Your Imagination is Imperative Real Estate Investor (CFFL 0264)
Your Imagination is Imperative Real Estate Investor
Jack Butala: Your Imagination is Imperative Real Estate Investor. 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 how and why you’re imagination is imperative as a real estate investor. What the heck? I thought I was supposed to be stern and …
Jill DeWit: A machine.
Jack Butala: A machine and just do …
Jill DeWit: Efficient.
Jack Butala: Yes.
Jill DeWit: One word answers.
Jack Butala: Imagination. Great show today, Jill. Let’s take a question first before we get into it, posted by one of our members on SuccessPlant.com, our free online community.
Jill DeWit: Okay. Ron asked, “Jack or others, on a recent podcast, you extolled the virtues of using mixed mailers, like picking more than one county for your letter campaigns, but you said that it was a level three strategy. Hope I got the terms down correct there.”
Jack Butala: You nailed it.
Jill DeWit: “Implying that you do not recommend that in your first couple of mailers. It seems like a great strategy any time. What is the downside to picking two or three counties in your first few direct mail campaigns, assuming you are pulling a list of 1,500 or more?”
Jack Butala: There’s two downsides. That is an excellent question. I’m super glad you asked it. The first downside is that I want you to be super familiar on how to do a mail merge. It seems easy. There’s a ton of ways to get educated about it. One of them’s through us. I walk through it in chapter five in great detail, right down at the last detail on how to do a mail merge, but if you’re going to take three mail merges, let’s say you want to do three counties and put it into one, it’s going to complicate things. If you’re Mr. Mail Merge, Ron, and you’re not afraid of that and you’re scoffing at this saying, “Ha, I can do a mail merge in my sleep,” then this doesn’t apply to you.
Jill DeWit: I love it.
Jack Butala: Number two, any maybe more importantly, now you have three county officials instead of one set of county officials that you have to make friends with. You have three places to call when people call back. Maybe you need to talk about the planning and zoning. You need to get to know three people there. If none of this scares you, if you’re just like, “Come on, man. I can do this stuff over and over, I’ve done it fifty times,” then Ron, you are a level three strategy out of the box. Most people I just think, especially … Here’s my concern. If we complicate it upfront, you’re going to get discouraged, it’s going to take too much time, and you’re not going to do it. I want you to have a great first experience. I want you on your first mailer to do one deal. Get it all out of your system. Make a million mistakes, do it all wrong. I don’t want you to lose money.
What we hear often, Jill and I hear, “Man, I did great on this and I sold it, but boy I guess if I did it this way, I could’ve made more.” They don’t usually say I lost any money, but man, next time I’m going to do this, this, and this. That is the experience I want you to have.
Jill DeWit: I love it. I love it. I want it to be easy. Not easy, but I mean like Jack said, don’t over complicate it. I want you to go, “All right, I did it. I got this.” I invested only whatever your budget is. I doubled it, I figured it out. I had to send it back to the recorder, we got something goofed up. I learned that one. Then you can be on your way. Love it.
Jack Butala: One of our three kids is incredibly intelligent.
Jill DeWit: One. Only one?
Jack Butala: Hint, it’s a she. Our number one kid, the girl, Jill and I sat down with her counselor when she was in high school, she’s long gone from high school now. He said this, and it stuck with me, it’ll stick with me forever because she had a long list of advanced placement courses that she qualified for. He looked at us and said in very plain English, “Why the hell are you going to put this kid in all these advanced placement courses? Just to cause problems for her? She’s not going to get into college any better, and if she does, does she want to go to that school? Why doesn’t she just show up at school in the regular classes, get an A, have a good experience, learn some stuff, maybe help some of the other kids, get to know the teacher.” That’s what I want. That’s the same thing here.
Jill DeWit: That’s a very good point.
Jack Butala: If you’re capable of doing level three stuff, congratulations, but let’s just stick to level one. What it means to me is you’re going to advance way faster, but let’s put one foot forward.
Jill DeWit: That’s true. Don’t try to over complicate it for yourself.
Jack Butala: I want you to get out of it and say, “Man, I learned a lot. That was way easier than I thought. I’m going to kill it on this next one.”
Jill DeWit: Ron’s going for … This is AP investing.
Jack Butala: Yeah, advanced placement, cause yourself some problems investing.
Jill DeWit: Here’s the deal, Ron, you officially qualified and are able to take the AP class. Don’t take it. Go for the A. Go for the easy A.
