to visually review more than 1,000 records at once. Does anyone have a workaround for this or a more efficient method?”

I do have a workaround for this. I’m not picking on anybody, but I’m super glad you asked this question because I think it’s going to clarify the process of pulling data, reviewing data, and getting it from the point where you pull it, that decision that you make to pull records in which ones you pull, and what could go in the mail.

For some people, it’s daunting. For me, it’s not only because I’ve done it a million times. Here’s the deal. Number one, please review chapter 3 and chapter 4 of Land Academy 3.0. I go through this process of what Jill would call a painful delivery. Here’s the deal. Data is cheap. We make it free, but sending the mail is very expensive. I would highly recommend that you go to WallStreetPrep.com and take an Excel course.

Many people have taken it in our group and they’ve all come back. I’ve never heard anything bad about it. You should not be limiting yourself in any way. It’s how many records you pull, analyze, and reduce from a number standpoint when you get ready for a mailer. I pull the entire county like every single record in a county. In Maricopa County where we are right now in Arizona, that’s 30,000, 40,000, or 50,000 records. It’s not that expensive.

That’s what I was going to say. I’m wondering too. I wonder how big is this county. It could be a very small county that doesn’t have a lot of property. I’m curious if he’s accidentally already having too many things going on before he even hits the download button.

We’re in Career Path right now and we have multiple people in Career Path that have taken Career Path in the past. One of the guys’ names is Chris. He has reminded me of the last Career Path that he was involved in. I said this. Land Academy and land investment in general and real estate investment is not a place where you want to sit down and try to save money. Save money on your mortgage, save money on your kids’ birthday presents, and drive an old car. There are a lot of ways to save money. This is not one of them.

Real estate investment is not a place where you want to sit down and save money.
Share on X

Not on your wife.

Do what you need to do with your wife. I’ve never figured it out. If you figure that out, please email me.

I’ll make up for myself.

If you have a podcast with your wife, please email me at [email protected] and ask me how that’s going.

We’ll explain how yours is going. That’s funny.

Everybody pulls a ton of data. He was successful at this, pulling a ton of data and reducing it. There are a lot of ways. It reduces the amount of records that they’re going to send mail to because that’s just how it is.

It’s their nature for some reason. Why is that?

I understand praying to the efficiency God. I’m a middle-aged man. I get it. Efficiency is how and why I live and get up in the morning for a few degrees of it. You have to pull all the records, get in there, and however you reduce all of those records into your target is how you do it. I have a set way and it’s proven that it works. That’s what we teach, but it might be different for people in Career Path. I’ve never had anybody in Career Path, and there are people who make millions of dollars a year come to me and say, “I pull too many records.” I understand your point.

In a perfect world, if you’re going to do a 4,000-unit mailer, you download 4,000 records, and you look at them and you mail it. That will never happen. You’re going to pull a ton of data of all different types. It might be vacant land. There might be houses on it, but depending on what you’re trying to accomplish with that trailer, you’re going to have to extract all the anomalies in the data set and send it out to your target. I understand your frustration and it’s a great question. The answer is in the Land Academy 3.0. Today’s topic is the four career choices you have in real estate that Jill and I are going to go through.

I feel like there are 40. How did you narrow it down to 4?

Because they’re subsets.

Okay, got it. I didn’t know where we fell so you followed us falling in the Wednesday group.

Our bread and butter is flipping land. It says Land Academy right in the title, Jill.

I realized that, but we need to explain this a little bit. When I sat down and looked at the topics, not that you did anything wrong here. I would just clarify that. I thought when you put flippers, I was thinking rehab or I didn’t think of me in that category. I know what it is, but explain it to the planet.

Here are the four career choices you have whether you’re a long time in the industry or just starting out. You can choose the landlord model. There are all kinds of forms of landlords, you buy property. Maybe it’s an SFR, single-family residence. Maybe it’s a massive Class A apartment building. Maybe it’s a skyscraper in Manhattan. It might be triple net properties. You know, Chick-fil-A, triple net properties that you were on the real estate, and obviously, Chick-fil-A or whoever owns the operation.

There’s a ton, too many to list, and we’ll talk more about it tomorrow, but they all have one thing in common. You secure the real estate and equitable title and you rent it out. There are two huge amazing benefits to that. You have income every month and you have a balance sheet-type equity increase. It’s hugely attractive for the right personality type.

Number two, flipping is what we do. You buy or secure a piece of real estate and you sell it for more. The whole point is to buy it as inexpensively as you can and resell it theoretically for as much as you can. It’s not necessarily our specific model. You get in and out fast. You get tired of it. For a few months, you can stop doing it. There are a lot of benefits for our personality type. It may not come out on the podcast but Jill and I agree on this. It’s in and out situation. We’re just wired for both of us for whatever reason.

Number four is the service industry. We talked about this just a few minutes ago. There are so many people involved in the management and the changing of hands of real estate, starting with real estate agents, which we know all about, real estate property managers, and on and on, and then finally, construction. I think that construction chooses you. You don’t choose that career. I know people who love construction. It could be the people on HGTV who love design.

You could be a plumber. You could be everything from a regional mall developer and on and on. There are tons of constructions. We’ll talk about that on Friday. There are a lot of ways to make money in real estate. The best way in the end is to get me involved in all of that, which we are to some degree.

There are a lot of ways to make money in real estate. The best way is to get involved in multiple career paths to some degree.
Share on X

Excellent.

Join us tomorrow, Tuesday. We’re going to talk about analyzing the landlord modeling real estate. You’re not alone in your real estate ambition. We are Jack and Jill. Information and inspiration to buy undervalued property.

Many property sellers, buyers, and lenders assume that working with real estate agents is a must because they know more than you. After all, they are licensed and trained. But is it really the case or simply a myth? Steven Jack Butala and Jill K DeWit discuss why real estate agents do not necessarily know more than you do and why it is possible to successfully close deals even without their help.

I’m Steven Jack Butala.

I’m Jill DeWit finishing my tea, and this is The Land Academy Show.

This is episode number 2078 and today’s topic, this is the 5th real estate myth of the week, real estate agents are smarter than you. I do not think so. This is a fun topic for Jill and me. If you follow us at all, you know that we are not the kindest on the air at least to real estate agents. We’ll talk a little bit about that. Why? First of all, because it’s fun. Second of all, because it’s true.

It’s funny. I was going to pause and I made a note and I’m going to interject it here. I’ve worked with so many agents over the years and the good ones do listen to me. The good ones, we have conversations. I’ll tell them, “I may have done this many deals but I don’t know your area as well as you know your area. I’m just moving into this area. What’s been moving?” That kind of a thing. They go, “Thank you. Here’s what we found over this part of the county this or that part of the county that,” but then the conversation goes to, “Jill, I always want to know if my listings can be better. I always want to know what you found to move your properties all over the country.”

The good agents though, I want to make sure everybody is clear that there are some and I have some dear friends that are agents. It’s a conversation and they want to learn and they want to improve. It’s a test. I don’t mean to be braggy, but we have done more deals than they have. I can’t find any agent who’s done more transactions than Jack.

The sole purpose for the vast majority of real estate agents is to get in the way of your real estate deal and get paid for doing nothing. Each day on the show, we answer a question from our Land Academy member Discord forum and take a deep dive into land-related topics by popular request.

The sole purpose for the majority of real estate agents is to get in the way of your deal and get paid for doing nothing.
Share on X

Frank said, “Hello, Land Academy. Until I joined this group, I thought you had to be licensed to do real estate deals. I now know that’s not true. Why do real estate agents need to be licensed and should I get my license to be better at buying and selling land?” Can I pause right there and then jump in here? I’m going to answer the question briefly and then I want to go into the topic because it’ll incorporate these. Should I get my license to be better at buying and selling land? I would not. You do not need it. You do not have to. The only thing it does is open you up to more rules, more regulations, other things you have to think about, the things you have to report. Let’s go into the show and I’ll explain our story and it’s going to lead into what we’re talking about.

