Back Tax Offer Mailing Nightmare (CFFL 372)
Back Tax Offer Mailing Nightmare
Jack Butala: Back Tax Offer Mailing Nightmare. 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: Happy Tuesday.
Jack Butala: Welcome to our show today. In this episode Jill and I talk about back tax offering mailing nightmare. Back tax offer mailing nightmare I should say, great topic Jill. I listened to the show yesterday week. It’s Jill week.
Jill DeWit: This is Jill rant week, day two.
Jack Butala: These are topics that come up, I guess, well we’ll get into it in a second. Before we do, let’s take a question posted by one of our members on the LandAcademy.com online community is free.
Jill DeWit: Luke asked, “How do I create easements? Can I just write up my own easement on the deeds to give access to the back lot across the front lot of which I own both?” Love this. This is such a good question. We talked about this on our member call the other day.
Jack Butala: I got to tell you princess, I’m reading something different.
Jill DeWit: Oh, well that’s very interesting.
Jack Butala: How about I read it?
Jill DeWit: Okay, what are you reading?
Jack Butala: I think our producer snuck some stuff in at the last minute, which I love.
Jill DeWit: Very interesting.
Jack Butala: Luke says, asks, “What are your thoughts on improvements? I mailed 0% improvement properties and, but, I got a few signed offers on properties that do have minor improvements as it turns out. Is this beneficial?” Well this is a fantastic question as well as the other Luke question which might be coming up later and I’m guessing it’s coming up later in the week. Here is how it works, when you pull data correctly, you don’t use a list. We talked about it yesterday.
When you pull it from an assessor aggregator what happens is you are going to look at, there are several columns that you really want to pay attention to and one is improvement value or improvement assessed value. There is land assessed value, right? Then there is the improvement, so the house or the roads or however the property is improved. Both of those things make up the full, the total property assessed value and that’s how the assessors sets the tax rates. It also gives you a real indication … The assessor does a ton of work for you by the way for free.
It’s a great indication about how much you should offer for the property, not the actual dollar amount but it’s relativity to the other properties in your group of mailing. It’s not that hard, believe me. What he is asking is, he mailed at a 0% improvement property. To me that means, it’s just land. It’s for a land, vacant land. It hasn’t been improved yet. He said he got a few signed offers, some of them have improvements on and here is what happens, especially west of the Mississippi, people build stuff and they don’t tell anybody about it.
They never pull permits. The assessor is looking like it’s just a piece of-
Jill DeWit: What? Really?
Jack Butala: They break the rules.
Jill DeWit: Who would do that? Oh no, no, no.
Jack Butala: Jill has a few middle names and one of them is work around.
Jill DeWit: Totally.
Jack Butala: I’ve seen Jill build stuff and never tell her county about it at all.
Jill DeWit: How the heck did that get there? I have no idea.
Jack Butala: She doesn’t actually build it herself. She yells at the guys who are building it for her.
Jill DeWit: Make it happen.
Jack Butala: In the end Luke that’s really what I think is going on here. The assessor just doesn’t know about it so he thinks it’s land or he or she thinks it’s land and that’s great.
Jill DeWit: Yeah, you win.
Jack Butala: You do win but now I had a consulting call about a month ago with a guy who’s from a very far eastern part of the country and he’s bought some property on the west and did the research and found out there is a structure on it and flipped his lid. Why would you flip your lid Jill about this? Why would this be a bad thing?
Jill DeWit: Well, I mean, now you are responsible for it. You do need to get it taken care of and-
Jack Butala: Permitted.
Jill DeWit: The right way if you are going to sell it but.
Jack Butala: Probably if you are in New York city.
Jill DeWit: Or you are an insurance person.
Jack Butala: Or a bunch of things, which is a problem. This is not a problem. He was funny. He was really worried about it. How much is it going to cost? I got to get it fixed-
Jill DeWit: I got haul it all.
Jack Butala: What if someone lives there I got to evict? All this negative East Coast crap. It’s really funny, it cracks me up.
Jill DeWit: It’s okay, we are pretty, yeah.
Jack Butala: If you listened to any other episode of this program you know how I feel about New York. We have a website called deed perfect and we had exactly 49 deeds on there not 50. Guess which one is the 50. Guess which one will never be on there.
Jill DeWit: Right, problem. That’s a problem.
Jack Butala: If you have a question or you want to be on the show, reach to either one of us on LandAcademy.com. Today’s topic, and this is meat of the show, back tax offer mailing nightmare.
