Why First Deals Can Go Side Ways
Jack Butala: Why First Deals Can Go Side Ways. 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: Howdy.
Jack Butala: Welcome to our show. In this episode, Jill and I talk about why first deals can go sideways. Why your first real estate transaction could possibly go sideways. Here’s a hint, I bet it won’t. Great show today Jill, let’s take a question posted by one of out members on successplant.com, it’s our free online community.
Jill DeWit: Ever since the “Success Pants”, we have to really try to over-enunciate and I think …
Jack Butala: I said “Success Pants” one time and now that’s my name.
Jill DeWit: Success Pants. I love it.
Jack Butala: That’s my nickname throughout our whole community.
Jill DeWit: Hey Success Pants.
Jack Butala: Members address me that way, Success Pants.
Jill DeWit: I love it.
Jack Butala: I still don’t get it. I think it’s funny.
Jill DeWit: It’s hilarious. Good thing you’re wearing your success pants today. All right, Ryan asked, “The seller’s husband died and she has multiple properties she would like to sell in one transaction. I wanted to make sure I have all the questions I need to ask her before I talk to her tomorrow. Here is the letter I received, thanks for your help.” “Mr. Ryan, I am interested in selling this property. My husband died five years ago so I’m not sure what paperwork you need to see to prove I am the owner. There are also other properties I would like to sell if you, or someone you know would be interested. I would prefer to sell them all at once. I look forward to hearing from you,” and then Ryan says, “What questions do I need to ask her to make sure i have all the info that I need?”
Jack Butala: Well, Mrs. Widow, I would prefer to buy them all at once.
Jill DeWit: Exactly.
Jack Butala: This is what we’re going to do.
Jill DeWit: Yay.
Jack Butala: This is a happy, happy, happy thing. I love this situation. You can undo these deals pretty easily. Every circumstance is slightly different, but in general, chances are this couple took title to the properties as joint tenants. It’s got the full phrases, joint tenants with right of suvivorship. If I were talking to Ryan right now I would say, “Please get the document, the vesting deed, or the document or documents that show who’s name the property’s in.” That’s the starting point for every discussion like this. He’s going to read who’s name it’s in. It might be Mrs. Smith’s name or Mr. Smith’s name only, or whatever, and then you start form there. Chances are, most property you run into like this, it’s in join tenants with rights of suvivorship. It’s called JTROS. Just like the name suggests, you’re joint tenants with rights of suvivorship. If a husband passes away like this, now she owns the property, and she can phase it to Ryan.
There’s a few ways that it could be really, really messy if they took title as Mr. Smith and Mrs. Smith, married couple, you don’t see it too often more, used to be that way, then there is some stuff you’ve got to undo. Depending on what state it is, it’s real easy, or it’s impossible, or anything in between. Most of the time, it’s really, really easy. You just file an affidavit with whatever county it’s in, so there is real specific stuff to address these things. It sounds like this deal might be large enough where you just hire a title entitled does it for you.
Jill DeWit: That’s a good point too, yeah. Depending how big it is and how much is at stake, I love it.
Jack Butala: Multiple properties. I love multiple property deals.
Jill DeWit: I do. Well, the questions, you want to know. You want to know about how the ownership is on the vesting deed and then you know your next step is from there.
Jack Butala: Here’s the take away, listeners, get the vesting deed. Day-to-day Doorstep, the company that we own, the numbers … We provide the resources for you to very easily go pull, from multiple places, and multiple companies, multiple websites, go pull the vesting deed and see what’s going on there. If you are new at this, whether you are a member or not, start doing that on every single deal, even if it’s a slamdunk because you are going to learn so much. When you do a little bit slightly more difficult deals like this one, it’s no big deal. Our process is easy.
Jill DeWit: Exactly.
Jack Butala: Hey Ryan, if you need some help, call me. He’s been around, he’s one of our original members too and I’ll help you. Jill will too. Jill is an expert at this kind of stuff.
Jill DeWit: Thank you.
Jack Butala: Hey, today’s topic, why first deals can go sideways. What happens? How can they go sideways? This is the meat of the show.
Jill DeWit: I wanted to talk about this because it comes up with folks coming to us may or may not have our program. Usually this comes up when I’m talking to people who are thinking about getting into the business and they have these really, really, really big lofty, lofty goals. One of the things I want to tell everybody is, “Let’s slow down, let’s do this right, let’s not go overboard. I don’t want first deal craziness. You think you are going to dive in and do an apartment building tomorrow,” because there is a lot involved in that, “so let’s start off right and do it the right way.” I love the way you titled this, Jack, why first deals can go sideways. One of them is, yeah, you went way overboard, and you got a little ahead of yourself. That’s the thing, I don’t want you to get ahead of yourself and then now you think, “All deals are bad, this doesn’t work.” No, that’s not true. You just got ahead of yourself.
