3 Myths About Real Estate Investment (CFFL 0133)
3 Myths About Real Estate Investment
Jack Butala: 3 Myths About Real Estate Investment. 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 for Land Academy, welcome to our Cash Flow From Land Show. In this episode Jill and I talk about the three myths about real estate investment. You need money. You’re too late to the game. The pros have it locked up already.
Jill, great show before we start, let’s take a question. From a caller.
Jill DeWit:
Okay, cool. Delaney from Houston called in and asked:
I’m thinking about getting my real estate license to help me with investing. Would doing so be a big help or am I just wasting my time?
We’ve talked about this before, but since she left that question I thought it would be really good to address again.
Jack Butala:
Many, many times.
My answer is this. Take the classes. Take the classes as if you were going to go all the way through. Take them with that much effort. Show up for the classes. You’re going to learn a ton. Out west here it costs about five hundred bucks to go through the whole program. I think it may or may not be a little more expensive or inexpensive depending on where you do it.
What you’re going to learn is amazing. For five hundred dollars, the amount of education you’re going to get in the hours of instruction that you’ll get from local people on local laws and the whole thing and the contacts that you make in the business, both from an investment standpoint and the whole thing, I think is absolutely worthwhile.
I’d put it under this umbrella: when is less education better? Never. It’s always better to have more education and then decide, maybe that wasn’t worth it. But should you take the exam? That’s going to be up to you at the end. Don’t walk away because you’re lazy and you don’t want to take it, or study for it.
You might find out that throughout those courses and the kind of people that are there that you’re more on the investor side than you are on the agent side. I think the big difference between a licensed agent and an investor is that investors represent themselves or they put other investors together and they buy and sell properties. An agent represents people in the purchase and sale of their property.
I’ll leave it all to you to figure that out, but it’s actually pretty simple stuff. Do you want to represent yourself, or do you want to represent other people?
Please don’t do this- I hear this all the time. I only got my license because I wanted to have access to the MLS.
Jill DeWit:
That’s the funniest thing, I love that.
Jack Butala:
I hear that all the time. Weekly. That’s the only reason I got my license, I’m not going to use it. I only want access to the MLS. There’s a million ways to get access to the MLS.
Jill DeWit:
By the way, we talked about this too, by the time it hits the MLS, it’s probably too late.
Jack Butala:
The MLS is good for a lot of stuff. Depending on how robust your MLS is, the one in Arizona is fantastic, it’s great for sales comparisons and a lot of data and a lot of stuff actually but it’s incredibly expensive. The further we get into the internet, the more resources you have to find out completed sales and the whole thing.
Redfin. Currently Redfin is the number one app on the front of my phone. I use it everyday. It’s a direct feed, I think they update it twice a day, once or twice a day, to the MLS. I have access to the MLS and I don’t have a license.
Jill DeWit:
There you go. Thank you, Steve.
Jack Butala:
Is that a long winded way? Oh, did you have anything to say?
Jill DeWit:
No, that was perfect. Don’t anymore. Just kidding.
Jack Butala:
Hey, this could be called the Jill Show.
Jill DeWit:
Do you have anything to say, no I think you’ve got them all. No, just kidding.
Jack Butala:
This could totally be called the Jill show today. It’s up to you.
Jill DeWit:
Why?
Jack Butala:
If you want it, go ahead and answer these questions.
Jill DeWit:
No, no, no. I want to do it with you. This is funny. No, it just hurts. I’m just teasing you. You know that. I know you don’t feel good, so I’m just kind of really teasing you. It’s all good. Okay.
Myth number one. You need money.
Jack Butala:
Isn’t that funny? I get it, I get why people think that.
Jill DeWit:
You need money to be a real estate investor. Got to have money or I can’t do it. I don’t have a million dollars in my back pocket, I guess I can’t do it. That’s not true. Very wrong. Can you explain that?
