Remove All Risk in Your REI Career Sell Before Buy (CFFL 0242)
Remove All Risk in Your REI Career Sell Before Buy
Jack Butala: Remove All Risk in Your REI Career Sell Before Buy. 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 with Jill DeWit.
Jill DeWit: Hello.
Jack Butala: Welcome to our show. In this episode, Jill and I talk about removing all the risk in your REI career. How do you do that? Well, you sell the property before you buy it, before you take the risk. Great show today, Jill. Let’s take a question posted by one of our members on SuccessPlant.com, our free online community.
Jill DeWit: Okay. Martin asked, “Is this a deal breaker? Uncle has a homestead and there was a cabin/shed. In Data to Doorstep, it’s listed as having a frame/furnished, but in the county data, it’s listed as having no value for the improvements. Thoughts?” Jack?
Jack Butala: Well, heck no it’s not a deal breaker. I’m not understanding the homestead piece, but I guess his uncle homesteaded it. I don’t know if it’s homestead proper noun, capital H. Sometimes people use homestead as like …
Jill DeWit: Good question. I copied it as it was.
Jack Butala: Yeah, no, I’m glad. Sometimes people use homestead as a way to describe a type of piece of property like a plantation. I have a homestead in New Mexico, meaning a 40 acre or 1,200 acre something spread and there’s a house on it. You can see it. You can picture it in your mind. You can picture a plantation in the South. The technical definition of homesteading, which is actually a verb, not a noun, or it could be a noun, I guess it’s both. When the federal government ran its programs during the 1800s to generate property tax, long story short, they gave away property or sold it for literally like five cents an acre by the 40 acre properties so that people could live and sustain and sell crops and stuff. They could start a tax base to collect tax revenue and build infrastructure and roads and stuff. Wow, how’s that for boring?
Jill DeWit: I’m waiting. Just kidding. Now make me think of something cool. Go ahead.
Jack Butala: I doubt that this guy’s uncle, because he’s alive, homesteaded property. I guess what he’s asking is, you know, is it listed … What we teach is don’t send mailers out … If you’re going to buy land, don’t send an offer to somebody who’s got any value, any improved value scenario because you want to buy vacant property. If it’s got improvements on it, like houses and stuff, it’s just a different animal and there’s an appropriate time to do that, but you usually don’t get property for rock bottom prices like we like. I think that answers the question.
Jill DeWit: I have a question, because it says in this one … I’m curious too, Jack, because this could happen. We’ve had this happen where we send a mailer out and it doesn’t have any improvements and I look on the map and there’s something there. What do you think about that?
Jack Butala: Well, what I think about that is they probably never pulled any permits. They probably … Especially because a lot of this property, almost all of it, is really rural, they just put some stuff up. The county never knew about it. They never asked for permission. Maybe you don’t. Maybe the rules are, in that county, you don’t have to. It never hit the assessor’s desk and it never got reassessed. Property gets reassessed usually because of two events. One is because it gets sold, or two because you pull a permit to put some improvements on it and then it triggers the assessor to say, “Oh, it might be worth more.” That’s what’s happening. If it’s got zero value in the column and you send a mailer out, I wouldn’t worry. I mean it’s just kind of like finding a thousand bucks in your suit from a year ago.
Jill DeWit: That’s what I was thinking. I was just thinking, you know what, that’s not a bad thing. Great, there’s something there. Fantastic, a little bonus.
Jack Butala: I don’t know if we answered that question at all and I’m not sure about the frame for this thing.
Jill DeWit: I don’t think it’s a deal breaker. Is this a deal breaker?
Jack Butala: No.
Jill DeWit: No.
Jack Butala: I don’t know if he’s asking should I mail it. This falls into Jill’s whole thing. Are we getting a little too detailed here or do we just want to do some deals and make some money?
Jill DeWit: Right.
Jack Butala: I got to go with Jill on this. Let’s make some deals and make some money.
Jill DeWit: There you go.
Jack Butala: Hey, if you have a question or you want to be on the show, call 800-725-8816. Today’s topic, remove all the risk from your REI career by selling the property before you buy it. This is the meat of the show. Yeah, Jill, so we have almost 300 shows now and in the top five or ten that always comes out from listenership is we did a show a long time ago called Remove the Risk From Your REI Career, so I decided to do a follow up on it because it’s so darn popular, and I understand why. If I can remove my risk, then why wouldn’t I?
Here’s how … This is how Jill and I wholesale houses. We have a buyer already, a single buyer, who turns a ton of houses. He’s a flipper. Sometimes he just puts carpet and paint, sometimes he really guts the thing. He does all the work and the whole thing, but he’s not good, for whatever reason, at sourcing deals like we are. Now we have a buyer long before we have a seller and we sit down with him and say, “Hey, what do you want?” He says some version of this, “Boy, if I had ten properties in south Scottsdale, Arizona that are about 12 to 15 hundred feet, they totally need to be renovated, and if I could get them for 190,000 each, I could clean them up and turn them and make 80 to 100 thousand dollars each really quickly. Can you come up with those?” Well, yeah.
