Make Offers to Make Money (CFFL 357)
Make Offers to Make Money
Jack Butala: Make Offers to Make Money. 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, in this episode, Jill and I talk about making offers to make money. Love it. If that’s not an obvious, anyway. We’ll get into it in a second.
Before we do, let’s take question posted by one of our members on the LandAcademy. Com online community, it’s free.
Jill DeWit: All right, Rod asked, when buying property from a trust, do I need a document that establishes the Grantor is authorized to sign for the trust, by the trust to sign?
I sure would.
Jack Butala: This is all you.
Jill DeWit: I totally would. Could you imagine, no really it’s me. It’s me I promise. My dad left it all to me, okay got it.
Jack Butala: Think of a trust as an entity that is allowed by law to own real estate.
Jill DeWit: Like a company, like an LLC.
Jack Butala: Like an LLC, like an individual, like a married couple.
Jill DeWit: Exactly.
Jack Butala: You treat it exactly the same. If John Smith is one the deed, John Smith has to sign it and convey the deed. There’s the same thing in a trust, if you flip through it, it’s daunting. It can get scary because the thing some of them are big, like a couple hundred pages. There’s always one page in there that says, this person is allowed to sign property over.
Jill DeWit: Exactly, so that’s what I do when, it’s like Jack was just saying. If it’s an LLC you can go online and you can see who the managing members are and all that good stuff. You can usually check that out in every state, it’s right there. In this situation with a trust, you can’t go online and do that, so do you do need the document from the person, and I do get it from them, and I’ve never had anyone not share it.
Just so you know too, it’s not a weird crazy request, I think sometimes some of our members are like, gosh can I ask for that? The answer is yes, I’ve never had any member, or any seller say oh no, no that’s personal.
Jack Butala: Right.
Jill DeWit: I will tell them look, and I don’t. I want the whole document, I don’t want just pages one five and nine. I want the whole thing, just to cover my, maybe it’s a Jill thing, but just to cover my whatever. I want to scan the whole thing, I’m really not looking for personal information, about who’s getting this Theadreaux collection, I don’t really care. I know seriously I saw you Theadreaux store.
Jack Butala: You did?
Jill DeWit: The other day, I did, I’ll tell you about that in a second.
Jack Butala: Okay.
Jill DeWit: Anyways, that’s why it’s on my mind. I don’t really care about that, but I do want to have, should I ever need to show someone I had the whole real document, maybe it’s a bigger property too, and I’m going through escrow whatever and I’m going to hand it over. Anyway, you do need to have that and it’s spelled out right in there and then my second point is, because this comes up too, how do they sign, and what’s the format?
There usually is a template, you can go look through past deeds in our, gosh in our program and see some ideas of, it’s usually the name of the person, as the trustee for the Smith Family Trust, however it’s named.
Jack Butala: Next time we do a trust deal, I’ll put the conveyance documents up there.
Jill DeWit: We should share that, make it, I could even put it in our newsletter and stuff too.
Jack Butala: It’s simple, it’s easy for us, because we do it. Put it in the newsletter.
Jill DeWit: I’m going to put it in the newsletter.
Jack Butala: Put the document, maybe the conveyance document.
Jill DeWit: Yeah, I’m making a note about that right now.
Jack Butala: Here’s the thing about trusts too, people, what a trust is, it’s really, before I learned about this. Years ago I thought that they were recorded at the county, but they’re not, they’re just documents that usually an attorney. If you go online, people who set up, here’s my point. People who set up trusts, are extremely organized, they’re going to have a PDF that they can email to you, pretty quickly. I’m trying to think if anybody struggled with that, ever and I don’t think so.
They’ll have it, and it’s all signed and it’s, nine times out of 10 with a trust, the person that you are talking to is available to sign. You always want to check, and I think getting the whole, it’s probably in most cases harder for them to separate the PDF just the signature page.
Jill DeWit: Then just that one part.
Jack Butala: Then sending the whole thing.
Jill DeWit: Just send the whole thing. They usually have it, you’re right.
Jack Butala: I guess the only reason, has anybody ever said to you, there’s some personal stuff in there, I Just don’t.
Jill DeWit: No.
Jack Butala: Okay, me either.
Jill DeWit: Nope, never, I just say, just send me a copy of the trust, I need the whole thing. Okay.
Jack Butala: That’s exactly how it goes.
Jill DeWit: Do you want me to scan it, do you want me to fax it to you? I’m like whatever is easiest for you, that’s fine. That’s really easy, and you know what, this whole topic, for all of our members, I don’t have any member that’s different, only the very first time were they like, oh it’s a trust do I need to do anything special. Then once they learned this little thing, then they’re like, okay. Now I know how to do every trust from now on until forever.