You do not need to get a license to be better at buying or selling land. The only thing it does is open you up to more rules and regulations.
Share on X

Today’s topic, it’s the fifth myth of the week, real estate agents are smarter than you.

We all know what’s going on in Arizona. If you’re listening to this show, you’re into real estate and you have seen holy cow numbers coming out of Arizona, and then people that are moving here, how it’s growing, the industries, and things like that. Check out the Phoenix area, it is on fire. It’s insane. Even some of our own personal acquisitions, we’re looking at each other going, “Maybe we should sell this.” It’s hard to turn down that kind of dough. When we bought this three years ago, I didn’t think it would double like this. What do we do? It’s hard. That’s what’s going on.

It’s crazy. Arizona, you would think is great on top of things. You guys got it all figured out. Look how much money people are making. Why are all these investors in Arizona? It seems to be half of Land Academy or all these other people are in Arizona. It’s interesting and funny and true. There’s a lot you can do in Arizona. I want to back up a few minutes and explain a little story about our experience tiptoeing down the path of being real estate agents ourselves in Arizona.

A few years ago, we went together in person and did the I think it was 80 hours, I want to say 80 or 100 hours. You had to do in-person real estate education. You get out of that. You got to take a test, you got to do this, you got to do all the little things, and at the very end of it, then you can apply for your license. At the very end of it, we both chose not to because of the things I explained earlier.

For $500 or what is very small amount of money, you can learn tons on real estate in your state and never take the exam.

Let me say this one important topic that is my main point for today and it ties into everything. Remember, 80 hours in a classroom learning about real estate to be a licensed real estate agent in the state of Arizona. What percentage of that 80 hours of training time do you think was spent on analyzing data to make decisions to help sellers and buyers maximize profit and read the market and best guide them to a decision? Not one minute. This is all we do all day every day. That’s the part to me that’s frustrating. I am literally in a conversation right now with a real estate agent. I’m asking this question and he’s not even understanding the question.

I’m brand new in the market right now. I’m always not going to use this agent. It was to do some land, to sell some land. This person is not the one. I had some smart professional questions asking about this county, the area he services, and what’s going on specifically. He doesn’t even understand my questions. He knows what he bought and sold yesterday and he knows what the guys in his office are buying and selling, but as far as the market as a whole, he doesn’t read it every day.

He’s not looking at it this way. He’s looking at what he’s got on his plate, who he’s going to call, how he’s going to sell it, and get this dumb thing sold. The first thing is, I hate to say it because I feel so many agents, all they think is ‘Let’s drop the price.” How about your marketing changes? How about you reach out to more people? How about whatever?

I remember a couple years ago, a gal on Landing Academy said, “I can’t believe I did this but I taught my real estate agent how to use Facebook and post property to help get some business on Facebook.” We did another person in Land Academy, a nice guy. The first initial is B. You know who I’m talking about. He sent out neighbor letters and put his agents’ phone numbers on them.

I sold the property.

There are times I do pick on them. This time is not one of them. I want you to know that it’s not the training. It’s rare to find them that think like investors.

Let us take a couple of steps back. Why would anybody get a real estate license? What’s it good for? You need a real estate license in all 50 states in this country anyway to represent somebody in the acquisition or sale of their property. If that person doesn’t want anybody to represent them and they want to go off and sell it themselves, they’re entitled to do that. No one knows that.

That’s all it does. It allows you legally to represent somebody. How the hell did that come up? A very long time ago in the early ‘40s and ‘50s, there was no such thing as a real estate license. What ended up happening was that the big social butterfly busy bee in the town where someone was thinking about selling the house found out about it, and realized that Sally Smith over here wanted to sell the house.

This busy bee knows everybody in town. She goes and says Sally Smith is selling her house. Mr. Jones, over here, she finds out needs a house. She put those people together and life went on grand for a long time just like that. Maybe she got some money. Maybe she got some brownies. I don’t know. Somebody and I don’t know exactly who realized that there’s a lot of money in this.

The National Association of Realtors, NAR, is either the largest or number two largest lobbyist group in Washington, DC, of all the lobbyist groups in the world for anything. Larger than petroleum, larger than labor, and larger than anything. Why? Because they’re falsely propping up the notion and perpetuating this false sense of I need a real estate agent. The National Association of Realtors is in the business of managing all the lower associations below them. I think there are like 300 or 400 MLS, multiple listing services, with little tiny regional ones all over the country. They report to the National Association of Realtors and they have to pay them.

Why don’t we call it a union? Because that’s what it is.

Hold on a second. I’ll explain the facts first. These associations’ business is to attract schmoes to go to these schools for 40 to 80 hours, depending on whatever the rules are, and spend dues every year. When you start down the path of being a licensed real estate agent, you have to pay about $5,000, all total, in various associations all the way up the chain before you can hang your license on a real estate brokerage.

Real estate brokers in the business have recruited you also because you’re going to split the fuse with you. You are the schmo. You’re the one doing all the work, paying all this money up for all the transactions, and what? They have a huge financial motivator to convince the government that real estate agents are needed. They’re not at all. It’s what you said. They’re not helping anything. They’re getting away in the way of the transaction. Jill is exactly right with this example. All the stuff that you need to know about making money in real estate, has nothing to do with being an agent.

Everything you need to know about making money in real estate has nothing to do with being an agent.
Share on X

I’m going to make Noly. We could do this the same way by the way. It’s the National Association of Land Investors that just decided.

What’s sad is that just like Jill had explained in her example earlier, they were promised riches. They should never. I’ve never met a real estate agent in my life who couldn’t multiply 6% by any number. It’s because 6% of a $2 million house is a lot. It’s a lot of money. Please help me understand. Is there any more work in selling a $2 million house or a $200,000 house? It’s probably less worth on a higher-end house. Is that real estate agent adding that much more value? It’s a $120,000 fee versus a $12,000 fee. That’s insane.

To end this on and not mean vibe.

Why? You know the truth. My point is I want the audience to start thinking about what the heck?

Here’s what I hope your takeaway is. Know that going into this, when you’re choosing like, I do. I often choose land-focused agents to sell my property. Now it sounds crazy, but I do. I put a lot of thought into it and I asked them intelligent questions and if they can’t answer them, I move on to someone who can. That’s it. If I can’t find someone, then I might have to do it myself and I’m good with that because I want to make sure it goes well.

I want to make sure I’m maximizing what I can get out of it. I want to make sure that I get the right buyer and that it happens quickly. That’s reality. Please don’t assume just because they have something posted on the internet and they have a company behind them that they know more than you. Because most often and I’ll tell you, if you’re in Land Academy, you’re not like we are, they don’t know more than you.

The real value I find is they’ve got a photographer ready to go. They have a team that can make good listings. They know how to use AI because they’re all using it now to write their descriptions. We all know that and that’s good. I’d rather do that. It’s probably better for property descriptions, what it used to be versus two sentences.

Sometimes two sentences are like, “You’re selling my property and that’s all you got?” Paint the picture, please. They hopefully have a list of buyers that they’ve worked with over the years or someone who didn’t get the property. They just sold last month. That’s like mine. That’s the value and that’s what I’m seeking when I ask these people. I don’t ask a lot of what you think’s happening in this area questions.

I asked more, “Based on what you sold, how did it go? What do you think? How does mine compare to that one? How fast can you sell this one? Do you have buyers lined up? Those are the questions and that’s what I want you to do and that’s a good. Use of how we work with them.