Jack Butala: When we do mailers now, we do 12 to 15 at 20 counties all at the same time. I personally, still to this day, we do not outsource this and I do not have my employees do it. I pull the data, I analyze it, I do the mail merge myself and run it to the printer through the whole printing scenario myself. That is something I will probably never outsource.
Jill DeWit: My favorite top … My way when I coach people is, okay, we got this county down. I figured it out, I played with some different sizes. Great. Now I’m going to add another layer on top. Now I’m going to merge this one in. All right, now I’ve got the hang of these two and I can jump back and forth and I know how they operate over here and I know how they operate over here. I’m going to now add a third layer on top. Then as you’re doing it, I think one of the reasons is people want to have their sell side, have their website look like they have a variety of properties. I get that.
Jack Butala: I didn’t mention that. That’s perfect. It’s easier to sell different county property than one county.
Jill DeWit: Still, start slow and that’s okay. This could only be a month from … Take one month and then another one month, add another layer and another county and another layer the next month and then go from there and there are there.
Jack Butala: Jill and I are contemplating doing a very large apartment building transaction. The land thing runs in the background and it’s doing great. The house thing, same thing, wholesaling houses. We’re looking at doing a very large apartment deal and we’re not looking at doing three, just one. It’s not my first commercial deal by any stretch, but this is just a little bit different. The players are different and there’s renovations and stuff involved. I would never take … I only would ever and will ever take on a project like that where everything, all of our other stuff is all just running itself and we need to spend only a couple hours a day like if we’re recording this and making the basic decisions about what to buy and sell.
We could, Jill, I thought about this earlier today, if we really sat down, everything that we do, we could do it in about two hours. That’s if there’s no anything unusual that comes up, just the routine regular stuff, about two hours a day, five days a week each. Don’t you think? That’s pretty freaking amazing, actually.
Jill DeWit: It really is.
Jack Butala: I wonder why … Well, the real reason I was having a conversation with myself, I wonder why we tend to work … I think it’s maybe just me, not you, why we just tend to work a lot more than two hours a day.
Jill DeWit: I don’t know.
Jack Butala: It’s not for lack of wanting to do fun stuff.
Jill DeWit: Well, you know, part of it is I enjoy what I’m doing.
Jack Butala: Yeah, me too.
Jill DeWit: Well, here’s what happens. I don’t know if this is where you wanted this to go, but I’ll tell you, I really love what I do and I kind of get sucked into projects and it’s almost like a hobby for me, so that’s what happens to me. I could be out goofing off, but I have to tell you, I like looking at maps and looking at properties and talking to people and helping things. I do stop and people’s desks that I shouldn’t and get into little things because I enjoy it.
Jack Butala: Thank you that you do that, because I don’t.
Jill DeWit: I do. Now you know why. There’s my excuse. What’s your excuse? You know what? I think, in a very healthy way, Jack, your hobby is research.
Jack Butala: Yeah. I mean, I just love being on the computer. We’re done with … When there’s not something to do outside, we’re not riding our bikes to the beach or whatever, I’m on the computer doing cool stuff, putting together other projects that I can do for other things. Yeah.
Jill DeWit: Exactly.
Jack Butala: Anyway, try it. Try new stuff. Try two hour for five days one time.
Jill DeWit: I’m in, starting today. Hurry up, let’s get this over with. Just kidding.
Jack Butala: Today’s topic is your imagination is imperative as a real estate investor. I have a feeling that Jill has a lot to say about this and I’m really, really glad. This is the meat of the show. What do you think, Jill? Is your imagination imperative, not necessary, not option, is it imperative as a real estate investor? I think so.
Jill DeWit: Absolutely. There’s a lot of steps to this that are A to B to C, but there’s a lot of variables in there. There’s a lot of things that you’ve got to see and feel and know and trust in this whole process. One way that I’m thinking about using imagination that I have been completely impressed by our members is on the sell side. I am constantly seeing more fantastic and beautiful postings and videos and visions. Some of our people, you know what it is, they’re getting so excited like we talk about, being excited about what you’re doing, and they’re putting together these incredible videos and describing these things about what people can do for the property. It’s hard not to watch that video and be so excited and want to buy it like, “I really do see myself there.” It’s like staging a house, you know what I mean? They’re staging their property and they’re using their imagination. It makes selling just easy.
Jack Butala: We don’t teach doing videos. I’ve mentioned it a few times, I think it’s always a good idea.
Jill DeWit: We talk about it.
