Why Real Estate Taxes are Great!
Jack Butala: Why Real Estate Taxes are Great! 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: Welcome to Land Academy. I’m Jack Butala.
Jill DeWit: I’m Jill DeWitt.
Jack Butala: We show you how to buy real estate for half of what it’s worth-
Jill DeWit: And sell it on the internet really fast.
Jack Butala: (unison) We’re Jack and Jill and this is the Jack and Jill show two.
Jill DeWit: (unison) We are Jack and Jill and this is the Jack and Jill show two.
Jack Butala: With over 15,000 completed transactions we’re the experts at acquiring property.
Jill DeWit: Of all kinds not just land.
Jack Butala: For half price and flipping them for way more.
Jill DeWit: All right. Let’s get this show started.
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 why we think real estate taxes are great. When’s the last time taxes and great were in the same sentence?
Jill DeWit: They are in our world.
Jack Butala: Great show today Jill. Before we get started, please share something interesting that happened to us lately.
Jill DeWit: Jack you will not believe the people that are coming out of the woodworks and asking to have an invite on our member call. This is a funny [crosstalk 00:00:50]
Jack Butala: Like on our Thursday call?
Jill DeWit: Yes. Okay. I just got one again Erin in our office was sharing with me. I think they’re hearing from our members how funny this is, so I don’t know if they’re really legitimately want to be on our member call because they’re interested in what we do or they’re just interested because they hear the call is so flippin’ funny.
Here’s what I’m talking about. If you want to be on an invite you sure can. I’ll just put it out, I think I put it out there before. Every Thursday at 3:00 Arizona time, Jack and I have a one hour member call with all of our people. It’s their time to ask us anything about the business or properties or deeds. Dream it up, anything they want to ask.
Always, it goes sideways because …
Jack Butala: Sideways in a good way.
Jill DeWit: Oh my gosh [crosstalk 00:01:42] hilarious.
Jack Butala: It’s a blast to do that call. I love doing it. I look forward to it.
Jill DeWit: We do. We are in tears crying all of us at the end of that call. It’s funny because I know some of the people are doing this at work so how are they missing over an hour out of their workday and not under their desk cracking up. We can say stuff that we can’t say here.
Jack Butala: Yes. That’s what it is.
Jill DeWit: Right? It’s with a pretty tight group of people that obviously are in our world and understand what we all do. It’s just the funniest thing.
Jack Butala: They’re making some money for themselves and it’s just a good time.
Jill DeWit: Oh yeah.
Jack Butala: Everybody’s happy and comfortable.
Jill DeWit: Everybody gets on and they’re sharing little tidbits like, oh my gosh I have 4,000 mailers going out this week and the next guy will chime in with hold onto your hat. Here it comes.
Jack Butala: I did that once too and I’ll never do that again.
Jill DeWit: Exactly. Then the poor person’s like oh no, what have I done? We just laugh and have a good time. It’s funny, the people that are …
Jack Butala: It’s very candid.
Jill DeWit: Oh yeah.
Jack Butala: It’s a lot less clean than this show.
Jill DeWit: Oh it is so fun. I’ll put it out there again officially, if you would like a one time invite to be part of our member call on Thursday afternoons send an email to Erin, E-R-I-N @landacademy.com. Let her know, just say Jack said this is okay.
Jack Butala: That’s the third time I’ve gotten thrown under the bus.
Jill DeWit: Yeah I’m doing it right now.
Jack Butala: … By a colleague today. Third time.
Jill DeWit: Jack, I usually volunteer my name. She’s tired of hearing yeah Jill I get it. I’m going to tell them Jack this time. Jack said I could have an invite and she’ll send you a quick little four questions, just who you are and your contact stuff and she’ll get you the invite to be on the call.
Jack Butala: At the moment we do it on WebEx and you have to be invited. She needs your email, a functioning email address to get it there.
Jill DeWit: It’s not open to public because we can’t handle that many people.
Jack Butala: We will do it actually very soon, but we can’t …
Jill DeWit: It’s coming.
Jack Butala: … Logistically …
Jill DeWit: Handle.
Jack Butala: The way that it’s handled- Jill and I just visited a studio today, Pro Studio, and they’re going to start handling our calls.
Jill DeWit: Doing all kinds of stuff. Webinars …
Jack Butala: Live callers and everything.
Jill DeWit: I’m so excited.