I have more things to say but I’m not going to say it.

All right, thank you. Say it for the NLAI.

Join us in the next episode for five more interesting episodes. You are not alone in your real estate ambition. We are Jack and Jill, information and inspiration to buy undervalued property.

Is real estate investing risky? Not if you do it right! In this episode, Steven Jack Butala and Jill K DeWit tackle the myth that real estate investment is inherently risky, offering practical strategies for minimizing risk and maximizing returns. They explore the importance of due diligence, market research, and leveraging data to make informed decisions. They also discuss the benefits of surrounding yourself with a supportive community, such as the Land Academy network, to gain valuable insights and avoid costly mistakes. Discover how you can confidently navigate the real estate market, reduce your risk exposure, and achieve your investment goals with greater peace of mind.

This is Episode 2077, and the topic is we are talking about myths. This is our fourth myth, “Real estate investment is risky.” I don’t think so. We are going to explain to you why real estate agents think that they are smarter than you and they are not. Each day on the show, we answer a question from our Land Academy member Discord forum and take a deep dive into land-related topics by popular request. Let’s take a question.

I have to admit. Here’s what happened. I had a little bit of a rant about a particular topic. There are some very good, smart, “experienced” real estate agents that I know, and I appreciate that whole place. I happened to be ranting. This one, it’s like a dog with a bone. He’s funny. I was going off a little bit. I will share it next time. I have a lot to say. Here’s the question that we have from Discord. Michael wrote,
“Hi, Land Academy Community. I need help. In the four years I have been at Land Academy, I haven’t done great, but I have always made money. This calendar year, however, I am completely stuck. I have sent nearly 40,000 mailers, but I haven’t landed a single deal, and I’m down to less than $10,000 of working capital. I have some personal financial commitments coming due, and I need some profits. Have you ever been in a similar situation? What did you do to find success? Do you have hints on how to break my losing streak and close on some deals? Thanks in advance for any suggestions and encouragement.” 

I put this in because we have all been in this situation. If you have ever owned a company or participated in life, you know there are ups and downs financially. Especially, and I chose this question because our topic if you take any type of risk. Getting into this business to buy and sell land and make money is slightly risky. Buying and selling land, in my opinion, has a very small amount of risk, which we’ll talk about. Michael, we have all been in this situation. Jill, what was your response?

You’ve got to change some things. I see this happening a lot. Who’s answering the phone? Is the best person taking those calls? You sent out enough mailers you should have some deals. My first thought was whoever’s taking those calls may not be the best person at creating a deal. Number one. Number two, have they created several deals, and you kicked them all to the curb because your due diligence checker or picker is off? I have seen all of these things happen.

You’ve got to shake it up, and something’s got to change. Some of these have good ideas, and it ties to my talk that I did for the Land Academy Community for advanced training. One of them said, “Go back to your pipeline.” It ties in with those deals that maybe kicked him to the curb. Why did you kick him to the curb? Maybe there’s something there.

Maybe whatever was going on then with you, or the seller, has changed. Someone said, “Go back to your stupid pipeline and see what’s there, and give them a callback.” TWhichI would like to add, give them a callback. See what’s going on with them, understand the deal, and see if you can’t put something together but you are at the end of the year. Start dropping things like, “I have got this much money to spend by the end of the year. I love it. Give it to you.” That’s a powerful thing. “Wouldn’t you love to have an extra $40,000 right now between now and the end of the year?” The holidays are coming. There are all kinds of things that you can do to bring those deals back. I’m guessing the price is a lot of it. A lot of people kick things to the curb a little too quickly for price instead of trying to find a happy medium.

A lot of people kick things to the curb a little too quickly for price instead of trying to find a happy medium.
Share on X

I’m reading between the lines here, and whatever you did you always made money. Whatever, you didn’t change it. You have to roll with changes. Whatever happened is no longer working. I will tell you, in my case, many years ago, I bought and sold a couple of pieces of property. We sold it very successfully right at the beginning of my career and very quickly realized that that was not sustainable.

The source of the properties where I was buying was very inconsistent. I needed to establish a different pipeline, and I chose to physically go to tax-defaulted property auctions in the southwestern part of the country. I moved there. I moved here from the Midwest to do that specifically. That worked for many years. I made a ton of money until it stopped working, and I was sitting in the same situation as you, like any of us. That’s when out of necessity devised this mailing scenario and utilized data to send off land offers. We had to make a lot of changes. When it stops working, you have to make changes.

There are lots of things that we don’t know too. Michael, have you always had success in this one layer, and now it’s not working because people are moving over here? You can pivot and move to where the people are buying the land too. We don’t even know if that’s the situation. It could be something as simple as that.

Jill and I have been doing this together for many years. The company looked absolutely nothing when we started together. It is entirely and completely changed, and I can tell you, we have never made more money than we do right now. Hopefully, with these changes, it’s a new opportunity. The basics are the same. We are trying to find property that’s undervalued and resell it as fast as possible. That’s the constant. Everything else that surrounds that is different.

You have to be ready for changes, Michael. It’s not going to be like that, and I’m ready for the next change. I’m over it now. I’m ready. I’m like, “Something is going to happen. Someone is going to do this. There’s going to be something over here.” Fine. I know how to pivot. I’m good at this.

If you are in the group or if you even follow us or simply read these episodes, you know what’s changing with AI and what’s changing with the internet, the tools and resources that are available, and all kinds of stuff that’s happening. I am here to tell you, the businesses that we have now will not look very similar several months from now.

The businesses that we have now will not look very similar several months from now.
Share on X

That is why Jill and I are trying to drive this point home and diversify your product type place. Buy houses and buy mobile homes or properties with structures on them, that will never go away. Buying and selling land will never go away either, but one of the reasons that we have done so well financially buying and selling land is because there are a lot of intuition-based decisions where data is involved. The more information, data, and resources that we get for land specifically the easier this is going to be.

Where it ends, and it might not be in our lifetime, is the same way stock is traded. A share of Ford stock is probably worth around $10 or $11. I am not going to be able to buy that for $3 and sell it for $6 to anybody. No one in their right mind would sell their stock to me for $3 when it’s worth $10 because it’s a click of a button. You have to change. This topic is myth number four. Real estate investment is risky.

I got three things. I have got risky, not risky. You’ll love this. Number one for real estate investing is risky, borrowing money. Taking on debt. A personal guarantee. Scary, risky. What’s not risky? Paying cash. Paying what you have. Not risky paying cash, and that’s what you can buy. You double it, and you do better and better. If you don’t have the cash, you use somebody else’s cash. So what? You only ask it. Not risky.

Is it risky to get married, Jill?

We’ll get to that in a minute. That’s not on my chart. That was number one. Number two, risky, not risky. Risky, guessing about where to send mail or using a dartboard? Super risky. Not risky, to use data. Letting the numbers tell you the days on the market, the new list to sell. Everything we do when we troll, and everything that we do on the regular green test. You know what I’m talking about if you are in Land Academy. Not risky. What’s risky is if you don’t listen to it, and you go, “I like this area.” Hold on a moment. The math, the numbers, and the data world will tell you where people are buying. Even if you don’t know it, It tells you where they are buying. It tells you what to mail and how to price it. That’s not risky.

Number three. Risky, not risky. Risky, I got this. All I have to do is buy a property. Jack did it. He bought it off eBay. He told me the whole story about it. I can do this. I have no education. I have no experience. I don’t know what I’m doing here. I’m YouTube certified. I could even read my notes here. Risky, not risky. Get a mentor, take some time, and learn the right way. Follow along with somebody, ask all the questions about how they are doing it, and then go repeat it or do it with them. Join forces. Not risky.

There is nothing more risky than doing nothing.

There is nothing more risky than doing nothing.
Share on X

That, too.

