How to Get Past Your First Deal
Jack Butala: How to Get Past Your First Deal. 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: Hi!
Jack Butala: Welcome to our show! In this episode, Jill and I talk about how to get past your first real estate deal. Great show today, Jill! Let’s take a question before we get into it seriously, posted by one of our members on successplant.com, our free online community.
Jill DeWit: Cool. This was from Aaron. Aaron wrote and asked, “I’ve come across a relatively expensive property purchase in my county.” Not his county, the one he’s working on right now. “They’re asking $15,000. I’m always hesitant to accept the first offer. Why is that what they’re selling for? The comps support this price very well.” I don’t know about why he’s accepting an offer. I’m a little confused here. “Before investing in this amount of capital, I want to ensure that I’m not missing the boat here, so I’d like to option the property. We could list an endless amount of reasons as to why this makes sense for me, however, what’s in it for the seller? How have you gone about effectively pitching the idea of an option contract? What’s the value proposition for them? Before I go back to the seller and offer an option, I’d like to be armed with sufficient rationales to why they should do it.”
Jack Butala: This is an awesome question, Aaron. This is master’s degree/PhD level question, and I don’t know how far you are into this, but boy, you’re going to go far. It has to work for everybody. Most people, a lot of people don’t understand that. You’re trying to make it work for the person that you’re buying it from. This is how I do it with options. You obviously sent them a letter, whoever this person is, you sent an offer for let’s say, I’m going to guess $4,000. They say, “Oh, no, no, no. I want 15.” You say, “Okay. Then I’m going to give you two choices. I will pay you $4,000 now and we can be done with the whole thing, depending on your motivation. Or I’ve looked into it, and $15,000 might not be so unrealistic, but that’s not my acquisition criteria, so I will option it for $15,000, and when I find a buyer, and that will probably be relatively soon based on my research, I will purchase it for 15,000 bucks. It’s going to take a little bit longer, and it’ll be a little bit more complicated, but not really.”
That is what’s in it for the seller. Obviously the price matters to them because the methodology that Jill and I use when we send all these offers out is to smoke out the people where price just doesn’t matter. They just want to get rid of it. They want to clean out their attic. They want to have a garage sale, and they don’t care if they make $4,000 or 400 or four dollars. They just want the stuff gone. This is not one of those people, and that’s when it’s appropriate to use an option. I hope that answers the question, Jill. Is that pretty clear?
Jill DeWit: I focus on the time.
Jack Butala: Jill is the option queen by the way. She’ll option everything.
Jill DeWit: Yeah, here’s what I’ll do, and this comes up often. This exact situation, Aaron, is when I would do it. Or just not meeting on the price, but it is a good property, and maybe I can get $19,000 for it, right? It’s not crazy. Here’s what I’m going to do. I’m going to say, “Here’s the deal. I’ll give you $4,000 tomorrow, or really in two days. I’ll do all the recording. I’ll handle all this. You can have a check right now, or I will stress, I will go try to sell it and get that price. This may take some time. Give me 90 days, and I’ll see what I can do. If it doesn’t sell in 90 days, we’ll talk,” kind of thing. Then I send him a one-page agreement. They agree on it. Blah, blah, blah. I’m really trying to paint the picture that I’m going to try, which is true. I can’t guarantee it. I can guarantee $4,000 tomorrow, because I know I can buy it for four. I can double it for eight. I’m out. I’m happy. I got a nice return on it.
Jack Butala: That’s the business we’re in by the way. I would do that and then probably walk away, but Jill and I are different.
Jill DeWit: I’ll say, “Hey, I’ll roll it into my inventory. I do have a lot of people that look at my stuff,” and they get excited about that. I said, “But I don’t know if this 15’s going to work,” kind of thing. “We’ll see how it goes.” Here’s the thing. Say you do that, and you do the option agreement. The guy may call you back in 30 days or two weeks and say, “Is that $4,000 still a possibility, because I don’t really want to wait after all. I changed my mind. I need the money. I just want to get out.” That happens often.