Jack Butala: The key is to make sure, just like with every deed, the grantor and the grantee match.
Jill DeWit: You have the right person.
Jack Butala: To the character, to the period, if there’s a period there, put a period.
Jill DeWit: If it says Smith Family Trust of 1982, make sure you put Smith Family Trust of 1982.
Jack Butala: If there’s a period at the end, put a period at the end. Get that fanatical about it.
Jill DeWit: That’s it, because that’s what the county is looking for, when you record it, the recorder and the assessor they just want to make sure it’s the same entity selling the property.
Jack Butala: Don’t get so hung up on it just make sure it’s a good deal. We should talk about good deals more often.
Jill DeWit: This is true.
Jack Butala: Less legal paperwork stuff.
Jill DeWit: Don’t worry about the paperwork, it’s a detail, it’s little.
Jack Butala: Exactly.
Jill DeWit: You got this.
Jack Butala: Join us up at 35,000 feet, where Jill and fly.
Jill DeWit: That’s good.
Jack Butala: Hey, do you think you could go back in time and just run everything? If you didn’t have any people? How many mistakes would you make?
Jill DeWit: Nah, it’d be a piece of cake.
Jack Butala: I would make many mistakes.
Jill DeWit: You think so.
Jack Butala: Oh my gosh.
Jill DeWit: What? You think you are that far removed right now?
Jack Butala: What happens to me is this, no no, I’m not that far removed. What happens to me is that, once I figure it all out, I don’t want to work there anymore. I want to go figure out something else. I want to get into the details and do stuff.
Jill DeWit: That’s kind of funny. No I like it you know it’s really interesting though, because I’ve had some few, some of the deal that we’re doing right now. With some of our members, there’s a couple bigger deals.
Jack Butala: Yeah, those are fun.
Jill DeWit: I kind of personally, I by choice want to be involved because it’s fun for me. I’m doing some of the stuff, I’m actually posting some things, and writing some stuff old school. Coming up with it, and you helped me recently, because I’m like I haven’t done this in awhile.
Jack Butala: I like the maps and stuff, the engineering pieces I really still do enjoy.
Jill DeWit: Yeah, it’s fun. Yeah, I have a team that helps but it’s fun when I get involved. I really like it, I like talking. I truly sincerely love talking to sellers more than buyers. The buyers are a little bit, or there’s a lot of tire kickers you have to weed through so that gets tiring.
Jack Butala: Every week we get emails, why don’t you guys talk about sales?
Jill DeWit: It’s easy.
Jack Butala: When you buy a piece of property for $100 an acre.
Jill DeWit: It’s true.
Jack Butala: It sells pretty quickly, and I’m being satirical.
Jill DeWit: Way under value, I mean that’s really the bottom line, not even the dollar amount. I’m buying, when you really think about it. It’s so true, in our world we get all jacked up about the purchased because we know it’s going to happen. I’m like, I can see two days later, or two weeks later. Someone put their credit card in and checked out, and bought that property for the price that I wanted it to go for. It’s like yeah, I knew that was going to happen, it’s not as exciting as, look what I’m going to get from this person, they just want to get rid of them, it’s great I’m solving this problem for them, they’re thrilled, I’m excited.
Jack Butala: With houses, we find a buyer long before we even find the seller. There’s no sales with that, at all. We just don’t talk about sales.
Jill DeWit: Nope.
Jack Butala: I had to bring it up on the air Jill because I had, probably once a day I get somebody emails me that.
Jill DeWit: Right. I concur.
Jack Butala: Hey if you have a question or you want to be in the show, reach out to either one of us, on LandAcademy. com. Today’s topic is, make offers to make money. This is the meat of the show, could it be any more clear in the title of this.
Jill DeWit: I know.
Jack Butala: Here’s the raw numbers, ready? This is actually the take away, if you are correctly mailing offers, and you’re using one of the two professional mail companies that we use, that have the correct software, you should expect, if you’re scribing it properly and basically taking the advice that we generally give about how to do this. You can expect between half of 1%, of what you send out.
Let’s just say, 1% between 1% and 5%, as high as 10% sometimes of the properties you’re going to purchase. If you send 100 letters out, properly, you will buy between 1 and 10 pieces of property. In general, if you’re brand new and there’s some chances you might make a couple mistakes, you’ve got to lower that percentage. Just call it 1 out of 100.