It is incredibly risky in this business to not send a mailer out. Nothing is going to happen if you don’t send a mailer out. If you do it all wrong, price it wrong. All kinds of stuff can happen in that mailer. You are still going to look at some details and you are going to learn.

Maybe you can get something out of them. Some of our best deals, we have screwed up. Offered too low, offered too high. Dreamed it up. You can add money because they love it if you have money and you could take it away. Figure it out.

Real estate. They are going to pick up the phone and call you if they are interested in selling or if they are angry. Either way, they are on the phone with you.

Make a deal out of it. Do what you have to.

I want you to picture three houses on your computer screen, on your phone, or whatever. There’s a house in the middle and 2 houses on either side, worth approximately $250,000, and you are about to buy the house in the middle for $190,000. Do you see risk in that? If the answer is, “Yes. There are all kinds of things that can go wrong.” You should read another blog. I see, categorically, no risk in that. None. Whatever we potentially were unable to discover during our due diligence period both for the physical asset and the market and the whole thing. Let’s say there’s some foundation crack or some crazy thing. Figure it out.

You do have to dig in, spend the time, get to know the markets, and understand why Jack says it’s not risky. When you have these three houses, it’s for this exact reason. Jack is a pro at getting into an area and understanding a zip code. He can tell you, down to the dollar, what is the breakpoint in a certain area, and he knows how fast every 3-bedroom, 2-bath with a garage and no pool will sell within 30 days. You just know. You know that money. You can analyze it. Jumping into something, not having that level of confidence, and not spending the time to understand the market like that is risky. Doing it this way is not risky. It will tell you what to do.

The first step in reducing risk in any type of real estate investment is to surround yourself with people however you think that’s appropriate who have already done it correctly. You are removing a massive amount of risk especially when deals come up or whatever, and you can ask your peers, us included, “Should I be doing this deal? Would you do this deal?” “No, I wouldn’t do it.” “Yes, I would do it. You should get off the phone right now and go do this deal.”

The first step in reducing risk in any type of real estate investment is to surround yourself with people who have already done it correctly.
Share on X

Tell me if you need the money.

Doing nothing is incredibly risky. Doing nothing and expecting something amazing to happen is silly. Join us next time when we talk about our fifth myth. Real estate agents are smarter than you. I don’t think so. You are not alone in your real estate ambition.

You love that.

We are Jack and Jill. Information and inspiration to buy undervalued property.

Think you need a fortune to invest in real estate? Think again! This episode debunks the myth that it takes a ton of money to get started in real estate, especially when it comes to land investing. Steven Jack Butala and Jill K DeWit share practical strategies for building wealth with limited capital, including their proven method for turning $10,000 into $250,000 within a year. They also explore creative financing options, such as leveraging other people’s money and partnering with funders within the Land Academy community. Discover how you can unlock the potential of real estate investment, even with limited funds, and achieve financial freedom through strategic land acquisitions.

This is episode number 2076. We are talking about myths all week. This episode’s myth is that it takes a ton of money to invest in real estate. I don’t think so.

I t takes a ton of money to invest in real estate. In some properties, it does. If you’re brand-new and you’re doing houses, and you don’t have a community or you don’t have people behind you, it does take money. I hear a lot of people saying, “I can’t jump into it because I don’t have $200,000 to plop down on a median-priced home in a good area. I can’t plop down $200,000 and put $60,000 into renovations to hopefully sell it for $350,000,” because in that area, that’s what it’s worth. It’s between $350,000 and $400,000. Those would be real numbers. Maybe they’re like, “I don’t have the credit score. I don’t have this.” It needs money for that product type. I’m talking about SFR. We didn’t even talk about, “I want to have an apartment complex or a duplex,” or fill in the blank. It gets higher.

People automatically think they are not candidates, that they can’t do this, or that they’re not going to be in the club because they haven’t saved up a couple hundred thousand dollars. I’m here to tell you I got a great way for you to get a couple hundred thousand dollars. When you know of my way and my plan on how to easily go from $10,000 to a couple hundred thousand dollars, seriously, you’re going to realize, “Why would I even ever change that plan?” to which I say, “Exactly.”

I want to hear Jill’s quarter-million-dollar plan.

It’s easy. We’re going to do it on the show. We haven’t even gotten to the show. We have a question to do. We have all kinds of things.

Each day on the show, we answer a question from our Land Academy Member Discord forum and take a deep dive into land-related topics by popular request.

Johnny wrote, “I am brand-new to Land Academy. My brother and I are partners. We are wondering if there are any states or counties that may look good when trolling but we should not waste our time on.”

There are terrible states to buy and sell land in and there are amazing states to buy and sell land depending on who you are and what you like. We have many members who buy and sell and put food on the table full-time. Buy and sell land in California. We have made a lot of money in California. We no longer do for a lot of reasons. In the last several years, it has changed. It has changed politically, tax-wise, and all of that. You are subject under a microscope in that state. For that reason, we don’t buy land there. Half of you who are tuning in to this are going to completely disagree and that’s fine.

It’s fine. I’ll also look at the deals if you need funding.

West Virginia has a lot of problems with what we call undivided interest. Long story short, multiple APNs were assigned to people, not to the properties. The way we send out mail and look at data doesn’t apply to West Virginia. In the New England states, we have some people there from our Land Academy group that smash it. Jill and I do tend to avoid that state. It’s got more regulations.

We are middle-of-the-country people, in general. All those middle states, all the way North and all the way South, we are very into that. Some people don’t even bother with states like Wyoming, Arizona, New Mexico, Nevada, Texas, Tennessee, and Arkansas. We do really well there. Is that the way to do it? Is that where you should send out a mailer? No. I grew up in Michigan. We don’t buy a lot of property in Michigan. I don’t know why. You need to take a look at what makes sense to you and look at the regulations in that state.

There’s so much, Johnny, that you’ll see in our community. When you’re trolling, bring it up to us on the Thursday call or bring it up in Discord. Chat with people like, “This is what I’m thinking. Does anybody see any big flaws? Has anyone experienced anything wrong with this area before I hit the download button?” They’ll tell you. It’s a really good group.

This episode’s myth is that it takes a ton of money to invest in real estate.

I was talking about houses. That is a true fact. This is my whole point here. I’ve got $10,000 to invest. What can I do with $10,000 in an SFR or any other property type like that? Not a lot. I really cannot get very far with $10,000. Hopefully, maybe you find someone or you find a partner, but then it’s their money, not your money. You don’t have any experience to go with this too to show, “I can do this. I believe in this deal. Trust me.” $10,000 is not going to get you far. That’s a fact.

Think about land for a moment because that’s what we do anyway. I want you to know that it doesn’t take a ton of money to get going. Think about your $10,000. You could start off by buying 1 property for $10,000 and selling it for $20,000. Next month, buy two properties. You buy 2 for $10,000. You spend your $20,000 and double it again. You got $40,000. In month three, I do it again. I do $40,000 to $80,000. Maybe it takes a little bit longer. I do it in month six. By month six, I turned my $80,000 into $160,000. It’s very easy. I could be buying for $20,000 and selling for $40,000 or I could still not change a thing.

It doesn't take a ton of money to get going in land investing.
Share on X

Let’s assume you are not comfortable yet. You’re going to keep your buy for $10,000 and sell for $20,000. I f I can do 8, I can do 16. Maybe it will take me five months to do that, but so what? That’s going to be close to a year of all my time invested. At the end of the year, I’ve turned my $160,000 into $320,000 all doing the same type of deals.

