Material Limits of Writing Offers on Back Tax Property (CFFL 0265)
Material Limits of Writing Offers on Back Tax Property
Jack Butala: Material Limits of Writing Offers on Back Tax Property. 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 DeWitt.
Jill DeWit: Hi.
Jack Butala: Welcome to our show today. In this episode Jill and I talk about the material limits of writing offers on back tax property only. Great show today Jill. Before we get into it let’s take a question posted by one of our members on successplant.com, our free online community.
Jill DeWit: I’m going to preface this, this one’s a little bit length so I’ll try to condense it as I go through.
Jack Butala: Length is good.
Jill DeWit: You’re right.
Jack Butala: Length is detailed.
Jill DeWit: Tim asked, I have a question about scrubbing the data in data doorstep. Jack addressed this to some degree in your program and I saw another member also addressing it here in the forums. I want to ask the question to a slightly greater depth or possibly a slightly different focus. This is good too. When I download the county data I scrub it exactly as Jack describes in the educational video. I eliminate no addresses, foreign addresses, duplicate entries, etc. Ultimately I’m left with many entries with no entry in the column that’s like owner first name. I’ve seen every possible combination of letters and numbers as owners for these entries. Sometimes churches, ranches, pipeline companies, living trusts, and every other combination I can think of. I eliminate the ones that seem obvious, like large corporations, railroads, public utilities and so forth, but I live on the churches and the ranches and the developers and some of the others.
I guess I’m using this as a rule of thumb. If it seems reasonable that my mailer might actually get in front of a real human being I might have a chance. I love that. For instance, there may be a church out there that has bought land with the intention of building but now needs to sell the land. What do other success plant members do when you’re scrubbing your data? Is the ideal scenario that the land is owned by a husband and wife as individuals with the actual owner first name to plug in, or do you have varying shades of grey on this? Love to know what you guys think about this. Tim.
Jack Butala: This is an outstanding question and I feel incredibly qualified to answer it. Tim, whatever you’re doing I can tell you right now the way that you’re approaching this and looking at it and just by this question, you’re going to do incredibly well. You probably already have at whatever else you chose to do for a living but I’ll tell you, my hats off. It makes me proud actually to even hear a question like this. There’s a lot of questions in and out and through this whole question, lots of multiple questions, but I’ll tell you what I think you’re really asking is, how much is too far? How much data do I scrub out? How much do I leave in? What do you guys do? The answer is, part of this is art and part of this is science. You clearly have the science part down, but I can tell you that I have made mistakes in mailers in the past, sent offers out to corporations and railroads and churches and ranchers and developers and purchased property from every single one of them.
Am I saying leave those all in? Absolutely not. One of your questions entwined in this was do I want Mr. And Mrs. Smith as a buyer only? That’s the ideal situation. I think your yield percentages are going to be best there but you just really never know. There’s a lot of fish in the lake and you’re going to stick the line in the water and a very large percentage of the time it’s going to work. There’s no x y z way to scrub data. That’s what makes it beautiful.
There’s some stuff that I completely steer away from. I steer away from industrial property always. That’s just personally what I do. We have members who specialize in that, but I can tell you the way that you’re doing it is exactly the right way. You might just want to send out a church owned property scenario one time all on it’s own. Jill and I buy properties from non profits like that all the time, in ranchers and everything else. You’re right on the right path. Did I answer the question, Jill? I’m not avoiding it in any way. There’s not a linear way to do it. Everybody does it differently.
Jill DeWit: That was his whole point, and I thought it’d be fun to put in here so he and everybody could hear out thoughts on this in this way, because it really just is a, what do you guys do, kind of thing. It’s like Tim thinking out loud and wondering what everybody’s else’s little take is on this and I love it. It’s interesting because one rule of thumb is take them out, let’s make it really easy, and another rule of thumb is leave them all in. You never know what’s going to happen.
Jack Butala: Exactly.
Jill DeWit: That’s true. Have we bought property from churches? Heck yeah, and all kinds of interesting entities and places, like donated land when people pass on. You’d be surprised. They don’t want it. It’s really interesting.
Jack Butala: I’ve sent mailers out on accident to properties that should never have gotten the offers that they got and purchases property for probably five percent of what it’s worth. Some of our members do that on purpose.
Jill DeWit: Those are my favorite deals.
Jack Butala: I have never heard of anyone getting stomped. Have you Jill?
Jill DeWit: No. My favorite deals is when you pick up something you are not going for at all, wrong person, didn’t even they had this and it’s something fantastic that they forgot they have. It’s like finding something in the back of the closet and they’re like, do you want it? I don’t want this. You’re like, heck yeah. I’ll take it. That’s how it feels.
Jack Butala: I’ll leave it on this. It’s really hard to do this wrong. You have the basic science part of this down. The art’s part up to you. After your fourth or fifth or twelfth mailer you’re going to say, you know what? These mom and pop deals, they’re way easier. Maybe I’m just going to send them to mom and pop. Or you’re going to say, I bought forty-two pieces of property from this church that I left in the scrub on accident. Maybe I should send out church data. That’s really what goes on. That’s the truth of it.
