Driving for Dollars Ding Dongs (CFFL 0063)
Driving for Dollars Ding Dongs (CFFL 0063)
Jack Butala: Driving for Dollars Ding Dongs. Every single month we give away a property for free. It’s super simple to qualify. Two simple steps. Leave us your feedback for this podcast on iTunes and number two, get the free ebook at landacademy.com, you don’t even have to read it. Thanks for listening.
Jack Butala: Jack Butala here from Land Academy. Welcome to our Cash Flow From Land Show. In this episode, Jill and I talk about driving for dollars and specifically maybe why it’s the single biggest waste of time when starting out any type of real estate or real estate investing. Jill, I know this topic really just chafes your butt.
Jill DeWit: There’s a few things. [It can 00:00:20] go on.
Jack Butala: What is driving for dollars, and why does it get you so riled up? Personally, I love this because you don’t get mad very often, maybe ever.
Jill DeWit: Thank you.
Jack Butala: For some reason, it pushes you over.
Jill DeWit: It’s the dumbest thing. When I first heard about this whole driving for dollars, years ago, I even thought there’s got to be a better way. That doesn’t make any sense. I thought it was a thing of the past.
Jack Butala: So did I.
Jill DeWit: I really thought … Back then, you didn’t have the internet. We didn’t have … There was no other way to do it, so you really canvassed the neighborhood, and you, gosh, really got to know this area because you want to be the pro in that, whatever. Then I realized people are still doing this.
Jack Butala: I know and they’re talking about it on the internet even as early as yesterday.
Jill DeWit: Right. I took X amount of cards with me or flyers with me. Gosh, I got to shake a few hands and I’m like, “What a waste of time.” I’m not answering the door, by the way. How many people really actually answer the door anymore?
Jack Butala: Let’s describe what it is.
Jill DeWit: Okay. You want me to describe it?
Jack Butala: Yes, because you’re angry.
Jill DeWit: Thanks. No, that’s very funny. Driving for dollars is a real estate practice where you set out to get clients. You’re literally driving and getting … Well, there’s a couple things you do. One is you’re driving around neighborhoods looking for maybe a boarded up home, something that might be vacant, something that looks neglected or something that could be a possible … They want to sell it. A listing, if you will.
Jack Butala: I don’t think it’s a listing so much as it is in our case. Just a-
Jill DeWit: An acquisition.
Jack Butala: Yeah, it’s an acquisition candidate. It’s a [inaudible 00:02:12]. I guess agents use it.
Jill DeWit: I think agents use it as a possible listing.
Jack Butala: That’s probably how it … That’s probably how it started.
Jill DeWit: I think that’s how it started. Now, flippers use it because they go, “Look, there’s an investment there. I can buy that, and clean it up, and rent it out kind of thing.”
Jack Butala: Right. Yes, you literally drive for dollars. You get in your car … In fact, if you really want some information on how to mess up your real estate career, go to YouTube and type in driving for dollars. There’s lots of people who put a camera on their dashboard and talk to you while they’re doing it.
Jill DeWit: It’s hilarious.
Jack Butala: They can waste your time with them.
Jill DeWit: Yes, you can spend eight hours on YouTube and still get nowhere. That’s perfect. You know what? That’s a better use of your time. If you’re thinking about driving for dollars, don’t waste the gas. Just sit and watch it on YouTube because you’re going to have the same end result.
Jack Butala: Which is nothing.
Jill DeWit: Exactly. That’s why-
Jack Butala: We are going to in great detail,
Jill DeWit: Oh, my gosh.
Jack Butala: … in a second here try to talk about exactly what you need to do instead of driving for dollars.
Jill DeWit: Oh, my gosh.
Jack Butala: For the time being, it’s fun to watch the steam coming out of Jill’s ears.
Jill DeWit: Oh, my god. Well, here’s my reason why. You spend eight hours of your precious day driving neighborhoods. Maybe you find a handful of possibilities that you can follow up on. The time and energy that you spend on a handful, you could have done so much more reaching out to the whole … You could have spent two hours, a Sunday afternoon, downloaded the data for that neighborhood, blasted out letters, and Steven is going to get into this in great detail in a minute, and then just sit back and let them call you and reach thousands instead of a handful.
Jack Butala: You nailed it. Reach. R-E-A-C-H. We talk about it in Land Academy all the time, and you nailed it.
Jill DeWit: Thank you.
Jack Butala: In an eight-hour drive around session, there’s like nine things wrong with this.
Jill DeWit: Gas.
Jack Butala: Well, no. I mean, let’s just look at the raw reach numbers first which is the most important. You’re going to reach … In a car, you’re going to reach … In eight hours, you’re going to reach, I don’t know, if you’re doing everything right, 20 or 30 potential acquisitions.
Jill DeWit: Oh, my gosh. I think that’s a really high number.
Jack Butala: Okay. Let’s say 10 or 15 or something.
Jill DeWit: Yeah. More like 10 from what I read in here.