That’s staggering, financially what could happen, and what does happen to us and many of our members. For houses, it’s about 1500, to 2,000 letters that you send out for 1, and you generally make a lot more money, per transaction with houses and they go a lot easier and faster because they all go through escrow, so there. All these things we talk about with trusts and deeding property, an escrow agent handles that, and your buyer pays for it, the way you structure it. If you make a lot of offers, you’re going to make a lot of money.
None of the members every come to us and say, I don’t ever have. Ever had a member come up to us and say this doesn’t work. What I’ve had and what happens, is members get pretty jacked up pretty fast because they realize it’s happening, it’s working and they don’t build the correct infrastructure around, and they start, it gets out of control. It gets away from them.
Jill DeWit: It can.
Jack Butala: They don’t have a website done, they don’t have all the stuff that we suggest upfront. They just wanted to get it in the mail, and there’s a lot of people calling back saying, yeah, I do want to do this deal.
Jill DeWit: You know it’s funny, because I’m just listening to you, because it’s so perfect the way you. How you took this topic as all numbers and how I took this topic is not numbers.
Jack Butala: Go, tell us.
Jill DeWit: It’s so interesting.
Jack Butala: Tell us.
Jill DeWit: My take aways here are, number one, don’t use shortcuts, there are no shortcuts. You just have to do it. You really do have to, Jack and I show you all, a to b to c, that’s what I think a lot of people love us too.
Jack Butala: People love us?
Jill DeWit: Well, two.
Jack Butala: People love you.
Jill DeWit: Thank you.
Jack Butala: They put up with me.
Jill DeWit: We really do go a, to b, to c, to d.
Jack Butala: We do.
Jill DeWit: Really please don’t miss this step, don’t take a shortcut, that’s my thing. Don’t my other point is, don’t get in your own way. I talk to people about members about do it, go for it, dive in, don’t get in your own way. It’s okay, and it works. That’s my point about this. You just got to make the offers, I love when were on our, we have a weekly member call that we do with all of our people.
It’s Jack and I live and we have so much fun, and I love when we have a new member that says, okay, I dove in. I just sent out 3,000 offers on Tuesday.
Jack Butala: Oh my goodness it’s hilarious.
Jill DeWit: It’s great because all of the other members are like, hold on to your hat.
Jack Butala: Some of the more senior members are like, mmm okay.
Jill DeWit: Here it goes.
Jack Butala: Good luck.
Jill DeWit: Just be ready. What’s great is that they send them on Tuesday and then they go gosh, it’s Friday, I haven’t heard anything yet. Oh it’s coming you just wait, then the next week, they may not even make the call because they are so busy, it’s so funny. They’re like, what just happened, we’re like, yep, right.
Jack Butala: It’s funny you bring that up, because some of our members, some of our most silent members, you know the one we never hear from. They just took it and ran. I had to call somebody, a consulting call with somebody last Wednesday, we talked about it on the call, but this guy did 10 deals, and he made $40,000 each. He made $400,000 in a year, in his first year doing this.
Jill DeWit: Isn’t that crazy, right out of the gate.
Jack Butala: Yep, and he flat out said on the call, he really called me to thank me, and he said, I have a bunch of kids and full time job, and I am super pressed for time, and this thing worked, and it’s working. Now I’m planning to quit my job.
Jill DeWit: I love that.
Jack Butala: Yeah, it was perfect. He made a ton of offers, that’s my point in saying this. The numbers can get staggering if you want them to, and you really work this the way it’s supposed to be worked.
Jill DeWit: I love that term unintended consequence. There’s a lot of people I know that went down this path, just to have a little bit of, just a little bit of a cushion, I just want to get a little bit of extra money coming in to pay my mortgage, or just take care of the kids college and kind of things like that. Then the next thing you know, they’re like, oh well this is going to be my business now. They get in and there’s a lot of our people, it’s a perfect fit for them, and they’re like, now I’m leaving my day job.
This is what’s going to happen.
Jack Butala: Exactly, here’s so more math since Jill brought it up. If 1% of the properties you purchase, you sent out a 100 letters, you buy 1 property, let’s say you make $2,000, I think that’s really fair, and extremely conservative. I just talked about making 40.
Jill DeWit: You bought it, for 1 sold it for 3.
Jack Butala: Yeah, so you make $2,000 on it.
Jill DeWit: Something like that.
Jack Butala: Now what happens if you send out 1,000 letters. Right, now you made $20,000. How much does it cost to send out, this is a test Jill, I don’t think you know, or maybe you do.
Jill DeWit: Maybe I do.
Jack Butala: How much does it cost to send out 1,000 letters?
Jill DeWit: About .50$ roughly times that many.
Jack Butala: $500, so you spent a couple of hours and $500 to make $20,000.
