Driving for Dollars vs Direct Mail (CFFL 0091)
Driving for Dollars vs Direct Mail
Jack Butala: Driving for Dollars vs Direct Mail. 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 Land Academy and welcome to our Cash Flow From Land show. In this episode Jill and I talk about driving for dollars versus direct mail as a method of finding property owners who want to sell their property at a super reduced price so you can mark it up and sell it. Jill I picked this topic because it makes you crazy.
Jill DeWit: It does. That’s a fact.
Jack Butala: Plus, I personally like when you … You’re pretty when you’re angry.
Jill DeWit: Thank you.
Jack Butala: LIke once a week though. No more than that.
Jill DeWit: Thank you, thank you. I don’t like to get angry, so that’s perfect.
Jack Butala: Hey, before we get into it though, as always, let’s take a question from a caller.
Jill DeWit: I knew who this person is too. Michelle from Florida says-
Jack Butala: Michelle from Florida? That’s a … He’s a member.
Jill DeWit: I know.
Jack Butala: He’s a super successful member.
Jill DeWit: Uh-huh.
Jack Butala: What does he say?
Jill DeWit: Okay, so this is a question that we had recently. I regularly buy property at at the Florida tax auction every week.
Jack Butala: There’s a Florida tax auction every week?
Jill DeWit: Yes.
Jack Butala: Yes, there is. We’ll fill you in in a second.
Jill DeWit: I usually sell it every week or so, so why use data for doorstep if this is working already. Good question.
Jack Butala: How about you answer?
Jill DeWit: Why?
Jack Butala: Why do you want me to answer?
Jill DeWit: Well my number one thing is, why limit yourself? Number one.
Jack Butala: We both do both those things.
Jill DeWit: That’s what I’m saying. Don’t stop what you’re doing because it’s working. Roll this in to and broaden your reach or broaden your counties and get more deal flow. If you’re in it, in it to win it … I know that’s a silly phrase but you know what I mean.
Jack Butala: It really is.
Jill DeWit: If you’re in it to be successful and kill it in this company or in this business I should say, you want your phone ringing off the hook so bad that you have to hire help and you can’t keep up.
Jack Butala: Here’s the difference between waking up in the morning and going out to actively buy a property through a tax situation, which I am all for. Our company was based on that solely for the first few years of existence by living off of tax deed auctions. Here’s a problem with it. You can’t leverage your time. As my friend Jill likes to say, you can spend an hour driving around looking for houses or going to a tax auction, in a tax auctions case a whole day.
Jill DeWit: Yes.
Jack Butala: You’re going to end up with a couple of properties, or you can spend the exact same amount of time, an hour or a day, sending out 25,000 offers via direct mail, with good data. You want to make 25,000 offers, or do you want to just buy one or two properties in a tax auction in the exact same amount of time?
All kidding aside, it makes a lot more sense … Hey if you’re successful, don’t stop doing it Michelle, but you really need to… I say this a million times through the Cash Flow From Land program, there’s no replacement for doing a mailer. Do your mailer, then go out and do this other stuff, and I will tell you, every single person that I have ever come in contact with who begins to send mailers, on top of something else like going to a tax auction or whatever other way, they eventually stop doing the first thing.
Jill DeWit: Like you.
Jack Butala: Yeah. You get inundated every day with offers and with mail offers back in the mail, signed offers saying yeah.
Jill DeWit: Saying I do want to sell.
Jack Butala: Then you tell them how much you want to pay. You don’t wait and see at an auction how much you’re going to pay and wonder.
Jill DeWit: It’s true.
Jack Butala: There’s a lot to say about this anyway.
Jill DeWit: It’s so much easier. It’s very true. You know, I just think, with Michelle, while you’re waiting for your phone to ring you can be looking at some of those things, sure, but eventually like you said, you’re not going to have time, and that’s a good thing.