Today’s show or today’s topic, the material limits of writing offers on back tax property. Oh my God, this ties perfectly into the question we just answered. For Tim, what you don’t want to do is just send offers to properties that have back taxes on them. Boy, if you’re a regular listener on the show and you hear us talk about this topic and you’re saying to yourself, why do these guys keep harping on this topic. Here’s why. Jill talks to people all the time. Land Academy members and members that come from other places and they ask this question. Jill, what’s the question?
Jill DeWit: Just, can I only do back tax? Should I only do back tax? They have it in their head that those are really the only motivated people. I have to let them know that, no. My answer is, I don’t isolate back tax people and I don’t take them out. I include back tax people with everything I do.
Jack Butala: The title of this show is the material limits of writing offers on back tax properties only. Here’s the material limit. In every county, back tax property is somewhere between point zero one percent and in crazy cases maybe five percent of the actual property in the whole county. If you’re going to limit to sending mailers or sending offers to owners of back tax property, now you’re mailing out property to, best case, five percent of the people who own property in that county. Wouldn’t you rather send it to everyone who qualifies from a percentage standpoint and how we scrub data? That’s why our percentages are so much better than I think our competitors are. Here’s another thing that doesn’t get talked about enough. Properties with back taxes on them, that’s usually there for a reason. They’re tough deals to get closed, a lot of them.
We get letter after letter after email from people who say, you know what? I used to just send back tax properties and then I heard about you guys. Went through the whole thing and now I’m killing it. Here’s the math. One person really recently did a whole analysis of the responses and the properties, sending it to everybody. I don’t mean everybody. You don’t send a five hundred dollar offer on a property that’s in the middle of Manhattan. I go into great detail in our program to avoid that. You’re just wasting the money on a stamp there. If you follow the way that we do it your percentages are going to be pretty high. Way higher than just back tax property and once you go to close the deal you’re going to find out the person you’re talking to on back tax property is maybe, they don’t even own it.
There’s all kinds of issues. The meat of the show here is please consider sending people mail offers on properties of all type, not just land. Set up a scenario or an acquisition criteria and get offers in front of those people and forget about the back taxes. Do you exclude them? No. Absolutely not. Include them.
Jill DeWit: That’s my whole thing. Yeah. I can’t tell you how many people have tested this. I was trying to just find it right now and I can’t find it. I was going to share this one about this individual who actually did his own little test on this. I don’t know if you remember this, Jack. It was like, I don’t know, six months ago and the numbers they came up with, doing that test versus including everyone was amazing. He’s like, oh my gosh. The rate of return. You just covered that? I apologize. The exact test? You can tell me.
Jack Butala: Multiple people throughout the last, I don’t know, year and a half, have really come to us and said, and one person that Jill’s referring to and I did earlier, really got technical about it. Said, on this date I sent out these back tax mailers and this is what I yielded. Then from date to this date I did it with everybody. Same county, same everything, same prices, and it yielded three times the acquisitions and much less headaches getting the deals closed than just back tax property alone. I’ve never had anybody come to me ever. Really. Jill, stop me. Please let us know if they’ve come to you. Never had anybody come to me and say, this back tax methodology is better. It works much better. I’m not going to spend the thirty-eight cents or whatever it cost to get an actual piece of mail offer in front of an owner. It’s just not worth it. Have you ever heard anyone say, it’s not the way it should go?
Jill DeWit: Uh-huh. (affirmative). I completely agree. It’s just that you never know, you’re hitting people at the right time. It’s hitting the right people. I guess my thing is hit them all. Let’s not mess around too. Why are we trying to limit our reach? We should be reaching as many people as possible too.
Jack Butala: Yeah, reach. Well said.
Jill DeWit: That’s a thing. If you’re excluding everyone who’s current on their taxes, well good. Then I’m going to reach them and you won’t. You know what I mean? There’s just so many sellers out there. You never know why they’re motivated. My other thing about it too is, I might be behind on my taxes today and I paid it tomorrow and I still want to sell. Whatever it is. Now they’re not popping up on the list. There’s just so many little details. If you’re really in this and you want to do it right you’re going to hit them all.
Jack Butala: That’s what I think. I can speak for Jill and myself. Not all. Not the universe of people who own, but we teach capping the access value so that you don’t waste money sending low prices offers to super high value property either. The short of it is our methodology works. I bet you can guess the technical two today. Two minutes of property investment advice from our fifteen year, fifteen thousand transaction experience. It couldn’t be more simple. Don’t limit yourself to just mailing offers to property owners who have associated back taxes. It’s simple as that. If you have a question or you want to be on the show, call 800-725-8816. Jill, inspire us.
