The Best Start Up Ideas Come from Where
Jack Butala: The Best Start Up Ideas Come from Where. 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 for Land Show. In this episode Jill and I talk about the best startups ideas and where they come from and why. Jill I’m excited to share how I came up with this new … I’m excited to share how we come up with new product ideas and share it with the audience I guess and how it applies to buying and selling land. Before we do that, as always let’s take a call.
Jill DeWit: Okay. Earl from Texas called and asked, “Is it okay to buy property with back taxes? I don’t want to go through another foreclosure.”
Jack Butala: I’m so glad we got this question, so this topic comes up not very often, but I actually had … I did an acquisition a couple years ago face-to-face, which really never … It’s unusual for me at this point now to acquisitions myself, but I did. It’s extremely unusual for any of us to do face-to-face acquisition, but there’s a guy, long story short, he owns a bunch of property in Northern Arizona.
He worked at University of Phoenix and so I met him on campus which is just a few miles from here. He worked there and on campus, at the cafeteria, we did the deal and his reason that for selling the property, because we always ask, “Why are you selling this?” or his reason to sell is. He did not want to go through another foreclosure so I chuckled to myself. I think I actually came back to the office and told you about it, but let’s get all informed here. Unless we have something to say about this I’m just not going to …
Jill DeWit: No. Go ahead.
Jack Butala: When you own property, free and clear like this, and the property taxes themselves start to accumulate, there’s no foreclosure process. Well, there is, but it’s not like getting foreclosed on from a mortgage company or credit card situation where people are calling you all the time, and it’s a horrific experience for anyone to go through that. When your taxes are delinquent, your property taxes on a property, and there’s no data associated, whether it’s a house or an apartment building or anything. The set process is exactly the same.
The county or the taxing entity is almost always accounting. Send you a letter and then a bunch of time goes by, and then they send you another letter, and another letter, and maybe at best they’ll send you a registered letter. No one ever calls you. They don’t care and eventually there’s a foreclosure proceeding that you will not even know about and they’ll take the property. They’ll take title to the property. In between that, they’re might be a tax lien stage and it’s way beyond the scope of this topic, but there’s no foreclosure process to go to. The most painful thing is if you ignore your mail. That’s as hard as it gets.
Jill DeWit: Then you just let it go.
Jack Butala: Yeah.
Jill DeWit: Does the …
Jack Butala: So, Earl?
Jill DeWit: There’s no ding on your credit or anything like that?
Jack Butala: Yeah, there’s no credit score.
Jill DeWit: They’re not going to come after you and start garnishing your wages, or anything like that?
Jack Butala: Yeah, that’s a good point. Which could happen. Well, that happens with
Jill DeWit: Other stuff. The mortgage.
Jack Butala: The mortgage foreclosure and credit card stuff and all that.
Jill DeWit: Yeah, not with this. They just take it back. That’s it.
Jack Butala: That’s a good question. I’m glad we got a chance to say that.
Jill DeWit: That’s a great question. Can I piggyback on this?
Jack Butala: Absolutely.
Jill DeWit: I have no trouble buying property with back taxes, by the way.
Jack Butala: That’s probably what is real [inaudible 00:03:18].
Jill DeWit: Do your homework ahead of time so you how much the back taxes are owed on the property, because you want to factor that into your purchase price, because that’s something to think about, but that’s the only thing I do, and I ask the sellers, and then I check it for myself. Hey, are your taxes current? Most of the time they say yes, but sometimes they’ll say no. I’m staring at a bill and I’m like, all right. I’ll say, well you owed five hundred bucks if it’s even that depending on the property, so now I’m going to offer X, because of that and factor that all in and they get it. You know what’s funny? Is I probably get deals that way because there’s probably properties that no one wants to touch, because they’re afraid of the back taxes and I have no trouble with that.
Jack Butala: You just got to make sure the deals make sense, so if the property, and a lot of times the back tax amount plus the fees and stuff that the country charges, it exceeds the value of that property.
Jill DeWit: That happens.
Jack Butala: In that case, it’s not over yet. In that case, you just let it go all the way back, so if it goes all the way back, like the end of the line, and the county takes it back, and this is true in almost all cases, but make sure, if you buy a back tax property from a taxing entity, like the county, make sure that everything’s wiped out, because they will wipe out all of the taxes just to get it back on the tax roll, so remember about back tax property, the country’s real motivated to get it back out there and get it to be at an income producing property for them.
Jill DeWit: That’s a great way to buy a property when you get them at that play and they literally wipe everything out. It’s almost starting fresh like it came from the original.
