What Can Go Wrong Flipping Land
Jack Butala: Today's show is called "What Can Go Wrong When Flipping Land." Jill and I share stories and thoughts about the less than great parts of our little Real Estate niche.
Good morning Jill, welcome to your own show.
Jill DeWit: Thank you Steven, I'm glad to be here with you on our show.
Jack Butala: Yeah. The topic of the show today is and it's called "What Could Go Wrong With Flipping Land." I got this idea, partially from you, but then it's been coming on and off for a couple of months where people say, "Look, congratulations guys, you talk to each other about how great this business is that you're in, but you never really say this is what could go wrong, or, give us something negative that we could talk about at least." That's what this show is all about. Before we get into it though, and I have a bunch of questions for you, and I hope you do for me too.
Jill DeWit: Yes.
Jack Butala: I want to address a question that I got in bigger pockets today. I'm going to read you the question right out of bigger pockets.
Jill DeWit: Cool.
Jack Butala: His name is Ravi from Massachusetts. He says, "How are you able of increase the value of the property that you purchased by six times over what you paid, and then sell it?" I love, love love, this question, because and I know you know the answer. Ravi, here's the deal, we don't do anything to the property. We, at Land Academy, believe that you should spend all your time and energy doing the greatest acquisition you can possibly do, and then sell it for a lot more than you paid, because the acquisition was so good. It was so undervalued when you purchased it. Which really ties into what I think this show is about, Jill, what could go wrong, and I think that you before the show were talking about, lets compare it to houses, flipping houses versus flipping land, what could go wrong with flipping houses, what can go wrong with flipping land?
Jill DeWit: Oh, nothing, I'm sure it's a piece of cake all the time! That's why everybody is doing it!
Jack Butala: Did I sufficiently answered Ravi's question?
Jill DeWit: Yes, I think you did, which is basically buy it right.
Jack Butala: Yeah, buy it right, spend all your time and energy, and resources doing good acquisitions, and not improving the property so to speak, putting stuff on it, or putting in roads or whatever.
Jill DeWit: Can I say something, there are two parts though. Yes, buying it right solves all your problems, it really does. Then, depending how you want to turn around and sell it and market it, that's where you get to decide do I want to sell it for cash tomorrow and make 2 and 3 times as much, or do I want to hold up and sell it for terms, do I want to dress it up with some great photos, do I want to put it all over the internet, there's things that you can do that will increase the value and make it look more attractive, for whoever your buyer is. That also adds value there as well.
Jack Butala: I interviewed somebody a long time ago, and I just described what we did. I said we have this acquisition machine, we buy these properties on the internet, buy these properties through normal channels through sending out mailers and stuff, and then we dress them up just like you said, and put them on the internet. Their response was, "Oh, so you're kind of like a tech company that happens to sell real estate." And I said, "That's exactly it."
Jill DeWit: Who said that, that was pretty smart.
Jack Butala: Yeah. It was a long time ago, I don't even remember which person it was or if we hired him or not.