Now we took all the risk out of it. Now we’re not trying to find property and resell it and market it or any of that, we already have a buyer and we know this guy really well, we know his source of financing, we know he has a ton of money, and we know his history and we laugh together sometimes even when we’re not doing deals. Then we build it around him. We send mailers out, custom mailers out, to property owners who fall in that category. Now we have removed all the risk completely from buying a property.
Jill DeWit: I’ve watched our members do this in Success Plant. I have seen them buy multiple five acre properties in X counties and then before they know it, they have one guy that wants them all. They’re scrambling to go back and get more, and then they’ve actually started working together like, “Hey, everyone, does anybody have any more property in this area? I have a guy who wants it all,” kind of thing, and there you go. That’s how you do it. It can happen really quickly, and when you’re new, the right guy will find you.
Jack Butala: You read my mind, Princess.
Jill DeWit: Thanks.
Jack Butala: Exactly. I was exactly going to say the same thing. It happens with land, too. It’s a little bit harder, in my opinion, to find … While you can, it’s harder to find somebody upfront, but they’ll find you. If you want to find somebody upfront in the land business, this is what you do. You send actually … We already know who owns every single piece of property, right? We send them a letter saying, “Hey, I’ve got a bunch.” We find a person that owns a ton of property in one area. You look through the Data to Doorstep data and you see somebody’s name over and over and over again. Well, you get a hold of this guy and say, “You own half the dang county. You want some more? I’ve got a ton more.” They say, “Heck yes,” and then it’s a version of that sentence I just said. “Well, if I could buy five acre properties for $1,500 dollars, I would do that all day.” You buy them for 500 and ship them out to this guy. Now you’ve removed the entire risk situation from the whole [inaudible 00:07:44].
Jill DeWit: To piggyback on you again, I don’t mean to steal your stories …
Jack Butala: No, I like when you finish the thought.
Jill DeWit: This goes back to the time that you were looking at a rental property somewhere and so you’re like, “Hey, before I buy this rental property, I want to test this market and see how much I can get for the rent,” and blah, blah, blah, blah. You created like a Craigslist or some posting like that and put this property up there or a similar property just to test one to rent to see how many calls you would get. Then based on the flood of calls, hey look, I got ten people willing to pay $1,500 a month right now, okay, I know this is a good investment. I’m going to do it. That’s a great way.
Jack Butala: Perfect example. Before the internet, before Craigslist or any of that, I would put ads in … I used to buy properties and rent them out and that’s how I started out. I hated it. That’s just not my thing. Some people are great at it. I love the renting tenant piece, but what I hated was dealing with the real estate agents to try to buy the property, which ultimately ended up resulting in Land Stay and then Land Academy, sourcing my own property. Yeah, before, I would check to see if a market was hot by placing an ad in a classified ads, remember those?
Jill DeWit: I heard about those.
Jack Butala: I remember one time …
Jill DeWit: I heard about cassettes, too. I still don’t know what those are.
Jack Butala: Jill has a car right now that’s sold all over the world …
Jill DeWit: I’m keeping this car forever now that we know what we know.
Jack Butala: Rather than answer people’s questions and provide options, I love this, they just put in all in there. They put a DVD player … I mean a CD player, a cassette deck, 3.5 mm input line, and Bluetooth. It’s got it all. You can’t say, “I need Bluetooth. I want to have old cassettes.” All their customers … I love that.
Jill DeWit: Exactly.
Jack Butala: Anyway, that’s the story.
Jill DeWit: I will keep that car.
Jack Butala: Get to remove the risk. Find a buyer before … I bet you can tell what the Technical 2 is going to be this show. Hey, this is the Technical 2. Two minutes of property investment advice from our 15 year, 15,000 transaction experience. Find a buyer before you find a piece of property. Find somebody in the business who’s done a lot of deals, who’s proven themselves, they don’t even talk about money, they say, “I want X, Y, Z and I’ll take a hundred of them if you can find them,” and then go find them for them.
Jill DeWit: Yes.
Jack Butala: Instead of inspiration, because we’re going to get to Jill’s inspiration in a second, this is the repairing … Here, I’ll do it. One second. If you have a question or you want to be on the show, call 800-725-8816. Jill, fix the boredom of the show.
Jill DeWit: Some days you just go and it’s good, you just have a lot to say and I appreciate that. It’s nice though. I like it. I can just sit and listen and enjoy.
Jack Butala: I hear crickets on the other end.
Jill DeWit: I heard you give good radio.
Jack Butala: Somebody said that.
Jill DeWit: I know. You give good podcast. That’s really good.
Jack Butala: My gosh.
Jill DeWit: Do we still call it radio now? I don’t even know. Anyway, you want to hear my inspiration?
Jack Butala: Yeah, absolutely. Fix the show.
Jill DeWit: I’ll fix the show.
Jack Butala: Fix this episode.
