Time and Patience are Required in REI (CFFL 353)
Time and Patience are Required in REI
Jack Butala: Time and Patience are Required in REI. 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 the time and patience that are required in REI. First, before we get into it, let’s take a question posted by one of our members on the LandAcademy.com online community. It’s free.
Jill DeWit: Claire asked, “Have you ever kicked squatters off their land? Did they resist? Did you press charges?” I haven’t, have you?
Jack Butala: No, no and no. There’s three questions there and no. I looked at this just before we started the show. Here’s the thing, I’m of the theory and I’m full blown in this camp, pretty sure Jill is too, I don’t want to and I’m not interested in looking at every piece of real estate that closely. I’m a data person and a software person, all that and a real estate person, so on a much larger deals that we do, I love going to look at the real estate, but on a 40 acre property, lets say in southern California, southeastern California, that you’re going to buy for four or five grand and sell it for twelve, I just don’t look at it that hard. I look at it to make sure I’m not going to lose money, I look at it to make sure the person who’s selling it to me actually owns it, things like that. My big question, Jill, is how does she know this?
Jill DeWit: True. It could’ve been, I’ve had people go out and they go look at the property and then they’ve called me back and said, “Hey, that road was a little rough,” or duh, duh, duh, an that’s the only way I know that. I found it, but this is what went on. Great. Otherwise I wouldn’t know. You know what my gut tells me? Somebody wants the property so I guess they’re actually already using it. That tells me something good about it. It’s obviously worthwhile, then that’s my number two is, “Look, since you’re using it anyway, I happen to own that, let’s make a deal.” That would be my thing. “You’re either going to make a deal and you’re going to buy it, or somebody else is going to buy it and you’re going to have to move. Which would you prefer?”
Jack Butala: You and I have a friend who buys notes, who buys foreclosed on notes. Somebody’s living in a house, they had a mortgage on it, or they have a mortgage and they just stopped paying it years ago. That’s basically squatting. He’s got a long list of ways to deal with this. He loves this by the way. It’s Joe.
Jill DeWit: Uh-huh (affirmative). I was just thinking that.
Jack Butala: He’ll go to a bank and a bank will say, “These awful, non-performing mortgages over here, here’s 25 of them, we can’t give these things away. Here they are for 10 cents on the dollar, knock yourself out,” so he does. He buys a 100 thousand dollar mortgage on a property that’s probably worth 200 thousand, he buys it for 10 grand, literally. He doesn’t own the property, he owns the mortgage. It’s foreclosable. He can choose to do all kinds of stuff so he has like a flow chart if you can picture a flow chart.
The first thing he does is contact the person and he tells me the numbers on this stuff. Fifty, sixty percent of the time they say, “I don’t know where to send the check. A lot of stuff’s changed. I’m happy to do it. Is it priced the same?” That just solves it right there. Reaching out to the people in the situation like that, in opening the line of communication, so that everybody knows the other person’s not kooks, that’s number one. There’s lots of ways, Jill, you’re exactly right, you totally nailed it. There’s a good, easy way to turn this into a real positive situation for everybody.
The other thing he does, and I think this is really, really interesting, is no matter what the price is, or no matter what the person was paying on the mortgage in the past, he makes sure it’s less. Sometimes substantially less because he’s buying it for so cheap. Now the guy should be, theoretically, if he’s an okay … The homeowner, theoretically should be now joined at the hip, theoretically, because he’s hooking the guy up.
Jill DeWit: Right. Your payments just went down. Congratulations.
Jack Butala: There’s just a lot of positive ways to turn this thing around. Squatting’s such a weird …
Jill DeWit: It’s so funny.
Jack Butala: I have purchased properties that, full blown, have houses that were built … I’m doing a deal just like this right now in New Mexico, where there’s structures and stuff on the property. It looks to me like from the satellite pictures that somebody’s living there and I think that’s great. If I have a partner in the deal and it’s freaking the person out because he’s from back east and he’s like, this is the worst thing that can happen. They built it without … There’s no structure, they didn’t pull permits,” I’m like, “It’s going to be all right.”
Jill DeWit: Right. It’s an improvement. It can be an improvement that’s a little happy surprise. I love it.
Jack Butala: You know how we always say do anything to your piece of land that can differentiate it from all the ten other pieces of property that are posted everywhere else in the area, so this is good.
Jill DeWit: Exactly. There are buyers out there that would say, “Oh, look. Even thought it’s a beat up, run down shed, it’s a shed. I can start working with that.” They’re excited.
Jack Butala: If somebody’s squatting on a property, assuming they’ve figured out water and sewer and communication and everything. That’s cool too.