Jack Butala:
Yes. There’s way more money out there than talent. If you find a great real estate deal that’s undervalued, I don’t care if it’s a mobile home, a nursing home, a piece of land way out in the sticks, or if it’s a house that’s falling down; if it’s undervalued substantially, I’m talking fifty percent, I’m not talking about thirteen percent off, if your talent is, and this is what we teach, to locate undervalued and secure it, undervalued real estate and then secure it, the seller doesn’t need to know that you don’t have any money. You walk in pounding your chest saying “I’m ready to complete this transaction,” even if you have nobody, no cash, it’s no skin off your nose. Then find people that are in your market or in that little niche, regardless of where it is, it doesn’t have to be in your backyard, it could be anywhere in the country, they will respond. You will get a deal done.
Money is, for whatever reason, this is a question I do not have the answer to and I never will, I don’t know why people who have a lot of resources financially just are lazy, I don’t know why they don’t go do it themselves. I know plenty, I have plenty of friends who have a ton of money and they do it themselves. It’s really easy to find someone to back it if you found an undervalued piece of real estate.
Jill DeWit:
You’re right. They are happy to just give you the money and then take part of the profit.
Jack Butala:
A partnership.
Jill DeWit:
Exactly. I love it. That was excellent. Thank you Steven.
Jack Butala:
We cover all the details in our programs and on Land Academy. Success Plan, excuse me.
Jill DeWit:
The other one is, number two, you’re too late to get to the game.
Jack Butala:
I want you to take this one, if that’s all right?
Jill DeWit:
Really?
Jack Butala:
Do you want to?
Jill DeWit:
No. I’m just kidding. All I wrote down was, oh I just think that’s silly. You know what, I think that’s, as I say, no I don’t want to do it and I’m answering it.
I think that’s an excuse. I think there’s something else going on. If you say, “Oh, I missed it. The bubble, I should have been there for that.” We have a good friend that had a hard time recovering with all this, and you know who I’m talking about, and he’s afraid to jump back in. I’m like, this is silly. Hello? It never slowed us down. We’re still successful. You know what, all you do is you alter what you’re doing and you change it. All we did was, maybe the prices changed but we’re still, the percentages didn’t change. Does that make sense?
Jack Butala:
Yes.
Jill DeWit:
You can do this at any time. It’s not crazy. I just think it’s an excuse for something else. You’re just afraid to do it.
Jack Butala:
I said, I understand what the concern is. A lot of us caught the internet wave early on and just made a ridiculous amount of money, but now it’s different. It’s still a ridiculous amount of money, you just have to do things differently.
We didn’t have to, in the early days of the internet we sold these assets for three four five times what we were purchasing them, everyday. Twenty a day. It’s gotten a little bit more competitive because the internet’s caught up with, customers are caught up with the whole thing, and that’s great. Now it’s something else. Now you have to reinvent how you sell things. Maybe you have to have a podcast. Maybe you have to whatever, you just have to go in with the attitude: Whatever it takes, I’m going to do it. Whatever advantages are out there, I’ll shift my talent or my effort toward that and do whatever it takes.
Jill DeWit:
You know what I think is happening too is that nowadays there’s so much change and I think changes happen faster than used to. Do you know what I mean? I think there’s still people that are a little uncomfortable with change. Gosh, you know what? You may not think now is the right time to jump into X, but you know what, five years from now you’re going to say boy, I wish I would have done that.
You just have to jump in and roll with it and stay with it and be committed. It’s never to late.
Jack Butala:
I’ll tell you what’ll never change. Ever. I don’t care what goes on with computers. What will never change is the value of personal relationships. When you send them, and what we teach is send a heartfelt offer to buy someone’s property that’s professional and sincere, and follow-up on it. They connect with that. For whatever reasons. I’m not talking about postcards or silly little colored letters or all that stuff. Don’t go over the top sappy and put lipstick on it. I’m saying just send a heartfelt letter that connects to John Smith, the owner of XYZ property at ABC address, for thirteen hundred dollars cash and you’re going to close on Thursday. People take that seriously and they connect with it. Then they pick up the phone and call Jill and she connects with them. There is no replacement for personal relationships. I think it’s triple or quadruple in person.
