Buying Property Out of the USA (CFFL 476)

Buying Property Out of the USA

Transcript: 

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 buying property outside of the US. Before we get into it, let’s take a question posted by one of our members on the landinvestors.com online community. It’s free.

Jill DeWit:                           Okay. Brandon S., this is is kind of a technical question. I like it. “When downloading a list from RealQuest Pro, do you download the whole list or part of the list?” We should probably back up and give a little information on what this is about.

Jack Butala:                       Go ahead.

Jill DeWit:                           That is our number one go-to for downloading ownership records, and that’s how we generate our mailing list and things to send out offers to owners to buy their property. That’s the big picture. We have tested them all, haven’t we, Jack?

Jack Butala:                       Oh, yeah. I mean, there’s two major places. RealQuest Pro is a collection of every single assessor’s database or tax roll in the country with very few exceptions, so you tap into a database. It’s not just a list. Go ahead.

Jill DeWit:                           That’s a good point.

Jack Butala:                       The only other one really that’s worth it at all is TitlePro247 and we offer that too. We’re licensed providers of both. That concludes the commercial portion of this podcast.

Jill DeWit:                           I love it. Yeah, so what we do is we go in and it’s nice because we all, in our community we log in and I pick a county and I pick a size and I can sit and pick every last little detail. This is what Brandon’s asking about. We’ll go in and pick the zoning. If I’m looking for vacant land I’m going to pick up assessed … Maybe I want to do 4.9 to 5.1 acres. I’m doing that to get all the five-acre properties and I’m picking a county and I’m putting in, I want it zoned this way, I want to make sure it’s residential or vacation. Dream it up. I’m going to take out all the federal stuff and I’m going to make it assessed up to a certain level and I’m going to put in improved percentage of zero which is huge. That’s one reason we use this data, is because other data sets don’t have that.

Jack Butala:                       Yeah, improved percentage of value means that if there’s an improvement value anything other than null or zero there’s-

Jill DeWit:                           Something on it.

Jack Butala:                       Yeah, it’s been improved and it’s not land.

Jill DeWit:                           Exactly.

Jack Butala:                       That’s not [crosstalk 00:02:22], unless you want to buy houses. That works too.

Jill DeWit:                           Yeah. On the other side, just so we can share with everybody, we have access to all that too. Say I want to buy apartment buildings. I can go in and put in a ZIP code-

Jack Butala:                       It’s the same database.

Jill DeWit:                           Yeah, I’m just doing the same thing. Instead of picking land, I’m picking apartment buildings. I’m going to put in a ZIP code and I want up to this many doors and-

Jack Butala:                       It’s literally 148 million properties. Every single piece of real estate in the country is in there.

Jill DeWit:                           Whether it’s-

Jack Butala:                       Every single participating county, the real estate’s in there.

Jill DeWit:                           Yeah. Could be an office building, could be a bank.

Jack Butala:                       There’s a few counties that don’t participate because they’re in the Stone Age and you don’t want to buy property there anyway.

Jill DeWit:                           Exactly. Yeah, Brandon’s question’s about, “Okay, now I’m staring at this information. What do I download?” Jack?

Jack Butala:                       Well, he’s saying, “Do I download the whole list, or part of it?” In Chapter 5, again, this is not meant to be a commercial but I’m really just answering Brandon’s question because I can see he’s a member. In Chapter 5 I go in incredible detail on how we scrub the data down to send out a mailer. What he’s asking is at the end I’ve got a universe out of 100 and, I don’t know, let’s say it’s 1,532 properties. Do I download the whole list, or I download part of it? I would opt to download it all. Even if you’re not going to mail it all at one time, download it all and prep it at the same time. You don’t want to do things twice. That’s the real reason. It’s, what, 10 cents a record?

Jill DeWit:                           Mm-hmm (affirmative).

Jack Butala:                       Depending on when you … I mean, couldn’t be cheaper. It’s half the price. If you go to RealQuest-

Jill DeWit:                           It’s less than half.

Jack Butala:                       It’s less than half of the price that they would charge you off the street as a member. Again, this is not a commercial.

Jill DeWit:                           No.

Jack Butala:                       It sounds like a commercial. I don’t really mean it to be that way, but Jill and I have spent how many years making sure that our members get all this stuff for less than half.

Jill DeWit:                           Well, let me back up and let me talk big picture for people here. This is why we’re so successful. We’re not buying a list from somebody off the street. I’m not getting something from the county and trying to scrub it down and make it work and hope I got all the information I wanted.

Jack Butala:                       We’ve done all those things.

Jill DeWit:                           Yeah, I’m not-

Jack Butala:                       And most of our members have too, which is why they’re now members because it sucks to do all that.