Think about this. At the end of the year, you’ve got $320,000. Let’s say I screw a few up. It didn’t go like I planned or I didn’t finish on time. I screwed it up and I have $250,000, but so what? There’s my $250,000 inside of a year. I can make different decisions. This is my point here. Do I want to buy one house or keep doing what I’m doing? If I can turn $10,000 into $250,000, think what I could do with $250,000.

In the mid-’90s, I bought a piece of property on eBay. It was an 80-acre property in the middle of Arizona, sight unseen. I won the auction for about $8,000. I cleaned the property up on the internet. I never went and saw it. I didn’t clean the property up physically. What I did was I represented it with maps and cool stuff and re-auctioned off for 2 or 3 times what I paid.

Did you even do anything about photographs?

No.

Did you use whatever photographs they had?

I used what I could find on the internet that was free.

This is good because I was curious. Of the area?

Yeah.

Thank you.

I told the story and all of that. I cleaned up the photos. Back then, it wasn’t even Photoshop. It was something else. That was the real beginning of my real estate career. It was out of frustration with buying and selling nursing homes, which is very difficult. It’s in the eBook. Go get the eBook on LandAcademy.com. I tell the story in the 1st or 2nd chapter. I have never put a dollar into this business since that day. I did exactly what Jill described. 16,000 deals later, here we are and you’re reading about these stories. We know what we’re doing. What Jill said is exactly the way to do it with land.

Point number two and my final point is this. There’s an old saying in life that there’s way more money out there than cents. There are so many people that wake up in the morning and their job is to find people to lend money to, whether it’s mortgage companies, mortgage brokers, or credit card companies. There’s tons of money out there. They are not particularly scrupulous about who they lend money to and what it’s going to be used for as long as they get their money back with a predictable and consistent return interest rate.

There's way more money out there than cents.
Share on X

We’ve been hardwired, all of us, and rejected when we have applied for loans in the past because of how it’s structured. Debt leaves a pretty bad taste in our mouths to the point we don’t want to take a bite out of it anymore. That is why we created Land Academy. All you need to do is find a great piece of property and let us know. There are many members in Land Academy and all they want to do is lend money. They have no intention of ever sending a mailer out. I don’t know why. I’ve never understood that.

They know how smart this group is. They don’t have to do any work.

If you bring a house or a piece of property to us that you have under contract for $300,000 and you can show us that it’s worth $400,000, we will not be able to write you a check fast enough. You do not need any money at all to be incredibly successful in real estate.

You do not need any money at all to be incredibly successful in real estate. Your job is to locate undervalued off-market property.
Share on X

Go find those deals.

Your job is to locate undervalued off-market property.

Queue them up. You’d be surprised at how fast you’ll get them funded. It’s a natural progression in Land Academy too. It’s really nice. That was one way. There are two ways. Start small. That was one. You watch my $10,000 to $320,000 around a year. No big deal. The other way is to use other people’s money right out of the gate.

Let me paint this picture for you. You have your $10,000 but you’re like, “This is only going to get me so far. It’s going to be a slow process. I don’t want to mail and buy for $10,000 and sell for $20,000 because it’s worth $25,000 or $30,000. I want to go for it. I want to start mailing right away. I want to buy for $80,000. I don’t want to sell these things for $150,000 or $160,000 because I know they’re worth $200,000 or maybe more.”

Those are easy real numbers. You’re like, “I don’t have $80,000.” Jill does. Jack does. I see all these people in Land Academy where they do. The other way is you could dive right in. Buy for $80 and sell for $200,000. Those are really easy numbers. When people get a letter for $80,000, you better believe they pay attention to it.

You don’t get the whole profit. It’s whatever percentage you and the funder work out. Maybe it’s 50/50. Maybe it’s even more depending on what you’re putting into it. Maybe you’re doing more like, “I’m going to sell it in 30 days. I know what’s going to happen. How about 60/40?” People will not argue with that. You could also say, “If I don’t sell it in 90 days, then we rock it to 50/50,” or whatever it is. Whatever you and your funder work out is what you do. You do 4 or 6 of those a year. My earlier transaction was 16 deals to get you to at least $250,000. You’re probably going to do it in 4 to 6 deals and then you’re going to get your $250,000 in a year.  That’s the other way to do it.

Your talent is leverageable. Your funder is going to run out of money eventually, so you get another funder. All you’re doing is running around, placing these properties with your funders. It’s not incredibly difficult if you learn how to do it and utilize data correctly the first time around.

I’m going to argue those bigger deals are a little bit easier too. I want to take a moment and share that. At that price point, probably bring in a professional to sell it for you so you don’t even have to do that work. You find the deal, get the money, put it all together, and get it purchased. You’re then managing an agent and watching the transaction go. How fun is that?

The people reading this are like, “You guys make this sound so easy. Why doesn’t everybody do this?” Here’s why. It’s because they’re not smart, and you are. Join us in the next episode where we talk about the fourth myth, which is that real estate investment is risky. You are not alone in your real estate ambition. We are information and inspiration to buy undervalued property.

Are you ready to rethink everything you thought you knew about creating equity in real estate? In Episode 2075, Steven Jack Butala and Jill DeWit bust one of the biggest myths in the business: that improving real estate is the best way to build equity. Spoiler alert—it’s not. This week is all about tackling the top myths we hear at Land Academy, and today’s topic is one of our favorites.

We’ll dive deep into real stories, like Kimberly’s journey of pricing a property, neighbor letters, and strategies that work in the real world. From understanding market data to exploring the power of off-market deals, this episode is packed with insights to help you work smarter, not harder.

Tune in as we uncover why buying property below market value beats renovations every time and how this simple principle can fast-track your path to wealth. Let’s get into it!

—

You are tuning in to episode number 2075. All week, we are debunking or dispelling myths. In this episode, the myth is that improving real estate is the best way to create equity. I had to pick my favorite five. This is one of my favorites. There are a lot of myths in real estate. We could do another entire week on the myths that I said about how I can’t fit them in.

You came up with the whole theme for the week. I remember you popping in whatever room I was in. You were like, “Can you give me a couple without thinking about it too hard and brain dump?” I was like, “I got some.”

This whole week is about myths, but it could be easily called the top five questions we get at Land Academy. Each day on the show, we answer a question from our Land Academy Member Discord forum and take a deep dive into land-related topics by popular requests. This is long, but it’s worth it.

It’s a little conversation. Kimberly wrote something. She got an answer back and she wrote an answer back. It’s long.

It’s a story and it ends beautifully.

I’m going to read it verbatim. I’m going to go right through it. Kimberly wrote, “I have a property that won’t sell. Should I reduce the price? I have it listed for $15,000.” Chris wrote, “You should be determining the market price based on like-kind comps in the immediate area, not assessed values. Those are used by the county for tax purposes.

Generally speaking, your selling price should be at or below market price to move the property. As for neighbor letter pricing, are you planning to list with an agent or sell yourself? What is it going to cost to market and sell it? Discount your price by what those costs would be, and send the neighbors a letter with your neighborly price and a deadline for taking action before you list it on the market.” Kimberly wrote back, “I got it for $1,500. There are 2 properties down for sale at $14,000 right now with the same acreage and same everything. I’m sending neighbor letters as soon as I get the deed back in my hands. I was going to sell it myself since it’s such a low-cost property.”

Rebecca wrote, “How long has the property been for sale on the market? Has the asking price on the listing gone down over time? How many views and saves on Zillow? Actual sold prices of similar property are a more accurate reflection of market value than asking prices.” Kimberly wrote, “It has been on the market for a long time now. I was thinking of listing it for $7,000, which would quadruple my investment.”

