Even if You Dont Have Money, Do a Great Deal (CFFL 452)
Even if You Dont Have Money, Do a Great Deal (CFFL 452)
Jack Butala: Jack Butala with Jill DeWit.
Jill DeWit: Hi.
Jack Butala: Welcome to our show, today. In this episode, Jill talk about how to do a great deal even if you don’t have the money.
Jill DeWit: What?
Jack Butala: I’m telling you.
Jill DeWit: What?
Jack Butala: Jill and I talked about this before we started the show, and-
Jill DeWit: I can get creative.
Jack Butala: And new people, acquisition, seasoned, old school acquisition people like me love new deal flow. We’ll talk about it in a minute. Before we get into it, let’s take a question posted by one of our members … On landinvestors.com online community. It’s free.
Jill DeWit: Okay, Scott asks, “I’d like to hire somebody to help with the sales marketing side of business. I know most states have pretty strict real estate laws and you can’t legally have somebody represent you or your property if they aren’t licensed. Has anyone hired somebody to help with this side of the business?”
Jack Butala: I have.
Jill DeWit: How do you work around … Yeah, like me. Just kidding. Joking.
“Has anybody hired somebody to help with that side of the business. How do you work around real estate laws? What things do you have them to help?”
Jack Butala: The … This isn’t even a workaround situation. This is exactly how you should do it. You need to hire them through … You need to W-2 them. They need to be an employee, so if someone works for you and they don’t have a license and they’re not a subcontractor. They’re just a W-2 employee, they can represent the property owner all day long.
Jill DeWit: Okay, because you’re the investor. It’s your investment firm and they work for the firm.
Jack Butala: Get an LLC. I just formed a new LLC for some stuff that Jill and I are doing and I did it. It cost $90 … In Arizona, it cost $90.
Jill DeWit: We did it online, right?
Jack Butala: It’s called Tower Five, LLC. for a bunch of reasons. Anybody can go look it up and see or look up my name. I took less than, like, three days and cost like $90, I think. Maybe something close to that.
Jill DeWit: But you just did it online. That’s what so nice. You can apply online and have your LLC like right there and get an EIN and all that good stuff.
Jack Butala: I did the EIN. The whole thing took 10 minutes, so go do that, then sign up with ADP. Automatic Data Processing which is a payroll company. You should be doing this after the 10th deal, so Jill says you should do this anyway.
Jill DeWit: Because you’re going to pay yourself W-2 salary.
Jack Butala: Yeah, that’s right. That’s how you keep the IRS out of your life.
Jill DeWit: Exactly, it’s a good, little tip. Pay yourself and pay yourself less than you pay your employees. That’s what we do.
Jack Butala: We do, too. That’s what we do.
Jill DeWit: That’s what I was saying. Jack and I don’t make a lot of money. W-2-
Jack Butala: Because we don’t have any bills. That’s really why.
Jill DeWit: That’s true, so yeah.
Jack Butala: It’s not even a workaround. That’s the real way to do it. This country’s packed full of real estate companies that have unlicensed people talking about their deals.
Jill DeWit: Can I dissect this a little bit because I’m trying to figure out where he’s worried about this. He’s having-
Jack Butala: His concern is valid.
Jill DeWit: Can somebody representing you or your property if they’re not licensed, so it’s like … It’s my property. It’s like an options deal. Even as an options deal, it’s not illegal where you have an agreement with the seller. You’re not technically representing them. You’re marketing it for them to sell the property.
Jack Butala: Marketing for yourself, technically.
Jill DeWit: Well, for yourself, exactly.
Jack Butala: Because you have equitable … Or no, signed option [inaudible 00:03:19], you have equitable title which means you can … You don’t own the property, but you have legal rights to make decisions.
Jill DeWit: Mm-hmm (affirmative)-, exactly, so interesting that this came up.
Jack Butala: We should do a show about that.
