Greatest Property Scams of All Time (CFFL 0078)
Greatest Property Scams of All Time
Jack Butala: Greatest Property Scams of All Time. 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 for LandAcademy, welcome to our Cash Flow From Land Show. In this episode, Jill and I talk about some real estate dishonesty. I came up with this topic because we’re talking with more and more of our new members, our brand new ones, about their initial experiences in real estate investment and full disclosure here, with candor, a lot of them aren’t good. A lot of them involve a hotel lobby and just a lot of bad experiences and bad advice. Jill, I got to tell you this really turns my stomach.
Jill DeWit: Me too.
Jack Butala: I’m glad we’re doing this … We’re talking about this on the air, because … I’ll tell you, I cannot, on the air, use the language that I use around the office about this topic.
Jill DeWit: I know.
Jack Butala: I won’t. I’m just giving you a heads up. I won’t.
Jill DeWit: Thank you.
Jack Butala: Hey, but before we do, as always, let’s take a question from a dial-in caller. Hey, if you want to be in this show, call 888-735-5045. Leave your question for us. A lot of people are doing it lately, and we’ll have you on the show.
Jill DeWit: Cool.
Jack Butala: When we get better equipment.
Jill DeWit: Yes. Right now we’re reading the questions, but soon you will be on the show.
Jack Butala: Yeah, right.
Jill DeWit: All right. Percy from Milwaukee asks “What if I just want to learn how to buy a house or land for myself and save a lot of money?” Love it.
Jack Butala: Right, so I think what he’s asking there is “I don’t necessarily want to get into the real estate business, like your members do.”
Jill DeWit: Yeah. Just want to learn the process.
Jack Butala: “Can I get involved with the program because I want to buy a vacation lot or a cabin or something in Northern Michigan?” In fact, that’s a fantastic question. We have a lot of members who purchased the program and sent out 1 or 2 mailers to buy extremely inexpensive targeted property for personal use.
Jill DeWit: Mm-hmm (affirmative).
Jack Butala: They do it with houses, too.
Jill DeWit: Mm-hmm (affirmative).
Jack Butala: Usually second houses, not first houses.
Jill DeWit: Mm-hmm (affirmative).
Jack Butala: That’s maybe something we should …
Jill DeWit: It’s interesting. I do see it as second houses.
Jack Butala: It’s probably because we talk about it that way all the time. I could buy a primary residence this way, really easy.
Jill DeWit: I know some of our members that have bought more than one property in the area that they like and then picked the one that they wanted and sold the other ones off, and they like made the money back to pay for the one they just bought.
Jack Butala: I’ve done that many times.
Jill DeWit: I know you have.
Jack Butala: I end up always selling … You know we end up selling almost all because then we buy another one that’s nicer.
Jill DeWit: Exactly.
Jack Butala: Yeah.
Jill DeWit: I’m like that’s the brilliant plan. When they finally figure out “Wait a minute. I have people calling me back, and now I could buy 3 in this area. Wait, and then I could sell 2 and keep the one I really like. Why wouldn’t I do that?” I’m like “Yes, that’s … Why wouldn’t you do that? Just pay for yours.”
Jack Butala: Percy, yes, our program works perfectly well for that. Works great for vacation. Land or recreational land, and it works great for cabins. Cabin sites or cabins. It’s not just for land.
Jill DeWit: People want stuff just to go hunting sometimes, too, I’ve had like guys that like to take their family out and just be out there doing their thing. Off roading maybe.
Jack Butala: In the long list of programs that are in development, and they’re all based on how frequently our customers ask for them, we are developing a program that is just specifically for exactly what you’re asking. You don’t have to wait for it. The basics are the same.
Jill DeWit: Mm-hmm (affirmative).
Jack Butala: When we get to it, we’ll get to it, but right now everybody wants the data.
Jill DeWit: I know.
Jack Butala: We’re releasing the data package in February of this year.
