How We Started Buying Land 90s (CFFL 336)

How We Started Buying Land 90s

Jack Butala: How We Started Buying Land 90s. Leave us your feedback for this podcast on iTunes and 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: Hello.

Jack Butala: Welcome to our show today. In this episode Jill and I talk about how we started buying land in the 90s. I was forced to tell my own story a couple of days ago and Jill liked it so much she’s going to make me do it on the air again.

Jill DeWit: Love it.

Jack Butala: Before we get into it, first lets take a question posted by one of our members on LandAcademy.com, the online community there. It’s free.

Jill DeWit: Cool. Ted asked, “I have a parcel in New Mexico … Excuse me, Minnesota, that I’ve currently got sold on a contract for deed. The buyer has been looking to getting some permits and the county has alerted him that there’s a fee owner on the title from way back in 1972. Apparently, when they parceled out a larger piece of property it wasn’t done correctly so this guy is on the titles of this parcel and all the neighboring parcels and he passed away in 1995. It wasn’t an issue 3 owners before me until now. Is this something that probate would clear up or a quick title action? What should I do?”

Jack Butala: Excellent, Ted. This is a great question. It’s probably even a PhD level question, at least master’s degree for sure. I think that you and I … I’m really glad we’re doing this on the air. We alluded to answering this question on our weekly call on Thursday for our members, but the thick of it is this: It sounds to me like you need to do a Quiet Title action.

I know in Minnesota, I did a bunch of research for you, and I found out that it’s called Adverse Possession. In Minnesota they don’t actually call it Quiet Title. The first thing I would do is, like I suggested to you pretty much in private, I would contact an attorney and just have a consultation. There’s several law firms that pop right up in Google that rectify situations like this. On the thick of it or on the front end of this it sounds really scary, like, oh my gosh, I’m going to lose all this money, I sold the property, I did something wrong. I really don’t think it’s really that complicated. I really would just consult with an attorney and if you do end up having to do what’s in effect a Quite Title action or Adverse Possession action, all it really is is just following the statutes. You have to literally put notice in the newspapers for a certain amount of time and then file a bunch of court documents. The whole thing probably takes 3 to 6 months. If nobody responds to the posting in the newspaper, because I’m not sure people read newspapers anymore.

Jill DeWit: Isn’t that funny. It’s funny that it’s still a formality, but you still have to do it. Okay.

Jack Butala: In the end, you’re done. At that point, by the way, you have what I think, this is my opinion, now you have an insurable piece of property, what some people call Marketable Title. Is is a little bit of a wrench? Yeah, but you know what’s going to end up happening too is you’re going to find out how easy this is and now you’re going to seek property out, because there’s a ton of property that’s just sitting around because this makes everybody really afraid. This will open up Minnesota acquisitions for you too.

Jill DeWit: That’s very true, once you figure these things out. I agree. It’s funny, some of these terms, it’s easy to go, oh no, it sounds so big and scary. No it’s not. There’s ways around it. Is anybody trying to pull a fast one or do anything? No. The guy’s not here anymore, it’s just a formality.

Jack Butala: It’s a formality, Jill.

Jill DeWit: It is.

Jack Butala: Exactly. Well said.

Jill DeWit: We get hung up on these sometimes. You can work through it. You know what? You just have to call sometimes, like I’ve been in these funky situations, and I just have to call and call and call until I find the right guy. You might have to call a couple of different attorneys, by the way, until you find them because I’ve had to do that, until you found one that said, “Oh, I just did one of these. I can help you.” Great. Done.

Jack Butala: Isn’t that true with anything? Whenever you hire an IT guy or anything, the best thing they can ever say is, “Oh yeah, I just did that for another client. I know exactly how to do that.” I learned on his dime, not on yours.

Jill DeWit: My other things is, don’t give up too. This is, I think people … “I talked to an attorney, he said it’s not going to happen so I’m just going to have to let it go.” Don’t take one opinion. If you know that this is right and you can get it fixed, it’s solvable. Which it is. You’re just going to have to keep at it until you find the right person and they will understand.

Jack Butala: If you ask your mom for permission for something and she says no, you go ask your dad, right?

Jill DeWit: Right.

Jack Butala: That’s just like with attorneys. If you don’t like the answer the attorney’s giving you, get another one.

Jill DeWit: This is actually true. That’s so funny. Our attorney friends would probably shrug their shoulders and go, “Yeah, that’s right.”

Jack Butala: Some people trade out spouses because of that too.

Jill DeWit: That’s a whole other show.

Jack Butala: If you have a question or you want to be on the show, reach out to either one of us on LandAcademy.com. Today’s topic, this is the meat of the show by the way, how we started buying land in the 90s. If you haven’t picked it up yet, go over to LandAcademy.com and grab the eBook because I do talk a little bit about my background personally and how I got into this cockamamie crazy thing.