Jill DeWit: Well, you know what the thing is, too? This is a perfect example of how, as a society, we’re all hung up on … You need to have a license to … I mean, let’s think about it. You have to have a license to drive your car, you have to have a license to cut hair.
Jack Butala: I know.
Jill DeWit: You have to have a license to be … I mean, there’s so many thing that we’re so trained to. I really think that there’s people out there that don’t even know that you could sell your home by yourself.
Jack Butala: I do, too.
Jill DeWit: I think that there’s people that think that there’s a law in every state but it’s maybe in a few you need representation. I don’t eve know, but-
Jack Butala: I don’t think so.
Jill DeWit: I don’t think anybody … And all 50 states?
Jack Butala: Yeah.
Jill DeWit: Okay, but the bottom line is you can sell your house on your own. You don’t have to do that, so this, to me, ties into this question with Scott like, uh-oh, do I have to be … Even in our world, we have people-
Jack Butala: Well, that’s why we’re here, too. Scott’s a good question.
Jill DeWit: Yeah, we have people come to us like, “Well, what do you mean you’re not agents?” We’re like, “Heck no. I’m not an agent.”
Jack Butala: Every month, somebody says, “How do you guys get away with doing this without a license?”
Jill DeWit: Isn’t that funny? You were just describing this to somebody the other day. They were asking about what we do and when we talk about what we do and one of the sentences is, which is funny, “We’re not agents” because then it kind of calms people down as if they’re … Because I hate to say this, but it’s true. People have a little bit of a pre-formed opinion about real estate agents, car salesmen, you know what I mean?
There’s a lot of things that you have a … Attorneys, politicians, you know, accountants, seriously. We all have these notions about, uh-oh, you’ve had an experience. Usually it’s not a good one that comes to mind, so Jack and I are always saying, “We’re not real estate agents,” and then they go, “Oh,” and when we explain, yeah, we’re just playing with our own money. It’s ours. That’s it. They’re like, “Oh, now that’s cool.” Then they’re like, “Okay,” and then you just start talking about how it really goes and they’re like, “I want to do what you do.” Well, that’s why we’re here.
Jack Butala: So Scott, to answer the last part of your question, hire somebody that really knows social media well. Jill and I … If you’re listening to this podcast and this is really interesting to you, please go back and listen to a podcast that Jill and I did with two of our members, Kieria and-
Jill DeWit: Rowdy.
Jack Butala: Rowdy, and she came up with, all on her own, a brilliant way to sell property that is, hands-down, the most creative, the most effective way I’ve heard it and it has to do with Facebook. She goes in and targets, let’s say, properties in Wyoming. SHe’ll target Facebook groups that have nothing to do with real estate in Wyoming, so it might be knitting in Wyoming or ranching in Wyoming, or cattle whatever, and she advertises a property right in there for … I mean, she doesn’t even spend any money. She just goes and starts communicating with people in that group.
Jill DeWit: Yeah, just posting in the groups.
Jack Butala: She sells every single property that way, so I would have … If you’re going to hire somebody, don’t hire like a phone salesman. I would hire somebody who’s young and really good at social media and creative, and I wouldn’t go to an agency. They’re just too damn expensive and they don’t give you the time that you deserve as a client.
Jill DeWit: And, by the way, when you hire, speaking from experience, you’re going to go through for our five people before you find the right one.
Jack Butala: Yeah. There’s a function on LandPin.com. If you put your … Because Scott’s a member, right? Jill, do you know?
Jill DeWit: I do not know.
Jack Butala: I think he is. When you put your property up on LandPin, which is a site that Jill and I own, right below the pictures and stuff is social media share buttons. Well, they’re not just the regular share buttons. They send it to the planet, so shoot us an e-mail and we can do it. You can do it for other people’s property. You can do it for your property. You should just od it all the time because it builds a huge buyer base really, really quickly.
Jill DeWit: Mm-hmm (affirmative)- Exactly, good question.