Jill DeWit: Exactly. Okay, so let’s get to the topic. Property scams of all time. Can I throw some out to you and you tell me what your thoughts are?
Jack Butala: Yeah.
Jill DeWit: Okay. I made some notes. Number 1, title fraud.
Jack Butala: Yeah, you know what this is? Not a lot of people know this.
Jill DeWit: Okay.
Jack Butala: You know that you do not have to have the consent of the recipient to deed property to them? If you are listening to this right now, I could, if we … If I really liked you, deed a property to you and you don’t sign it anywhere and you own it. A year later you get a tax bill, and you pay it or you don’t pay it or you say “What the heck?” And you call me, or try to find me. That’s how it works in 99% of the counties all around the country. That gives way to fraudulent … You know, fraudulent behavior, because-
Jill DeWit: Mm-hmm (affirmative).
Jack Butala: This has happened to me in several counties. Not really recently, but it did several years ago, where someone just essentially forged my name and deeded property to themselves, and if you sit there long enough, you can probably master some … Anybody’s signature.
Jill DeWit: Mm-hmm (affirmative).
Jack Butala: If your wife’s notary … It’s not too hard to start thinking that way, which I think is really too bad.
Jill DeWit: Mm-hmm (affirmative).
Jack Butala: Fraudulent … What’s the actual quote Jill? Fraudulent what? Title?
Jill DeWit: Fraudulent title. Title fraud.
Jack Butala: That might not be the definition of title fraud, but it … Deed fraud I guess is closer.
Jill DeWit: Right.
Jack Butala: Where you’re just … You’re clouding the title, then it causes all kinds of problems for everybody. You got to go back and get title insurance and work it out. People have to sign affidavits and stuff. Yeah. I’m sure.
Jill DeWit: It can be done. It can be fixed. Yeah.
Jack Butala: It doesn’t happen-
Jill DeWit: It’s a bummer that it just, it just some property scams, we’re just kind of talking about it.
Jack Butala: It’s just this topic, yeah.
Jill DeWit: Yeah.
Jack Butala: This is a … We’re turning a negative topic positive … We’re trying to take a positive take on it.
Jill DeWit: Yeah.
Jack Butala: There are things that you need to know.
Jill DeWit: You need to know about this.
Jack Butala: Theoretically you’re listening to the show to learn about land and real estate.
Jill DeWit: Right. You’re never going to come across this, but it’s stuff you want to know about. Just that it has happened. Can I … Next one?
Jack Butala: Yeah.
Jill DeWit: I’ve heard of this. This I think I’ve heard of in the ’70s. There were people travelling around selling property more than one time.
Jack Butala: Oh, yeah. There’s a whole movie about that. I think it’s called Legendary Glen Ross.
Jill DeWit: Is that what it is? Okay.
Jack Butala: Yeah. I think it actually was in Arizona where they got leads. This is long before the internet. It was a play originally.
Jill DeWit: Okay.
Jack Butala: I think he was a Neil Simon … I don’t know who wrote the play. These poor guys are sitting in an office, somewhere in the east coast, just picking up … They get these cards back. They put an ad in the paper. Or in a magazine. The ad says “If you’re interested in getting these properties for $100 or 5 or whatever. Send this card out … Rip this card out of the magazine, send it back.” They have stacks of these cards.
Jill DeWit: Right.
Jack Butala: They’re calling these poor people and just hounding them.
Jill DeWit: Right.
Jack Butala: A lot … That was … A lot of times, the way that those deals are structured back then, you could sell 1 lot to 10 people simultaneously collect all the payments and then play the odds that one person is going to finish making the payment stream. It’s awful.
Jill DeWit: That’s awful. I agree.
Jack Butala: That’s a scam.
Jill DeWit: That’s awful. Okay, how about this next one? Property investment seminars and courses. Just fly that one in there.
Jack Butala: Love. I would love to hear what people are thinking right now. Now, there’s a …
Jill DeWit: It’s worth talking about.
Jack Butala: The truth is, Jill and I find ourselves in a defensive position on this topic often.
