No Such Thing as a Failed Mailer (LA 1397)

Transcript:

Steven Butala:

Steve and Jill here.

Jill DeWit:

Hello.

Steven Butala:

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

Jill DeWit:

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

Steven Butala:

Today Jill and I talk about how there's no such thing as a failed mailer.

Jill DeWit:

What?

Steven Butala:

Yep.

Jill DeWit:

What?

Steven Butala:

I really think this taps into a lot of people's concern about their capability of pricing mailers and there's all kinds of things that can happen after you send a mailer out. I've only ever had positive experiences, including, "Wow, nothing really came from that," but I know I'm never going to mail that state again.

Jill DeWit:

Oh, that's a positive too. We did that just recently.

Steven Butala:

That's what I'm saying. We'll talk about it in a second.

Jill DeWit:

Okay.

Steven Butala:

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

Jill DeWit:

David asks, "Hey, all. I was wondering what key metrics you all find most important and are useful to monitor and run your land business for acquisitions, sales, profitability, whatever you think are the most important ones." Thanks very much. I know what mine is.

Steven Butala:

Go ahead.

Jill DeWit:

I monitor our bank balance.

Steven Butala:

You know what? I used to do that way before you.

Jill DeWit:

I do.

Steven Butala:

I think that's dangerous.

Jill DeWit:

I know, but I do know if it's going to the right direction or not.

Steven Butala:

I was fully prepared and I'm going to answer the question the way I was going to answer it anyway, but I didn't know how much money I'd make. I have an accounting background, so I tend to complicate things just like, "Yeah, there's a lot of money in there. More than yesterday. I'm going to go have some fun now."

Jill DeWit:

Exactly. I think we're doing okay.

Steven Butala:

In this business, like a lot of businesses, but in particular this business for some reason, there's this relationship between how much cash you have, like Jill said, and how much real estate you have. And they're constantly going up and down. What's the value? So I'll directly answer your question, David. I look at the number of properties that we own based on have we spent the money on. So if they're in escrow and we've already purchased them, but they're not yet purchased, so there's cash that's out. So how much cash is out and what's the sale value of the real estate that we own? So right now, Jill and I own literally about $2 million, this is sale value of property. And we have generated this year so far ... I don't know what the numbers are, it doesn't matter. A lot, millions of dollars in sales, sold property, and how much money did we make on it?

But I really, really focus, hyper-focus. If I'm in a hurry I only look at one thing, how much property, what's the sale value, the whole sale value of the property that we have already paid for? And then I can sleep at night, because I know there's a million dollars worth of property in there, it's constantly being cycled through. And then secondarily, I look at what's under contract, which means in layman's terms that pipeline's jammed full enough so that we've got a million dollars for sale property, we've got a couple million dollars of property that's being worked on. Not all of it's going to close for a lot of reasons, I'm sleeping good. What I don't look at, and I probably should after Jill just made that comment, is how much cash that we have in reserves or ... I'm not happy when there's too much cash.

Jill DeWit:

I know, that's true, but I do keep track of that. On the first of the month I write it down. What I don't look at is, I look at the big picture, I don't look at the number. I don't have a bottom number, like I have to buy 10, I have to buy the good ones.