Buy One of Ten SFR Opportunities During Virus Times (HA 1222)

Transcript:

Steven Butala:
Steve and Jill here.

Jill DeWit:
Hello.

Steven Butala:
Welcome to the House Academy Show, entertaining real estate 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 Buy One of Ten SFR opportunities during these virus times. You can be way more picky and it should be way more picky. Only the best deals should you be buying right now. Before we get into it, let’s take a question posted by one of our members on the houseacademy.com online community. It’s free.

Jill DeWit:
Brandon wrote, “Hi all, I just started and I think I’ve found my County but I’m a little worried. So here’s the reason why I pick the County and why I’m worried. Pros…” What’s so funny?

Steven Butala:
He shouldn’t be worried. You should pick a County with confidence.

Jill DeWit:
I’m okay with this. I like doing your due diligence. This is doing a little extra due diligence so, but I agree. All right, so let’s see what the pros are. The pros and cons are applied tell us. Pros are low days on market, seems to be no wholesalers or good wholesalers. Either that or they are bad or they don’t have a website. Okay, good. A bad website or no website, now I got it and a pro because it’s nearer growing town slash city. Okay, these are good things. Now here are the cons. Again, no wholesalers-

Steven Butala:
That’s not bad. That’s not a con.

Jill DeWit:
Two, extremely low tax deed sales.

Steven Butala:
Not a con.

Jill DeWit:
All right-

Steven Butala:
That’s a pro.

Jill DeWit:
And then three, there’s a huge difference from those few bad wholesalers that he could find. So I mean it seems like I found a good County, but the low days on market and no other wholesalers makes me think that people have mailed this County and had no success. Also, could it just mean that I have to offer a slightly higher price? I would still yield a good net profit. Just nervous about my first mailer. Anything helps. Thank you, Brandon.

Steven Butala:
The price on your mailer, first of all, toward the end here, there’s like nine questions in here, but the price on your mailer for houses, if it’s up 10%, down 10%, that’s not going to matter one bit. There’s no way to prove this, but it’s not going to matter 1% on who respond. People respond to a housing mailer because they want to sell their house and price is secondary. The people that call back with the hate and they say, “Oh my gosh, I can’t believe that.” Those people are not… That’s not your customer. Your customer is, “Wow, thanks so much for sending this letter. I know it’s cheaper than it’s worth, but you know what, I do. I just want to sell it to you because I want to get out of here and I got to move to Boston or whatever.” It’s a life event. It’s not a price thing.

Steven Butala:
So forget about increasing your price to actually find a deal on a mailer, just forget that forever. That goes for land to what you’re looking for is the life circumstance. That’s why they sign it and send it back and do the deal. No wholesalers in a market for land or houses is great. Extremely low tax deed sales, forget that. That was something that happened in times that are different now because of this virus. And a huge price variance can happen for lots of reasons.

Steven Butala:
For houses, I avoid places that have massive price variances. What it tells me is that… You’ve all heard the phrase wrong side of the tracks, so you look on this side of the track, figuratively. You’re looking at a housing market on, on this side of the tracks, you’re looking at a housing market on this side of the tracks. Everything’s 300,000 here, everything’s 100,000 here. So that tells me there’s a local market effect going on.

Steven Butala:
You see this in Detroit, we cross one street, one major artery in Detroit and everything’s $20,000 and on the other side, literally it’s a million to two. So one street, that tells me that you have to go in and it’s not a bad thing actually what they’re doing, they’re doing your job for you. They’re telling you, here’s the little micro market, here’s little micro market. Make sure you send the correct offers to that market, which is easy as hell to do in housing with the smart pricing thing. We don’t have enough time to go into smart pricing, but smart pricing solves it because it’s asset by asset priced. So there’s no cons here.

Jill DeWit:
I agree.

Steven Butala:
Here’s what you don’t want. You do not to mail a market where there’s so much property for sale, it makes you laugh. And so if you follow the program, I don’t know if Brandon is in our group or not, if you follow how to price houses in our program-

Jill DeWit:
I think he is.