Jill DeWit: Well, I sure hope I have the right topic here.
Jack Butala: Jill, this is Jill-
Jill DeWit: Since I realized what happened, I went back and looked and our producer had cut and pasted some stuff and then she hadn’t updated my version yet, so we are good.
Jack Butala: That’s okay.
Jill DeWit: It’s cool.
Jack Butala: Let me set this up because this is Jill week. These are Jill rants, Jill rants week. She wrote all these topics. I love it. I’m just a guest on the show and I love that. When you mail offers to people who own property, you have lots of choices and how you do that, the data you use, the mail company that you use, all that stuff those are little key points, the little key points along the way to make you successful. One of the things that Jill and I see over and over and over again and is people sending mail out to a specialty group, to a special group of people, right? Maybe there is back tax property.
Jill DeWit: Sounds like special needs.
Jack Butala: Well I was going to bring that up but I’m not.
Jill DeWit: Okay, okay, sorry.
Jack Butala: In any given county there is a bunch of property that’s got back tax associated with it. In any given county there is a bunch of property that is in the foreclosure process maybe through lenders. In any given county there is a group of property that is in some form of going through in a state because somebody passed away. There is a lot of specializations you can choose. Here is my takeaway and I’m going to let, here is the takeaway. Don’t specialize.
Send everybody an offer. Send everybody an offer that’s in the group, [inaudible 00:06:17] universe. Use the assessed value to determine who you are going to send an offer to, not this … Take it away Jill.
Jill DeWit: That’s my solution also. Here is my points here on this. Number one, this also came from a member, a new member call recently and I don’t understand why this concept is so-
Jack Butala: That’s what this show is about.
Jill DeWit: It is.
Jack Butala: People call you and they say, “Well, why don’t I do this? Why don’t you guys do it this way?” That’s what this rant is all about this week.
Jill DeWit: It is and here is my-
Jack Butala: I love this.
Jill DeWit: And here is my, my whole point is why-
Jack Butala: Jill you are the girl for me.
Jill DeWit: Thank you, why is this concept so hard to reverse? It’s like we’ve all moved ahead in so many way. We all have cell phones. We all trust the internet now, you know what I mean?
Jack Butala: Why can’t we get over back tax property?
Jill DeWit: Why cannot we get over some of these really old ingrained theories that don’t make sense? They have been tested and tested and tested and they don’t make any sense. Well, that’s number one. I don’t understand why this concept is so hard to reverse. So many problems can be found in these back tax properties. There is very often a reason why that property is in that messy state. Do you really think that you are the only one that spotted that little gem that’s all boarded up on this street on Oak Avenue in this little beautiful little town with all the trees?
Do you think you are the first person that’s come along and tried to do that? I hate to tell you, you are probably not and there is a reason why it’s in that situation. It’s boarded up. It’s been that way for probably years and it’s behind on the taxes. Like Jack said, my solution is also mail to them all. I joke and I say, “I don’t discriminate.” Which means I don’t discriminate whether you are current on your taxes or not current on your taxes. If your property meets my criteria, you are going to get a letter, period, and then-
Jack Butala: Data criteria by the way.
Jill DeWit: Yeah.
Jack Butala: You don’t look at the property. You only look the property after they sign the offer and then you decide if you want to do it.
Jill DeWit: Exactly. Sorry I lost my little train of thought here but you get the concept. It’s just, it’s so interesting to me. Yeah, that’s what I was going to say. So many of the properties that we buy and my team picks up and we purchase, they are current on their taxes. You would be surprise-
Jack Butala: The vast majority.
Jill DeWit: How many people out there-
Jack Butala: 95%
Jill DeWit: Yeah, they are current on their taxes. They are thrilled to get an offer from me. They had no idea they could not pay their taxes and they’ve been paying them all these years and just kind of hoping to sell. Some people have this concept that, gosh if I don’t pay my taxes I’m going to lose the property or gosh it’s going to be a ding on my credit report. I mean it’s all kinds of things that people think will happen and so they are paying their taxes.
Jack Butala: I want you to visualize this, whatever you are doing right now, visualize this with me. Two identical houses in a good neighborhood, you are staring at them both, right? You are standing at the curb staring at the houses. We specialize in land and the show is all about land but we buy houses too. We buy anything that’s super cheap. You are standing at the curb looking at these two houses, one is falling down, maybe it’s got a notice on it and one is just kept up pristine and perfect, but the owner just died.
