Why It Makes Sense to Make Your Hobby a Business (LA 1739)

Transcript:

Steven Jack Butala:

Steven and Jill here.

Jill K DeWit:

Good day.

Steven Jack Butala:

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

Jill K DeWit:

And I'm Jill Dewitt, broadcasting from the valley of this sun.

Steven Jack Butala:

Jill and I talk about why it makes sense to make your hobby a business sometimes.

Jill K DeWit:

My latest hobby collecting cars, what's yours? Kind of the same.

Steven Jack Butala:

Well, here's what I'm going to talk about. If your hobby is price is no object, I want to collect statues and I will pay top dollar then making your hobby a business is a super bad idea. If your hobby is to try to get stuff cheap, it's obviously our hobby like land. Then maybe you can make a business out of it, which we're in the process of doing and I'll describe it.

Steven Jack Butala:

Before we get into it, let's take a question posted by one of our members on the landinvestors.com online community it's free. And also people don't know this. We have a full, Jill and I own and op rate a full blown commercial printing company called Offers 2 Owners. Over the years, jill and I internally developed a system to send blind offers to owners, tens of thousands in the mail sometimes through direct mail. And we found out the through, after we started Land Academy that our members wanted this product. So we launched it. Probably several years ago.

Steven Jack Butala:

Today we mail between 700 and 800,000 offers a month on our members' behalf and I would just want you to know about it. Contact support at offers2owners.com there and just check it all out. It's pretty straightforward and simple.

Jill K DeWit:

Thanks. Mark wrote, "Just read this great article. I had a question. When I'm buying a land property, I will buy with tile insurance. Then when I'm selling with a title company, I'm also purchasing tile insurance for the buyer, like $5,000 plus the purchase price. Will you ..." I can't read the whole question here.

Steven Jack Butala:

That's it.

Jill K DeWit:

Okay. So I didn't know, this Aaron, his name is used a lot. I didn't know if you liked all his questions or if it was a typo. So that's why I didn't say Aaron. Sorry. I made it. But if it really is Aaron, I believe you. So this article is-

Steven Jack Butala:

Let me explain this, how this works. When you go to buy a piece of-

Jill K DeWit:

I know what he's saying. Oh, okay.

Steven Jack Butala:

Let me super, super clarify this, because this is a popular question especially with my people. When you go to buy-

Jill K DeWit:

Am I doing double work?

Steven Jack Butala:

When you go to buy a piece of property, whether it's your house or a piece of land, you go through the escrow process. And when you look at the closing statement, one of you, the buyer or the seller is going to pay for stuff. Or sometimes it gets combined. When you buy a piece of property, the person before you, the seller pays for your title insurance policy. When you go to sell it, because now you are the seller, you pay for the title insurance policy for the next person. Don't ask me why. This is just how it is. And it's a very small amount of money on vacant land, usually two or $300, but it varies around the country. So it looks like you're paying for it twice. What you're really doing is paying for the next guy when you sell it.

Jill K DeWit:

You know what? Sometimes I have to, no offense, I have to interject here. Because sometimes we have to pay closing costs and we pay the title insurance.

Steven Jack Butala:

That's correct.

Jill K DeWit:

That's where he's going with that. Like, wait a minute, wait a minute, wait a minute. Are you guys advocating this, which is, I think of the question, when I buy it, I told the guy, "Here's a deal net to you is ..."

Steven Jack Butala:

10,000.

Jill K DeWit:

Exactly. And I'll pay all the costs. And so I make sure that guy,