Jack Butala: This is how Florida … Jill I don’t know if you know this, this is how Florida tax, yes there’s a weekly auction for tax deed property in Florida and houses and everything is in there. What happens is, Florida is a tax lien state so when people stop their taxes, eventually the governing authority, usually the counties, they issue a tax lien. They put a lien on the property, and if you continually not pay investors can buy the lien as an investment vehicle and then they can … So they buy the lien if there’s $100 worth of back taxes, they buy the lien for $100 and then the owner of the property gets charged all these fees, and one of two things happen. They incur all these fees and to get the property back in good standing, they have to pay all these fees and buy this lien back. It’s expensive. In the end the investor can make a lot, up to 20%.
Jill DeWit: Because if they don’t do that, the investor gets the property for the price of the lien.
Jack Butala: That’s right. Then the other thing that can happen is the owner just says forget it, I don’t care, I never wanted the property anyway.
Jill DeWit: I’m just going to walk away.
Jack Butala: In which case the lien holder forecloses on it and owns the property. It surprises a lot of people to tell you that these are two completely different camps. People that buy liens are like stock. They own stock. They want the paper, they want the return, they don’t want anything to do with the property.
Jill DeWit: Like a bank.
Jack Butala: Yeah. They don’t want anything to do with what the property is all about. Then there is our camp. We want the property. It’s all statutory, in every state. You have to follow the state’s statutes, but to the letter, so Florida is unique in this way. When it gets foreclosed on by the lien holder, by statues they have to offer it to the public as a tax deed sale. You can incur all the expense of going through the foreclosure process. Actually Florida is an administrative foreclosure, so they … Believe it or not Jill, Florida, the county people go through the foreclosure process. You don’t have to hire an attorney or anything.
Jill DeWit: They do it for you?
Jack Butala: They call you and say hey your deed is ready, but we have to auction this thing off first just to see if anybody will pay more. Well what happens? There is always somebody that pays more.
Jill DeWit: Right.
Jack Butala: Always.
Jill DeWit: Right.
Jack Butala: This is what Michelle does. He’s the guy that wrecks it for everybody at the end. Which, I have a lot of respect for that.
Jill DeWit: I kind of like that. That’s really good. Congratulations.
Jack Butala: That’s just a little side note about how the Florida tax lien and deed thing works, and I think it’s a silly, awful law but-
Jill DeWit: Right.
Jack Butala: Guess what then? Let’s say the guy who originally owned the property right, he said forget it, I never wanted it anyway.
Jill DeWit: Right.
Jack Butala: If he owes $100 in taxes and it goes to the auction and Michelle pays $3,000 or $5,000, there’s a what? A $4,500 difference, guess what happens?
Jill DeWit: The owner gets it?
Jack Butala: It’s called overages, tax overages.
Jill DeWit: Who gets its?
Jack Butala: The owner gets it.
Jill DeWit: Yeah, that’s what I thought.
Jack Butala: All he has to do is fill out a piece of paper and he gets it.
Jill DeWit: They don’t even know that I’m sure.
Jack Butala: The net affect is, think about this, the owner sold his property and he didn’t have to do anything.
Jill DeWit: That’s true.
Jack Butala: He gets a bunch of money.
Jill DeWit: But he has to ask for it.
Jack Butala: There are people who make a living out of this.
Jill DeWit: Got it.
Jack Butala: This is what they do, just what we do. They make an offer, they buy a piece of property, they let it go back. They let the county and the lien people go crazy. Remember last year when we were talking about a lazy entrepreneur?
Jill DeWit: Mm-hmm (affirmative)- There’s a good-
Jack Butala: You could be super lazy and win at this.
Jill DeWit: Exactly. I just sit there.
Jack Butala: File for the overages.
Jill DeWit: Yeah.
Jack Butala: I know people. They’re on bigger pockets, they make hundreds of thousands of dollars doing this exact thing.
Jill DeWit: You talked about doing … I know.
Jack Butala: We have. It’s on our radar to do an educational package.