Steven Butala:
It would solve… Go through it and really pay attention to, especially if your first mailer, pay attention to how we price mailers and how to choose a County, you can’t make mistake.

Jill DeWit:
I don’t think Brandon would be asking these questions or know about these questions if you weren’t a member. I think he’s in.

Steven Butala:
Okay, good.

Jill DeWit:
Thank you. Whew.

Steven Butala:
Wow Jill.

Jill DeWit:
Yes what.

Steven Butala:
She sat there.

Jill DeWit:
That’s how it got. There we go. You had a lot to say it. It was great. No, it wasn’t. Try it some time. [inaudible 00:05:22] Oh boy. Have you been spending a little too much time with your significant other? We have. We normally spend a lot of time together, but when you’re forced to, Oh, it’s different. Let me tell you, it’s not so fun. Trust me.

Steven Butala:
Today’s topic, Buy One Out of Ten-

Jill DeWit:
Trust me I’m about to get a dog.

Steven Butala:
Buy One Out of Ten SFR opportunities during these virus times, this is why you’re listening. I’m going to set this up and then you’d take it home. All right.

Jill DeWit:
All right. Speaking of which actually, you know what, if the pet stores are open, I don’t think they are, which makes me sad. I would love to get a pet right now.

Steven Butala:
I saw on the news that there are no adoption candidates.

Jill DeWit:
I saw there was like one area somewhere that the other they ran out of dogs to adopt because everybody’s already adopted them all. They’re doing what I’m thinking.

Steven Butala:
I also saw that somebody tested their tiger for this virus and it tested positive, but that could be like a national inquirer.

Jill DeWit:
That’s true or yeah, national inquirer Yeah. That’s funny. Is that even still out?

Steven Butala:
I don’t know.

Jill DeWit:
Okay.

Steven Butala:
They only let me to go to the grocery store and Tuesday.

Jill DeWit:
That’s right.

Steven Butala:
So I don’t know these things.

Jill DeWit:
Okay. Set me up.

Steven Butala:
You send out mail during good times and bad times, you send out three, 4,000 mailers for houses. And during good times to get a bunch of mail back, a bunch of hate, then you get a bunch of mail back, couple of signed offers, and it’s kind of Slim Pickens, but you do some deals because you just get through it. During these times, you’re going to get a disproportionate amount of people calling back saying, you know what? I do want to do this deal. What’s your job now? Pick the best, the title is Pick One Out of Ten now.

Steven Butala:
For every probably 10 offers during good times you probably would’ve said, “You know what? I’m going to do this offer. I’m going to do this deal.” Now, this is so important in these times. This is our third recession together, my third real recession as a real estate investor. You have to be so darn picky and choosy about the properties that you buy both houses and land. They have to be an amazing fall over deal because you’re going to get way more opportunities and choices, so make it count.

Jill DeWit:
I was going to say before this all hit because of what we know and what you have taught us and about how to pick a County, what to look for in days on market, it’s never a bad situation. You said just get through and I’m like, huh, it’s not just get through it. Just get through it as if you’re hitting an area that you know is not a good area because that’s where you personally want to live and you’re only in it for a primary residence kind of situation. That’s the only reason that I would be mailing not a hot market. There’s other reasons why I want to buy a property there. So that’s separate.

Jill DeWit:
But the reasons we’re all sending mail out and looking for houses is because the data tells us everything in this area, in this price range is going to sell in 21 days or less. Facts, right? So we all know that. So this is going into this, we were all doing just fine coming out of this, we’re all going to be doing even better because there’s just going to be more, like you said. More opportunity, more people are going to really be calling us back. I know we talked about stats on Monday that giving a bunch of different statistics and things to look at but based on experience, like you said, we’re going to have a lot of inventory out there and we have done that.

Jill DeWit:
Steven tells great stories about 2007, 2008, 2009 things that… And it was funny because we did this one day on, it was one of our House Academy Member Calls and we were showing an area that look, Hey guys, we bought properties in this neighborhood for $20,000 and now they’re 180. And I happened to click on one, we were on neighbor scoop and I’m like, let’s just pull up one for example, like here’s an example of the house that I clicked on it and I scroll down to show the price that it showed. You know what it was bought for?