These two people are helping Kimberly, Chris and Rebecca. They are telling her to look at the data. That makes me all warm and fuzzy inside. If you dig down into the data about what’s going on in the market and what’s happening with the property and maybe with you personally, you’re going to find the answer to everything. If you’re like, “Why am I not making as much money?” If you dig down into the data, you’ll find out. You’re like, “Why isn’t my property selling?” We’ve all been in this situation. Jill and I have multiple properties that are not selling. If we dig back down to the data, we know exactly why. In our case, we probably don’t care and that’s not good.

Philosophically, and this is my final point before Jill jumps in, a $7,000 sale with a comparison value and 2 properties over $15,000, you won. You tripled your money to $7,000. My question to you, Kimberly, is why didn’t you list it for that in the first place? We would never be having this conversation. The answer is that you wanted to maximize the price. You wanted retail.

We’re not in the business of selling properties for retail value except in very rare circumstances. I say this to everyone, and we don’t talk about it enough. We are in the real estate business to provide properties on the sell side. We’re selling properties below the break point in every single market so we can move in and out of these properties really quickly. Holding a property for a year and getting retail value takes longer. Probably in the end, you make less money than burning, churning, and selling a ton of property quickly.

She’s been on the market for a long time. A long time for me is 30 days. I wonder what a long time is for her. We don’t know. I have a couple of points to make here. Number one, she bought it for $1,500. There’s 1 listed for sale for $14,000. Why would you go in and do yours at $15,000, I have no idea. Chris said, “Do a neighbor letter.” I love that too. I would start with a neighbor letter and I refer to the 1 for $14,000 and say, “Mine’s $10,000. If you’re not into it, I’m going to list it for $12,000 or $13,000,” or something like that.

I wouldn’t go too low because when you have a property on the market that is half the price of the property a couple of lots down, it tells everybody there’s something wrong with yours. I’ve had that happen. I’ve had to go in and raise the price. I’ve tested this and done that. I go back and raise it and everybody is like, “It’s in line.” Everybody sees, “It is a great property like this one.” I’m a little bit lower so then mine moves. That really is effective.

We’re not trying to reset the market, but you do need to do what makes sense in the area. I’m assuming you ran all your Red Yellow Green tests so you wouldn’t have sent out mail there anyway. You did everything right. We need some more. I hope you have three other properties coming through so you won’t be so hyper-focused on this one. Set it and keep an eye on it. Watch your phone. Answer questions. See what they’re asking. Update your listing if possible. Make sure the photos are great. Do all the stuff that we show you to do in Land Academy. If you did your test right and you mailed it to a good area, then it will move.

Every time Jill and I do a live event, I ask this question, “Who here doesn’t like off-market real estate deals?” No one raises their hand, not a single person. That’s because off-market real estate deals are amazing. They’re amazing for the seller and they’re amazing for the buyer. When you send an Everett letter out, you are creating on the sell side an off-market real estate deal and you’re going to get a great response.

A neighbor letter, if you don’t know, is a figurative circle around your property that you have for sale a mile out. Everybody that owns real estate within that mile or ten miles if it’s rural or whatever number you think is appropriate, you are sending them a letter and saying, “I know you own this property here. Congratulations. I bought a property and I’m going to sell it. I would like to offer this to you as an off-market real estate deal before I send it out to the planet. It’s easier for me to sell it to you. It’s faster and cheaper. I don’t have to work on it and you’re going to get a better price than if I post it. Everybody wins.”

Put a deadline in there. I would be really clear like, “I’m going to sell it right now for you for $10,000.” Give them 30 days or something like that. Say, “If you don’t reply by the end of the month, I’m going to list it for $12,000, FYI.” There you go and move on.

This episode’s topic is the myth that improving real estate is the best way to create equity. It’s not. You’re tuning in to this because you want to get wealthy or you want to increase your already wealthy situation, or you want to get into real estate because buying and selling land is something that you’ve always maybe thought about in the back of your head. Maybe you’re so tired of driving down the freeway and wondering, “Who the heck owns all this land all over the place? Why isn’t anybody doing anything with it?” or some version of that.

We call that in our house equity. What’s your net worth? How much equity do you have? Creating equity is why we’re all here. You can go to your W-2 job and get a paycheck. You might be $5,000 or $6,000 more wealthy or have that much more equity that month before you start paying your bills. That’s creating equity.

In real estate, there are two ways to do that. Number one, you improve the property. You might be a developer and put up a regional mall. You might put up a skyscraper in Midtown Manhattan or you might put a shed on a piece of vacant land in the middle of Montana. You are creating or attempting to create equity, the value of the land. When your actual cost of building the skyscraper and buying the land is less than what you would go to sell it for, that’s creating equity through improvement.

In real estate, there are two ways to create equity: improving the property or buying it below market value.
Share on X

HGTV is packed and full of improvement programs. Buy a piece of crap house for $150,000 and put $80,000 into it, which ends up being $220,000 and you sell it for $300,000. You’ve created $80,000 of equity. That’s fantastic. The world does it every single day. There’s a bunch of schmoes with a hammer in their hand trying to do this. I don’t like that and neither does Jill. Once in a while, Jill and I do it and we do it very profitably. It’s not my favorite way and it’s not hers. The second way to create equity is to purchase any type of property for less than it’s worth.

That is the easiest.

They’re like, “It’s so obvious it’s silly.”

It’s like, “I bought this car.” It’s Barrett-Jackson time, which is coming up in Arizona in February 2025. We all know this car is worth $80,000 and you get it for $50,000. Congratulations. There’s your equity. That’s what we’re talking about. It’s the same thing. We think of it and see it so clearly in everything else, but for some reason, people look at us sideways like, “How do you do that in land?” We do it all the time.

Here’s one of my peeves in life. It is when people act and don’t think before they act. It’s so automatic for people to buy a house and immediately think it needs a new kitchen and a new bathroom. Does it? How about you get it so cheap that it doesn’t matter and you go to resell it with the existing kitchen and the existing bathroom? They’re like, “You’re leaving so much money on the table.”

Am I leaving money on the table? In the time that it would take for me to renovate this house, I could have done three real wholesale transactions. I don’t mean wholesale like this industry likes to say where you put an offer in, shop it around, and mark it up $10,000. I mean buying a piece of crap house so cheap that you can sell the exact same piece of crap house without ever going into it and seeing it for $40,000 or $50,000 more.

That can work. We all know that that’s documented. We all know when you first get into real estate, you start learning and talking to people. You read stuff and you understand that most of the time, by putting in a pool, and it’s probably $40,000 or $50,000 already to put in a pool, you’re not going to typically see that as an immediate exact cost bump on the sale price. There are some things like kitchen, bathrooms, depersonalizing things, paint, and carpet.

Where is this going? Are you going to renovate a house?

I want to tell you that this can work. That stuff works. If you’re set up for it and you already have a construction company, and that’s what you’ve been doing your whole life, it is a whole different ballgame. For people coming into our world who think, “I’m going to now do this. I’m going to learn that stuff too,” I always say, “Hold on a moment because you’ve changed your job description. You’ve changed your whole business model. You might not be as profitable as you could be because you don’t have all that stuff in place.” That’s where I’m going. It can work, but it’s not the best use for most of us.

What Jill and I are great at is a lifelong career in buying property for less than its actual as-is-where-is value. If it’s worth $100,000 we like to buy it for $20,000, $30,000, or $40,000-ish. We’ve refined the process of doing that. Each time it gets refined, it gets a little bit more efficient. We’re sending out tens of thousands of offers, as you know because this is the Land Academy way, instead of picking up a hammer. Jill is using her skills on the phone to create an off-market real estate deal where there wasn’t one moments before. Isn’t that easier than doing a new kitchen?

Here’s the point too. Time. In a week, you and I could queue up three of these deals. It’s a lot of mail. It’s a lot of time on the phone. I don’t care. Think about this. It’s worth $100,000 and we sell for $80,000. We got three deals that I queued up within a week. That’s $120,000. I could not renovate any house inside of 1 week and create $120,000 worth of profit by renovations.