Jack Butala: If you have a question or you want to be on the show, reach out to either one of us one landinvestors.com. Today’s topic, even if you don’t have the money, do a great deal. The heck does that mean?
Jill DeWit: Right?
Jack Butala: I know what it means because I wrote the title.
Jill DeWit: Exactly.
Jack Butala: What you want to do when you … Everybody’s concerned about lack of acquisition funds and we have several people in our group that start with no money at all. If you’re good at a data and you’re good at sourcing really undervalued transactions, that’s all you need, and then you get very creative about communicating the fact that you found a great deal. It’s a smoking deal. It’s half the price it probably should be and you don’t want the thing to go to waste, so, you know, I’m young and I’m new. I’m reaching out to you seasoned people. What should I do?
I don’t have the cash to close a deal. Does anybody want to do the deal with me? Our group is packed full of people who love these things. Make a big deal about it. You’re brand new. Acquisition people … Seasoned, old-school acquisition people like me, in any type of role, whether you’re buying assisted living facilities or any type of real estate at all, love new channels for deal flow.
If you call any CEO on the planet, I know right from the top of the chain to the small business and say, hey … If you call a barber shop owner and say, “Hey, I’ve got a barber shop for sale down the street from you. Just want to let you know,” that guy’s going to call you back. If you call the Trump organization’s acquisition people and say, “I got a skyscraper for sale. I just wanted to make you aware of it,” they’re going to call you back fast, so with land, trust me, I know because that’s how I got in this business in the late 80s, 90s.
With land, it’s no different. If you call a couple of a people who own a bunch of property, or send them a letter, or however you do it and say, “I’ve got this great deal and you own some property close to you,” I don’t want it to go to waste, but I don’t have the cash, they’re going to drop everything and talk to you. You could really … I see a lot of people kind of hanging their head like, “Man, if I had the money, I could do this deal,” and it just cracks me up, so turn that around, if that’s your situation, into a positive thing.
People have called us recently and said, “This deal’s too big.” Let’s break it up. You guys buy some. I’ll buy some. I love that kind of stuff.
Jill DeWit: Exactly. Again, I agree.
Jack Butala: We’re setting up a portal. It’s not going to happen super soon called landcrowdfund.com. It’s not up yet … Where you can just … If you’re in that situation, you just submit it, and then the people that are on the other end of it, us included, everybody in the group can say, “Yeah, I’ll do that deal” or, “No, I won’t,” or kind of like a Shark Tank situation.
I love it 1000 bucks, but at 1200, it’s just not my thing.
Jill DeWit: Exactly.
Jack Butala: Or 100,000, not 120,000 or whatever the numbers end up being.
Jill DeWit: Exactly.
Jack Butala: Does that make sense?
Jill DeWit: Mm-hmm (affirmative)- Yeah, well you know-
Jack Butala: That’s a nice nail color that you’re putting on.
Jill DeWit: Thank you. I was going to say when I was reading the title, we were talking a little bit, too. I was thinking, okay, even for me … Say I don’t have money. I don’t have a lot of money. I’m going to do a great deal. You brought up a point about maybe my acquisition funds are $5000 or whatever it is. I have a limited acquisition fund, so I have to really be picky and careful and choose the best deals. Were you thinking about any … Were you going there with that earlier?
Jack Butala: Yeah, absolutely, so yeah, go ahead, Jill.
Jill DeWit: You don’t have a lot of … You all have a budget. We all have a budget. I even have a budget. I’m not going to go crazy and spend $300,000 on acquisitions this month. No, I have a budget, so it might vary.
Jack Butala: Make it count. That’s my point. Make it count.
Jill DeWit: So, whatever your acquisition budget is, and so even if you don’t have money or don’t have a lot of money, that’s my thing. Do a great deal, pick the right ones, and line them up. It doesn’t take a lot of money to get rolling and let’s just say you’re not bringing deals to somebody else. You’re not there for that. You’re here making money for just your own little funds, you’re learning how this goes, and you have limited funds.