Jill DeWit:                           Right, and I’m not hand writing 100 letters a week and putting my own stamp on them or anything like that. The reason that we’re so successful is because we’re using data and learning how to manipulate the data on a big picture sending out mass mailers minimum 1,500 mailers just to test an area. We’re not messing around here. Seriously, and here’s the result.

Jack Butala:                       I love when you talk like that, Jill.

Jill DeWit:                           Thank you. The result is, huh, we’re really successful. Guess what, everyone who’s copied us, they are too. Seriously. I’m not kidding. I have to say that.

Jack Butala:                       Copy us.

Jill DeWit:                           Well, not just … Yeah. Anybody who sets out to do it like we do and if you really learn how we do it and you mirror what we’re doing you will be successful.

Jack Butala:                       You don’t have to be a member.

Jill DeWit:                           No. That’s what I’m saying.

Jack Butala:                       We want you to copy us. We’re licensed providers of all this stuff at half the price.

Jill DeWit:                           Yeah, we’ll get you the data.

Jack Butala:                       If you want to go pay full price with RealQuest or with TitlePro or LetterStream, they’ll charge you $1.25 to send a mailer out or you can do it 50 cents through us. It’s up to you.

Jill DeWit:                           Exactly.

Jack Butala:                       But it’s the same exact access to the same stuff.

Jill DeWit:                           Well, my bigger point is you’re listening to us for a reason, okay?

Jack Butala:                       It can’t be for the entertainment.

Jill DeWit:                           Yeah, that’s for sure. You’re listening to us for me. Just kidding.

Jack Butala:                       Yeah, that might be true.

Jill DeWit:                           No, no, no.

Jack Butala:                       I really wish that guy would talk a lot less.

Jill DeWit:                           No, no, no.

Jack Butala:                       I really wish it was The Jill Show.

Jill DeWit:                           Silly you, no.

Jack Butala:                       That guy needs to stop talking.

Jill DeWit:                           No, you’re listening to us for a reason, and I’m here to tell you this is why you’re here. Because you want to make some money at this, and you know what? We can help you. This is one of them. Don’t mess around. Do it in a big way. It’ll pay off.

Jack Butala:                       Our whole goal is to charge nothing for education and half for the exact same tools that you need to succeed. That has been our mantra from the beginning.

Jill DeWit:                           The show’s free, online community’s free.

Jack Butala:                       Right.

Jill DeWit:                           Lots of free. Good stuff.

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, buying property outside of the USA. This is the meat of the show. Here’s the super short version of the show: It’s a really bad idea.

Jill DeWit:                           I was going to say it sounds exciting, it sounds like a good idea but really? Really?

Jack Butala:                       With the exception of Canada to my knowledge it’s very, very difficult and very, very risky to buy real estate outside of Canada or the US. Here’s why: You have no real recourse. In a few minutes I’m going to tell you some stories, just disastrous stories, about people purchasing real estate and losing 100% of the money. In this country we have a set of rules and laws, and we all take them for granted. Jill and I do for sure. When you go to buy a house, let’s say, there’s pretty much one or two ways to do it. You go get a mortgage or you pay cash and you get an escrow agent, you buy the house. If something goes wrong, you get an attorney, you start suing everybody, and you have some recourse. There’s a set of rules. You know what the rules are before you set out to do this, right?

Jill DeWit:                           Right.

Jack Butala:                       You can go look up statutes, you can talk to a lawyer depending on the state or the county that you’re in. It’s really, really predictable, the outcome is. We take it for granted, again. Same thing in Canada. If you go to buy a piece of property, let’s use Italy for example. You want to buy a house in Italy. Sounds romantic, right?

Jill DeWit:                           Oh, it does. Let’s do that.

Jack Butala:                       Well, it’s crazy because you got to put 50% down before the bank will even talk to you. Even then, it’s an if. Now, that 50%, the seller may choose to keep it or not. Then, in some places, in some provinces in Italy you have to register with the police department. They need to make sure that you’re not a criminal or some type of … They want to check your character. Maybe they don’t like that you part your hair on that side, honest to God.

Jill DeWit:                           Yeah, it’s like an interview process and all that.

Jack Butala:                       Yeah. Then, even then, it’s …

Jill DeWit:                           Then, are you guaranteed, I mean …

Jack Butala:                       Are you guaranteed that you’re going to get the house and it’s all going to work out? No, not at all.

Jill DeWit:                           Right. Exactly.

Jack Butala:                       The houses are from the Dark Ages, by the way, so there’s a lot of stuff that needs to go on from a … It’s very, very complicated. The rules are very different from what we’re used to. Look at China. China’s still a Communist country. We don’t think about it anymore, but they were driving tanks through Hong Kong not so long ago.

Jill DeWit:                           Yeah, Tuesday. Just kidding. I’m just kidding.

