Real Definition of Deal Flow (LA 1375)
Transcript:
Jack Butala:
Steve and Jill here.
Jill DeWit:
Howdy.
Jack 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.
Jack Butala:
Today Jill and I talk about the real definition of deal flow. This phrase, do you ever notice in our little land investment world, there's catchphrases that go on and off?
Jill DeWit:
Yeah. Too many sometimes, there's a lot.
Jack Butala:
And some of them are misunderstood.
Jill DeWit:
Mm-hmm (affirmative).
Jack Butala:
And some of them have multiple definitions and it's like, "No, that's not good." One of them right now is a homestead. I did a show, we did a show, whatever about a month ago. It's like, look, this is what homestead really means because it's just not getting used correctly.
Jill DeWit:
I got one, when you're ready.
Jack Butala:
Well, deal flow is the one today, but yes, go ahead.
Jill DeWit:
Wholesale.
Jack Butala:
Yeah, wholesale is not used right.
Jill DeWit:
Correct, exactly. It drives me nuts.
Jack Butala:
Here's another one, passive income.
Jill DeWit:
Yes.
Jack Butala:
That's a crack up for me.
Jill DeWit:
This is funny.
Jack Butala:
Jill got interviewed by Mark Podolsky, actually.
Jill DeWit:
I did.
Jack Butala:
Two or three days ago. I don't know when it's going to air. He's a scheduling freak like I am, so he's probably got five years of interviews lined up and recorded so he can just air. But they use passive income a lot in that, I noticed. Have you noticed that?
Jill DeWit:
Exactly. And every one of us that has "created passive income". In our world, there's nothing passive about it.
Jack Butala:
Jill and I are lucky enough to have several rental properties in Arizona, and it's as passive as it gets. They're condos for the most part, not all of them. The renters are family friends and over years-
Jill DeWit:
Super easy, they solve their own problems.
Jack Butala:
When they call they laugh and stuff, nobody ever calls and says 12th is work.
Jill DeWit:
Right.
Jack Butala:
And I don't think that's passive. I still think there's stuff that goes on in there.
Jill DeWit:
Oh, stuff goes on. We just don't hear about it. It's good.
Jack Butala:
So, is it passive, really?
Jill DeWit:
No. We're lucky.
Jack Butala:
Is buying stock passive? I don't think so. Because you look at it [inaudible 00:02:13].
Jill DeWit:
That's true.
Jack Butala:
Anyway, I don't know how we got off on that. 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:
Matt W wrote, Hello all, I closed on 18 properties from one seller on Friday, October 30th, for $60,000. They're mostly one to four acre lots, several are landlocked. Most are in the floodplains, but there are a few nice infill lots. I sent out 54 neighbor letters. And by last Friday, November six, one week after closing, I sold six of those lots for $60,000. So while the remaining 12 will take a little bit longer to sell, I have my money back and I can relax a bit. How cool is that?
Jack Butala:
Mic drop.
Jill DeWit:
Then he brought on and said one more thing. I also had an offer on a 15 acre lot. I purchased for 22 five at the end of July for $62,500. All in all, not a bad week. Holy cow, I love that.
Jack Butala:
I mean, he made-
Jill DeWit:
It's perfect.
Jack Butala:
He generated $120,000 in revenue on $60,000. And he's got how many lots left? 12 properties left. So if those 12 properties sell for half of what the other properties did, he's got $70,000. He created 70,000 plus 40,000. He created about 120, 110, $120,000 of equity.
Jill DeWit:
That's why you do it.
Jack Butala:
Since July.
Jill DeWit:
Love it.
Jack Butala:
Most of it is cash. Some of its property, which is like all of you know that if you've been buying and selling property,