Jill DeWit: Exactly.
Jack Butala: Maybe you advertise it that way. “Inherit my squatters for half price.” I don’t know.
Jill DeWit: “Your first tenant.”
Jack Butala: There you go. “Built in tenants. You set the price.”
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, time and patience are required in real estate investment. It’s kind of like yesterday’s show, a little bit, but there’s an interesting twist on it, as always. This is the meat of the show. The title of this show, Jill, is based on a consulting call that I had last week with a guy who is full-blown in the real estate investment business and we have made his day because he’s part of the group but he doesn’t sell land at all. He has no intention of doing this. He, quite simply, is a house flipper and he’s not getting the deal flow in his specialization that he used to. He used to concentrate on foreclosures as a source of acquisitions and then buy them from the bank or from whoever, clean them up and resell them. He joined us a couple of months ago and started sending out mailers, did all the stuff that we talk about, and he’s just knocking it out of the park.
He, in his case, it got me to thinking about this guy is a perfect addition to our group. He’s super low maintenance, he can bring, actually, a ton to the group. He can bring stuff to us that we can learn instead of the other way around. He doesn’t see that there’s time and patience involved in any of this at all. He loves it. He revels in it. He thinks it’s a great thing. There’s several other people, not necessarily members of the group now, but I think that there are some people … This is for new people out there. It takes some time and patience to learn something new. It’s not just a push of a button. The rewards are massive.
Jill DeWit: I was thinking where I see it the most is people like, when they first finally dip their toe in the water, and they send out their first mailer and then they’re sitting there waiting for the phone to ring within the first five minutes. I’m like, hold on a moment. The mail hasn’t even been delivered yet. I see it on our member calls and it’s so fun for me because they’ll chime in on the call and say, “All right, I just …” Some of them have gone bananas and said, “I just sent out three thousand offers,” and everybody in that group goes, “Oh boy.” They’re like, “Nothing happened,” They’re all like, “Just wait, it’s coming.”
Jack Butala: Get your catchers mitt.
Jill DeWit: Exactly. Wait five minutes and you won’t be able to breath. It’s coming. That’s where I see people getting a little impatient sometime. You’re right, even just the … You’ve got to give yourself a break and really learn how to do this and do it right. It takes patience so that’s really good.
Jack Butala: There’s a bunch of things. We all have a list of stuff we have a lot of patience for, and there’s things that we don’t have patience for. When I sit down to do a new mailer, I get high a little bit. I love doing it and it’s only because we’ve taken the sales piece out of this and we’ve really taken all the risk out of it. I know it’s going to happen when I start manipulating this data. I have so much patience for all kinds of stuff that can go on, but there’s some …
Jill DeWit: I was waiting for this. Go ahead, Jack.
Jack Butala: Let’s hear it, Jill. You know where this is going.
Jill DeWit: Tell us, Jack. Just give everyone an example of things that you are not patient about.
Jack Butala: Most beautiful person in my life, you tell me. I’m going to do you next.
Jill DeWit: Oh no. Let’s just say on a scale of one to ten, let’s maybe we can rate each other about my patience level and your patience level over all.
Jack Butala: Sounds perfect.
Jill DeWit: Should we rank ourselves or rank each other.
Jack Butala: Rank each other, absolutely. Rank each other.
Jill DeWit: All right, Jack, I’m going to give you, on a one to ten, I’m going to give you a four.
Jack Butala: On what? Just patience in life?
Jill DeWit: Exactly.
Jack Butala: What? On everything?
Jill DeWit: You’re pretty like, “Let’s get it done and only do it once. Let’s get it right and do it once and get it out of our lives.”
Jack Butala: Actually, or “Let’s just put a system in place.” Here’s an example: everyone has to get their car washed, right? Maybe some people don’t, I don’t know. Just put it in a system. Do it once a month the same day, then you’re done. Then you never have to think about it again.
Jill DeWit: Exactly.
Jack Butala: I don’t have a lot of patience for like, “How do I feel today? Do I feel like getting my car washed? Do I feel like having spaghetti? What do I feel like eating?” That is tough to deal with, with my personality type. On a scale- Go ahead.
Jill DeWit: That’s what I’m saying. I don’t mean to throw you under the bus or give you a hard time, but just …
Jack Butala: No, everybody’s got their stuff.
Jill DeWit: There’s just some things that … And it works for you. That’s the whole big thing, it works for you.