Here’s another part of that peeve. Every time you pick up a hammer, call a contractor, or do any type of improvement, I don’t care if you’re a developer building a skyscraper in New York. There’s a profit margin in every step of the way. There are real estate agents involved. There are title companies. Some of that is unavoidable, specifically a title company or escrow company.

We are in this business for one purpose: sourcing undervalued real estate. Mastering this one skill—finding undervalued properties and selling them, or partnering with someone who does—can sustain you for life.
Share on X

If you go do a new kitchen, even if you do it by yourself, you’re going to go buy the material, buy the tools, and pay sales tax on all that stuff. The government is taking a little bit of profit already. When you go buy a piece of land, no one is taking any profit margin out of that thing at all with the exception of the title agent. If you do enough deals with the title company, you can hammer them and get that cost down. It’s a few hundred dollars anyway usually. The more you develop and the more you improve, the more people who have fingers in that pie.

I agree.

We are in this business to do one single thing. I would really encourage you to seriously think about this. You only have to be good at one thing for the rest of your life, and that is sourcing undervalued pieces of real estate and then selling them on the other side or your partner does.

There you go.

Join us in the next episode where we talk about our next myth, which is that it takes a ton of money to invest in real estate. You are not alone in your real estate ambition. We are information and inspiration to buy undervalued property.

https://www.youtube.com/watch?v=OpvnByIQQgE

This is episode number 2064. This Monday, all week this week, Jill and I are going to be talking about what works and what doesn’t work in your land business. Why are we qualified to do that? Why are we qualified, Jill?

We know a lot about what doesn’t work. We have 30 years behind us. I’m going to keep going. You do. I have sixteen almost years behind me full-time at this. What else? We’ve got 18,000 deals under our belts.

It’s some number like that. I think it’s a little closer to 16,000, but it feels like 160,000.

That’s true. It feels like 3 million. That’s good.

We’re going to tell you very candidly all week this week. Whatever time Jill and I sit down to do topics for the week. We look and see what people are talking about both within our group and then outside out there on the internet. These are five topics that we picked that we would like to maybe bust the myth associated with these topics and give you the real answer because we’ve made money and screwed some stuff up in every single one of these topics.

When people come to me like, “There’s this new thing that’s called fill in the blank.” I’m like, “Been there, done that. What do you want to know?”

Good. I had a kid come to me a lot of years ago and say, “There’s this new band called the Beatles.” He’s just obviously new to him. On Monday, we’re going to talk about how does investing in tax things or tax deeds works as part of your land investment business. We’ll spend some time on that. On Tuesday, we’ll talk about subdividing and land and whether or not it’s profitable as part of your business. Wednesday, adding mobile homes or houses to your business. Thursday, which types of the five types of land should you be flipping and where in the country should you be doing it? Friday, we’re going to look at, Jill and I are going to be very candid about how we have kept food on the table for 30 years doing this.

It all comes back to land.

Sure does. Each day on the show we answer a question from our Land Academy member Discord Forum and we take a deep dive into land-related topics by your request.

Vahid wrote, “Dear team, for estimating price per acre, the size of the property matters. I would look up recently sold comps in a given geographic location within a certain acreage range which would be comparable to the property that I would be considering.” All good. “Some use this technique for blind offers. How would you group the acres in order to price the land?”

This is what he’s getting at in general. This is a good basic concept for everybody to either now be aware of if you’re new or if you’ve been in this for a while to refresh. Property. The smaller the property is, the acreage size, let’s say one acre, it’s more expensive. More expensive as a price per acre than a 40-acre property, let’s say. A one-acre property you might see on the internet for $50,000 to $80,000, something like that. Then right next to it, there’s a 40-acre property that is listed for the equivalent of $5,000 an acre or less $5,000. That’s just how it is. It’s in economics. It’s called the bottle case theory. When you buy a bottle of beer, It’s more expensive than if you bought all 24 at the same time. Comes back to beer and sports.

I’m like, why does it always go there? It’s when you’re like, you could have used a carton of eggs or something, I don’t know.

The bottle case theory has just been around forever. I don’t think people buy one egg.

No, but we buy hard-boiled eggs, buy six in a package. I do that.

People understand baseball, beer, and members having relations with members of the opposite sex in most cases. Those three things. The land business is about the same. What Vahid is asking here is what categories I should deconstruct to look at the property. Should I look at 0 to 1, 1 to 20, 20 to 40, what’s the deal? Here’s the deal and I’m going to try really hard not to explain how to build a watch when you ask me what time it is. Our entire land system in this country is based off of England’s land system and everything starts with one square mile, which is 640 acres square.

Back in the 1800s with the great land giveaway, the federal government subdivided. Most of the country into a range township scenario and blocked all of the contents of a range township into one square mile. You’ll still see in a ton of places all over the country, 640 acres for sale, specifically Nevada. From there, properties were homesteaded and then started to get subdivided. Usually, it was farmers or ranchers who wanted their kids, they wanted to give their kids properties so that they could stay close to work on the farm or the ranch or whatever. They started cutting them in half.

You start with 640, you go to 320, and half of that is 160. Half of that’s 80, then 40, which is why you see 40 acres everywhere. Forty acres, it’s the title of the song. 20, 10, 5, 2.5, and everything below that. I would heavily recommend that that’s how you do it. You start with 640 and divide by two. It’s really interesting. This topic was all over. This could be the Land Academy Discord channel and somebody in there asked chat GPT this question and very intelligently phrased question. They said exactly what I just said. How scary is that?

I wonder where chat GPT probably got it from you.

No, I wonder. There has to be some stuff in there.

We’re going to have enough content out there. I haven’t Googled us lately, but I bet it’s comical. How much content is out there, especially after how many 2000 and I don’t remember podcasts?

The takeaway from this is it’s not logical. You would think it’d be different, but the reason that you want to use those step-ups or step-downs, depending on how you look at it, when you look at price per acre is because that’s usually what’s out there. If you go to Landon Farm and look at ranch property, usually, it stops at 80 acres, not 60. It’s not logical. It goes from 40 to 80 and 80 to 160. I hope that’s clear. Is that clear?

The reason that you want to use those step-ups or step-downs when you look at price breakers is because that's usually what's out there.
Share on X

Yeah, did a great job. Speaking of sports, before we go into the main topic, just something, you’re talking about baseball, the commonalities of certain people, and it leads to their traits and things like that. When you and I are watching the World Series, Dodgers by the way. They throw all these crazy stats on the screen for you during a TV timeout or whatever it is they’re talking. Changing pictures most likely. Anyway, my favorite stat of all stats this whole year was showing the size, the average size, and weight of the players per sport. Remember that?

Yeah. Hockey players are tiny.

They’re little but those baseball players, boy, they outweigh them all. I was laughing.

What’s the message there, Jill? I swear, more than football. It was funny. I’m like baseball players know how to drink beer.

I think that’s part of it.

Jill and I have a personal relationship with several umpires.

Behind home plate.

They can drink beer. I can personally confirm that. Our topic is Does Investing In Tax Liens and Tax Deeds Work as Part of Your Land Investment Business? Yes, it does. I’ll tell you.

Done.

Here’s the deal with tax liens and tax deeds and I’ll do a light definition really quickly.

That would be great.

Jill owns a property and she owns it in Arizona and every year, sometimes twice a year depending on where it is, she gets a tax bill in the mail. Like it’s $19.58 and she gets the bill and she pays it. Either pay it online or write a check. At some point, for whatever reason, she stops doing that.

I get tired of writing those checks.