Jill DeWit: Cockamamie.

Jack Butala: It’s all because I was a commercial real estate acquisitions person for KPMG. Before that I was a commercial real estate broker in Michigan and I specialized in very, very complicated, very large health care transactions. Hospitals, assisted living facilities, long-term care, post acute hospitals, and nursing homes and the whole thing. I went from doing the most complicated transaction to doing what we do now, obviously this eventually stuck better than the other one, the most simple transaction. In a long-term care, let’s just say a nursing home deal, you’ve got to get approval from everybody. The whole thing takes a year so the financial performance is variable. There’s just a ton of stuff to do. You have to get federal and state approval, just a lot of things that can kill the deal.

What I took away from that, and this is actually ultimately how we got started in land, is I learned how to buy property by reaching out to people through a fax. Back then it was through the fax, now we do it through mail and some other sophisticated ways with texting and things like that, but the bones of what I learned there for buying very large commercial real estate deals and selling them, is really the bones of what we’re doing here. It’s way more perfected now because we’ve had so many years to perfect it, but that’s my background. Jill, for whatever reason, thinks that lends a lot of credibility to what we’re doing. I don’t know. Plus, I don’t like talking about myself.

Jill DeWit: Do you know what’s funny though? It also partially explains why we love what we do now. That’s one of the things that we go back to is, you could have that world or you could have a buyer and a seller and nobody else involved.

Jack Butala: And you. We’re the buyer.

Jill DeWit: You’re the buyer, or you’re the seller. Pick one. It’s the greatest thing on the planet. It doesn’t have to be that difficult, that’s the thing. The number of transactions that you can do when you’re just a buyer and a seller, it’s so much easier.

Jack Butala: Everything in life is more difficult when there’s lots of people involved. If there’s only one or two people involved and they’re basically on the same page, stuff’s going to get done. This is no exception. Those deals, the way that they get done now, it’s just … They’re not the way that they used to get done in the 50, 60, 70s in this country. There’s so many people that are trying to get a piece of the pie. Lenders are trying to take a piece, just everybody involved, with the exception of the title company, who I actually thing they earn their money, I question some of the fees and their involvement and whether they really want to get the deals done. I came from that and it really, really pushed me to find a better way. That’s what this is.

Jill DeWit: Exactly.

Jack Butala: A much better way.

Jill DeWit: Much better way.

Jack Butala: A lot of people come to us from the flipping houses environment and they see how we’re doing this and just the light bulb goes off over their head. It’s so easy.

Jill DeWit: Isn’t that funny? That’s one of the things I get all the time with that group in particular. They’re standing their scratching their heads going, “I’m missing something. This is a little too good to be true.” I really have to stand there and say, “No, no, you’re right. You’re okay, you’re right. It doesn’t have to be that hard.” They almost think that if I’m making this much money off one deal I should be really having to go jump through a bunch of hoops and earning my keep or whatever. No, you really don’t. Seriously, you found a good deal, you bought it right, you sold it right, move on. It is supposed to go this way.

Jack Butala: Yeah, you send a bunch of mail out, you send offers out, and you send it at a price that you’ve developed and the offers that you’re sending so that if they do sign it or they call you back and say, “Yeah, I want to do it,” now you’re running to the bank. You don’t send out offers with a relatively good price. You send out offers with a price that will rock your socks then it just sells itself.

Jill DeWit: And you’re hitting them at the right time. Like, “Aw man, shucks. I hate to let it go for this, but boy, I sure need that money.”

Jack Butala: Or “I’m just tired of paying the taxes on it. It probably is worth more but this is easier with you, thanks. Thanks for sending me an offer.”

Jill DeWit: Exactly. That’s how it goes.

Jack Butala: What I did back then, this is the second part of it, the spirit of that, the spirit of waking up in the morning and trying to find a better way, trying to improve, improve, improve on what you’re doing, that’s kind of our corporate culture here at Land Academy and I never lost that. Jill and I go at everything like that. How can we make this easier? How can we sell these properties faster, how can we buy them … To this day.

Jill DeWit: It’s true.

Jack Butala: We just had breakfast and we’re talking about [crosstalk 00:10:17].

Jill DeWit: How can I hands off raise three children.

Jack Butala: No one knows the answer to that. Hands off. How can I outsource child-rearing?

Jill DeWit: Exactly. Do I really have to show up? If it’s recorded isn’t it just as good as Mommy being there?

Jack Butala: Wouldn’t it be great? Wouldn’t that be great if all the screens in the house turned to you telling kids to clean up their rooms and stuff?

Jill DeWit: Wouldn’t it be great? The fridge opens and I go, “Make sure you’re making a good choice. Eat the yogurt. You know there’s apples over there.”