All right, so let’s buy a couple little properties, spend $500 a piece, I don’t care.
Jack Butala: A thousand bucks.
Jill DeWit: Double your money.
Jack Butala: Double your money.
Jill DeWit: Now I’ve got … Now, let’s say about three properties $500 each. I put $1500 in. Now I doubled it. Now I have $3000. Okay, I’m going to do it again. Now I have $6000. I’m going to do it again. Now I have $12,000. See where I’m going? Now we can start to make different decisions.
Jack Butala: And you got some dealer experience, too.
Jill DeWit: And all the while, you’re really only picking the cream of the crop.
Jack Butala: That’s right.
Jill DeWit: You’re not wasting your time on these back tax nightmares that you have to undo something because somebody passed and it’s such a good deal because nobody can find this guy. Well, and you can’t find them, either. You know what I mean?
Jack Butala: First 10 deals you do should be slam dunks.
Jill DeWit: And it should be easy, it should be Mr. and Mrs. Smith who live in this little, little town, and boy, they’re just too old now to go camping there anymore and the kids don’t want it and gosh, this money you’re sending them is going to pay for their retirement party. You know what I mean?
Jack Butala: Yep.
Jill DeWit: That’s really what it is and they’re thrilled, so those are what you should be looking for and they’re out there and you know what? If you’re not finding enough of those, you need to done thing. Don’t hit your head against the wall. Don’t try to talk to people into things. Just send out more offers. That’s it. It’s 50 cents a pop.
Jack Butala: That’s right.
Jill DeWit: Send out 1000. That’s $500. You can do this.
Jack Butala: In the flipside, if you’re a pretty seasoned acquisition person that just discovered this sending out unsolicited offers, spend 100 grand on one property. You know how to sell it already if you’re seasoned. You know if you can sell it for 200,000 or not. For sure you know that, so don’t be afraid. I will add this. I’ve seen people do this recently for some reason. They’re seeing something that’s not there because they want to be a deal maker, so do not in the beginning unless you really, really know that it’s smoking.
Jill DeWit: Exactly.
Jack Butala: It’s hard to get that confidence, but and that’s what deal review is, by the way. Jill and I can … We’ll answer your questions if you want on Wednesday.
Jill DeWit: I’m surprised so many times people come to us on our weekly member call and they say, “Gosh, I guess this doesn’t work in every county,” and Jack and I go, “Yes, it does.”
Jack Butala: It does.
Jill DeWit: Seriously. What’s your budget? That’s it. Does $100 an acre work in every county? Oh gosh, no. In some counties, $5000 an acre is probably it. You know what I mean? It might be-
Jack Butala: Or 50. $50,000 an acre doesn’t work in San Barbara county.
Jill DeWit: Yeah, you know?
Jack Butala: For most of the parts of it.
Jill DeWit: Exactly.
Jack Butala: Northeast, it might.
Jill DeWit: So this absolutely works in every county. It’s just you have to adjust your numbers.
Jack Butala: Yeah, exactly.
Jill DeWit: That’s it. That’s good, thank you.
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 every day 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. That ended up-
Jill DeWit: I had to say thank you. I was like, I had to get that out and I had to say thank you for letting me get that out.
Jack Butala: Oh, to me?
Jill DeWit: Yes.
Jack Butala: Oh, sure. You don’t have to thank me, Jill. Thank you.
Jill DeWit: Thanks.
Jack Butala: I have a member every time I talk to him … He’s a black level member. I say, every time I get done talking with him, he knows who he is. I say thank you, and he’s like, “No, thank you.”
Jill DeWit: It’s like your thing now.
Jack Butala: It’s his thing.
Jill DeWit: That’s funny.
Jack Butala: It’s funny, man.
Jill DeWit: No, Jack, thank you.
Jack Butala: I’m guessing he says it to everyone because it’s funny as hell and really memorable.
Jill DeWit: That’s really funny.
Jack Butala: Information and inspiration to undervalued property.
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