Jack Butala: Yeah.
Jill DeWit: We’re going to do some really great live good-
Jack Butala: That’s going to up our game in that call and really seriously, and not joking around about this, get the answers that people need to make some money at this. I don’t care where you are, if you’ve done 50, 500 deals or if you’ve done zero and trying to get passed that first one.
Jill DeWit: Exactly.
Jack Butala: That venue is very effective.
Jill DeWit: It is.
Jack Butala: We don’t have an immediate feedback on this show.
Jill DeWit: No.
Jack Butala: We get immediate feedback in that in that venue and it’s awesome.
Jill DeWit: Funniest thing. There’s always something funny. Somebody always puts their foot in their mouth and somebody always calls them out on it.
Jack Butala: That person is me.
Jill DeWit: It’s just so darn funny. I tell you, I just really love the call too. The camaraderie and the support, that’s the best part too. I didn’t mean this to turn into this but here we are, what you and I have created, and a lot of it is our online community that we’re going to take a question for in a minute here, but our people help each other. They were all new once and they’ve all done those deals before. You know what I mean? Someone helps you and then guess what, now six months later you can help somebody else.
Jack Butala: That’s right.
Jill DeWit: It’s a wonderful environment and we all learn from each other and there’s enough property to go around. Wow.
Jack Butala: I learn something on that …
Jill DeWit: You know what I mean?
Jack Butala: Yeah I do.
Jill DeWit: It’s not a secret. Help the guy.
Jack Butala: Yeah.
Jill DeWit: It’s okay.
Jack Butala: It’s one of five things that everyone’s concerned about when they get in the business. Did I come to the party too late?
Jill DeWit: Yeah. Is all of the property gone?
Jack Butala: No you didn’t.
Jill DeWit: Is that county already just combed over? Oh my gosh.
Jack Butala: None of that stuff happens.
Jill DeWit: I don’t have enough money. Oh come on we got this.
Jack Butala: You’ll be fine. I learn something on that show- I keep calling it a show. I learn something on that call every week.
Jill DeWit: Yeah. Exactly. We do look forward to it. It’s so much fun.
Jack Butala: Let’s take a question posted by one of our members on the Land Academy online community, the free one.
Jill DeWit: Yes. How do you get there? Go to Landacademy.com if you want to and just [inaudible 00:06:23] find the online community [crosstalk 00:06:24]
Jack Butala: Online community.
Jill DeWit: Join in and check it out. It’s fun. We have a lot of people too that aren’t in our world but they use that and you can. Go for it. We’re here.
Jack Butala: It’s free.
Jill DeWit: It’s all free. Luke asks, “Do you guys record anything at the county when you enter into a land-” this is probably a follow up. I think I know which Luke this is. I think it’s Luke number two.
Jack Butala: I do too.
Jill DeWit: Okay.
Jack Butala: I can see his writing style.
Jill DeWit: Good questions here. Okay. “Do you guys record anything at the county when you enter into a land contract? Also do you guys go ahead and sign and notarize the deed so it’s complete in the event something should happen to you as the seller prior to the buyer paying off the land contract?”
Jack Butala: Can I answer?
Jill DeWit: Yeah. Go ahead.
Jack Butala: There’s two questions in this. What do you record at the county at the time of sale and do you actually just get a deed all ready to go like an escrow agent would? Then it gets conveyed if you get hit by a bus.
Jill DeWit: I was waiting for that. I was like how are you going to handle that. I’m like that’s [inaudible 00:07:28]. I’m like Luke what do you think’s going to happen to me? What’s going to happen to you? I’m like come on.
Jack Butala: Jill.
Jill DeWit: I’m like Luke you’re scaring me here.
Jack Butala: You do some stuff in a professional environment.
Jill DeWit: Luke knows me.
Jack Butala: That I just think is cute as hell.
Jill DeWit: Thank you.
Jack Butala: It gives me all conflicting feelings. This is one of those reasons it’s maybe not good to work with your spouse.
Jill DeWit: Good thing we’re not married.
Jack Butala: No I mean just cute stuff and then I have conflicted feelings and then it’s like I’m not professional anymore. All the lines, they’re all grey.
Jill DeWit: You just want to pat me on the head and say it’s okay baby.
Jack Butala: Yeah. Yeah.
Jill DeWit: All right thank you I appreciate that.