Jack Butala: Right.
Jill DeWit: That’s what’s in it for them. What’s in it for them, is do you want to wait and guess? Depending how much they’re asking, I won’t even take it on, because sometimes it’s just not realistic. Then I want to say, “Well, go find a realtor and you can really sit and wait six weeks or six months,” because that’s what happens.
Jack Butala: I can’t stress this enough. I’m going to be very brief, and I say it over, and over, and over again. Have an acquisition criteria and stick to it. Our most successful members, us included, we send a ton of offers out. Some of them come back. They come back signed, and we have one of our staff members contact the seller, and they say, “Hello, Mr. and Mrs. Smith, I understand you’re getting ready to sell this property for $4,000. I’m here to get that check delivered right to your hands. This is how we’re going to do it.” Those are the deals I do.
If you want to take a phone call from somebody that says, “I got your $4,000 letter, and I really need $12,000 or $15,000,” and then you want to talk to them 10 or 15 times more. Back and forth doing all this stuff. Try to find a seller, a buyer, and you really don’t know if it’s going to happen or not. Then go do that, but I will tell you, you are seriously reducing the success likelihood of this business model.
Jill DeWit: To reiterate what you just said, Jack, the next guy who’s going to call me back, who accepts my $4,000, I sent it for eight, same spread. Huh! Look at that! Versus I go through all the work like you just said, Jack, and I list it for $19,000 to try to get his $15,000, so I still get my four. There’s more work I had to do. You know? I’m not in. That’s the thing. These option things, Aaron, they have to really still make sense.
Jack Butala: What if you spent all the time on this deal, you spent it on analyzing data. Data to doorstep, data on who to send offers to, you became an expert, not at how to do real estate deals, but what if you spent all this time becoming an expert at choosing the right data to download and get into the mail? Now you have a lifelong skill. This isn’t going away. Real estate is not going to go away. The data’s going to change. How we deliver offers might change, but the fact that people in this country own real estate and don’t want it any longer will never change. Finding them in a huge sea of data is really simple. It’s a skill that I developed. Doing the real estate deal? Eh. I see a lot of people with a lot of questions about … Here’s why. It’s not their fault. That’s just how we all learn. We learn about negotiating and doing- Isn’t that funny?
Jill DeWit: I know.
Jack Butala: We go to buy something at the store, we don’t negotiate.
Jill DeWit: Very true.
Jack Butala: The price is on the thing.
Jill DeWit: That’s very true.
Jack Butala: We walk up and we pay it. When we go to buy a car, what do we do? Negotiate it, because that’s what we all learn.
Jill DeWit: Exactly.
Jack Butala: It’s silly! I can’t believe this day and age.
Jill DeWit: I know.
Jack Butala: We negotiate the price of a car or the price of a property like we do.
Jill DeWit: Exactly. I agree.
Jack Butala: I personally refuse to do it. Again, that’s why Jill and I are great partners, because she loves to do it.
Jill DeWit: Within reason!
Jack Butala: I’m not knocking it. I’m just saying, I don’t know, it’s just … I always solve almost all acquisition problems by sending more mail out.
Jill DeWit: Love it.
Jack Butala: If you have a question, or you want to be on the show, call 800-725-8816. This is the Technical Two. Two minutes of property investment advice. From our 15-year, 15,000 transaction experience.
Jill DeWit: Wait a minute. I’m sorry. You missed the whole topic of the show.
Jack Butala: Oh! How to get past your first deal! Thank you!
Jill DeWit: I love it! I’m like, where are you going there?
Jack Butala: Wow! We were still answering the question.
Jill DeWit: Yes. I love it.
Jack Butala: Wow.
Jill DeWit: I don’t think you’ve ever done that!
Jack Butala: I don’t either.
Jill DeWit: That’s hilarious! You just fast forwarded to wrap up! Have a nice day!
Jack Butala: Maybe I need somebody to stand behind me all day and point stuff out.