You send an offer to both of these houses. You don’t ever look at the house. You don’t ever Drive for Dollars or anything like that. You see the two lines of data in the assessor database and they are both assessed that they are same amount. They’re assessed for let’s say $43,000 and the address is 123 main street and 124 main street. You send them both an offer for $100,000 because you think the house is probably … you did your homework and the house is worth $180 and you will buy it for $100, $110 and market it up and sell it to a whole seller.
There is just as much likelihood that the pristine house, where the owner just passed away, and the kids are working out the estate are going to sign the offer and send it back. In fact in my opinion, and I know Jill is going to get to this, there is a better chance for that than the one that’s falling down. The one that’s falling down it’s got back taxes and all kinds of other problems and you want to incur all the cost to clean it up, no. What you are looking for is a situation and you found it.
You sent two letter out, one person passed away. It’s a perfect timing. They call you and they send it back and you close the deal. Now if you send thousands and thousands and thousands of letters out like we do, your percentages go up. Right? You are looking for a situation, not a piece of property and you shouldn’t discriminate. You are right Jill. You can tell back tax properties that have associated back taxes have other associated problems.
Jill DeWit: The only times I’ve ever heard of people ever talk about … Gosh, I talked to this guy and he got a letter from somebody else three weeks ago, that’s the situation. That’s the only time that I’ve ever heard that, is people focusing on the wrong properties. Then, heaven forbid, you follow through. I have heard this. I have people call me and say, “Help. Can you get me out of this pickle now? I made an offer to the guy. The offer got accepted and I’m about to it and I just found out it has $2,000 in back taxes. Now it’s not worth my time.”
I hate to say but I’m like, “You know, that’s, you needed to do your homework and you probably should, you know.” That can happen.
Jack Butala: Here is the truth of it in a pure data in here in numbers. If you send 4,000 letters out to back tax property, you are going to get a ton of response. All right? You are going to buy very few. If you send 4,000 letters out to just regular, you don’t discriminate like Jill said, you are going to get land. You are going to buy 1%, ours is closer to five but we always use 1% to set your expectations low, but there are going to be great deals. You already set the offer in there, there are going to be smoking, smoking deals.
Would you rather talk to seven million people and do two or three deals or would you rather talk to the people that sign the damn thing and send it back to you? You are setting yourself up to fail with this back tax business.
Jill DeWit: I was just thinking-
Jack Butala: How do I know this? Because I failed at it.
Jill DeWit: Oh my gosh, well I’m just thinking about our members. We all know the Luke Smith story and he just did a podcast with us last week and he was going on about that but now he is really getting strategic and picky with his offers and what’s coming in now. Do you think that Luke’s focusing on back tax property? Heck no. He is strategically hitting a market and hitting them all.
Jack Butala: He is a member. He is one of our members. He was one of our first members. If you haven’t heard the show, go back and listen to it. It’s a lengthy show.
Jill DeWit: Like last Thursday.
Jack Butala: He really sits down and totally explains to us why he is so successful with this. 50 to 60 units a month-
Jill DeWit: A month.
Jack Butala: He sells, buys and sells, amazing.
Jill DeWit: Yeah, I did the math on those.
Jack Butala: He is clearing some money.
Jill DeWit: Yeah, he is.
Jack Butala: Multiply that times 5,000 in margin per unit average.
Jill DeWit: Yeah, that’s a pretty good monthly income, thank you.
Jack Butala: He already spends every month $250, that’s our fee, our subscription fee, and we don’t make any money on that. We do it because to provide the tools to people who need them. That’s all he spends with us.
Jill DeWit: That’s so interesting because when we set out to do this too-
Jack Butala: That’s what everybody spends by the way.
Jill DeWit: That wasn’t our focus. It just our members came to us and said, “Hey, can you help us out? We need access to the same tools you guys have.”
Jack Butala: We went to RealQuest-
Jill DeWit: So funny.
Jack Butala: This is not a sales pitch. We went to RealQuest and said, “We’ve sent millions and millions and millions. We’ve spent just almost a million dollars on data with you over the years and we would like to be a licensed provider and help some other people do it.” They said, “Oh my God that is a good idea. Here you go.” They made us licensed providers, so we charge our members really in the end a nominal fee to access this stuff. It’s way cheaper than if you went to get it yourself, way cheaper.