Jack Butala: Then it’s not appropriate to do that at all.
Jill DeWit: Not around the office. No they got tired of you smacking my rear every time I walked by your desk. Here they go again.
Jack Butala: I smack her rear and she smacks my face.
Jill DeWit: Yeah. Our poor staff.
Jack Butala: We’re probably 62 lawsuits into this.
Jill DeWit: That’s so good.
Jack Butala: Anyway here’s the answer to these questions. [inaudible 00:08:39] exact same question as yesterday. There are two ways to convey property when you sell it on terms, when you make payments. One is through a deed of trust which is when you use an escrow agent. They manage the whole transaction. They usually do the contracts, they collect the payment, they distribute it to as the seller. If the buyer defaults they go through a foreclosure process, same thing as if you owned a house and you have a mortgage.
What Luke’s asking here is if you do a land contract where it’s just a handshake deal or maybe a back of the napkin deal and the person owns a piece of property, you sell a piece of property, Jill sells me a piece of property for 99 down, 99 a month, I start paying her and she processes the stuff. In that case do we record anything at the county and the answer is no. It stays in Jill’s name until I make the last payment and then she signs the deed over to me, which leads us to the second question.
Do you actually do the deed right at the beginning of the deal in case someone gets hit by a bus and it can get conveyed properly? The answer is no. We don’t, but it’s got me thinking maybe we will.
Jill DeWit: I don’t know. I don’t know. Once you sign that deed, technically it’s theirs.
Jack Butala: I’m trying to think really it comes back to that land contract, the document itself. If you expire, if the seller expires or is incapacitated let’s say, what happens to the deal? Does it automatically convey?
Jill DeWit: It shouldn’t.
Jack Butala: Is it part of the estate?
Jill DeWit: It should be part of the estate because it’s not paid off yet. Now my heirs should get those payments.
Jack Butala: That’s what I think too.
Jill DeWit: This is why- yeah. If I have the deed ready- I’m never going to have a deed signed without a date on it so I’m not going to do that and I don’t want to date today because now that means that it’s officially that person’s.
Jack Butala: Right.
Jill DeWit: It doesn’t have to be recorded, that’s just for public knowledge.
Jack Butala: If an extremely astute, one of our customers or buyer in a land contract deal said, I need some assurance that …
Jill DeWit: That’s what the contract’s for.
Jack Butala: I would actually put a provision in there. We would work it out pretty simply.
Jill DeWit: No one’s ever going to ask that.
Jack Butala: No one’s ever asked that.
Jill DeWit: No.
Jack Butala: I’m actually surprised about it.
Jill DeWit: Exactly. No. These are good questions.
Jack Butala: This is extremely good question.
Jill DeWit: Really good questions. I appreciate that and I hope that that helps. That’s how we do it and I hope it makes sense.
Jack Butala: If you have a question or you want to be on the show, reach out to either one of us at Land Academy’s free online community.
Today’s topic. Why real estate taxes are great. Exclamation point.
Jill DeWit: Especially this time of year. Seriously.
Jack Butala: This is the meat of the show. Jill, we talk about this all the time and it probably seems ironic to a new listener. Why do you think they’re great?
Jill DeWit: It triggers people-
Jack Butala: It’s a trigger.
Jill DeWit: … To maybe make some decisions about their property.
Jack Butala: It’s a sales trigger.
Jill DeWit: It is. They’re staring at a bill. Here it is again. I just got a bill. I’m staring at a bill I have to pay taxes on this property that I know I’m not going to use.
Jack Butala: Did a year go by again?
Jill DeWit: Yep.
Jack Butala: It went by again and I never went and saw that property.
Jill DeWit: Man.
Jack Butala: 20 years have gone by. I’ve been paying taxes on this property. You know what? I just got a letter from these guys. They want to buy my property for four grand. I’m just going to-
Jill DeWit: I’m going to think about it.
Jack Butala: I’m going to get a check instead of writing a check.
Jill DeWit: Yeah. Exactly. I love these. You and I are the same, we’ll both … Back in the day when we handled a lot of these ourselves I would tell these people, and this is what my staff does, don’t pay it. They’re like really? I don’t have to pay it? I’m like no. Don’t.
Jack Butala: You mean right when you were buying from them?