Jill DeWit: That’s a good one.
Jack Butala: To make offers.
Jill DeWit: We’re going to call it the Lazy Entrepreneur. Why not? That would be really kind of cool. Everybody I think would-
Jack Butala: Slothpreneur.
Jill DeWit: Slothpreneur.
Jack Butala: Yeah like merging two words like entrepreneur. Sloth and entrepreneur. Slothpreneur. Oh you’re a slothpreneur? Oh not really.
Jill DeWit: Which program are you? Hey I’m a slothpreneur Pro.
Jack Butala: I’m a 100 mile-per-hour-preneur.
Jill DeWit: My favorite is Data To Doorstop. I still like that one.
Jack Butala: That’s a crack up.
Jill DeWit: The program is Data the Door Step, and you might choose to it as use the door stop.
Jack Butala: What’s this show about?
Jill DeWit: Driving for dollars. Okay, back to that. Driving for dollars makes me crazy. I think it is probably the biggest waste of time that anyone can do to try to get, to get out there and hand out ten business cards and canvasing a neighborhood hoping to meet someone that … It’s not even about them liking you too, do they really want to sell? Are you really going to canvas a neighborhood that no one … The only way they sell is when somebody’s passes on and we know those neighborhoods, Paradise Valley, so you know what I mean?
Jack Butala: We have a funny story about that. Go ahead.
Jill DeWit: There’s neighborhoods people just get in and they love them and they … You know, things change. It changes but it’s kind of silly. Some neighborhoods are easy to to … There’s a lot of movement and some there not, I think. I just think a walk doing the door to door thing is the dumbest use of your time. I mean you might-
Jack Butala: Is that what they do?
Jill DeWit: Yeah, they literally go door to door and then try to-
Jack Butala: All the driving for dollars people that I’ve seen, they get in the car-
Jill DeWit: Or that.
Jack Butala: They drive around and they look at the asset itself and say, oh there’s boards on the windows, but there might be something there.
Jill DeWit: Right.
Jack Butala: Or that one is all painted and renovated, there’s obviously no play there.
Jill DeWit: Right.
Jack Butala: Let me tell you something about real estate. It has very little to do with the asset itself.
Jill DeWit: Right.
Jack Butala: Everything to do with how the deal is structured, how much financing is, what’s going on with the paper. Paper, paper, paper. It’s not the asset.
Jill DeWit: Right.
Jack Butala: Assets are important when you’re buying a house for yourself and your family. Then you want the wallpaper to look right, and the foundation to be good and the roofs okay.
Jill DeWit: Nobody uses wallpaper.
Jack Butala: As an investment, or maybe if you’re an apartment guy too, that’s important, but when you’re flipping property or doing … Especially land, or houses you don’t care about the asset. You just want to make sure it’s super cheap. That’s serious mistaken number one. Well a flaw we should say. It’s a flaw with driving for dollars. The asset doesn’t matter, it’s the price. You got to ask yourself this question. You’re driving around in the neighborhood, all the houses … Let’s say in your subdivision, and all the houses are basically the same. Basically the same square footage, or at least you could reduce it down to a price per square footage.
Let’s say all the houses in the neighborhood are $100 a foot. Would you rather drive around to see who has bullet holes in their window, or would you rather write an letter or offer to 13,000 people that live in that neighborhood saying, hey I’m sure that … If you’re interested in selling this asset for $50 a square foot and you want a check by Thursday please sign this and send it back or call this number and we’ll talk about it, and you will be shocked and amazed.
What’s a better use of your time, bullet holes in the windows or cutting to the chase, making an offer and finding two or three out of the mailer? You tell me. If you’re in your car right now listening to this, driving around, deciding how to find property-
Jill DeWit: Whoops.
Jack Butala: Freaking stop it.
Jill DeWit: Yeah. Go get a coach.
Jack Butala: You’re wasting your time.
Jill DeWit: Go back to the office.