Jack Butala: We do videos, not on every property. The ones we wholesale, we don’t at all, but I did a video and put it on YouTube about a year ago on a couple 40 acre properties that we bought and sold and it got like 4,000, which is a lot for us, 4,000 views pretty quickly. To my surprise, our members go out there, they look at us as an example and they do these videos. I’ll tell you right now, the videos that our top producers, our top members, they’re way better than …
Jill DeWit: Dude, they’re doing like drone videos. I’m like, what the heck?
Jack Butala: They’re not only doing the drone videos, they’re taking that drone video and putting it into a video that they’re narrating themselves because they didn’t go out there and do the drone themselves. They hired somebody.
Jill DeWit: The coolest thing.
Jack Butala: What’s happening? This guy’s killing it. He’s selling these properties for $100,000 more than he buys them.
Jill DeWit: There you go.
Jack Butala: That’s why.
Jill DeWit: That’s it.
Jack Butala: That’s imagination. I didn’t tell him to do that. He thought it was a good idea.
Jill DeWit: Thank you. Bingo. There’s a good point about imagination, even with us. We did our darnedest, we spent over six months putting together our whole Land Academy program and we really tried to pour …
Jack Butala: That’s a result of our imagination.
Jill DeWit: Right. That was our imagination, exactly. We tried to pour everything that we could think of and imagine in there and now our people are taking that to another level and using their imaginations. It is so great. I’m even learning … My favorite thing, it’s like learning from your kids. I’m learning things from our members like, that is a better way. I love it. I’m not embarrassed to admit that you came up with something better. It’s going to happen. There’s things that I know a lot about and there’s things that so and so knows a lot about, and there you go.
Jack Butala: Yeah. We have multiple products that we release that we roll into the membership, the Data to Doorstep membership or Land Academy members, they’re synonymous. That’s all because they come to us, our members come to us and say, “Man, I really need to do X,” and then we come up with it. DeedPerfect.com is an easy way for people to generate deeds. There’s lots of stuff, lots of products that we have like that that we keep rolling out. That’s their imagination and our imagination. I don’t know anybody, any other competitor, direct or indirect, that does that stuff.
Jill DeWit: Not even … Dream up any kind of a thing, a cooking form, I don’t know, something like that, they don’t do this.
Jack Butala: Here’s why I came up with this title of the show. Jill and I, as I mentioned earlier, that’s not what the show’s about, about flipping apartment buildings, but we’re considering doing an extremely large deal. For us, it is. Commercial real estate deal. We were talking to a maintenance guy in a building that we were walking through and he told a story, and he told it from a first person scenario where he said, “I used to live in this building and I watched the building across the street get purchased. I watched all the people get kicked out, and then I watched the new owner renovate the whole then, and then I watched him move all the new people in at a much higher rental rate, and then I watched him sell the building.” I listened to this story with my jaw on the ground, and Jill and I are making eyes at each other the whole time.
I started to use my imagination. I said, wait a minute. I didn’t say this out loud and I didn’t even say it to Jill until about a week later. They’re just flipping an apartment building. They’re taking a building that’s got, let’s say for sake of an argument, 20 units and each person’s paying $1,000, but it’s in a great rental location. This one is. It’s in a location where when someone finds an apartment and rents it, they feel lucky. They don’t have to shop … When it’s available, everybody runs to try to get it. This and that market’s got that going for it.
Here’s a business model, find a building that doesn’t have a lot of debt on it, make a cash offer because you have a private equity group or some huge investor in your back pocket, kick everybody out, pay them to leave, clean it up and re-rent it for 2,000. Recalculate the cap rate and price it appropriately and sell it. The numbers are staggering. It’s hundreds of millions of dollars, it can be, with the right deal.
Jill DeWit: Right.
Jack Butala: Is it a lot of work for let’s say us? No. That’s the killer. Renovating a house is a lot of work. You got to stick around. If you have a general contractor that deals this big, you’re not involved at all. You don’t even know where it is. That is purely from some superintendent and Jill and I ran into on accident in a building we shouldn’t have been walking through, and now it’s got my wheels turning. This is not new. People wonder why a lot of people in commercial real estate or real estate in general are driving fast cars and live in big houses.
Jill DeWit: That ties into your imagination too, like you’re really good at stating let it find you. You know what I mean? A lot of people come into this world, they’re not exactly sure what kind of property, there kind of here learning the process, learning how it works, learning the data. Some people think they want to do apartment buildings, some people think they only want to do land, some people want to do vacations, they want to do single family homes, whatever it is. Let it find you. If you’re open to it and you have an imagination, like you said, Jack, and this apartment story, it will find you. There you go.