Jill DeWit: Right.
Jack Butala: Like what the hell are you guys talking about?
Jill DeWit: Mm-hmm (affirmative).
Jack Butala: What are you hawking here?
Jill DeWit: Who are you … What are you different?
Jack Butala: Yeah.
Jill DeWit: I get that one all the time.
Jack Butala: The truth of it is, for … I’ll answer the question in a second. The truth of it is way more than half of the people that come to us come from these silly seminars and these silly … Our direct competitors, in my opinion, have some ethics issues with how much they charge and what they teach.
Jill DeWit: Mm-hmm (affirmative). Mm-hmm (affirmative).
Jack Butala: Yeah. Unfortunately, and I never seen … I have never seen a residential program that I would buy.
Jill DeWit: Mm-hmm (affirmative). I agree. Like those late night infomercials and all that.
Jack Butala: Unfortunately there’s a lot of negative stuff out there, but there’s a lot of good stuff too.
Jill DeWit: Mm-hmm (affirmative).
Jack Butala: There’s a program called, and I’m not … I have no affiliation with these guys, I’ve never spoken with them, but I just read through their website, I never bought it, called Trailer Park University. If you check it out on the internet. Those two guys in my opinion, man I could end up eating my words here because I didn’t watch the whole … Get the whole thing, but just the information that I got from their website, a lot like us.
Jill DeWit: Mm-hmm (affirmative).
Jack Butala: There was a …
Jill DeWit: They lay it all out.
Jack Butala: There was a SuccessPlant. Yeah.
Jill DeWit: Oh.
Jack Butala: I’ll tell you why, they back it up with data.
Jill DeWit: That’s nice.
Jack Butala: They back it up with trailers themselves with data about where the income in this country is going and why trailer parks will surpass at some point apartments as just affordable.
Jill DeWit: Ah. Hey, good for them!
Jack Butala: Yeah.
Jill DeWit: That’s cool.
Jack Butala: They own a bunch themselves, and they run them, and it’s not like here’s the thing.
Jill DeWit: Why aren’t we doing deals with them, whoa.
Jack Butala: Oh, yeah.
Jill DeWit: We have the lay up.
Jack Butala: I need help with that on my TODO list.
Jill DeWit: We’ve talked about them. We have talked … Not that we haven’t talked about this, because we have. Yeah.
Jack Butala: I could do this, this like 1800 a day since I …
Jill DeWit: We’ve looked at a couple of trailer parks ourselves.
Jack Butala: Yeah that … That will happen.
Jill DeWit: Okay.
Jack Butala: The difference is, to summarize this, the difference, in my opinion, between people who … The people who run these education situations and don’t are people who have done transactions where they haven’t. Do they have a credible transaction history? Are they just kind of an actor that’s aligned themselves with somebody who’s actually done some deals? I would think … Or do they have a TV show where they’re running around with kids and strollers and stuff. I just don’t think there’s a lot of credibility in that. It’s entertaining as hell.
Jill DeWit: Mm-hmm (affirmative). You know though, I take it a lot more-
Jack Butala: There are lot a people out there that are way more entertaining than you and I. I doubt they’ve done more deals.
Jill DeWit: I’m confident. My thing is even if you’ve done a number of deals, are you really properly helping someone and teaching what you know? Are you holding stuff back? I get … I hear a lot of things along those lines that people are like “I got this piece, that piece, this piece. I got to pay for this. I got to do that.” I’m like “Wow. I don’t … I don’t understand.”
Jack Butala: If you are ever in an education situation, ever, I don’t care if it’s in a hotel, online, and someone says “What’s your credit card number?” Then don’t do it.
Jill DeWit: We need to look it up in your credit limit. That’s the one that-
Jack Butala: Anything.
Jill DeWit: That’s a little red flag for me.
Jack Butala: If you haven’t … Don’t ever … Do a lot of research.
Jill DeWit: Right.
Jack Butala: You need to be convinced.