Jack Butala: Where is Mom anyway? I haven’t seen her in person in 3 weeks.

Jill DeWit: Exactly. But I hear from her every day.

Jack Butala: Why does she always have a good tan?

Jill DeWit: Exactly. I finally figured out it’s a green screen. Mom’s really not in her bedroom.

Jack Butala: That’s not real mom, that’s mechanical mom.

Jill DeWit: Exactly. Mom is not at the office.

Jack Butala: Mom’s in Tahiti. She’s been down there for 2 months.

Jill DeWit: There we go. That’s good.

Jack Butala: Join us in another episode. Did I answer everything?

Jill DeWit: I think you did.

Jack Butala: Let me say one more thing quick. Back then, this is now … The whole thing really started in the mid-90s. I didn’t do my first land flip until 1999, but what ended up happening is that I wrote an interface program between a CRM and a fax modem, if you’re old enough to know what that is. This is before the internet really seriously kicked in the way that it is now. I [inaudible 00:11:54] overnight in a very methodical way who owned, let’s say, an assisted living facility that’s larger than 30 beds would receive a note, a single page fax that says, “We’ve identified your property as an acquisition candidate. We’re extremely interested. The ballpark number that we probably could pay, subject to reviewing everything, is X.” Man, what a response did I get. That was unheard of.

After that I started doing it with companies. “We want to buy your company, we want to buy your apartment building,” and it just … I knew I was onto something. Now we do it with land because you can just sell it so fast. Jill and I also do it with wholesaling houses where we never go look at the asset. That’s the key. We’re taught so many things that are, I believe, incorrect and they become habitual, about real estate.

We have a rule, and I’m not saying you should do this if you’re brand new, but if we have to go look at the asset anyway, Jill and I generally don’t do the deal. It’s too time consuming. If we’re looking at a deal that if you even have to look at the deal at all, or more than 15 minutes let’s say on Google Earth, just to check access and some other things, we usually don’t do it.

Jill DeWit: Exactly.

Jack Butala: Make this easy on yourself. We’re all taught for some reason you’ve got to go look at the property, you have to go sit on it, you’ve got to breath it in …

Jill DeWit: You have to know the seller.

Jack Butala: Just really over thinking it.

Jill DeWit: You don’t need to [crosstalk 00:13:25].

Jack Butala: Yeah, get to know the seller. That’s a great one Jill.

Jill DeWit: You don’t need to do that one.

Jack Butala: Don’t ever do that.

Jill DeWit: Yeah, exactly, but people do that.

Jack Butala: I know.

Jill DeWit: They think that, “They’re going to be confident in me and want to sell it because I established this relationship.” You don’t need to do that. Your relationship is the transaction.

Jack Butala: You want to mechanize the acquisition and mechanize the sales process to the point where you have people that are working for you full time or they’re virtual assistants and they’re handling most of that bulk work, or software’s handing it. That’s how we do it.

Jill DeWit: Exactly.

Jack Butala: It’s very, very feasible and possible and we do it all the time, to make a good living at this. That’s how we can have time to do this silly podcast.

Jill DeWit: Silly. You’re so funny.

Jack Butala: I think I made my point.

Jill DeWit: I think you did. Thank you.

Jack Butala: Yeah, yeah, I did a bunch of complicated real estate deals as a commercial guy and found out that it’s a lot easier this way and way more profitable. 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 real estate acquisitions. It’s like I avoid talking about myself.

Jill DeWit: Yeah, why is that?

Jack Butala: I don’t know.

Jill DeWit: It’s good. It’s a good story. It does lead a lot of credibility and it tell everybody-

Jack Butala: I don’t like to sound like I’m bragging, that’s why.

Jill DeWit: Oh no, I don’t think it does. No, it’s good. You know what I think is good, because people can hear that, wow, you went from that to this? This must be good if you stopped doing that.

Jack Butala: Yeah.

Jill DeWit: There’s something there.

Jack Butala: This is so much better.

Jill DeWit: Right? When you think about what you were doing and the size of the deals and all that good stuff, that’s nothing to sneeze at. However, doing what we do now in bulk, it’s a whole different world.

Jack Butala: It’s so much more profitable and you just have so much more control. When you’re paying cash for an asset like we do and there’s just no approval process, there’s no lender, we probably should’ve brought that up in the middle of the show. When there’s a lender involved in anything it takes 4 time as long. Everybody’s looking at it, they’ve got to fill out forms. What we do is amazing actually.

Jill DeWit: You got to send out the estimator, whatever, and all that good stuff and it’s just insane.

Jack Butala: Yes, we come from credible source and yes, this is way more fun too. I think. Information and inspiration to buy undervalued property.

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