Jack Butala: Yeah, 15 people could’ve heard that story and half of them would’ve left because it was a pretty lengthy story.
Jill DeWit: It was a long story.
Jack Butala: Half of them would’ve left.
Jill DeWit: We were both really intrigued. I’m like, tell me more, tell me more. Yeah.
Jack Butala: It’s only because of the imagination that any of that is even … I’m going to tap into the Technical Two, in fact, I’m going to do it now. This is the Technical Two, it’s two minutes of property investment advice from our 15 year, 15,000 transaction experience. Right at the beginning of your real estate investment career or if you’re revamping it, like a lot of our members do, sit down with a theoretical blank sheet of paper or blank computer screen and dream up what you want to happen. I don’t mean like, I want a car in the driveway and all of that. I don’t mean that. I mean, what if I could contact every single person that was willing to give away or almost give away their real estate overnight and then execute it in a week? Dream it up like that. Use your imagination like you’re two years old. What if I could fly? What if I could sell all the properties that are vacant under X amount on MLS overnight? That’s how all these things start. That’s how they start for me. A lot of it’s unrealistic and silly, but it leads to good stuff.
If you have a question or you want to be on the show, call 800-725-8816.
Jill’s inspiration of the day, my favorite part.
Jill DeWit: Power through. If you do, you will probably be the only one that does. How many times do you … It happens in our world all the time. People have all these ideas, right, and maybe these inspirations and then they come up against some kind of a road block and then they stop and they give up. That’s the end of that. Why? I don’t understand. Why? Find a way. Keep that motivation going. Power through. You know what? Like I said, you’re probably the only one that does. There’s a lot of people that probably have that same idea, like our apartment building that Jack just talked about. There’s probably a lot of people right now, there’s probably a lot of people who are right now, wheels are turning and thinking about doing that. How many of you are really going to power through and get it done?
I’m here to tell you, Jack is that person. I’m here to tell you, sit tight, you’re going to be hearing more about it and you’re going to get some details here because Jack, it doesn’t matter what it is, Jack doesn’t let things stop him. He doesn’t know how to. Good news, bad news, but no, it’s all good news. I’m joking. Jack doesn’t know how to stop. He powers through and he gets it done. Guess what? On the backend, he’s the only one that did. Make that you, too. There’s no reason you can’t. It all comes from you and, like Jack says, pulling yourself up by your bootstraps, figuring out whatever the problem is, whatever’s standing in your way. So what if it slows you down two days or two weeks to solve that problem and get through it? Maybe it was a financing problem. I don’t know. Who cares? The numbers lined up so you know there’s money out there. Whatever it is, power through and you’ll get it done. Jack?
Jack Butala: Well said.
Jill DeWit: Thank you. You want to add to that?
Jack Butala: No. Thanks for the compliment. Power through’s one way to use it. That is a compliment, thank you. I just don’t know any other way.
Jill DeWit: That’s what I mean, it’s good. You know what though? Here’s the thing, Jack. You don’t even realize that you have mentally trained yourself that way so now it’s second nature. For a lot of people, they’ve mentally trained themselves to stop when they hit an obstacle. They go, “This isn’t for me. That’s my red light.” No, no, no, no, no. You can retrain yourself and power through and get to the level that you are at, Jack.
Jack Butala: I don’t want to talk out of both sides of my mouth, because you hear Jill and I say this all the time, focus on the acquisition strategy and that’s it. Do not veer from it. I’m not veering from it. It’s only because our land business for years has just been a machine. Our wholesale house business is a machine.
Jill DeWit: This is adding another layer.
Jack Butala: This isn’t like we’re veering from our acquisition strategy. It’s all happening. We’re just adding. Maybe we get the first sale done … When we get the first sale done successfully, the people that are financing it and the contractor and the people who buy it, all they’re going to do is beg for more. It’s the same story. It’s just like what we do with land and houses.
Jill DeWit: That’s true. You do one right and there’s ten more here that come.
Jack Butala: Here’s the key to this, this show is not about real estate apartments. The key to this and what all the people I just mentioned, the players, these huge players with deep pockets, they don’t know how to buy undervalued real estate. They asked me in a meeting, “How do you guys find these properties?” I tell them, “We send out offers everywhere.” What do you mean you send out offers? We print out offers and we write a number in there and we say, “If you want to sell this property at this number, call us.” They all look at each other and they don’t believe us and they say, “Okay, whatever. Keep doing it.” Why don’t they run out of that meeting and do it themselves?
Jill DeWit: I have no idea. Well, they don’t know how.