Jack Butala: Right. Hey, whatever you do, do not do the following: only buy back tax property. We have several competitors or main competitors that’s what they teach. Just focus on back tax property. Don’t do that. You’re missing 95% of the actual market. What you want to look for is property with no mortgage set. Vacant lands, houses, the whole thing. No doubt, those are the people they have the power to negotiate any price you ask, so no, don’t be afraid of taxes, back taxes, and you won’t have to go through a typical debt foreclosure at all.
Jill DeWit: Yep. Perfect. All right, so tell me more about the best startup ideas come from where?
Jack Butala: I was watching one of these shows … This is how I came up with this topic.
Jill DeWit: Okay.
Jack Butala: The show was … Actually, it came from a movie that we saw recently called Joy where she invented a product … If you haven’t seen the movie, I think it’s great. If you haven’t seen the … She came up with the product. She came up with a better mousetrap. In her case, it was a mop and she got on QVC and she was a struggling person. Got on QVC and long story short, turned it into an empire. It’s based on a true story. She’s the one who invented skinny, felt hangers in your closets so you can fit more clothes in there. Every woman’s dream.
Jill DeWit: That’s true, actually.
Jack Butala: A lot of the conventional wisdom from that is solve a problem. Walk around the house or all throughout your day my car used to freeze and we’d have to freaking throw water on the thing in Michigan. A lot of people go through that so that’s a problem. Walk around your regular life and solve problems and there might be a product idea. I think that’s a bunch of malarkey. I think the best way, no I shouldn’t say that.
Jill DeWit: I don’t think that’s where you were going. I thought that was a great way to come up with ideas.
Jack Butala: I know. It’s very conventional wisdom.
Jill DeWit: Solving the problems. We’re solving a problem.
Jack Butala: Ask people what they want and if you’re lucky to enough to have customers like us, ask them what they want. They will immediately tell you. They’ll also tell you how to improve your existing products, which will ultimately, you will cause you to launch another product. The single best way to get new product ideas that will work, because now you’re talking to people who are ready to buy it, because it’s solving a problem. You get built-in customer base. Is ask your existing customers or if you don’t yet have existing customers, find a group of people that all have something in common and ask them a bunch of questions about what would make their life easier.
Here’s a silly, unrelated example. There’s a bunch of bakeries in town. Any and every town there’s a bunch of bakeries, there always will be. I don’t care what happens with technology and the Internet, they all need something. Drive around, ask 15 of them or whatever what they need. They’ll all tell you and then now you’ve got personal relationships with 15 people who own bakeries. Start the product. This pie in the sky concept of, let’s make a better mop and sell it on the Internet or sell it on eBay, while I think that can be successful, I think my way’s better. I don’t know what to call it. We need a brand name for it. You’ve created this Jill, what can we call that?
Jill DeWit: The concept?
Jack Butala: Yeah. There’s a widget concept we could call it? Or what could we call that? Did you just fall asleep?
Jill DeWit: Yeah, kind of lost me a little bit there.
Jack Butala: Did I really?
Jill DeWit: Yeah, I did, well because I …
Jack Butala: Was the bakery thing too far gone?
Jill DeWit: It was a little bit confusing to me.
Jack Butala: It’s not that. It’s incredibly shocking.
Jill DeWit: Thank you. Thank goodness our listeners are …
Jack Butala: No, seriously. What were you confused … Are you joking, because I will clarify.
Jill DeWit: No. Honestly, I was thinking about other products. You started talking about … Here’s what happens to me.
Jack Butala: If it’s not a sound bite, she stops listening.
Jill DeWit: That’s not what I was going to say.
Jack Butala: Like a sound bite like this, read my lips.
Jill DeWit: No.
Jack Butala: No new taxes.
Jill DeWit: Stop.
Jack Butala: That’s how you have to talk to Jill.
Jill DeWit: No, that’s not true. No I actually …
Jack Butala: We will launch Wednesday.
Jill DeWit: I was going off on a tangent thinking about our people. Okay. Here’s what’s going on in my world. Sidetrack. I can’t keep up with these orders that we’re taking right now for our new dated door strip that we launched. I am so excited. I can’t believe it. It’s going so well and it became from a need from our customers like you just said, so I apologize in the middle of this show, I started to think about the next thing.
Jack Butala: You spaced out.
Jill DeWit: Well, because we’re talking about what is near and dear to my heart right now, and what we’re working on all the time and solving these problems and coming up with new things to help people, basically what they want. Give them what they want, so where I was zoning out really ties to what we’re going in. I was thinking about another thing that they want.
Jack Butala: Right, so here’s a real-life, exactly what Jill’s talking about. For in real life, this is what we do day in and day out. We send out a mailer and a million people call us back, landowners, and they say absolutely yes I want it. Or they send in an offer back signed and say, yeah I want to sell this property to you for five hundred dollars. Thank you for calling me and solving a problem, so what do we do? We solve their problem. We fill their need.