I thought that, this is a lot of years ago, with the internet, oh we’re all just going to be sitting at our coffee tables doing everything all day and that’s that. I don’t have to talk to anybody anymore. No way. Now more than ever that personal relationship is so important.
To summarize that, it’s a total myth. You’re never to late to any of this stuff. There’s always a faster computer program. You can always be better at one of the things that it takes to be successful at this or anything else.
Jill DeWit:
You’ll get there.
Jack Butala:
It’s not going to happen overnight.
Jill DeWit:
Exactly. Number three.
Jack Butala:
The pros have it locked up. Yes. I mean, again, you know what? I was concerned about that too.
Jill DeWit:
I have some things to say.
Jack Butala:
A lot of years ago. Many, many, many years ago. Especially when you go in, I did a stint in commercial real estate real early on, as a broker. It’s hard. It was tough. There are a lot of very seasoned brokers in the market. You know what? I found a niche. A healthcare niche. Knocked it out of the park. The first I made thirty grand, the second year I was making two fifty plus. That was only because I found a niche and I really learned about it. They’re complicated deals. Most brokers are lazy, they just didn’t want to do it. I shouldn’t say that. Most of the brokers I was working with back then, in Detroit
Jill DeWit:
They were lazy.
Jack Butala:
Yes.
Jill DeWit:
Okay. Well you know, here’s something I was going to say about the pros have it all locked up. I have seen individuals come in and blow others away that are brand new individuals with two things. One, ambition. Two, a fresh perspective.
Jack Butala:
Absolutely.
Jill DeWit:
Don’t think that you’re, that you might be ahead of the game. You’re thinking of things now other people have been doing it so long, they’re not even thinking about. You might find some missed opportunities from other investors. It’s not crazy.
The other thing I was going to say is, you think the pros have it locked up? Learn to do it like the pros do. Like what we talked about, learn to find the deals. Have the tools. Use what the pros use.
Jack Butala:
Which is what we have.
Jill DeWit:
Don’t try to reinvent the wheel here. If they’ve got something going good, but … Put that together. Your ambition and your fresh eyes and the way things are doing, you might tweak something that the pros are using and make it even better.
Jack Butala:
Every single, this is a little bit, tiny bit off topic, but the point is the same. We have a pretty lengthy interview process when, Jill and I go, when people come to work here. One of the things that I ask directly of, after the, not the first, second, or third round but when we really are taking somebody seriously, I say, look, what do you think you know about way more than I do? If it’s a tech position, I ask him … I ask questions, really, really detailed questions and I make sure they know more about it than I do. Because that’s the last thing I want from somebody working for me, that I’m smarter than them. That’s silly.
Jill DeWit:
Exactly.
Jack Butala:
I’m probably a better decision maker. I bring a lot more experience, transactions experience and all that stuff, to the table. Just for raw skill, these tools are changing all the time. You might to make sure.
So, yes, Jill you’re exactly right. When you’re young and you’ve got a fresh education behind you about a lot of these things and a new perspective and you’re just going a hundred miles an hour, you can really pass the pros pretty quick. Especially if you have the same tools.
Jill DeWit:
Totally. One of my biggest examples right now actually is social media. I just had another Snapchat 101 tutorial at brunch today. I learned a few things. It was pretty cool, some of the things it’s capable of doing. All these different things that are coming up. The advantages of being able to market there and reach people are huge. I’m loving it. This is stuff that pros doing this for twenty years, they don’t know, they don’t get it. They’re not even thinking about this stuff. Fresh eyes and younger, what you know, not even younger but just coming at this from wherever you’ve been.
I know we have a lot of members actually that, I know there’s so many tools, myself included, that I’m better in this world because I had ten years over here. I learned how to do this over here. I know how to run this over here. Whatever it is.