Jack Butala: Take the rest of the day off.
Jill DeWit: That’s right.
Jack Butala: Go to landacademy.com and check out Data To Doorstep. We have every single tool your need including all the education to buy a house tomorrow. For half.
Jill DeWit: You’re right.
Jack Butala: That could be the end of the show right there.
Jill DeWit: I know.
Jack Butala: Are you hungry?
Jill DeWit: No, I have a question. What’s with the bullet holes in the windows? Is that a Michigan thing?
Jack Butala: Yeah probably.
Jill DeWit: Detroit thing? We don’t have that.
Jack Butala: You know for some reason Jill, a lot of the driving for dollars videos I see on YouTube are really C and D neighborhoods.
Jill DeWit: Oh is that the point? Is that they really are looking for?
Jack Butala: I don’t know.
Jill DeWit: I thought they were just boarded up or neglected or just something that it’s abandoned. I guess abandoning it anyway.
Jack Butala: I don’t see … I say C and D only because that’s how our federal government census works. When I look at census tracks, which is the smart way if you’re going to do … Jill and I have a whole education thing on this … You pick out census tracks and you use math and if you … Believe me if you’re afraid of math, it’s not hard. Jill and I show you how to do it step by step. How to buy houses for 50-60% of what you’re wholesale them out for immediately. You’re not going to even … We are to the point where we don’t go look at the houses. We have somebody go and take a picture. If you’re new at this, I don’t recommend that at all, you really should go look at it, but you can streamline it so you’re just buying it. You’re buying an APN. That’s what I call it. Accessors partial number, on a piece of paper. I don’t care, at 50% of what a house is worth, in a well chosen neighborhood, it could be a tear down and you’re still going to win.
Jill DeWit: It doesn’t matter.
Jack Butala: Right.
Jill DeWit: Yeah, I love that. You’re right, the people that I see that are … They are almost getting hung up on the asset which is a wrong thing too, that’s a flaw because when I would watch those videos with you and their driving, their like, oh look what we could do with this, we could do that to it, we could make it pretty, we can do that. Stop everyone. Don’t.
Jack Butala: That’s a great way to go bankrupt quickly.
Jill DeWit: Mm-hmm (affirmative)- You know, so-
Jack Butala: Leave that … Leave the house flipping to the retail person, to the end user. Leave that to the pros. Leave that to the decorators, and the contractors and people who love to do that for a living and who can charge for it. There’s neighborhoods in Arizona, in Scottsdale specifically where you’ll look at a house, in older neighborhoods where they completely tore the thing done and they built a Frank Lloyd Wright gorgeous house and it’s four times as expensive as the one right next to it and people pay it and lenders lend on it. That is exactly what you do not want to buy and get involved in.
Jill DeWit: Right. I agree.
Jack Butala: Maybe we could end the show here.
Jill DeWit: No. There so much I have to say about driving for dollars versus direct mail. I mean, the eight hours of driving for dollars and maybe you’re … My other big thing is just strictly numbers. Driving for dollars you know-
Jack Butala: It’s inefficient.
Jill DeWit: What are you … Are you going to walk … If you had a good day you’re going to come home with ten properties that you’re going to follow up on. By the way it’s going to take you how many days to follow up on?
Jack Butala: It’s not … There’s probably three people in the universe who would come back with ten properties.
Jill DeWit: Thank you. See that’s even high. That’s too high.
Jack Butala: I think a great day is one a week.
Jill DeWit: Right. You have to follow up on them, see who owns it and what’s even the situation and all that good stuff versus I could have done this in just an afternoon and had my letters in the mail. I could have scoured the exact based on the property information, map information. Dream it up. You can put in all parameters you want to get the exact properties you’re interested in. Under 2,000 square feet, no debt, no mortgage.
Jack Butala: That’s one of the keys to this. It’s a well kept secret among real estate pros. Don’t send an email out to people who have mortgages.
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