Putting Title Companies Out of Business (CFFL 0301)
Putting Title Companies Out of Business
Jack Butala: Putting Title Companies Out of Business. 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 today. In this episode, Jill and I talk about putting title companies out of business. What!?
Jill DeWit: Oh my goodness.
Jack Butala: Great show today Jill. Before we get started, please share something interesting that happened to us lately, and maybe it’s even funny.
Jill DeWit: How about today?
Jack Butala: Okay.
Jill DeWit: Did we just drive how far, in how many hours to end up having breakfast, and then come back. It was hilarious.
Jack Butala: It’s not news that driving around in Los Angeles is pretty awful.
Jill DeWit: Mm-hmm (affirmative).
Jack Butala: It’s an awful experience.
Jill DeWit: Exactly. You and I, this morning, thought we had it all figured out, thought we were going to drive to our new podcast studio.
Jack Butala: Audio, video. Yeah, studio.
Jill DeWit: I thought we had it all figured out. Gosh, you and I were up at … I was up at 4:30, wheels up around 6:00 and head to LA. Thought we had this right. Oh my gosh, we drove an hour, which was technically not bad considering how far we went. An hour to get to the outside of the establishment to say, “We didn’t do our homework. This isn’t the place for us.” We had a nice breakfast. That was nice. The coolest part was …
You know what’s really funny, we found a little diner right around the corner here in LA, and-
Jack Butala: We had fun.
Jill DeWit: I kept waiting for somebody to walk in the door because … I’m sitting there looking around going, this is clearly a hang out where some cool people might show up, other than us. Maybe we were the cool people. That’s it. They were looking at us.
Jack Butala: Oh my gosh.
Jill DeWit: I’m kidding. It was funny.
Jack Butala: Every time I get in a car and drive around Los Angeles, all kidding aside, it’s pretty awful to drive here, but you learn so much. There’s so much cool stuff that goes on in a large city. It was make the best of a situation, and by the way, I wasn’t even the one driving.
Jill DeWit: No, but we had a nice breakfast and a nice time. Now we’re going to do a little more homework before we do that.
Jack Butala: Yeah, we’ll find a studio.
Jill DeWit: Cool.
Jack Butala: Let’s take a question posted by one of our members on successplant.com, our free online community.
Jill DeWit: Ted asked, “I’m scrubbing a new list, and I see a whole bunch of half interest. Should I just delete them all?”
Jack Butala: Good, simple, one sentence, one and a half sentence question. Good.
Jill DeWit: I want to explain what the scrubbing is, and-
Jack Butala: You explain scrubbing, and I’ll explain half interest.
Jill DeWit: Deal. Scrubbing is taking a list of data-
Jack Butala: Scrubbing is something Jill’s never done in her life.
Jill DeWit: That’s so not true. I did this this morning. You are such a stinker.
Jack Butala: Scrubbing data, not floors.
Jill DeWit: Oh, I know how to do that too by the way. I do some of that, thank you very much.
Jack Butala: You scrubbed a lot of data, not floors.
Jill DeWit: Oh, thanks.
Jack Butala: As you shouldn’t.
Jill DeWit: No, I don’t do that kind of scrubbing, but-
Jack Butala: One time, this buddy of mine said this sentence, and it always stuck with me, obviously, “If I love my wife, why the hell would I ever ask her to scrub anything?” I completely agree with that.
Jill DeWit: That’s very thoughtful.
Jack Butala: I totally agree with that. That’s absolutely for somebody else.
Jill DeWit: What kind of awesome, wonderful, gentleman would come up with that?
Jack Butala: His name is Ron, and he is legally blind now.
Jill DeWit: That’s very nice.
Jack Butala: Mm-hmm (affirmative). He’s also not married, so he doesn’t-
Jill DeWit: We’ll there’s that. His point was, “I don’t marry them, so I can ask them to scrub.” If Ron was listening he would laugh with that right now. He would like that. That’s funny.