Jill DeWit: Well, and I don’t want to be really going into serious debt. You shouldn’t be going into debt for stuff like this.
Jack Butala: You should never go into crazy debt.
Jill DeWit: If you’re starting out buying properties for $100, $200, $300, $400, $500 and then that’s all you’re doing. So what.
Jack Butala: Right.
Jill DeWit: Save up a month or two and $500 and then go buy a property and then start doing it slow. Okay.
Jack Butala: The other thing that comes straight to my mind that I think is really too bad is some of these late night infomercials where there’s a guy walking … There’s one, like a year ago. There’s a guy walking around his garage saying “I used to live in this garage, and I had nothing, and if you think your situation’s bad, my situation’s worse. Now I live in this house and I drive this car.” Don’t … People who are hawking getting rich. That … If that’s the point to all this, then it’s not valid. I did not … I got into this to make a great living, and we have. We do.
Jill DeWit: Mm-hmm (affirmative).
Jack Butala: I did not do it to drive a Ferrari. That bikini Ferrari mentality, it drives me nuts.
Jill DeWit: Mm-hmm (affirmative). I know that really sends you to the … We’ve had a number of employees that, and I’ll say right now, it’s been young men, who have worked for us, and they get into our offices, and they learn what we’re doing and they get an idea and that’s all they see. There’s like “I’m gonna have a bikini, I’m gonna have a Ferrari.”
Jack Butala: Yeah. I’m gonna have a bikini.
Jill DeWit: “I’m gonna have a Ferrari. The girl in the bikini next to me, next year.” That’s what they see.
Jack Butala: I know.
Jill DeWit: We’re telling them “Knock it off. Don’t think that. This is not, you know.” Then-
Jack Butala: Many people have asked me why the hell I drive the car that I drive. I don’t know.
Jill DeWit: I’m good with mine. All right, how about this. Home improvement scams.
Jack Butala: Hmm. That hit the top 5 list didn’t it. Is that number 5? 4.
Jill DeWit: It is number 4.
Jack Butala: Yeah, I mean we all know about those. I guess that made the list.
Jill DeWit: What is that?
Jack Butala: Home improvement scams are, oh man, there’s a million of them. You know, you just-
Jill DeWit: Is it like HGTV, you want to flip … Oh.
Jack Butala: You know that guy, you put an ad out in the paper, or in Craigslist, and you say “I’ll redo your bathroom for $5,000 and I’ll do it this weekend.”
Jill DeWit: Oh.
Jack Butala: They come in, they assess it, and they say “Oh, this is perfect. We do this all the time. I’ll do this on Saturday morning at 6:00. I need to go buy some materials. Please give me $1,500 and I’ll be back and we’ll knock the whole thing out.”
Jill DeWit: Oh.
Jack Butala: It’s very common.
Jill DeWit: Aw.
Jack Butala: Oh, Jill.
Jill DeWit: That’s awful.
Jack Butala: We should get a picture of your face on the show. Have a video.
Jill DeWit: Aw. That’s basic-
Jack Butala: You’re so [inaudible 00:12:53] times. You didn’t know this kind of stuff goes on?
Jill DeWit: No. That really … That ticks me off, man.
Jack Butala: Here’s another scam. It has nothing to do with real estate but I got-
Jill DeWit: Jeez, I didn’t know people did that.
Jack Butala: Here’s another scam. It’s just … When I heard this, I said “Man, everyone could get away with this.”
Jill DeWit: What?
Jack Butala: Let’s say you’re travelling, and you’ve been travelling for whatever 12, 10, airplanes and cars and cabs and stuff. You get to your hotel. You check in.
Jill DeWit: I heard this one. Okay. Yep.
Jack Butala: You check into your hotel.
Jill DeWit: Mm-hmm (affirmative).
Jack Butala: You go into your room, and you’re all groggy and you’re half asleep and the phone rings. The phone rings and the person at the other end says “Hey, this is the front desk, there’s something wrong with your credit card.”
Jill DeWit: Yep.