Jack Butala: What we do and what we help our members achieve and many, many, many, many members are now doing this on a daily basis … In fact, if you want real time information on that, go to successplan.com. That’s where all … It’s a website that I put up where all of our members get together and talk about sending out mailers to get acquisition candidates. The ones who are active in there are extreme successful.
Anyway, you drive for dollars, and you find some houses that you think you might want to buy. Then you go to the county. You contact … You look up who owns the property, or you have some type of database where you can look it up. You find out that Sam Smith owns this old house that’s got boards on it. Then you contact him somehow. You find him. That whole process is just, in my opinion, super silly and time-consuming. You can only reach certain amount of people.
Our way is to get world class data. Jill and I are now licensed resellers of the best real estate data. Resellers is the wrong word. We are licensed providers,
Jill DeWit: Yes, we are.
Jack Butala: … of data. We don’t mark the data up at all. We just provide,
Jill DeWit: I’m so excited.
Jack Butala: … the best highest quality data, and we’ll get into that in a second, in the country. You download some data in the same area that you’re looking for these houses, and you pull out the characteristics that you don’t want. Maybe there’s tons of back taxes on it or maybe there’s too much debt on it. We talk about this in our other programs. Let’s say you weed out … You spend your time learning how to do this instead of driving around. You weed out the properties that you don’t want for sure, and then you send offers to everybody else. If you have your stuff straight, if you spend maybe, I don’t know, what do you think? Like a week learning how to do this?
Jill DeWit: Mm-hmm (affirmative).
Jack Butala: Get yourself into a regular mailing schedule where you’re sending out, I don’t know, 20, 30, 40 maybe a hundred mailers a week, which is very, very inexpensive, it’s less than a price of a stamp for each unit, then the people who really want to sell their property are going to call you back. Then you take a look at the property and spend the time. Everybody does it backwards. I just wrote a blog about this. Even seasoned professionals are backwards.
Jill DeWit: They do.
Jack Butala: The thing about driving for dollars, the takeaway is this, it’s just silly, inefficient. When you’re done that day, you’re done. Then you got to get up in the morning and do it all over again.
Jill DeWit: I know. Oh, my gosh.
Jack Butala: This is, I guess, point number 17. With mailers, when someone is-
Jill DeWit: You get all riled up about this, too, I got to say.
Jack Butala: It bugs me because it’s so inefficient.
Jill DeWit: See? You make fun of me and it’s so darn funny but you think it’s the stupidest thing ever, too.
Jack Butala: I really do. Actually in our program, Cash Flow From Land, I look at … I [put up 00:07:18] a YouTube video of a guy- [crosstalk 00:07:20]
Jill DeWit: [crosstalk 00:07:20] You do.
Jack Butala: I talk all the way through it. I over talked the guy.
Jill DeWit: It’s hilarious. No, no, no.
Jack Butala: This is silly. This is silly. This is silly. This is silly. The guy ends up buying a house and that’s fine. I mean, I guess it works for him. Send some mailers out consistently, and then get the people who really want to sell it. Sell their property,
Jill DeWit: They’ll call you.
Jack Butala: … super cheap and call you right back or send them back the offer.
Jill DeWit: I say this works for other thing … You know what’s great about this, too, is that we’re not just talking houses here. It works for pretty much anything real estate related.
Jack Butala: We are on a consistent mailing schedule for unwanted, rural vacant land. If you looked this up or heard any of our other episodes, that’s what we do. We buy unwanted, rural vacant land for peanuts for like 5, 6, 700 bucks, and we resell it for a heck of a lot more on the internet.
This product type specifically … I actually have driven for dollars for a vacant, rural land way back in the day like in the ’90s and early 2000s because that was before I caught onto this mailing thing. I’d go to real estate office in like, let’s say, in Northern Arizona and sit down with some person and say, “I really want to buy a bunch of properties for $500 each.” Then they [left 00:08:35] me out of the office. This whole mailing thing I put together here or we put together is the result of failing at every single other way.
Jill DeWit: Yes.
Jack Butala: Not failing at it necessarily but it’s-
Jill DeWit: Yeah, you’re making the mistakes in figuring out the right way. We-
Jack Butala: Well, I mean, there’s a bunch of other ways to do this that are actually successful. Go into tax sales is one. I ran a whole company doing that for a while. This is by far the most efficient way to get immediate results.
Here’s the other thing about driving for dollars, you’re really putting yourself in a box about geography. If you’re going to go over to the next county wherever you are drive over there and take a look. Maybe the data shows you that you should be sending mailers out five states over. You send a bunch of mail out five states over. You’re immediately going to get a better response than a one county over concept, and then you can make arrangements for taking a look at the property if that’s what you want to do, or viewing it, or maybe the property is so cheap that you can’t lose. That’s how we do it.