We arrange to have a notary go to their house regardless of where they live, could be in Maine or in Arizona. We provide the document for the actual deed to be signed by the property owner. We do deliver it to a notary that’s in the area. They go meet with the person. They sign it. Hand them a cashier’s check that we mailed to them and we’re on our way. The stuff gets sent back to us, and we record the deed, and we own it, so they have a check, and we own the property, and so we’re solving a huge problem.
Then on the flip side, when we sell it, we provide that exact same service, but somebody buys a property, let’s say it’s for cash, not for terms. We get the documents to them, we deliver a deed, and we inform them all the stuff that they need that we know about the property, and so we’re solving that person’s problem. That’s our regular land state company.
For Land Academy, we are learning that our members have all the same set of issues that we have. They don’t actually know how to do what I just described. It’s just because they’re new, or maybe they’re lazy, or maybe they just want to be a deal maker and they want someone else to do the paperwork like me. I’m always taken at that angle, so it’s not anytime soon, but we are going to offer a very specific skill set of virtual assistance, so that we can do the paperwork and arrange for these closings. Where our Land Academy members for small price per deal. That is how you find a new product, because people are begging you for it.
Jill DeWit: That’s exactly it.
Jack Butala: This is something I actually learned in college. If you believe it or not.
Jill DeWit: Okay.
Jack Butala: That’s maybe the only thing I learned in college.
Jill DeWit: I love it.
Jack Butala: I can tell when you’re just done.
Jill DeWit: I am. I’m rather tired today.
Jack Butala: Tell us a story. Tell us a story with something that happened with your family recently, a good, positive, fun story. You always have good family stories.
Jill DeWit: What?
Jack Butala: You do. I mean there’s a couple bad eggs, but whatever, you always have good fun, like how’s your aunt doing in California?
Jill DeWit: I can tell you about kid number two, it’s kind of a cute story. Kid number two who wants to start doing … He’s really into graphics I found out, but he doesn’t have a computer. He needs a computer, so I said all right, we’re going to get you a computer. What do you want? Bless his heart, he came back to me with the base model. It’s a Mac and I’m like, because he’s all into graphics and stuff doing them at school, and I said all right, but is that the right computer? No. That’s good. That’s good. I started talking to Steven about it and so Steven says, “No. No. No. No. No.” We need to get him this, this, this, and this. I wrote back to him like “All right, are you sure?”
Jack Butala: We are over-equipped in our world. Over-equipped with equipment.
Jill DeWit: With the stuff. Yeah, Steven’s famous for, which I appreciate, let’s not dink around when it, you know what? You tape together a lot of things, but you don’t tape this together.
Jack Butala: Got to have the right equipment.
Jill DeWit: If we’re going to have equipment and computers we’re going to do that right and buy what we we’re going to need in six months, not what we need today, which I appreciate. Kid is so funny. He’s like, oh well in that case, and I pointed out some graphics difference and stuff on the Mac Pro versus the Air, and he’s like oh, okay, so kid is like so darn excited.
Jack Butala: Plus we’re going to throw in some work, right? That’s a perfect lead-in for this. He’s got a built-in customer.
Jill DeWit: Yeah.
Jack Butala: He’s got the tools to do it.
Jill DeWit: Right. We’re his customers.
Jack Butala: He’s going to solve a huge problem for us.
Jill DeWit: Exactly, so what’s so funny is it was taking a couple of days to get there, solved his own problem. He contacted the shipper and found out he can get it a day early if he went to FedEx and picked it up.
Jack Butala: That’s how excited he was?
Jill DeWit: He’s so excited. Yes. He got it yesterday.
Jack Butala: Did you get the?
Jill DeWit: He was texting me. Oh, totally.
Jack Butala: Is it all that?
Jill DeWit: Oh, yeah. He’s all excited.
Jack Butala: There’s no disappointment?
Jill DeWit: No, not at all. Are you kidding? No, it’s so great. What’s so funny is he got out of school, and he had a soccer game, so he’s like running to FedEx to get this computer to get back to the soccer game and practice and everything, but he’s just so happy and so excited.
Jack Butala: That’s awesome.
Jill DeWit: Yeah and part of this is all coming from, A, he needed a computer for school, but we need graphics help too, now that I know that he is all dialed in and he’s good. He’s already done some little things for me at school. Now, he’s really hooked up, so we are his customer. It’s going to be great.
Jack Butala: Our kids are getting to the age where they’re employable, so as a parent, you always have to wonder, “Eh, should I work with my kid or not?”
If you have any questions or comments, please feel free to email me directly at steve@LandAcademy.com.
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