Jill DeWit: Yeah, let’s think about that.
Jack Butala: Then after you do it a few times, it’s not a couple hours anymore, it’s a half hour. The numbers can get staggering. With houses, you know Jill and I wholesale them now, and we’re transparent about it, we only make $10,000 per house. We could make a lot more but we don’t. We choose not to deal with-
Jill DeWit: Get in get out.
Jack Butala: Yeah, we choose not, all my tools went to goodwill a lot of years ago, we don’t pick up hammers and clean, and do stuff.
Jill DeWit: He means, really tools, not internet tools.
Jack Butala: I mean like a hammer.
Jill DeWit: He means like drills and things like that. We’re not hanging doors, or any of that stuff.
Jack Butala: Let’s say it’s 2,000 to 1, we’ll be real conservative for houses. It cost $1,000, right .50$ an offer to send out 2,000 offers, so it cost $1,000 to make 10. All right and the turn around is, you don’t do any work there. There’s no work.
Jill DeWit: I started a little storm in bigger pockets by the way with that number, I was throwing out. Someone was asking me about offers, we were having a really good conversation, just in the last week. I was throwing out some numbers, and they’re like what the heck? They’re going, they’re comparing it to yellow letters, and click to mail, and all that stuff, and they’re like, I thought I was good getting down to .85$, and I’m like what the heck are you spending, what are you doing?
Jack Butala: We’re in the mid 40’s, between 45 and 49 cents. It’s cheaper than the price of a stamp.
Jill DeWit: I know.
Jack Butala: You never go buy envelopes or any of that stuff.
Jill DeWit: People are like really? I’m like you really can do, don’t mess around, do it right, get a professional printer, I have told people this. Look, do you want to be in the printing business, or do you want to be in the property business? Let’s think about this, if you want to be in the printing business, then you go get your own stamps, and maybe try to buy them off of Ebay, I’ve heard of people doing that, which is interesting.
You got them just under a real stamp, and then you have your, you’re getting a printer and ink, and paper and envelopes. You don’t want to do that.
Jack Butala: You don’t, there’s huge advantages to the software process that goes on with a professional printer.
Jill DeWit: Yeah, I haven’t even touched on that.
Jack Butala: That’s the real issue, these professional bulk mail printing companies, run all these addresses that you send them, through software to make sure the stuff’s going to get delivered. You don’t want to horse around and pay. They’ll take them out, the ones out that are not going to be delivered. You don’t want to waste .50$ on that anyway.
Jill DeWit: Exactly.
Jack Butala: That’s just the tip of the iceberg with the software, what this software does. It’s extremely efficient, and saves time and everything else. Anyways, back to the numbers.
Let’s say you make, for every 2,000, you spend $1,000 to make $10,000, in about an hour and half of time. Let’s say you send out 20,000, right, it cost $10,000 to send out 20,000 offers it sounds like a lot of money until you sell the houses.
Jill DeWit: Right.
Jack Butala: You’ve made, $50,000, the return is amazing, and I don’t see any risk in it at all. If you see this as risky, this is not for you.
Jill DeWit: Exactly.
Jack Butala: That’s fine.
Jill DeWit: That’s okay, that’s very true. That’s a good point, that’s a really good point. I have no trouble telling people that too by the way. If this isn’t for you that’s okay.
Jack Butala: Exactly.
Jill DeWit: We have people banging down our doors.
Jack Butala: Make offers to make money. Join us in another episode, where Jack and Jill discuss how to use information that’s me.
Jill DeWit: Inspiration, that’s me.
Jack Butala: To get just about anything you want.
Jill DeWit: We use it everyday, to buy property for half or less of what’s it’s worth and sell it immediately.
Jack Butala: You are not alone in your real estate ambition. Good show Jill.
Jill DeWit: Uh huh, I like that topic. It’s a good topic, it does come up, it’s very interesting doing that simple math Jack is very helpful for a lot of people.
Jack Butala: Yeah, you know if you’re brand new at this, or not brand new, if you’re even very seasoned, but you’re used to having your deal flow come from real estate agents or the MLS or whatever, it’s so hard to really believe this.
Jill DeWit: You know what’s so interesting, but then they’re focusing on one or two or three or five, properties, and we’re like don’t mess around.
Jack Butala: No.
Jill DeWit: Don’t even mess around with 100. I hear people that are like, I’m going to send 100. No, do 1500.
Jack Butala: 1500’s a good number.
Jill DeWit: Yeah, let’s get a bunch out there and see what happens, because you will get something out of that. The more you send, it just makes sense.
Jack Butala: Exactly, information and inspiration to buy undervalued property.
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