Jill DeWit: Are you aligning yourself with the right people? What made me think of this today was, kid number three is in middle school and we were actually having a reevaluation of his high school choices. One of the things that’s important to us for children is making sure they’re in the right environment, getting the right education, having the right challenges, and being with the right people. This has been our topic, this going on just the last several days. I started to think about it for myself and Jack and all of you. Are you doing the same thing? We think about it for our kids. We should be thinking about it for ourselves. Are you hanging out with the right crowd? Let’s put it that way. Even hanging out with, I’m trying to say this in a nice way. Maybe it’s the crowd that you’re like, I’m not sure I’m qualified to hang out in that crowd. I don’t know, but put yourself in that crowd. You should. Does that make sense, Jack?
Jack Butala: Yeah. If you’re wondering if you’re qualified, you are.
Jill DeWit: You are.
Jack Butala: Just by even having that thought, yes, it’s time to push yourself.
Jill DeWit: Exactly. Here’s another example. Here’s what happens to us sometimes. It happened by accident. We met some people a couple nights ago and it resulted in a rocking invite to this strand party with these incredible musicians a couple days ago, Jack and there we were, looking around, going, who knew this was the right crowd. You know what I mean? you know what I’m talking about, the other day?
Jack Butala: Yeah. I have a very clear memory of what happened. It was a blast.
Jill DeWit: It was. It was funny because it was a little bit by accident, slash however, is because we were in the right place at the right time, hanging out with the right people and the right crowd for us. Yeah.
Jack Butala: Having Jill on your arm helps everything by the way.
Jill DeWit: Thank you. It was so much fun. We met these people. It was fantastic. The next thing you know, the next day, Jack, you and that guy are texting and then the next day we get this invite to this part. I’m like, where are we going? What are we doing? Then we show up and I’m like, this is exactly where we should be right now and who we should be hanging out with. It’s perfect. If you’re hanging out with the wrong people, and I think in my past it might’ve people that maybe it was in my nine to five job and all they’re doing is ….
Jack Butala: Complaining.
Jill DeWit: Exactly. We’re standing by the water fountain or the water cooler and the coffee pot, complaining about the recent management decision which, by the way, I was at my girlfriend’s office a little bit the other night and I heard stuff like that, people talking about changes coming up and what are we going to do and a lot of depressing stuff. It’s easy to get caught up in that. Don’t get caught up on that. Get yourself out of that. Politely excuse yourself. Get in the right environment. That’s one of the things I love about and it’s totally true. I watch it happening in our little world. I watch our members becoming friends. Aligning themselves, doing deals. You and I Jack, have worked hard to create the right community and our people are doing it.
Jack Butala: We have multiple members who started with no resources at all but they’re real good. They’re just go getters and they’re aligning themselves. On the other end of the spectrum, other members who have no interest in bird dogging like we do at all. They’re just interested in financing the whole thing, and they’re getting that together on their own. It’s not like we have a forum to do that or anything. They’re in success plant talking to each other [crosstalk 00:16:57] happening. Success plant’s free by the way.
Jill DeWit: Yeah. That’s a good thing. That’s it. Just make sure you’re aligning yourself with the right people.
Jack Butala: Well said, Jill.
Jill DeWit: Just like when you were a kid. Hang out with the right crowd.
Jack Butala: Thinking about school systems for your twelve year old …
Jill DeWit: Isn’t that funny?
Jack Butala: To apply it. Seriously, well said. That’s super inspirational, even for me.
Jill DeWit: Thank you.
Jack Butala: I wonder if I’m hanging out with the right people.
Jill DeWit: yeah, you hang out with me.
Jack Butala: That’s not what I mean.
Jill DeWit: Don’t I count?
Jack Butala: Inside, but in the officer here we have the right people in the office for sure.
Jill DeWit: I know what you’re talking about.
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.
Jill DeWit: We use it everyday to buy property for half of what it’s worth and sell it immediately.
Jack Butala: As always, you are very alone in your real estate ambition. Good show, Jill.
Jill DeWit: Thank you.
Jack Butala: Great inspiration. Tying it on all together. Tying it all together. You know how many deals have happened on the back of a cocktail napkin where people are standing there saying, I got this apartment building. I don’t know what to do. Yeah, I want to buy apartment buildings or something like that. I bet a lot.
Jill DeWit: Exactly.
Jack Butala: I’ve never done a land deal that way because I close my ears. I always, naw, I have four hundred and fifty deals in the pipeline.
Jill DeWit: You know why? Here’s what happens for you and I. When we’re out in that environment, we’re not the first ones to hear about it so we don’t care. Right? We don’t want it.
Jack Butala: We didn’t get there first. It’s so true.
Jill DeWit: Which is really true. I get deals to me passed on by friends of friends. Hey, my buddy’s trying to unload a piece of property. Can you help him? That would be no, because you already know about it. That means he’s got a realtor working on it and duh, duh, so no, that’s fine. I’m sure he’ll be okay. That’s not my kind of a deal.
Jack Butala: Once a week that happens, either on the phone or in person where somebody says, you really need to get to know my friend, John. John does these land deals over here … and I stopped listening right there, because John doesn’t do it right and I didn’t even meet him.
Jill DeWit: Exactly. Yep, we’re good. That’s two funny things.
Jack Butala: Information and inspiration to buy undervalued property.
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