Steven Butala:
20 grand.

Jill DeWit:
20,000, it was in the numbers-

Steven Butala:
On the NRS, 2009.

Jill DeWit:
And it had a recorded sale of that and it showed what it was worth today or like, and it was just a random thing I didn’t like. I couldn’t have planned it that well and it was just so funny. But it’s true. It’s the facts. So we’re going to start seeing crazy stuff. And I think the whole point today is, we don’t want you to overspend and don’t want you to get stuck in a situation. You need to be ready for it. And looking for it like that. Think crazy.

Steven Butala:
Think crazy.

Jill DeWit:
Because that’s how it was-

Steven Butala:
Well said Jill.

Jill DeWit:
I showed an example of no way you could buy a three, two in Phoenix, Arizona for $20,000 that’s worth 180 today. That’s not possible. Well, you know what? You’d go look at the numbers, you’ll find them. That’s true. So think crazy. Think like that. Look for deals like that. Buy one of ten and you won’t fail.

Steven Butala:
Yep.

Jill DeWit:
That’s what I’ve decided.

Steven Butala:
These are your good old days right now. We’re going to go into this, maybe the next 24 to 36 months are going to be the properties that are two or three and four, especially in Phoenix, in markets like Phoenix and Vegas and Florida, properties that are $200,000 now we’ll be 40, 50,000 bucks. And so what it does is these are your good old days. So eight, 10 years from now when the market’s backed up and the whole thing climbs back up, you’re going to sound like an old man like me. You’re going to say, “200,000 bucks is a good deal for this house. Well, back in the day we were buying these properties for 40 grand and selling them for 60 and 80.”

Steven Butala:
And so that’s, that’s what’s about to happen. And is it going to happen everywhere? No, there’s some market center, like the one we live in here in Los Angeles is probably relatively immune, although it will go down. It’s just not going to be jaw dropping, lose 80% of its value.

Jill DeWit:
Slash however, some communities like where we are, they normally every 10 years have staggering growth numbers. You know what I’m talking about?

Steven Butala:
I know what you’re talking about. I’m not sure how that applies to what I just said. I think you just took a little sleep.

Jill DeWit:
I’m not sure.

Steven Butala:
Did you just take a little nap?

Jill DeWit:
I thought I could tie that in somehow and apparently I cannot. So, anyway-

Steven Butala:
We’re out of your hat.

Jill DeWit:
We’re in a different little-

Steven Butala:
Beautiful devaluation and market, let’s call it market adjustment. Isn’t that funny how people say-

Jill DeWit:
Yeah I like that.

Steven Butala:
… the market’s going to adjust itself?

Jill DeWit:
I like that.

Steven Butala:
No, it’s going to be a freak show.

Jill DeWit:
Freak show, market adjustment, whatever you want to call it. Happy you could join us today. Every Tuesday and Thursday we are right here on the House Academy Show. Monday, Wednesday, and Friday. You can find us on the Land Academy Show.

Steven Butala:
Tomorrow the episode on the Land Academy show is called why we, no, are we real estate sheep? Tomorrow is my day to talk about the crazy stuff that’s going on in this world and are we going to take it like sheep? No, we’re not. We’re real estate investors. You are not alone in your real estate ambition.

Jill DeWit:
That’s what threw me off. I’m like, what is he talking about?

Steven Butala:
We’re not sheep here.

Jill DeWit:
Got it.

Steven Butala:
They’re not going to tell us what to do.

Jill DeWit:
I don’t have a good sheep. Maybe you have a better one. It’s okay. The House Academy Show remains commercial-free for you, our loyal listener. So wherever you’re watching, wherever you’re listening, please subscribe and rate us there. We’re Steve and Jill.

Steven Butala:
We’re Steve and Jill. Information-

Jill DeWit:
And inspiration-

Steven Butala:
To buy undervalued property.