Jack Butala: Yeah, the few shows before this in the few shows after it are dedicated to this one topic, how to get past your first deal. I hear this all the time from people who have just, quite simply, not gotten past their first deal, and they are concerned that it’s going to go sideways. The fact is, it almost never does, so here’s my recommendation, it almost never does go sideways. The reason it go sideways is because you bit off too much than you can chew.
Jill DeWit: Right.
Jack Butala: My pure and simple recommendation is this, follow the whole thing, send a bunch of offers out to people who you think are going to sell the property. For $500-$1000, buy one for $500 or $1000, and if every single thing goes wrong, what you lost was $500 or $1000, in the scheme of things, not a big deal at all. Does it happen? Almost never if you go into it with this attitude and you use the tools that we have to make sure it’s going to be okay. Spend $500 on a 5 acre property on the western part of the country, chances are, it’s going to go fine. Sell it to somebody for $1000, might be even like another member in Land Academy, or might be your brother-in-law, you might deed it to your wife and sell it to her for one dollar just to get over all the paperwork and all that stuff. Really, when you break it down there is some little, tiny concern, “Does this business model work?” It’s that crazy. There’s a million people in Successplant doing it every day, us included.
Jill DeWit: Yeah, we all know it works.
Jack Butala: It’s not that it doesn’t work, it’s just that there’s little, tiny things you got to … There is some moving parts to this, but it’s well worth … In the end, you are doubling and tripling your money.
Jill DeWit: Exactly.
Jack Butala: We are all, in the back of our head, worrying that it might go sideways. How can it go sideways? It won’t. Just get one of those simple, little deals done.
Jill DeWit: Exactly. You know what? Here’s the thing to, like you said if it all go sideways and oh gee, you failed, like we talked about, great, you are only going to do that once.
Jack Butala: Got that out of the way.
Jill DeWit: Yeah, now we know.
Jack Butala: Exactly.
Jill DeWit: You’re going to laugh about it forever. You’re going to say, “My first deal, oh my gosh, I did everything wrong, but then from there, I learned and now look where I am.”
Jack Butala: We are so wired to think that failing at stuff is bad.
Jill DeWit: Right.
Jack Butala: From tiny, little children, and it’s not. That’s you succeed.
Jill DeWit: You know, I wanted to get up and fail last night at the karaoke, but you wouldn’t let me. I got to share this.
Jack Butala: Let me clarify something. I don’t let Jill do something or not let her do anything, trust me.
Jill DeWit: All right.
Jack Butala: What you said is, “Do I sing well?” I said, “No.” You took that as …
Jill DeWit: It was just funny. I’m like, “You just told me no, do not get up there and sing.”
Jack Butala: But you are super pretty, “But I can’t sing?”
Jill DeWit: Thanks. I thought that that would be enough. Looking around the room, that might have been enough. Looking around the room, no one probably would have even noticed I was singing, just kidding.
Jack Butala: We didn’t intentionally go to a karaoke place last night, it was in our path.
Jill DeWit: Exactly. “Hey, let’s stop in here,” and then we went, “Where are we?”
Jack Butala: Probably won’t do that again.
Jill DeWit: Exactly, that’s true. We walked in, we had very high hopes about that establishment, and we spent two minutes there, and we went, “Yeah, no. We’re not coming back here.”
Jack Butala: Exactly.
Jill DeWit: It was hilarious.
Jack Butala: It was fun.
Jill DeWit: I know.
Jack Butala: These deals, some of them go sideways, but almost never, we have deals go sideways sometimes. Do you know why deals go sideways? Sellers change their mind, that’s the A, number one reason. That almost never happens.
Jill DeWit: I’m trying to give a list of things that you could do wrong …
Jack Butala: Yeah, go ahead. That would be helpful.
Jill DeWit: That would happen, and that’s okay. You overpaid. Oops.
Jack Butala: Still got the deal done.
Jill DeWit: I know, right? You overpaid, you didn’t make as much. All right, we got that, and we learned.
Jack Butala: You don’t lose money, you just don’t make as much.
Jill DeWit: Let’s just see, it took too long to sell because you didn’t market it right, that can happen, you only put it one place.
Jack Butala: I’m really talking about on the buy side.
Jill DeWit: Oh, okay.
Jack Butala: On the acquisition side.
Jill DeWit: On the acquisition side?
Jack Butala: Yeah.
Jill DeWit: Okay.
Jack Butala: If you buy it right, the sales are going to be automatic.
Jill DeWit: Right, well then usually that’s a reason it … You didn’t buy it right.
Jack Butala: You paid too much.
Jill DeWit: Because, even if it’s a property that doesn’t have all the four A’s, missing, when I say the four A’s, it’s …
Jack Butala: Acreage.
Jill DeWit: Acreage. Attribute.