Jill DeWit: No.
Jack Butala: Maybe sometimes I do.
Jill DeWit: No. We could do the Technical Two before the show, but that’s okay.
Jack Butala: That’s good. Today’s topic is how to get past your first deal. As we mentioned, these first several shows this week are going to be regarding this topic and for good reason. It’s happening to a lot of members. Our members, they just can’t get past that first step. Jill, go ahead.
Jill DeWit: Well, you know what? I find it less from our members, more from people coming to us from other areas. That is why I asked to do this.
Jack Butala: Other areas meaning other …
Jill DeWit: Educational formats.
Jack Butala: There we go.
Jill DeWit: I’m going to be politically correct here. I have a lot of people coming to me saying, “I wish I would’ve found you first.” I appreciate that. I get it. I joke, because I say Jack and I got here as fast as we could. We didn’t know we were going to be doing this, and we had no idea it was going to do so well and everybody was going to be so successful, which I love. There’s a lot of folks that are finding us after being enlightened in this whole property flipping environment. I don’t really like the flipping word anymore, but I’m using it. From other people. They were struggling. I talk to a lot of people that, gosh, they’ve had a year of research under their belts, and they go to events, and they pay for this, and they upgrade to that, and they still are stuck. It A, ticks me off, because they shouldn’t be stuck. B, I’m going to help. I want to help. We are here to help.
Jack Butala: We’ll get you past it, whatever it is.
Jill DeWit: Right.
Jack Butala: I mean it.
Jill DeWit: I feel bad, because sometimes I feel like they’re hesitant because they don’t really know us and how we work. No, we really will do it. I’m not going to hold anything back. We’re really here to sincerely help share this information, get everybody up and running, because we’re all doing deals together. We’re all making money together. That’s our real end goal. Our goal is not to fill a stadium of people and charge $800. We would’ve done that. We don’t do that.
Jack Butala: That’s what nearly all real estate educators, that is their goal. That’s their technical training, how to fill a stadium.
Jill DeWit: Exactly.
Jack Butala: It’s not how to do deals.
Jill DeWit: It’s true. It’s really not real estate. I think their forte is marketing and selling and upselling and whatever it is.
Jack Butala: Well, their forte is how to fill a stadium and teach. It could be about real estate. It could be about teaching electricians.
Jill DeWit: Right. Exactly.
Jack Butala: It’s a sad situation, but it’s true.
Jill DeWit: Exactly. I’m talking to specifically anyone who doesn’t know us or they’ve had some experience in learning and getting some education in other areas, and you still haven’t got that first deal done. I want to tell everyone that you are not alone. It’s not you. If you think you’re missing some pieces, you probably are. It’s really not you. We are here to help.
Jack Butala: Good.
Jill DeWit: Jack?
Jack Butala: There’s a few stages that you could be stuck in. I spoke with somebody very recently, super bright woman on the east coast, and she’s stuck getting offers in the mail. Some people are stuck, they have people calling back, sellers calling back. They want to do the deal. They’re ready. They have a signed offer in the mail. They’re staring at it on their desk, signed! Even though the Cash Flow From Land program that Jill and I put together really outlines right down to the last detail, I think, how to get one of those deals done. They’re just lacking whatever it is to put it all in a line and get it done.
Jill DeWit: Right.
Jack Butala: I think the root of it is is just this concern about failing. Our country and the way that we’re educated is … Watching our three kids go through school and participating in it, we get in a lot of trouble. We don’t get rewarded for failing. We don’t get encouraged to fail at all. It’s not part of the learning process. Unfortunately I just think it’s backwards. It’s okay to fail! Then ask for help and say, “This failed. I don’t get it.” You’re going to get to success so much faster.
Jill DeWit: I think that touches on where I was going to go with this too is that wherever you’re getting the education, you’re obviously not getting all the missing pieces. You should be okay and have an environment to ask, “Hey, I’m three months in. I’ve studied the thing you gave me three times. I’m still not getting it. I’m missing this piece.” You should get that.
