Too Much Computer Work (CFFL 448)
Jack Butala: Jack Butala with Jill DeWit.
Jill DeWit: Hi there.
Jack Butala: Welcome to our show today. In this episode, Jill and I talk about too much computer work. Boy, am I going to be brutally honest in this show, Jill.
Jill DeWit: Like you hold back? I’ve never heard you hold back. Oh, bring it. Let’s see what’s different.
Jack Butala: You know they don’t let me swear in this show? No, nevermind.
Jill DeWit: Okay.
Jack Butala: Let’s take a question posted by one of our members on the landinvestors.com online community. It’s free.
Jill DeWit: Okay. Rick asks, “I’m working on buying an Arizona property. I’m buying low and I’d prefer to keep that exact value off the public records if possible. I figure whoever buys it from me will take a look at the records. My questions are, one, do I need to write the actual value paid on the warranty deed, and two, do I need to write the actual value paid on the affidavit of property value?”
Jack Butala: Go ahead Jill, you’re an expert at this.
Jill DeWit: I am an expert on this. Okay, so number one Rick, no. On the warranty deed you do not put the value. You never put the value on the deed, ever, ever.
Jack Butala: Never, any circumstance.
Jill DeWit: It’ll say a flat, like, $10 or from good and valuable consideration, something like that. Copy the verbiage on the vesting deed, the deed just before this one. I’m sure it has something like that, and that’s what you want to do. You never put the exact amount on there. Now, number two, the actual value paid on the affidavit of property value, that’s where you write the value, and the answer’s yes. Then, you don’t put in the doc prep fees, you really just put what you paid for the property, because you want it to be assessed at that rate. You want to keep the taxes down, which is really what they’re going to look at, and that’s why. Then the bigger picture is, the guy who’s buying it from you, if he goes and looks it up, if he even knows how to A, I’d be shocked.
Jack Butala: Me too.
Jill DeWit: B, I don’t really care.
Jack Butala: That’s the big picture point here.
Jill DeWit: I mean, when was the last time, Rick, that you were looking to buy a car, and you went to look up what the dealer paid before you bought it? Did that really make a difference?
Jack Butala: No, you just love the car.
Jill DeWit: My guess is probably no.
Jack Butala: You bought the car because you love it or you need it.
Jill DeWit: Exactly, mm-hmm (affirmative), or you need it. We don’t usually go, and by the way, if you do go to that dealer and you say, “Hey, I know you paid $2,000 less so I’m only going to give you this much money,” they’re going to say, “Have a nice day.”
Jack Butala: There’s the door now.
Jill DeWit: That’s not going to work. You know, that’s the thing. When you’re going to sell your property, it’s just not discussed. It really is, “This is what the price is.” The way we do it is, sure, I bought mine really, really low, but I’m still selling it undervalued low, so my buyer does feel good about it no matter what. Now, if I was selling it way, way marked up more than what everybody else was paying, then I better have something to show for that kind of thing, or my buyer’s crazy. I don’t know. That’s not how we roll anyway. I’m buying something half or less than half of what I think market value is. I’m marking it up a bit, and they’re still getting it less than market value, so everybody’s winning. Do you have anything to add?
Jack Butala: Yeah, so here’s the background on this.
Jill DeWit: Thank you for letting me go.
Jack Butala: There’s exactly two places on a deed/affidavit, regardless of any state that you’re in that involve numbers. Number one is the good and valuable consideration on the document itself. All that’s saying is, that I’m not giving it away. I’m deeding a property to somebody for consideration or value. It’s funny, because love is honestly an acceptable form of valuable consideration.
Jill DeWit: I like that.
Jack Butala: Honestly, it’s true. Then the second place is the affidavit, regardless of which state you’re in, called all kinds of different stuff all over the country. It asks you how much you purchased the property for, or sold it for or whatever, and whether it’s financed, or it’s an unrelated … Anyway, there’s two math places. What ends up happening is you send that thing in to the recorder. The recorder sighs and tears apart the staple, because you stapled it together incorrectly and tears it apart and sends one to the assessor, the affidavit, which makes his job way easier, because now he knows that your taxes are going to go up or down based on that price, and the deed gets recorded.
Please keep this in your mind: these two agreements or documents are a contract. Who makes contracts? Lawyers. Who knows less about math than anybody on the planet? Lawyers and politicians. It’s an incidental thing. Are you going to go to prison if you fill that out incorrectly? No, just the same way you don’t get in a lot of trouble if you’re driving in a 60 mile an hour zone and you’re driving 75. Can you get a ticket and get in some trouble? Yeah. It’s up to you. Ethically, we never waiver. We pay the actual value every single time. Just, there’s some background on the whole thing and just, I think it’s a good idea right from the beginning to just tell the truth about everything.