Jack Butala: Attributes. Is it close to something cool, or you can describe it cool like mountain views.
Jill DeWit: Affordability.
Jack Butala: Affordability, cheaper is better.
Jill DeWit: Access.
Jack Butala: Access, got to have it.
Jill DeWit: Right. Let’s just say you missed one of those, maybe you missed the access.
Jack Butala: Maybe you missed all four.
Jill DeWit: Maybe you missed all four. Again, we overpaid, you still got a property, you might have to hang on to a little bit longer to find the right person that once it, or just price it even more aggressively, I don’t know. That could be a first deal mistake. Like I said, you sticking to your computer after that reminding you to check all those things before you buy something.
Jack Butala: Here’s a mistake I made, and it’s never gone away. This is what people lay awake at night worrying about. Here’s my money and I don’t. Many years ago, I bought a property from a guy and didn’t do my homework. The buck stops at my desk, so I’m going to say I didn’t do my homework. It turned out it was a partial ownership property, the guy only owned 50% of it, and we dropped the ball. I get a tax bill for half of this property every single year.
Jill DeWit: I see that one.
Jack Butala: I open that letter and I am reminded of that mistake that I made and I laugh my ass off, ha ha, so what, I made a mistake.
Jill DeWit: Then we promptly do not pay that tax bill.
Jack Butala: That’s exactly right.
Jill DeWit: And laugh about it and go, “Okay.”
Jack Butala: It will go back to the county and … I’ve tried to contact the other half owner, he’s just nowhere to be found.
Jill DeWit: Yeah, I know.
Jack Butala: Stuff happens, and it doesn’t matter. I see people in residential investing, houses, I see brand-new people, this is how you can really screw up your REI career … You go into the MLS or you find a real estate agent, and you pick out a house, the one that you think is going to work great as a rental house or a flip. Then, you go get a loan and you get a loan for not only the property, but you get a loan for the repairs, and you hire a contractor, and you go through all the motions of all of that, and you spend a bunch of money, and then you list it after it’s done. You list it with a real estate agent and put it on the MLS and expect to make a dollar. In fact, you lose your ass doing, I said ass three times now in the show.
Jill DeWit: Nice.
Jack Butala: Sorry.
Jill DeWit: It’s okay.
Jack Butala: That my friends is almost all … We see it on TV, on HGTV, we see a million examples, we’ve seen our parents do it, we’ve seen everybody do this, sometimes successfully, sometimes not. This is absolutely, categorically the wrong way to invest in real estate. Not going to go into and spend a lot of time on it right way, but it doesn’t involve any of that stuff. It involves aligning yourself, if you don’t have any money, aligning yourself with people who do and have some transaction experience, and with our help, becoming an absolute expert at bird-dogging or locating undervalued property that are set up and ready to do what I just described. Purchase it, flip it, clean it up, in a lands case, clean it up on the internet, sell it for more. That’s what we’re experts at. I don’t even own tools. We do a lot of residential real estate deals.
Jill DeWit: Well said.
Jack Butala: Speechless, Jill’s speechless. What the heck is that?
Jill DeWit: I don’t know, that was just really nice …
Jack Butala: She does that when she doesn’t listen at all.
Jill DeWit: Yeah.
Jack Butala: You didn’t even listen to what I was saying.
Jill DeWit: I was listening. I was listening to the whole thing. I was totally listening, I just was kind of letting you go. That was beautiful and I didn’t want to interrupt it at all.
Jack Butala: This is a technical two and few minutes of property investment advice from our 15 year, 15,000 transaction experience. We are data experts, we just happen to sell real e-state. We’re data experts first. If you have a question or want to be on the show, call 800-725-8816. Jill, inspire us.
Jill DeWit: Are you stressed or pushed or anything along those lines, walking around dreary, you just can’t get everything done? I just want to remind you, take a step back and please be careful because if you let yourself get to that point, it’s going to affect, not only your health, but your decisions, your people. There’s a lot of things in your world that … Jack’s looking like, “What are you talking about?”
Jack Butala: No, I’m just thinking how true this is.
Jill DeWit: Oh okay.
Jack Butala: I was kind of, personal examples.
Jill DeWit: All right.
Jack Butala: It’s absolutely true.
Jill DeWit: it’s just something that we talk about, then we don’t talk about. We don’t want to talk about it because it’s stressful, it’s silly. We should talk about it. Chill out, relax. You’re going to make better decisions if you’re rested and feeling good and taking care of yourself, in whatever you’re doing. Whether it’s your side business, your day job, your commute, so I just wanted to bring that up.
Jack Butala: That’s awesome.
Jill DeWit: Jack are you …
Jack Butala: Do you have a personal example?
Jill DeWit: Sure, sure.
Jack Butala: Go ahead.