Jill DeWit: Fix this. No, I’m just kidding. There’s nothing to fix. I’ve been thinking about having a reset button and it’s so nice, I use … I have a reset button. We all have a reset button. You know what? I use mine and it’s a good thing. We all need that now and then. What’s a reset button? Imagine, gosh, you’re going down some path you’re not happy with. You’re not feeling yourself. Maybe it’s physical, maybe it’s mental, maybe it’s your financial situation. It could be anything like that. Sometimes we just need a reset button. You know, you don’t have to gradually make a change. I don’t, you know? How I operate best is I just say, “You know what? Today I’m hitting that reset button and I’m making the change.” We all need that sometimes. I’m going to wake up and hit the reset button and today this is how I’m going to look at things and I’m not going to waver. This is the new me. Before you know it, a week’s gone by, two weeks have gone by, and you are that person. You did your reset and it’s all good. Does that make sense to you, Jack?
Jack Butala: Heck yes.
Jill DeWit: Okay.
Jack Butala: I mean, I think that you can do it on a daily basis. I mean, let’s say your morning starts off a mess, you can hit the reset button at 1:00 or you could hit a decade reset button, which is more along … I’m all big picture and you’re not so much sometimes. Hit the career reset button. A decade’s enough. Enough’s enough. You have to say, “Hey, enough’s enough in this stupid accounting job.” I’m talking to myself now. I got to find something else to do because this is killing me.
Jill DeWit: I did it when we got permanently set up out here in California.
Jack Butala: Right, right.
Jill DeWit: I use that … Sometimes I use situations to force myself to use the reset button. I’m like, all right, now you’re not messing around. You know, reset, this is how it’s going to go from now on because this is the new thing. I love it.
Jack Butala: Excellent. I love this. This is good stuff. Jill, this is good inspiration.
Jill DeWit: Thank you.
Jack Butala: Reset button.
Jill DeWit: That’s all me. I came up with that. We all need a reset button.
Jack Butala: We should get like a plastic button and you could … You know what I mean?
Jill DeWit: Yeah.
Jack Butala: Like the size of a smoke detector that you could push, a reset button. I bet somebody’s got that somewhere.
Jill DeWit: I think I want a shirt … I think it’d be fun to have a shirt that just says “reset”. Seriously. I like that.
Jack Butala: That’s good stuff.
Jill DeWit: Instead of escape, escape, escape.
Jack Butala: Join us in another episode where Jack and Jill discuss how to use information, that’s me …
Jill DeWit: And inspiration, that’s me …
Jack Butala: To hit the reset button and get just about anything you want.
Jill DeWit: We use it every day to buy property for half of what it’s worth and sell it immediately.
Jack Butala: You are not alone in your real estate ambition. Cool show, Jill.
Jill DeWit: You know, it’s funny …
Jack Butala: Cool show. Take the risk out of it, you know?
Jill DeWit: Yeah. I’m just thinking about the reset button. I didn’t even realize how much I used it until like five years ago, my kid even brought it up about going to a new school and thinking about themselves making new friends. We moved to a different city and they were going to a different school and they were happy to have that reset button. I don’t think they used the right term, but they were describing the whole thing about …
Jack Butala: You reinvent yourself.
Jill DeWit: Exactly. I really want to pursue soccer and I want to do … I’m like, yeah, that’s exactly right. You can do that. Good for you for thinking of this.
Jack Butala: What if you have a bunch of pictures of you behaving poorly on Facebook, can you still hit the reset button?
Jill DeWit: Well, you can, I guess. You can try. You know what?
Jack Butala: I’ve always wondered about this. I use Facebook for business and that’s it.
Jill DeWit: I think you can.
Jack Butala: It’s not social at all.
Jill DeWit: I think you can. I totally think you can. You can be … Hey, you know why? A lot of people use it as a positive thing. I used to be that idiot, and look at me now. I mean, it can really be positive. It used to be boy was I on the wrong path, but I cleaned up my act. It could be positive. You can also say, too, I’ve heard people do this, “Hey, I’ve been there. I know that struggle and I turned it around, so you can too.” I think you can reinvent yourself. You can be dancing topless on a bar in Mexico and turn it around.
Jack Butala: Wow, I just got a great image in my head, Jill.
Jill DeWit: Anyway.
Jack Butala: That made my day.
Jill DeWit: Thank you.
Jack Butala: I don’t need to work anymore today. I’m going to go think about that.
Jill DeWit: Nice.
Jack Butala: You know what we could do? Actually do that.
Jill DeWit: No. No.
Jack Butala: Then film it and put it on Facebook.
Jill DeWit: There’s a good idea.
Jack Butala: We’d either get a lot more customers or lose all the ones we have.
Jill DeWit: Not going to happen, sorry. Yeah, please don’t use your reset number to go backwards. Boy, was I boring. Boy, I had all this money and I was so boring, so I decided to cut loose, sell it all and go crazy and live in a hotel. No, don’t do that.
Jack Butala: I wear too much clothing.
Jill DeWit: No, no.
Jack Butala: Rest.
Jill DeWit: No, no, no, don’t do that. I mean, you can, but just hide it. Change your name when you do that one.
Jack Butala: I’m only ordering a hooker once a week. Reset.
Jill DeWit: Nice. That does not count. You can’t make bad decisions and say reset every other day.
Jack Butala: Information and inspiration to buy undervalued property. Producer’s going to love listening to this.
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