Jill DeWit: That’s the thing, you don’t want to go down that path. It doesn’t make sense, you don’t need to.
Jack Butala: No one’s going to look it up, like Jill said, and the variance in taxes is so small it’s silly. If it’s a skyscraper, it’s a different story.
Jill DeWit: They don’t care.
Jack Butala: At this point, I would really get a reputation with the county and everyone else for really just being a straight shooter in all this stuff.
Jill DeWit: Right. You know what, if I’m ever selling, the only time that someone might ever is if I’m selling to another wholesaler. Even so, I’m selling it so fast, it’s not even record- They can’t even figure out what I paid for it yet, because it all happens so fast.
Jack Butala: None of this matters because you’re buying assets so cheap. If you’re part of our group, or even if you’re not … I can summarize our whole business model. Buy low, sell high. If you bought it so low and you’re selling it for so low, that everybody stops asking questions.
Jill DeWit: Exactly.
Jack Butala: What they ask is, “Who should I make the check out to?” That’s really the question you’re going to answer.
Jill DeWit: Exactly.
Jack Butala: “How fast would you like it, or where would you like it?”
Jill DeWit: Right, there you go.
Jack Butala: If you have a question or you want to be on the show, reach out to either one of us on landinvestors.com. Today’s topic, Jill loves it, put it in the preshow, she just loves it. I am going to be just ridiculously, brutally honest about this.
Jill DeWit: Got it.
Jack Butala: Today’s topic, too much computer work. This is the meat of the show.
Jill DeWit: What do I … You want me to go, and then you’re going to bring it?
Jack Butala: Yeah, I do.
Jill DeWit: All right, here are my … We didn’t talk a little bit about what direction we were on this, so here’s my thoughts on this. Don’t get sidetracked. Yes, what we do, this is primarily what we do, but you want to be focused. Get a criteria, get a system, know what you’re going to be doing every day, and set aside some quality time to do whatever you’re working on. Maybe you’re researching a county. Maybe you’re buying a property. Maybe this week it’s all about marketing. Maybe it’s about selling and deeding, whatever it is. Be strict. Stick with an asset type, too. Especially when you’re new and you’re starting out, make your life easier. You know, focus on one thing and get real good at it. Then, my final point is, use your resources. Like, we have [Personal Effect 00:07:33] coming up taking all your engineering off your plate. You know, there’s a lot of things out there to help you so you’re not overworked.
Jack Butala: Yeah, well said.
Jill DeWit: Thank you.
Jack Butala: I started this company in the late ’90s and made a lot of mistakes in the first four years, let’s say five years. On about, around 2004 I really wised up, and here’s what happened. I stopped going to look at property. I stopped making outbound phone calls. I stopped going to land auctions. I stopped bidding on property even on internet auctions, like on Bid4Assets. What did I do that really sent this thing to the moon financially? I got on the computer and never got off. We are in the computer business, whether it’s data or anything else. 10 hours a day when we’re not doing this show, I’m on a computer. That’s the truth about this.
If you love real estate and you love going to look at it and you bought a drone already and you’ve got a big set of tools and stuff because you like fixing houses, this is not for you. I’m going to be real straight about it. This is eight to 10 hours a day, seven days a week on a computer. In spreadsheets, doing all kinds of calculations on whatever makes sense to you. You’re hiring out all that other stuff and you’re receiving the data that they send to you. Even the drone guys, that send videos and stuff, you learn how to use Photoshop, you learn how to use the Adobe products. It’s a tremendous amount of computer time.
Jill DeWit: If you’re new, don’t be thinking that you have to do your eight hour job and then you have to do this eight hours. You can just buy a few properties a week or a month or something, and then just use your time wisely. When you say, for us Jack because we’re full time, you know, we’re eight, 10 hours a day doing this. What if I have a full time job? I might be eight to 10 hours a week doing this.
Jack Butala: We both started … Both of us at different times had full time jobs when we started this. All I’m saying is, I made a lot of mistakes and wasted a lot of time in the car, in looking at the assets and going to auctions and not leveraging what I really know about, which is computers and data. Our whole concept, I’ve said it a million times. Send a million letters out, send a million offers out, see which ones come back to you, and close the deals. That doesn’t take a long time at all. Jill’s right, but the eight hours a week that you do spend instead of eight hours a day like us, is on a computer.
Jill DeWit: It’s true.
Jack Butala: We’re both on a computer.