Maybe she died. In fact, that’s the reason. The vast majority of people are back on their taxes is because they’re died or they just lost complete interest in the property. Just say, “I’ve been writing a $28 check, and back East, it’s way more than $28. It might be $2,800 for a piece of property that my husband bought, my ex-husband bought, and my dead husband bought. I’m tired of it. I’m not paying anymore.”

My dad gifted me.

A period of time goes by and depending on what state you’re in, let’s say it’s a tax deed state. The taxing authorities start to send you notes and letters. They eventually send you certified letters and then they eventually send you one big package at the end. Ask me how I know this. That says, “Look, Jack, the auction’s a month from now. We are going to auction your property off and you have to follow these procedures.”

They involve cashier’s checks, walking into the county, or a bunch of stuff. That’s really inconvenient with all kinds of administrative fees that have been accumulated over the years. If I just blow it off and shred the package, ask me how I know that. The property goes to auction, a literal auction in a tax deed state and Jill wins. I don’t know, we switched positions on those.

That’s true, you win. It was my property, you buy it then.

Jill shredded the documents.

I did.

I go to the tax auction, usually sitting next to her, and we buy it. That’s what happens in the tax deed business, and I built this entire company based on exactly what I just described, buying tax deeds. All over the country. This was long before I had any real social responsibility in life and long before I met Jill.

Can we talk about this for a moment? This for you really started in the ‘90s. I would like you to just say I was telling someone the story about this. Someone brought this up recently to me like it’s a new thing and they just found it. I’ve said, hold on a moment.

Back seat?

I really did. I said, “This one used to be in his own forerunner was own camera, driving around looking at property going to these auctions, reviewing this stuff ahead of time, and picking out what you want.” I remember doing this with you. I came in on the tail end of that and that was almost 16 years ago. He put me in the car and had a list that he had highlighted, and we went to a couple of auctions. I remember I was in charge of keeping track of how much money you spent at that time. That’s the story and I know you’re going to say the pros and what was good about it was not good about it.

Fast forward to today. It’s still you can still do this and there are procedures but answer the internet. The internet now is where it all happens. If you go to Los Angeles County and sign up to be on their list, you can do it for free. They have this online only but I’ve been to the LA County tax deduction. It’s the largest tax deduction in the world and they do it every year and they used to do it in a stadium, believe it or not. Over the course of two weeks, that’s how much property and how much money would flow through there.

Now, the internet is where it all happens.
Share on X

Really interesting cast of characters in there, buying land. People that are small business owners are buying shops that just have tax defaulted. My whole thing was to drive around, go to these tax, do a lot of research, go to these tax deed auctions. Hopefully, there’s not a lot of competition when you’re there. It’s an auction. It’s just that everything that you’ve seen and heard about auctions is probably true. Buy a bunch of property and then resell it. We would resell it on the internet and mark it up.

A lot of times pretty dramatically market up 5 to 10 times what we paid. We were used to, it was regular for us to buy properties for $10 or $11 or $15. The only reason that I put myself through that was because it was just life on the road situation. It was fun when I look back on it. I got to meet all kinds of crazy people from small towns all over the country. The only reason I put myself through that is because I hadn’t yet figured out how to send mail out. Sending mail out does away with all the actual in-person work.

If the mail does all the work for you, you send out a thousand letters there are maybe 8 or 10 or 20 people that receive one of those offers and they choose to call you. Now instead of you putting all this outbound energy to bring a few properties back, you’re sending out a bunch of letters which takes just hours. All the energy is put on the people who are receiving those letters to contact, in our case, Jill to say, “Please buy my property. I’m tired of paying these taxes.” It really makes a lot of sense. Here’s the deal. When you stare at a tax, it gets really easy to get excited about this. I still do it every single time I see a tax list. I’m on all these lists, by the way.

The emails can go on your list.

I am getting constant emails.

Let’s do it.

It’s just fun to get on the road and go look at land. That’s what we’re doing in this rig, by the way. You have a list of in a tax deed situation, hundreds and hundreds but sometimes thousands of properties that you have to analyze. You’d sit down in a dark place somewhere and take a lot of time and analyze the tax deed list to see if the properties work. Very often these properties are not taxed correctly, which is why they’re on their list.

All these properties that are on these tax lists, lien or deed, have problems. They either have ownership problems because they’re dead or there are actual problems with the land. That’s very often the case. Now you’re sifting through a thousand, not sifting. You are going through the due diligence on a property that you probably have no chance of ever buying.

That’s a waste of time.

When you send the mail out, you get ten back, you do due diligence on ten of those and five of them work or two of them work and you buy it. It’s really efficient. Tax deeds are not efficient. Can you make money? Yes. It’s an incredible amount of work. Tax liens are worse. I’ll end on this. This is how tax liens work. It’s the same story. Jil stops paying. A lot of time goes by. It’s in a different state. It’s in a tax lien state, not a tax deed state. She shreds the final package. They have an auction, only that they’re auctioning off the lien, not the actual piece of real estate.

Whoever wins the auction, they have won the opportunity to pay the actual backtasks taxes plus an administrative fee. Now they own the lien. It’s Jill’s responsibility to either pay that person the amount of the lien. It’s usually 16% in the West. It’s different percentages all over the place. If there’s $100 of back taxes on a property that she let go, I go buy the tax lien and now I own that lien. I buy it for $116 and then a third party comes to me and pays me a premium on top of that. Then what? Who actually owns the property then?

Jill’s technically still owns it. I just have a lien on it. I can as a lien holder foreclose on it or I can sell that lien to somebody else who can go foreclose on it through a judicial foreclosure process usually. There used to be a thing back in the day and back in my day, where you could apply for administrative foreclosure so the county would do all the work for you. They would hand you the deed at the end. For like $25, it was the greatest deal ever. No one does that anymore. There’s too much liability. It’s too complicated. It’s a true lawsuit.

It’s a legal action. My whole point in that this is very complicated. It’s incredibly time consuming. I’ve seen tax liens, and lien lists for counties in the 30,000 to 40,000 to 50,000. Now I’m going to analyze 50,000 properties. I don’t think so. What do I do instead? I send out a mailer or send out a mailer to all the lien holders. That’s effective. Yes, tax investing in these things as part of your land business, it can be a great compliment if you surgically know about properties in a place where you’ve sent mail and do a bunch of deals and it can work.

Are you going to buy houses that way and then for $3,000 like late-night TV says you can? Nope. That’s pure fiction. There may be before my time. I think that may have been possible. There are always stories like that, but there are stories about people pulling the slot machine handle in, winning too. It’s the same thing. If you’re new, stay the hell away from this. If you’re retired and bored.

If you're new, stay the hell away from tax liens. If you're really bored and have nothing else to do, get involved in tax liens.
Share on X

That’s it. That’s what I was going to say is waiting for the bored or that’s what I’m going to say. Your experience and bored.

Your wife kicks you out around 10:30 in the morning because she can’t stand talking to you about whatever your problem is that day, get involved in tax liens.

There you go. That’ll eat up all your time.

There was a trend recently that proved to not work. I keep saying, I’m going to end on this, but I really well on this. Wall Street is like companies, because you can make a lot of money and tax liens just sitting at your desk, would go into a county and buy every lien. They wouldn’t even analyze it. Knowing that they’re going to get a 16% return and that backfired because nobody redeemed the liens because the property sucks.

Unless you really know about this and you want to spend a couple of years learning, I could write a book on this. That’s the truth. I will end on this. I could write a book on this. I haven’t written a book and we don’t do it anymore for a reason, because there’s a better way and it sends the mail out. Join us on Tuesday, we discussed the same type of thing. Is subdividing land profitable when you add it to your existing land business? Spoiler alert, yes, it is. You are not alone in your real estate ambition. We are Jack and Jill, information and inspiration to buy undervalued property.