Jill DeWit: Yeah. When I’m buying from them they think do I have to settle this up? I said no. Don’t even settle it up. They’re so darn excited too by the way when I tell them don’t even bother settling up that $200 bill, whatever it is you’re staring at, I’ll take care of it. They’re like, ah thank you.
Jack Butala: That’s a question we get a lot too. If I can convey a property to Jill and it’s got $400 worth of back taxes on it, she inherits that back tax liability.
Jill DeWit: Yep. That’s true.
Jack Butala: You sell a car with half a tank of gas and the person drives it away, they get the half a tank of gas for free. It’s that kind of thing.
Jill DeWit: Exactly.
Jack Butala: A lot of people think that that’s not possible, that the tax amount for some reason sticks with you and the property goes.
Jill DeWit: Nope. The back taxes stay with the property.
Jack Butala: Right.
Jill DeWit: This is probably a whole ‘nother show that we should do talking about the ways to deal with that. There’s a lot of good ways. Do you have to pay it off? No.
Jack Butala: I think they might make that mistake is because if you and I buy a house Jill and get a mortgage, but I only get the mortgage, I don’t get it with you …
Jill DeWit: That’s why.
Jack Butala: I can convey the house to an unrelated third party. In a lien, I am still obligated to pay that mortgage, period.
Jill DeWit: I can see how it gets confusing.
Jack Butala: It’s confusing a little bit.
Jill DeWit: Here’s another example too. When I sell my house tomorrow, let’s just say, at the end of that time the back taxes will be settled up so if the new person’s going to start clean on a bunch of stuff, but not in this world.
Jack Butala: Right.
Jill DeWit: You don’t have to do it at that time. What I do want to have everyone make sure they know is, when you do your negotiating that asset to purchase, now I know, I was going to give you $1200, but you have $200 in back taxes. Here’s what I’m going to do. I’m going to give you a thousand we’re going to call it even. They’re like done. Great.
Jack Butala: Right.
Jill DeWit: You need to know where they stand. You may or may not change your offer price, but you want to go with your eyes wide open and know where they stand. How do you do that? Number one you ask them. Seriously.
Jack Butala: What? It’s that simple?
Jill DeWit: Oh my gosh. Number two you do it yourself and check yourself and we have all that data. I can look it up in 30 seconds. I can go, okay I see that, you really do owe $206. Okay we’re cool.
Jack Butala: Right.
Jill DeWit: Thank you.
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 every day to buy property for half of what it’s worth and sell it immediately.
Jack Butala: You are not alone in your taxable real estate ambition. It’s so Friday.
Jill DeWit: Don’t pay them. Kidding. Not you. It’s so funny that … it’s like I have to remind myself. I’m sure there’s an equivalent of someone that I talk to that’s a professional in something and know they have to, how do I say this, explain it so I get it. Until you’re really, really in it, does that makes sense?
Jack Butala: Yeah. I’ll take it a step further. Until you really screw it all up like I do and make a ton of mistakes, then that’s when I really understand it.
Jill DeWit: That’s the best advice.
Jack Butala: Unfortunately that’s just the way I roll.
Jill DeWit: No but you’re right. That’s good. I love that. Everyone should ask a lot of questions, question it all whether or not it makes sense, question it and make sure you’re doing it right.
Jack Butala: Then do it wrong.
Jill DeWit: Expect you are going to make some mistakes because you are and that’s okay. Then you go all right I learned, I’m not going to do that again. That was expensive. Gee I didn’t check the back taxes, I just bought a property with $300 in back taxes, now I have to pay it. At least now it’s worth that much less because it has those back taxes.
Jack Butala: Yep.
Jill DeWit: Okay. I’m going to do it once, I’m always going to remember that now. Seriously. That’s how it goes.
Jack Butala: Information and inspiration to buy under value property.
Jill DeWit: (unison) We are Jack and Jill and this is the Cash Flow from Land show.
Jack Butala: (unison) We are Jack and Jill and this was the Cash Flow From Land Show.
We are the experts at acquiring property-
Jill DeWit: Of all kinds, not just land-
Jack Butala: For half price just so we can flip it for way more-
Jill DeWit: And really fast. Thanks for listening. You are not alone in your real estate ambition.
If you have any questions or comments, please feel free to email me directly at jack@LandAcademy.com.
I would like to think it’s entertaining and informative and in the end profitable.
And finally, don’t forget to subscribe to the show on iTunes.