I got a 40-acre property back in Northern Arizona in the mail for 2, or 3 or 4,000 bucks and it’s a signed purchase agreement. I take a look at it on the internet and say, “This got good access.” We teach all these in our program. Then why the heck would I … You know how long it would take to drive around and try to find that? It’d be a hassle.
Jill DeWit: Oh, my goodness. Well, in the … Like you said using the data to tell you where to go because you might be driving in the area and think this is perfect, but it’s priced not competitively for what you’re … Not in your … What am I trying to say? The prices don’t match exactly what you’re trying to do, or pull off, or in your …
Jack Butala: Yeah, I know what you mean.
Jill DeWit: I can’t say it.
Jack Butala: The real tragedy is this. Let’s say you do this for four days. You drive around. I think what Jill is trying to say is that it ends in bad decision-making procedure.
Jill DeWit: True.
Jack Butala: It’s like, “Well, I’ve been doing this for four days. This is the best offer I came up with, so I’m going to do the deal.” It’s not the best deal at all. You’re just convincing yourself to do it. There’s so many things that are wrong with this. We say driving for dollars in the title and all that, but it’s backwards. Send the mail out first.
This is how to do it properly. Get some great data. Scrub that data down. Take all the stuff out of there that you don’t want. The first thing you take out is property with debt on it. I don’t care how great the house looks, or the piece of land looks, or the apartment building looks. If it’s over leveraged, you’re not going to get it for the price that makes sense to you. Take that all out of there. You don’t ever need to talk to those people.
Now, you’re scrubbing the data down. There’s a bunch of other stuff to do after that. When you scrub it, it’s really easy. Then, number three, get some offers in the mail in a real consistent way. I’ll tell you right now. Send in 5,000 offers out. The first 20 minutes you start to do this is a super bad idea because you’re going to get a lot of offers back and pull your hair out that way.
Jill DeWit: Yeah, be careful of what you wish for.
Jack Butala: Now you got the stuff in the mail, a bunch of properties come back or offers come back, then you take a look and do some research at the top 10 that you pick. You buy one.
Jill DeWit: Exactly. It’s so much easier. Well, that’s it. That’s all I have to say. I’m just kidding.
Jack Butala: Here’s the kicker. Let’s say you don’t have any money. You got a great deal, you’re staring at it. You talked to the seller. He thinks you’re the buyer. You don’t have a dollar. This happens all the time with our members. You go out there and you find a buyer and they’re all over the place because nobody wants to waste a really good real estate deal. There’s tons of people that are in a real estate business, investors like Jill and I that have less time but lots of money. It’s really easy on Craigslist and several other ways that we teach to find people who are dying to do these deals and they pay you a ton of money to do them with you. You get the fees off of that or the margins split. Accumulate a bunch of money that way, and then start buying your own property.
Jill DeWit: You just negotiated what is it? 10 property deal with one of our members.
Jack Butala: Yeah, one of our members called me and said, “I sourced a deal. Let’s do it together.” We did. We’re both going to make for probably eight hours of work each, no, less than that, probably 20,000 bucks pretty each pretty quickly without ever seeing … It’s all land, vacant land.
I mean, [inaudible 00:13:25]. I just got another deal in today from a member. I’m not sure if you got [inaudible 00:13:28].
Jill DeWit: I think I did. I was just kind of looking at one so okay. Cool.
Jack Butala: I’m not saying send us your deals. That’s not [inaudible 00:13:35] is here.
Jill DeWit: Hold on, everyone. Good point.
Jack Butala: We didn’t design this-
Jill DeWit: Just a side note.
Jack Butala: We didn’t design this to do more deals or make more money in real estate.
Jill DeWit: We thought about that.
Jack Butala: We did.
Jill DeWit: We did.
Jack Butala: Actually, it’s still in some old … It’s in some publication, still.
Jill DeWit: It was one of the things we talked about. Now, we’re realizing there are so many out there.
Jack Butala: There’s too many deals to do.
Jill DeWit: Right.
Jack Butala: I think we’ve made our point.
Jill DeWit: I think you’re right.
Jack Butala: What did you do this weekend now that we’ve got that out of the way?
Jill DeWit: This is really funny. I got to tell you a funny little thing. I’m coming to the office today and I’m staring at one flight of stairs, one, to come up to the office. It was painful. Jennifer kicked our you know what this morning at the gym. One flight of stairs actually hurt. I’m like, “Oh, man.”
Jack Butala: It’s like walk up two steps and rest.
Jill DeWit: No, but I was almost panting when I got to the top. It’s kind of funny. That’s my funny story.
Jack Butala: That was the highlight of your weekend?
Jill DeWit: No. The highlight of my week … I got some highlights.
Jack Butala: Well, let’s hear it. I was there for part of it.
Jill DeWit: I got a car.
Jack Butala: We can finally stop talking about this transportation,
Jill DeWit: The little green car-
Jack Butala: … problem that Jill has gotten herself into.
Jill DeWit: I still have my little green car. She’s on her way out but now I have a little blue car.
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