Back to scrubbing. Basically taking a list of data, in our case we have … I don’t know if the right term is uploaded or downloaded, but a bunch of ownership information from a county website because we’re doing a mailer to send out-
Jack Butala: Offers.
Jill DeWit: Offers to a bunch of property owners we’ve isolated. Let’s say I’ve gone in, and I’ve got my data, that’s a whole other story, I’ve got my data, I’ve uploaded it into my spreadsheet, and now I’m staring at all these fields I don’t need. I’m taking those out. I’m staring at duplicate names. I’m not going to send the same person three offers to arrive in the same week. That’s a waste of paper, time, stamps and whatever. I’m not going to do that. That’s how I’m scrubbing my list down, and I’m also looking at my list to make sure nothing crazy’s in there like the government or a hospital or something. Some things like that I’m not going to send an offer to the forestry service to buy the property, or something like that that maybe have accidentally got in. Do you have anything else, Jack, to add?
Jack Butala: There’s a universe of … Just imagine for a second there’s a universe of every single property owner in a database. That’s what you start with, then scrubbing is you take the stuff off you don’t want to send offers to. What you didn’t mention, Jill, it’s fine is you want to remove owners of property who you know for sure are not going to respond. You don’t want to waste their time, you don’t want to waste your money on postage and the whole thing. Federal government’s a great example. People who have property that’s valued extremely high, let’s say five acre property, you want to send it out to accessed value that’s 20,000 bucks or less let’s say, not $17 million, then send them a $500 offer.
Jill DeWit: Exactly.
Jack Butala: Scrubbing is just getting the list down to logical.
Jill DeWit: Mm-hmm (affirmative). Thank you.
Jack Butala: This half interest business, it used to be, it’s not longer the case now that an APN – Accessor’s Parcel Number, was assigned or could be assigned to a partnership. You could have one piece of property and two owners. Let’s say Jill and I own a piece of property together. It turns out we do, but I would have an APN of 12345678, and she would have an APN of 12345678A.
Jill DeWit: Mm-hmm (affirmative).
Jack Butala: It would be the same property, and I own half of it, and she owns half of it. The county’s learned very quickly that’s a mess. It’s no longer the case, but there’s still these stragglers out there, and I think that’s what Ted’s talking about. That answer is yes. You should delete them all. I, on accident, have purchased over my career, several pieces of property that were partial interest property, and I lost all the money. You can’t sell it.
Jill DeWit: You can’t do it without the other person. You have to have the other interest when you want to do something with it. You don’t want to be trying to track them down. That’s the funny part. How many times have we talked to people that’s said, “This is such a great thing?” This guy wants to sell, but he doesn’t know where that guy is.
Jack Butala: You can quiet title it. There’s a bunch of things you can do to get ownership. It’s basically the same legal action you do when you foreclose on a tax lien. Some of these assets, their price, it’s just not worth it.
Jill DeWit: Mm-hmm (affirmative). It’s better just to move on.
Jack Butala: It’s better just to buy property that’s the way it’s supposed to be and mark it up and sell it.
Jill DeWit: Mm-hmm (affirmative).
Jack Butala: That’s the business we’re really in.
Jill DeWit: That’s it. Ted, you’re on the right path. Jack’s right, go to the next one.
Jack Butala: Yeah, open the next letter.
Jill DeWit: Yup.
Jack Butala: If you have a question or you want to be on the show, reach out to either one of us on successplant.com. Pretty success we’re going to not say ‘success plant’ anymore. It’s just going to be the Land Academy.
Jill DeWit: Community.
Jack Butala: The Land Academy Community.
Jill DeWit: Exactly.
Jack Butala: Today’s topic, putting title companies out of business. What the heck does that mean. This is the meat of the show. Go ahead Jill, you had some good thoughts about this right before the show.
Jill DeWit: I did because we were talking about the things we’re working on. One of the many things down the path that’s not going to be ’16, but it’s going to be ’17, and I can’t wait to get this going is being … Two parts. There’s two parts to this. One is, there’s a lot of things you can do, everyone of us can do as an investor for yourself, doing your own homework, and almost doing your own title work.