Jack Butala: “Do you have another one? We’ll just forget about the whole thing.” Because you’re so tired, you give them the credit card, and it’s somebody trying to get your credit card number.
Jill DeWit: Totally. I must have you.
Jack Butala: It’s never happened to me, I would fall for that every single time.
Jill DeWit: Right? I would too. You just [crosstalk 13:48] when the phone’s ringing.
Jack Butala: Yeah.
Jill DeWit: “Oh, yeah. Okay.” It’s housekeeping who wants to go in there. Who knows who. I don’t know.
Jack Butala: Sure, it’s a, or the guy at the desk, it’s not him but it’s somebody, he’s the feeder.
Jill DeWit: That’s true.
Jack Butala: The information feeder.
Jill DeWit: Oh, that’s right. That makes me mad. Okay, number 5. Homestead.
Jack Butala: Oh, yeah, yeah you know what? I added this one to the list, because more and more, I’m seeing take … “Learn about how to homestead properties.” If you don’t know what it is, homesteading is … I talk about this in our program. Cash Flow From Land Program. That’s how property got titled from originally from the federal government to individuals. The feds to raise taxes, to raise … To put themselves in a position where they could collect tax, which is property tax, they gave away property, or they sold it for like $5 an acre. This is all through the 1800s. In fact, it stopped in 1986 in Alaska. You could still homestead property up to that point. It involved, there are a lot of different ways to do it, but the initial one was put a fence around it, and prove the property so that you live there and create a farm, is what they really meant by it.
Jill DeWit: Right.
Jack Butala: Prove the property that way. We’re going to tax you, and then make a good living. It worked out great. It was a great program. Well I’m seeing more and more on the internet where there’s people that will teach you how to homestead property, and I’m here to tell you, it’s gone. That program is gone. You cannot get free property like that.
Jill DeWit: Yes. I concur. That’s a bummer that they’re still out there teaching it and people don’t know.
Jack Butala: Right.
Jill DeWit: Okay, one more thing that you added and then I have something funny to share. Dual escrow.
Jack Butala: Please add your funny stuff, first, because people can’t take it.
Jill DeWit: Okay. I have something funny to share. Steven has decided to help the office staff out, myself included.
Jack Butala: I can’t wait where this is going to go. I can’t be responsible for what I say.
Jill DeWit: Here, you got to say this. This is my partner, everyone, and my … This is what I get. Is my whole staff … They’re kind of liking it, it’s just funny. Steven has decided that instead of teaching somebody how to do something once, he’s going to now create personal videos for all of us.
Jack Butala: They’re not personal.
Jill DeWit: Well, they’re not personal.
Jack Butala: They’re training videos.
Jill DeWit: It’s kind of an office training video. It is a really good idea. I just …
Jack Butala: Why is this so funny?
Jill DeWit: I just am surprised, I just wouldn’t have thought of this. Do you know anybody else that does this in their world?
Jack Butala: Toyota.
Jill DeWit: Well do you do it for your kid, like hey, like you know if I could have done this for my kid when they’re little.
Jack Butala: Yeah.
Jill DeWit: Like “Here’s how you empty the dishwasher and watch the video a few times.”
Jack Butala: Yeah, no. Hey, change your own diaper. Here’s a video.
Jill DeWit: Yeah, exactly. Here’s how to operate the washing machine.
Jack Butala: I think it’s fantastic!
Jill DeWit: That’s what you’re doing in our office, but you’re taking it to a new level. It’s really … It’s really …
Jack Butala: It’s all computer stuff. Everybody loves it Jill. They come over and they’re like “This is the greatest thing ever. Why didn’t we do this 2 years ago?” You’re the only one who thinks it’s silly.
Jill DeWit: Right. Yes. All right, good. I … I just never would have thought of this. I just never … We have our own personal inter-office training videos. Nobody could say that. No, it is a good idea. I just thought that was funny. I had to do it.
Jack Butala: I have to ask why. Why are you reacting this way?
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