Jack Butala: On a scale of one to ten for your patience level, the thing is, Jill, I think you have no patience for certain stuff and a tremendous amount of patience for certain stuff and it’s almost the opposite of what I do, those specific topics. You have the patience that I don’t have so it works out great. Fortunately we don’t subject each other to it. I know when you’re going to go off and do your thing and I’m going to go off and do my thing, business wise, and it works out great. You like to talk to the customers, you have a lot of patience for customers and customer service and questions and I don’t necessarily. But I don’t see you as the most patient person with deep computer situations either. I have a lot of patience for that.
Jill DeWit: So am I a four? We’re both a four?
Jack Butala: No, you’re like … The other thing too that I was going to … No, you’re like an 8.
Jill DeWit: Oh thanks.
Jack Butala: Seriously. You’re also very good at, when there’s lack of patience on something. When you don’t have a lot of patience for something you handle it really well. You know enough to just say, “You know what? I don’t have patience for this so let’s just [crosstalk 00:12:25].” Yeah, or let’s just figure it out very quickly instead of making a big thing out of it.
Jill DeWit: Thanks.
Jack Butala: It’s all good.
Jill DeWit: If you give me an eight then I have to give you a six.
Jack Butala: No, no it’s fine. I think four is pretty accurate. I think in life when you look at just all of it, I might be four or five. Four is accurate, but I offset it with what we’re talking about.
Jill DeWit: You know what? I think the key is here, is recognizing your strengths and weaknesses and if you know that you have no patience level for whatever part of your business it is, then you’ve got to figure that out and get a system like you just said, Jack, and make it so it works for you and that’s correct.
We have a lot of members that, maybe they don’t like talking on the phone, or with their job it’s a hard thing for them to get to, so what do they do? They hire it out. Maybe their wife does it and fields the calls and then they call back on the good deals. I’ve actually had little consulting things like this with people and that solves it for them. “yeah, my wife queues them up for me, gets all the information, and if it looks like a good deal then I act on it.” I’m like, great. Perfect solution.
Jack Butala: Exactly.
Jill DeWit: They don’t have the time or the patience to be by the phone all day. That works. Just recognizing that and, like you said, get a system and figure it out.
Jack Butala: Yep.
Jill DeWit: Thank you.
Jack Butala: It just struck me with this guy, he’s been in the real estate business for a long time and didn’t understand offers to owners, how much … He just got it. He had the time and the patience to go through it because that’s not his thing. He comes at everything from the way contractors do, but he got it. He said, “Yeah, it took me awhile. It took me a lot longer than it probably takes most of the people,” so that’s why it made it into our show list. I think it is probably helpful for a lot of people who are like, “I just don’t [inaudible 00:14:28] just kills me.”
Jill DeWit: That’s a good point. I see this in some new members. Sometimes they unnecessarily give themselves a hard time because they didn’t grasp something as quickly as another person. I worry that they’re not asking questions because they’re a little embarrassed or something. It’s okay. Give yourself a break. What you didn’t grasp over here you probably really understood over there and it all works out.
Jack Butala: You know why this works out? This membership group that we have set up works out really well I think because everybody was exactly, no matter where you are as an investor, and I mean this is all free, where you are now as an investor, whatever question you’re going to ask, there’s multiple people in the group who are exactly where you were two months ago, and they got over it, or they didn’t and they left the group. It’s a no lose thing.
Jill DeWit: Exactly.
Jack Butala: I learn stuff all the time, like I learned about squatters today.
Jill DeWit: I find myself a couple of times a month relaying that exact same message, which is ask the group. Trust me, they were there too. It’s not a dumb question and everybody’s here to help. Totally.
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: You’re not alone in your real estate ambition.
Good show, Jill. What’s going on Wednesday? What’s up?
Jill DeWit: Just get- [crosstalk 00:16:11]. What’s that?
Jack Butala: I’m sorry. Go ahead.
Jill DeWit: Just all good stuff. I’m excited about the things that we’re working on. It’s like we have a push to the end of the year with a lot of the things for our members and websites. Everybody thinks you can just sit tight and coast through the holidays, but no, no. There’s lots to do.
Jack Butala: Yeah, we’re getting a lot of deals in. I agree. That’s good. I’ve been heavily involved in software development, piece of this for the last couple of months, specifically on LandStay, our land site. The stuff that we’re getting in and how it’s getting posted is so exciting. It just makes me happy.
Jill DeWit: I know.
Jack Butala: We’re pulling it in from a CSV delimited pile scenario and it just … We can post, literally, a thousand properties in five minutes all over the internet, it’s amazing.
Jill DeWit: I love it. I’m so excited.
Jack Butala: Information and inspiration to buy undervalued property.
If you enjoyed the podcast, please review it in iTunes . Reviews are incredibly important for rankings on iTunes. My staff and I read each and every one.
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.