Jill DeWit: All the time. I mean, we do it all the time. We let ourselves do it. “I’m late, I’m late,” and then you’re making bad decisions in the car, you’re cutting people off, you’re doing dangerous stuff, you’re calling to let the people know on the other end why you’re driving, that you’re late … Hold on everybody, it’s going to be just fine, just don’t …
Jack Butala: I’m going to answer this too.
Jill DeWit: Yeah.
Jack Butala: I am very quick to terminate profitable real estate transactions if they are not going the way, I think they should go.
Jill DeWit: Because it’s stressful?
Jack Butala: No, just because I don’t have any patience. I think that’s kind of what you’re saying. It’s just like, “Eh, I don’t really like the way this guy’s talking … To me or my staff.”
Jill DeWit: You don’t let it get to you to that point?
Jack Butala: Yeah. It’s a subsection of what you’re saying.
Jill DeWit: I like it.
Jack Butala: I know I could make some money on it, it’s just, again, this just, no.
Jill DeWit: Well, this is good. This is how you …
Jack Butala: I don’t let it get to that point.
Jill DeWit: That’s what I’m saying.
Jack Butala: You’re right.
Jill DeWit: I get it. You’re having a little hard time understanding the topic because you’re saying, “I don’t let it get to that point.”
Jack Butala: Yeah.
Jill DeWit: I get it.
Jack Butala: I understand the topic completely.
Jill DeWit: Okay, okay.
Jack Butala: Believe me, I go way over the line and then realize it multiple times …
Jill DeWit: Isn’t that interesting?
Jack Butala: Yeah.
Jill DeWit: That’s interesting because I think I do that too. I think I have the two extremes. I’m either like whatever, everything rolls off my back, or I have the, “Holy cow, everything’s now a big deal.”
Jack Butala: Yeah.
Jill DeWit: You go to have that happier medium and a little more towards the, “Is this really important,” picking your battles.
Jack Butala: I had to call a buyer once, like three or four years ago because this guy, it was a pretty big deal. We bought a bunch of acreage in New Mexico, Jill and I, and it was awesome property, it was a great deal and the acquisition went great, almost as always. We threw it out, it wasn’t a wholesale deal, we threw it out in our website, the whole thing. This IT professional, a young guy, loved it, loved the deal, and he bought it. We ended up doing the deal, but it was not through Escrow, and he wasn’t familiar with that, you’re going to run into this through your career, so he was not talking to Jill the way he should have been. She told me about it and maybe the Italian came out of me, I don’t know, but I called this guy and gave him the what for. He ended up still buying the property and he’s on our, let’s say B list now, not our A list wholesale, but that’s all it takes sometimes, is to just set the guy straight. That’s not pretty. I guess I probably could have handled that a little better, but it did solve it.
Jill DeWit: Thank you. That was good, I loved that. I just was to make sure everybody’s, just be aware of this and be in tune of this. If you think that walking around like that is pushing you to do more, better, and faster, I beg to differ. You might be affecting, like I said, your health, some of your decisions may not be your best decisions, and how you’re working with your people and treating your people may not be the best, and you might get better results if you take a step back.
Jack Butala: Join us in another episode where Jack and Jill discuss how to use information, that’s pretty much me …
Jill DeWit: And inspiration, that’s me.
Jack Butala: To get just about anything you want.
Jill DeWit: We use it everyday 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. You remember that guy?
Jill DeWit: Oh, I remember that exactly. I do. Did you not like my thing?
Jack Butala: Did I what?
Jill DeWit: Did you not like my inspiration? It’s okay to be honest.
Jack Butala: I love it.
Jill DeWit: Okay, got it.
Jack Butala: I love it, no.
Jill DeWit: I really couldn’t tell this time. I couldn’t tell if you were like …
Jack Butala: The fact is this, I just didn’t make a comment on it because I honestly took it to heart, probably like a listener and I’m like, “Man, I probably do that way too much.” I was thinking about it, you inspired me. That’s what it was supposed to do.
Jill DeWit: Thank you. I appreciate that. Even if you are fibbing, it’s a good recovery.
Jack Butala: No I really do, because we live in an area now where we have a great life. There’s nothing stressful at all, there shouldn’t be and stuff still is stressful sometimes. I have to take a step back and say, “It’s because I’m causing it.” I’m not causing it, but I’m letting it get to me.
Jill DeWit: Right.
Jack Butala: It’s silly.
Jill DeWit: I should have followed up with that, you’re right, most of the time you’re stressed because you’re doing it. No one is really standing over your desk yelling at you all day long, you’re causing it.
Jack Butala: If somebody is standing over your desk, yelling at you, you nee to find a different desk.
Jill DeWit: Exactly, totally.
Jack Butala: Even if your desk is at home, especially. Information and inspiration to buy undervalued property.
If you have any questions or comments, please feel free to email me directly at steve@LandAcademy.com.
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