We are about to release a product, it hasn’t been released yet, called Offers to Owners. It’s offerstoowners.com and number two and it’s going to cut that price even further. If you don’t need all the education and you don’t want to be in the calls and you are don’t want to be a part of the Land Academy, which I understand a lot of house [inaudible 00:15:13] call us and they say, “Hey, this isn’t really my thing. I wholesale houses and stuff. Any idea of a product where I can just access the database and help me out with a good discount printer that’s made for this.”
In response to that I created offerstoowners.com and we haven’t released it yet but the subscription number is cheaper and the data is the same and the mailing is really cheap too.
Jill DeWit: It’s going to be awesome.
Jack Butala: Land Academy members get it for free but again it’s not a commercial, I’m just saying if you are going to do this you need these right tools.
Jill DeWit: Do it right. Just don’t mess around.
Jack Butala: Through us it’s cheaper than going right to the source.
Jill DeWit: That’s my whole thing. You know what? The whole thing and why Jack and I are here and doing this whole show is to save you. We have made all these mistake. You don’t think that we haven’t thought of that? Oh sure, do you think we tested that? Heck yeah.
Jack Butala: Yeah. We are qualified to say this stuff. We’ve screwed it all up.
Jill DeWit: Totally. Now since 1999, I think we’ve figured out a few things, just a few.
Jack Butala: That’s why we can talk about relationships too because we’ve screwed up a whole [crosstalk 00:16:12].
Jill DeWit: Boy we’ve screwed that up.
Jack Butala: Catch flow from relationships, no, that’s a new [crosstalk 00:16:19].
Jill DeWit: Oh my gosh, what the hell-
Jack Butala: This is money with past relationships.
Jill DeWit: What the hell?
Jack Butala: I just screw up relationships really fast.
Jill DeWit: Oh my goodness.
Jack Butala: Find the right girl, trust me. It’s worth it.
Jill DeWit: Thank you. On that note, join us in another episode-
Jack Butala: Look Jill, ended it.
Jill DeWit: Jack and Jill discuss how to use information that’s Jack, and inspiration-
Jack Butala: And inspiration, that’s Jill.
Jill DeWit: To get just about anything you want.
Jack Butala: We use it every day to buy property for half of what it’s worth and sell it immediately.
Jill DeWit: You are not alone in all of these ambitions.
Jack Butala: Can I tell you how much I love when you rant?
Jill DeWit: Oh gosh.
Jack Butala: It happens so infrequently and it comes from your gut man.
Jill DeWit: Oh boy.
Jack Butala: I mean example after example. I was thinking, last show we … yesterday we read a nice email from somebody, we should get in the habit of doing that.
Jill DeWit: Yeah, that’s a good idea.
Jack Butala: We get so many of them.
Jill DeWit: That is a good idea. We should at least once a week share those.
Jack Butala: Yeah.
Jill DeWit: It was good.
Jack Butala: I mean do you have any more immediately?
Jill DeWit: I got to dig.
Jack Butala: We can do it tomorrow.
Jill DeWit: I could do one tomorrow. I’ll have one queued up for tomorrow but thank you for saying that. What’s really funny is our members on our weekly call because there’s been a few times when people have messed with by people and mama bear comes out and I don’t mess around. I take care of our people.
Jack Butala: I had to let somebody out, ask them not so nicely to –
Jill DeWit: Exit our group, not play, because they weren’t playing nicely.
Jack Butala: We refunded their money and I said, “I think we are going to part ways now.”
Jill DeWit: I like your idea. We might go to an interview process. That’s a great idea.
Jack Butala: If you would like to join this group or get involved with us in any way and you are an idiot and a mean person-
Jill DeWit: We don’t want that.
Jack Butala: Please just stop thinking about it.
Jill DeWit: We are really a tight group.
Jack Butala: We work really hard here and we make a ton of money.
Jill DeWit: We work together.
Jack Butala: I added it up. This group is now making, is generating more than a million dollars net a month.
Jill DeWit: I believe it, yeah.
Jack Butala: Actually it’s a lot more.
Jill DeWit: It’s a lot more.
Jack Butala: I just feel super safe saying a million … This is what? A year old?
Jill DeWit: Yeah.
Jack Butala: I feel super safe in saying a million. That excludes what you and I make.
Jill DeWit: Exactly.
Jack Butala: We are kicking it so, I’ll leave it at that and you are not alone in your real estate ambition.
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