Jack Butala: Absolutely. Jill and I pride ourselves in providing the tools, the information first, but then the tools to get it done. Here’s a bunch of sentences, Jill, that I’ve heard in the past from people. I just don’t know which county to choose. Okay, then we’re going to go through it again. That’s fine. I got an offer. I’m looking at it. It’s sitting here on my desk. It’s a great deal. I think it’s a good deal, but how do I get a notary? How do I find a notary to get a cashier’s check to the seller? Where do you get a notary to facilitate that whole thing? How do I do a deed? I’ve never done a deed before in my whole life. What is a deed? You know? There’s all kinds of little ways that you can, but I’m here to tell you, it’s just not that hard. We walk through the purchase and sale of a property through our Cash Flow From Land program from start to finish.
Jill DeWit: Everybody needs … I think there’s a psych issue, because they think they’re getting all the information. Here’s what I think. Imagine I was going to doctor school, and I’m sitting in a classroom. I mean, I’m just trying to-
Jack Butala: Doctor school is awesome. I’ve never heard anyone say medical school and doctor school. “What are you doing there, Jethro?” “Oh, I’m going to that there doctor school!”
Jill DeWit: Thanks a lot. Thanks a lot.
Jack Butala: You just opened it up.
Jill DeWit: I don’t know. I know. I know. I know.
Jack Butala: Everybody named Jethro, I’m sorry.
Jill DeWit: You’re so silly! I’m studying to be a surgeon, and what do I need to know? I don’t need to know that, “Hey, make sure you find this artery, and you use this, and you use that,” and da, da, da. I don’t need the philosophy. I really need someone to sit down and show me where is that artery, and how do I do this?
Jack Butala: That’s right.
Jill DeWit: Where it’s goofing people up is they’re only getting that philosophy, and I think they think there might be something wrong with them that they can’t figure it out. I’m here to say, it’s nothing wrong with you. You were only given chapters one through three. You weren’t given the whole book. You know? You need it all!
Jack Butala: We’ve all had good teachers and bad teachers, right? I can remember my three favorite teachers or so. I can hardly remember any of the bad ones, do you?
Jill DeWit: Any of the bad ones? No.
Jack Butala: Unless it was dramatic or traumatic. I don’t remember. Like I was sitting there yesterday, I remember my favorite three teachers and why.
Jill DeWit: Yeah, I do too.
Jack Butala: I’m sure it was some version of they really understood what the heck was going on and got me past it. Whatever it is. When you’re a little kid, it’s the same thing. Just get me past it, man.
Jill DeWit: Exactly. If you’re having any first deal psych issues like that, don’t be afraid- I love what you said, Jack. Number one, don’t be afraid to fail. That’s going to happen. You need to plan that by the way. That’s what I would do. I would start planning it. All right, fail number one. Nice! Now I got that out of the way! Oh, fail number two. Whew, that was a good one! Not going to do that again!
Jack Butala: I still do that. I mean, with everything I start out in. I fully realize it’s going to take- To start a company, it takes two years. You might be more successful than that, but in the end, and I’m not saying every single company and I’m not saying … Think about Cash Flow right from the beginning, but the hard knock piece of it, and working everything up …
Jill DeWit: You’re still going to make the mistakes.
Jack Butala: It’s going to take- Even after that you are, but to really get where you can look around and say, “Wow, okay. It’s going okay. I’m going to start to think about hiring people and all that.” It typically takes two years.
Jill DeWit: We did that. We’ve had companies where it was cash flowing, but then we were like, oh shoot. I took that on. I didn’t need to do that. I overspent on that over there, or that was a waste. We’re still making money, but we made those mistakes.
Jack Butala: Absolutely.
Jill DeWit: Stuff’s going to happen. It’s okay. You’re not alone, and we’ll help you through it!