Jill DeWit: That’s very true.
Jack Butala: Too much computer work? There’s no such thing. That’s my whole point here. If you’re afraid of the computer, maybe you’re a certain age and you just, man, never took a typing class or you’re going to rely on your wife to do all the computer work and you’re going to do the real estate work, I really think you should find something else to do.
Jill DeWit: I have a positive, too, about it, because it’s so computer heavy …
Jack Butala: You have a positive to offset all my negatives?
Jill DeWit: Totally, because I always do.
Jack Butala: That’s our life, that’s our whole life.
Jill DeWit: Exactly.
Jack Butala: Who’s that guy? I’m not going to talk to him, I’m going to go talk to her.
Jill DeWit: Exactly, that’s why. Well here’s the positive. I can pick up my computer and I can take it anywhere.
Jack Butala: Yep.
Jill DeWit: That’s another beautiful thing.
Jack Butala: I agree.
Jill DeWit: I don’t have to be here and babysit this property. I don’t have to show up and open the door and unlock something and show people around and make sure the drapes are going to stay, whatever it is. It’s nice. I can pick up my computer and be on an island.
Jack Butala: At this level in our careers, Jill and I, once in a while stuff gets to our desk, like a buyer wants to talk to us, especially because we have this silly show. About once a month somebody gets a call, Jill gets a call from somebody who wants her to show them property.
Jill DeWit: Oh, yeah.
Jack Butala: Her standard answer is, “Well, I’ll just leave the key under the mat. Here’s the GPS coordinate.”
Jill DeWit: Exactly.
Jack Butala: “Make sure you have a four wheel drive and the key will be under the mat.”
Jill DeWit: Exactly, it’s the funniest thing. They’ll say, “Are you going to meet me there, show me around?” I’m like, “What’s to show around?”
Jack Butala: Going to drive four hours out there, four hours back for a $5,000 asset.
Jill DeWit: Sure, yeah, just to stand there with you and look at it. It’s the funniest thing.
Jack Butala: Yep, pretty much looks like the last 400 miles.
Jill DeWit: Yep. Thank you.
Jack Butala: My whole point is, and please don’t take this lightly. Anybody who’s in this business and who’s good at it sits in an office somewhere, usually with the blinds on on a computer until they can’t stand the smell of themselves and they have to go take a shower.
Jill DeWit: Yep, and their family wonders who that guy is.
Jack Butala: Yeah. I still do that. I mean, you know this.
Jill DeWit: Yep.
Jack Butala: To this day I’ll get so hungry, that you forget to eat, forget to do everything.
Jill DeWit: Yeah, we’ve both done that. Yeah, there’s days I’ve got up and I’ve jumped on my computer and I’m still in, like, I’m in my robe and with my coffee. I look up and like, it’s lunchtime, “What just happened?”
Jack Butala: Yeah, in a good way.
Jill DeWit: It is, because I’m having a good time. It’s fun like, “Oh my gosh, look what I found. I think I can do this.” Then, there goes four hours.
Jack Butala: The more progressive that computers get, the more stuff you can do, the easier our lives become, the more fun this is, I think.
Jill DeWit: It’s true, I agree.
Jack Butala: There are some people that are just like, “Oh, not this new thing. I got to learn this new thing again?”
Jill DeWit: No.
Jack Butala: That’s not good.
Jill DeWit: It gets better and better every day.
Jack Butala: Join us in another episode where Jack and Jill discuss how to use information, that’s me.
Jill DeWit: And inspiration, and I’ll make it positive, that’s me.
Jack Butala: Can you imagine if I just sit here like Ferris Bueller’s history teacher? That’s what the show would be like if you weren’t on it.
Jill DeWit: “This is the bad thing, this is another bad thing, and this is another bad thing.”
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 your real estate ambition.
Jack Butala: I love when you get up and start working and it’s just a mess. I really do.
Jill DeWit: Do you really?
Jack Butala: That’s how you know you like somebody.
Jill DeWit: Oh, good. Sometimes I think, like, you’re frustrated with me because you walk in you’re like, “What, the bed’s not made. What happened?” I’m like, “I just started working.”
Jack Butala: Frustrated.
Jill DeWit: Okay, good.
Jack Butala: I’m Italian.
Jill DeWit: Okay, thank you.
Jack Butala: I’m frustrated about everything. It’s endearing.
Jill DeWit: Oh, that’s it. It’s not just me. It’s just life.
Jack Butala: Information and inspiration to buy undervalued property.
If you have any questions or comments, please feel free to email me directly at jack@LandAcademy.com.
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