What do I mean by that? Going back and connecting the dots. Going back and looking at the vesting deed, and depending how old it is the deed before that and maybe the deed before that. You can access all this stuff, and doing your homework and making sure the chain of title and the way property is transferred and everything’s in place and done correctly, so we know whoever owns it now for sure owns it outright. Everything went great, so as you’re buying it or as you’re selling it, you know the asset’s free and clear, and you’re good to go.
What we were talking about is taking it a step further that … What is so funny?
Jack Butala: I think you’re so tired today.
Jill DeWit: I am so tired today. You can tell. I am exhausted.
Jack Butala: It’s like story time in Kindergarten. It’s like NPR. “Then you take the title, and if you look at the vesting deed-
Jill DeWit: “I’m Diane Reed,” no I’m just kidding.
Jack Butala: “Then you fall asleep.”
Jill DeWit: “This is NPR.”
Jack Butala: “Then, this is Jill’s nap time.”
Jill DeWit: I was totally going to take a nap. You’re right. I’m trying to get some energy. I need some caffeine don’t I?
Jack Butala: I can do the whole show if you want. You can sit there and look pretty.
Jill DeWit: No. You take it from here.
Jack Butala: Title companies, this is what they do. They check to see if a guy that’s going to sign the deed over to you is actually the guy who owns it. They look at the vesting deed for that, the deed right before the one you’re going to get. They basically … It’s like doing a puzzle. They put the puzzle pieces here and there, and they try to connect them all, and if they do connect, great, and we’re going to issue title policy.
What Jill’s saying is, and she’s 100% right, although a little bit tired, is you can do this yourself. You do not have to purchase title insurance on a property. If you’re buying a $500 asset, like we do all the time, and our members do, a lot of times it’s not worth it financially, and the person who’s buying it from you doesn’t care to get title insurance. When does it really matter to get title insurance? When there’s a lender. Lender’s demand you get title insurance, and that’s fine. They won’t lend against a property. Most houses, when there’s a mortgage, you have to get title insurance.
We teach, and we do, and we practice doing out own title work, and obviously, never issuing a title policy because it’s very simple. We basically act as a title agent. The says, “Putting title companies out of business.” Here’s the best part. Here’s really what I wanted to talk about. There’s a company in California, in fact it’s Title Pro 24/7, it’s part of our pro membership benefit to have a subscription to this, they have literally put together the chain of title on every single property in California, and they’re moving their way east. I think that’s a pretty strong argument that title companies will be … When our kids have kids, they will probably be non-existent, or at least a lot less prevalent. Data will take over.
Jill DeWit: Do you know what I wonder though? How much of it is that you and I have the inside track? That’s really a lot of it, is you and I have access to the what the title companies are using. That’s what’s-
Jack Butala: So do our members.
Jill DeWit: I know, and we share it, which is really beautiful. That’s the reality. Our members, I tell you, I know they’re like, “Oh, this is wonderful. I can put in an APN and a county and a state, and I can pull up the vesting deed. I can go back before.”
Jack Butala: Plat maps.
Jill DeWit: “I can see it on a map.”
Jack Butala: GPS.
Jill DeWit: “I have the GPS in my hands.”
Jack Butala: That’s 80 or 90% of a title policy.
Jill DeWit: “I have a property report. I can print out a property report right now in my hands in 30 seconds. It’s downloaded as a PDF, I’ve got it, done.” It’s so great.
Jack Butala: That’s what’s so great … The vast majority of people I know that are super successful at this, they still have jobs because it takes so little time to do all this research. You can do it … You never have to go look at the asset. Looking at the asset’s insignificant.
Jill DeWit: True.
Jack Butala: It’s all just pushing paper around and looking at a computer screen and make sure all the dots connect.
Jill DeWit: It’s true. I was going to touch on one thing real quick, Jack, that I want to make sure everyone knows and hears this, there’s a couple things that they’re missed out there that need to be brought up. You do not have to have title insurance every time you buy or sell a piece of property, number one. That’s not-
Jack Butala: Oh, what else, demystifying, what was that? That was the last show I think.