Jack Butala: My mom had a saying. Jill’s heard it a million times. I think I’ve said it on the show once or twice really early on. “Three years from now, it’s going to be three years from now.” There’s no changing that. What you do in those three years is up to you. Don’t be afraid to fail. It’s going to be fine. You’ll get past it. Get past that first deal. If you’re having a super trouble, if you’re a data to doorstep member, and you’re having a tough time getting past the first deal, don’t blow it off. Contact us somehow, here at Land Academy, we will figure it out together. Can I say this now? Is this the right time to say, this is the Technical Two?
Jill DeWit: Go right ahead.
Jack Butala: Is it in the right order?
Jill DeWit: It is in the right order now.
Jack Butala: This is the Technical Two. Two minutes of property investment advice from our 15-year, 15,000 transaction experience. If you’re having a tough time getting past any point in your real estate career or getting past that first deal, micro-identify exactly what’s going on, and really get past it. If you can’t get past it yourself, don’t turn it off. Find the help that you need starting with us. We will, I promise you personally, if you’re not a crazy person, we do have crazy people around, if you’re just having some micro thing to get past, I will personally help you.
Jill DeWit: Jack’s phone number is … Just kidding!
Jack Butala: Well, it is!
Jill DeWit: Jack’s cell number is …
Jack Butala: 800-725-8816. Thank you, Jill. That’s perfect!
Jill DeWit: You’re welcome. I love it. You know what? Actually, that’s a very good point. Call that number. Whatever your question is, we’ll answer it. Do it on the show. That’s what this is for by the way. There you go.
Jack Butala: Surprisingly few people contact us via that …
Jill DeWit: I know. Why is that intimidating?
Jack Butala: I wonder why.
Jill DeWit: I don’t know.
Jack Butala: Jill, it’s that time to inspire us.
Jill DeWit: I thought that whole thing was inspirational.
Jack Butala: Me too. It always is.
Jill DeWit: I know. Thank you.
Jack Butala: We get to this point and it’s like how can this be more inspirational?
Jill DeWit: I know. I just want to add something that I’ve been thinking about. It is, please make sure your dreams are really your dreams. It’s easy sometimes for some people, I’ve done this, to get caught up in other people’s goals and dreams and you say, “Oh yeah. That’s what I want too,” or even like it’s for your spouse, and you think that’s great for all of us, but at the very, very bitter end, it’s really not your thing. You really have no desire to jump out of an airplane or to live at that address or to have that car …
Jack Butala: I love this. This is such great advice.
Jill DeWit: … Or life, so it’s easy to do that. I want to make sure everybody just takes a moment, and by yourself, really think about what your dreams are. You don’t have to share them. Just make sure you’re also working on your dreams. You should share them, but you want to have your own dreams.
Jack Butala: Our largest demographic on this show, I just looked at it yesterday, and other places in the companies that we have, not the actual land buying companies, but the ones that have shows and Land Academy and things like that, are young people from 24 to- Younger than 30. You’re young enough to remember whether or not your parents wanted you to be a hockey star. That’s their dream, not yours.
Jill DeWit: That’s true.
Jack Butala: If you are a hockey star, congratulations. That’s great, but for the rest of us, we had to crawl our way back out of that disappointing parents hole and go do something else. Jill’s exactly right. If you’re a parent, you’re one of those crazy parents on the sidelines thinking that your kid’s going to be a football star, you’re crazy. Listen to your kid. He’ll tell you really at a young age what they want to do. Now they won’t say, “I want to be an engineer.” They won’t say that. They’re going to say, “I like to build skyscrapers and play with blocks.” You know?
Jill DeWit: Exactly. No, that was great! Thank you. I appreciate that.
Jack Butala: I can go on for a year about that topic, but I won’t.
Jill DeWit: Okay, thank you.
Jack Butala: Mostly because I don’t want to bore my friend Jill.
Jill DeWit: You won’t bore me. That’s so funny.
Jack Butala: Wouldn’t be the first time though.