Jack Butala: This has baffled me.
Jill DeWit: They don’t know how.
Jack Butala: This is kind of the after talk.
Jill DeWit: It is.
Jack Butala: It baffles me that people don’t listen to that sentence that I just said, stop what they’re doing, and start making offers on real estate or cars or anything database driven, or mobile homes or anything that’s got a database to it. I’m not saying walk into a Walmart and start making half price offers on the stuff on the shelf. That’s silly, or maybe it’s not. I don’t know. I’m just saying, I don’t get it.
Jill DeWit: I agree.
Jack Butala: There’s some members that we have who get it, I’ll tell you that.
Jill DeWit: Oh gosh.
Jack Butala: There’s probably about 40 people, the group’s getting pretty big now, they’re obsessed with it like I am with these apartments.
Jill DeWit: Right, exactly.
Jack Butala: I used to be obsessed. I conquered it. I guess I conquered the land thing, now I’m moving onto something else. I don’t know. Who knows? Great inspiration, Jill. What was exactly the phrase?
Jill DeWit: Power through.
Jack Butala: Power through, man.
Jill DeWit: Power through, you’ll be the only one who does.
Jack Butala: Unless you’re a surgeon doing surgery today, do not power through.
Jill DeWit: Don’t power through that.
Jack Butala: Take your time.
Jill DeWit: Yeah. Oh my gosh. If you’re driving a school bus with children in the back, do not power through.
Jack Butala: That’s fine. In fact, you should listen to some classical music if you’re doing that.
Jill DeWit: That’s right. There’s a whole other thing, please don’t be that surgeon that has I don’t know what headbanging in the back. Could you imagine? You’re getting surgery done and it’s like … Whole other topic.
Jack Butala: Don’t make it your last surgery.
Jill DeWit: Love it.
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 get just about anything you want, including apartment buildings.
Jill DeWit: We use it every day to buy all kinds of properties like the layer we’re adding for a lot less than what it’s worth and sell it immediately.
Jack Butala: You are not alone in your real estate ambition. It turns out, neither am I. Good show, Jill.
Jill DeWit: Okay, so I’m trying to think of funny with the surgeon.
Jack Butala: We need to go off topic. Go ahead.
Jill DeWit: The surgeon thing is funny. I’m trying to think, what would be the funniest … I’m thinking like punk, like what if you had a Ozzy Osbourne obsessed surgeon?
Jack Butala: Oh my gosh. You know that happens.
Jill DeWit: Here’s another question. What if I’m a nurse, okay, and I’m in the surgery, am I going to eventually go, “Gosh darn it. I got to do surgery with that guy again? I can’t hear. I can’t think straight. He’s got whatever it is turned up so darn loud.” Do they do that?
Jack Butala: I don’t know. That’s cool, though.
Jill DeWit: I know. We see it on the movies.
Jack Butala: Do they listen to music? Hell yes.
Jill DeWit: You know what? How about this …
Jack Butala: It’s not pumping though.
Jill DeWit: Next time, or should there be a next time, if I’m involved in any surgery, that is going to be a question. Excuse me, by the way, while I’m under, what are you listening to because I really want to know.
Jack Butala: I read somewhere recently, and you and I have actually talked about it that there are certain levels of concentration that are enhanced by music in the background and weird stuff going on. I know you’re not one of these people. You do better when it’s just quiet. I very often listen to extremely loud music while I’m working, with headphones, obviously.
Jill DeWit: Do you know what’s interesting about that? You’re right. I choose deathly quiet, I can’t talk here, when I’m in my own little world. It’s funny because anybody who’s in my office with me, they’re like, “Can I pick up this paper?” It’s so quiet. However, you throw me in Starbucks, I was in Starbucks the other day working, and I tuned out. I didn’t even hear anything. Actually, I didn’t even hear when they called my name. Eventually at one point I looked up and I went, “Oh yeah, I have an iced coffee waiting over there.” I kind of forgot about it.
Jack Butala: That’s great. You were really seriously concentrating.
Jill DeWit: I really seriously concentrate. I tune everything out. I don’t even notice what time it is. When I noticed when it was time to go is it was getting warm in my seat because the sun had dropped to a certain level and now the sun was blasting where I was sitting. I’m like, what time is it? Then I knew two hours had passed. It’s really funny.
Jack Butala: Yeah. I mean, concentration’s key. It’s cool, man.
Jill DeWit: Thank you.
Jack Butala: Information and inspiration, I was just concentrating and I missed my cue, to buy undervalued property.
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