Jack Butala:
How many times did you hear way early on in our market, how can you possibly buy a piece of real estate if you don’t go look at it?
Jill DeWit:
Oh, yes.
Jack Butala:
I haven’t heard that in probably two years.
Jill DeWit:
You know, you’re right.
Jack Butala:
Everybody just got over it.
Jill DeWit:
They did.
Jack Butala:
Because of technology. Probably because of Google Earth and the associated tools like that.
Jill DeWit:
I feel like I’m standing on it. When I use Google Earth and I drop the little human guy on the street level, and I’m standing there and I do a three-sixty view, I can almost, I can laundry hanging on the line out back when I’m looking at something. Like a farm.
Jack Butala:
If you buy five acres and you have done all the due diligence you can in front of a computer on Google Earth, but you buy it for five or eight hundred dollars, is it going to be okay?
Jill DeWit:
I think so.
Jack Butala:
I think it’s going to be okay.
Jill DeWit:
It is.
Jack Butala:
That’s what I’m talking about. That’s the perspective that I brought to this, which I think, in a large part, was so successful, and is so successful now, now it’s just a machine. When it was a struggle a lot of years ago and when I was starting, everybody was this is never going to work, you’re crazy. No one’s going to buy a piece of property on the internet.
If you put together really detailed information and maps and cool stuff. Just what you said, Jill, it’s like I can feel it. I feel like I’m on there and I’m purchasing for twelve hundred dollars? That’s fine.
Jill DeWit:
Exactly. You know what, you’re right, Steven. Even on the buy side and the sell side you feel uncomfortable. That’s what we do. That’s my whole thing, we’re wholesalers. That’s our number one. We want that guy to feel like he got a really good deal and he’s not out a lot of money, he’s still doing great. Everybody wins.
Jack Butala:
Join us in another episode where Jill and I discuss your all important interesting property investment and in life.
That stuff brought me back a little bit.
Jill DeWit:
That was really good. You did that
Jack Butala:
It made me think of, I’m sorry, go ahead.
Jill DeWit:
No. Those are good topics, I’m glad we talked about it.
Jack Butala:
There’s probably more than three myths. One of them is it’s really easy. You can get rich really quick. You know it is easy, but it’s time consuming.
Jill DeWit:
You know, here’s a myth. A myth that bugs me. People think that everybody’s going to have one slam dunk and you’re going to be set for life. Nothing’s going to go, I think … It bothers me because I think people got a little bit jaded on watching TV. HGTV. They see The Property Brothers and they’re like, I can do that. Look how great this is.
There’s stuff that goes into this too. I don’t want to scare anybody, but
Jack Butala:
You have to make a commitment and learn it, learn about it and everything else. You’re going to get out of it what you put into it. Is it going to happen absolutely overnight? I don’t know. I don’t know why this whole win-the-lottery kind of concept is so prevalent.
Jill DeWit:
Everybody wants to be Mark Zuckerburg.
Jack Butala:
But I’m sure he worked his ass off forever.
Jill DeWit:
I know, but, you know what I mean, it’s, some people, I think a lot of people think
Jack Butala:
I know you’re right.
Jill DeWit:
I have a good thing to share and I meant to look it up. I’m getting more into social media and I saw a tweet the other day and JK Rowling, who did Harry Potter, she was going to, I don’t know if she did the article or if she was just talking about it, but she was posting or getting ready to post all of her rejection letters for people to see.
Jack Butala:
I’m glad.
Jill DeWit:
The years of rejection letters that she got for Harry Potter and she stayed with it. I love that.
Jack Butala:
It stayed with her. People like that who are, that’s what they’re going to do, that’s how we are, you and I, this is what I’m going to do for a living, it’s not even that I chose it it chose me and I’m going to make it work. It’s that mentality, that’s what it takes.
On that note, let’s go buy some property.
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