Jill DeWit: I got to tell you something funny about make sure your dreams are yours, because I try to instill that in all of … Not just our children, I mean, I’m a community … I think it does take a village. My best friend’s kids are kind of my kids at times, and I treat them all the same, so I instill the stuff in everybody. Our kid number two and I were having a talk today, and it was the funniest thing, because I was talking about realistic goals, and he came back with me with stuff like this. Actually, it was beautiful.
Jack Butala: What did he say?
Jill DeWit: I was saying, “Look … ” I said, “What if I told you I wanted to be a jockey tomorrow?” He looked at me and said, “Mom, you should go be a jockey.” I said, “No, no, no. I’m not four-foot-nothing, and I don’t weigh 80 pounds wet.”
Jack Butala: Pretty close.
Jill DeWit: “I am not going to be a jockey.”
Jack Butala: How much do you weigh, Jill?
Jill DeWit: I’m not going to answer that. I can’t believe he actually turned it around on me and it wasn’t even …
Jack Butala: I wonder where he learned that.
Jill DeWit: I know. Here’s what was so great about it. It wasn’t he was trying to do it, that was his innate response. “Well, then Mom you should go do that,” because he’s heard me say that forever. “Then you should go do that.” I was like, wow. That was really kind of cool. It was so funny, because darn it. You totally ruined the point I was trying to make, but it was a really good point. His point was better.
Jack Butala: Here’s what I never tell the kids or anybody for that matter. I don’t say crap like this. “You can be anything you want if you put your mind to it.” No, you can’t! I’m telling you right now, I can’t be anything I want if I put my mind to it.
Jill DeWit: You’re too tall to be a jockey, I can tell you right now.
Jack Butala: I’m telling you right now, there’s some stuff that I might want to do that I cannot do, period.
Jill DeWit: I respect that.
Jack Butala: Silly advice like that is not worth trying to come up with here. Like the rest of the world, anybody who’s successful, you take a look at somebody who did it already, and you work it backwards. Deconstruct the whole thing. Have the stuff in place: the motivation, the tools, and the whole thing. You’ll get it. That’s hilarious. I didn’t know about that.
Jill DeWit: Isn’t that hilarious? That was his response. I’m like, “What?”
Jack Butala: [inaudible 00:24:19] instead of just going to be just be a jockey, maybe you could go get a little jockey uniform and put it on once in a while.
Jill DeWit: Again, I’m not four-foot and 80 pounds wet.
Jack Butala: Maybe you should put on a jockey uniform that fits a four-foot 80-pound person. We’ll see how that goes.
Jill DeWit: No, no, no, no, no. Ride up and down the street and that would be funny.
Jack Butala: No, it’s not for the outside. It’s for the inside.
Jill DeWit: All right, moving on. Moving on.
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 dress up, to be just about anything you want in the appropriate situations.
Jill DeWit: Oh my goodness. We use it every day to buy property for much less than what it’s worth and sell it immediately.
Jack Butala: You are not alone in this real estate ambition. During this show I had a list of little outfits that I think would be …
Jill DeWit: No, no, no, no. Whatever that is, erase it. No, no, no. This is not the place. You want to send that to me in another way, sure.
Jack Butala: Jill, you crack me up.
Jill DeWit: You want to write that down, I’ll [crosstalk 00:25:28].
Jack Butala: Put it in a card?
Jill DeWit: Yes. That’s nice.
Jack Butala: In a card you pick out at Hallmark like that?
Jill DeWit: Well, we’ll talk about that later too. I have other ideas.
Jack Butala: I didn’t get shot down. She just said, “There’s a better way to do this.”
Jill DeWit: Yeah. It’s not that I don’t want to know. I do want to know.
Jack Butala: She’s negotiating with me.
Jill DeWit: I would rather not share that. That’s special. Jockey. Oh my gosh.
Jack Butala: Information and inspiration to buy undervalued property. I have a card to go buy.
If you have any questions or comments, please feel free to email me directly at steve@LandAcademy.com.
I would like to think it’s entertaining and informative and in the end profitable.
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