Jill DeWit: You want to hear this? Number two, you don’t have to be a broker or a real estate agent, or have one. No, you don’t have to do that. Number three, this one hit me, I couldn’t believe this the other day. I’ll end it with this one. I ran into a gentleman who is not a citizen of our country living here who went to an REI meeting, was all excited thinking he could make some money in real estate, and then he was promptly told he cannot own any property in the United States because he’s not a citizen. I fell over.
Jack Butala: That’s dead wrong.
Jill DeWit: Isn’t that crazy.
Jack Butala: That’s dead wrong advice, and possibly discriminatory.
Jill DeWit: I was … That’s what I questions, that maybe it was discriminatory against this poor guy. It made me mad. By the way, I’m helping this guy. He actually-
Jack Butala: Oh good.
Jill DeWit: No, I’m not kidding.
Jack Butala: You guys exchanged information?
Jill DeWit: I met him on a Saturday, and on Monday he had emailed me already.
Jack Butala: Did you say he was an Uber driver or something?
Jill DeWit: Yes. He was.
Jack Butala: Do you collect your Uber drivers Jill?
Jill DeWit: No, I do not collect my Uber drivers. Do you know what’s funny? Maybe-
Jack Butala: Do we have to have a talk?
Jill DeWit: No. This is what-
Jack Butala: Exchanging information with strange Uber men driver.
Jill DeWit: No, but it’s funny. Maybe because these Uber drivers are out there bringing in some extra cash, and they’re motivated, and they’re looking for other ways to get ahead.
Jack Butala: You just can’t stop selling.
Jill DeWit: I appreciate it. No.
Jack Butala: Sell, sell, sell.
Jill DeWit: That is not true.
Jack Butala: I know.
Jill DeWit: No, I’m-
Jack Butala: You’re doing a great thing. I’m horsing around, and I know you have that guy’s best interest at your heart. I know.
Jill DeWit: No, all I’m going to do is help the guy out, give him some free information, and let him know, “If you need help, we’re here.”
Jack Butala: You know I’m joking.
Jill DeWit: I do, thank you.
Jack Butala: I’m going to have a bruise on my shin from being kicked under the desk now.
Jill DeWit: No, it’s all good.
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 kicked under the table.
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.
I can’t believe someone’s giving that kind of advise at a live event.
Jill DeWit: I know, that made me mad.
Jack Butala: It really actually burns me up too.
Jill DeWit: If I-
Jack Butala: Come on.
Jill DeWit: If you and I were there, and I ever heard that I would’ve said-
Jack Butala: I would’ve stood up.
Jill DeWit: Wherever I was, I would excuse myself and gone over and said, “That’s not true.”
Jack Butala: I would’ve grabbed a mic and said, “Look-
Jill DeWit: I would imagine maybe it was in a room. I don’t know if it was like they’re having a talk. I don’t know the exact environment, but that’s what he was told.
Jack Butala: Since you bring it up, people from other countries can own American real estate, but I’ll tell you, there’s no slot for it … What I see all the time is when it comes time to send a tax bill out, counties do not have to send out tax bills. They just do it because there’s a higher percentage of people who write the check and send it back it-
Jill DeWit: Who will pay.
Jack Butala: There’s almost never a slot or a database to send a tax bill internationally. To send a letter internationally. A very high percentage of properties go back for taxes because people, in other countries if they own them, they don’t get tax bills.
Jill DeWit: Some of these counties, they probably don’t want to budget, or the chances of that getting lost or somebody moves in another country and it not being forwarded, that’s probably pretty high too.
Jack Butala: All of that. The ones … I’ve done deals with people in the past where they buy lots of properties, and they sell them wherever they are. Specifically, a guy from Israel bought my whole inventory pretty early in my career, and he knew somebody in this country, and he used that address. It was very smart.
Jill DeWit: That’s a good idea.
Jack Butala: Yeah.
Jill DeWit: That’s a great idea. I hope we helped some people.
Jack Butala: Information and inspiration to buy undervalued property.
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