Jack Butala:                       Yeah, you can buy a house in China but the government could wake up next week and say, “Eh, we really do own all this stuff so you’re out of luck.” It’s very, very, very risky and there’s 148 million properties to choose from in this country, so it’s going to be fine. Canada, Jill and I in the past have done really well in Canada purchasing property specifically on Prince Edward Island with an ocean view, and you can still buy properties there for 20, $30,000 right on the ocean.

But here’s some different things about Canada. They tax you in the transaction. Our government trusts us to file a tax return at the end of the year identifying all the properties we’ve purchased and sold and how much money we made. I don’t want to make this a tax discussion. In Canada they tax you for the value of the profit margin when you buy and sell a property, they tax you during the transaction right out of escrow. Canada’s a great place to make money, by the way, buying and selling real estate. You just have to plan for it, and it’s predictable, just like this country. To summarize it, then we can talk about some funny stuff because we have some time …

Jill DeWit:                           Were you going to tell your Mexico story?

Jack Butala:                       Oh. Oh, yeah. The Mexico story.

Jill DeWit:                           I want to hear the Mexico story. Let’s throw that one in there because that one’s …

Jack Butala:                       If you’re from the southwest part of the country, Los Angeles or Phoenix, everybody knows about Rocky Point. It’s a little-

Jill DeWit:                           Puerto Penasco.

Jack Butala:                       Yeah, exactly. It’s a little, tiny tourist community. It’s right on the ocean, or on the sea down there.

Jill DeWit:                           The gulf.

Jack Butala:                       It used to be when we were a lot younger you could go down there and buy, beer was 50 cents. That’s all changed. It’s all priced very differently now.

Jill DeWit:                           Now it’s 75. Still cheaper than water. That’s my favorite. I love going to Mexico where buying beer is cheaper than bottled water. Well, shoot, then I need to drink beer. Cerveza.

Jack Butala:                       During the last upturn when prices were, I think, really inflated a lot of developers from Phoenix and Los Angeles went down there and built these high rises and selling condos. They were selling them just like they would sell them in this country. Put your money down, we’ll build you a condo. We’ll build it out like a custom home. Well, the market crashed and everybody that put a down payment down or put any money into these things lost it all. The developers didn’t even need to file bankruptcy. Here you have to do that. They didn’t even need to do that. Everybody just said, “Yeah, your money’s gone.”

Jill DeWit:                           That’s just the way it goes.

Jack Butala:                       So everybody’s staring at each other going, “Well, wait a second.” There’s no recourse at all. There’s no lawyers. You just lost your money period. A lawyer buddy of mine, one of my really good friends, he was just shaking his head, saying, “Why didn’t anybody ever just ask me?” There’s no recourse for this at all, so he lost.

Jill DeWit:                           Right. I could’ve saved these people.

Jack Butala:                       He actually had clients losing hundreds and hundreds of thousands of dollars. They were buying these 5, 6, $700,000 penthouses in Rocky Point, which I don’t understand personally. You’re going to spend 500 grand in Rocky Point?

Jill DeWit:                           No.

Jack Butala:                       I wouldn’t pay $30,000.

Jill DeWit:                           I know.

Jack Butala:                       Same ocean’s right here. Yeah, it’s a little more expensive but it’s your money at the end.

Jill DeWit:                           Right. Exactly.

Jack Butala:                       Don’t buy property … I went down to Costa Rica and spent a month trying to buy some real estate because the subdivision laws are awesome there. You can buy 1,000 acres and rewrite the description and make it 1,000 one-acre properties. Here’s the thing about Costa Rica, too, as an example. If you live on a piece of property in Costa Rica for, I think it’s two years, you own it for free.

Jill DeWit:                           Because it’s kind of like we were talking about easements the other day. It’s like I’ve been sitting here for two years using it. No one said anything otherwise, so now it’s mine.

Jack Butala:                       It’s a very, very …

Jill DeWit:                           Got to pay attention to your property, apparently.

Jack Butala:                       It’s a very popular and typical thing to do for-

Jill DeWit:                           Squatting.

Jack Butala:                       It’s called a squatting law.

Jill DeWit:                           Yeah.

Jack Butala:                       It’s adverse possession, is what it is. You don’t want to horse around with that.

Jill DeWit:                           No.

Jack Butala:                       We have millions and millions, 100 million properties that we can buy, and God knows how many properties in Canada.

Jill DeWit:                           Can I throw in one little thing that’s kind of on this topic? Well, it may not be on this topic but anyway. The thing about buying property inside the United States, let’s flip it around, is anyone, I think we covered this today, but US citizen or not can buy property here. So we have a lot of international people that come our way. It is easier once they figure it out. Now we all know buying outside stinks. Buying inside, great.

Jack Butala:                       I mean, the international buyers that we have, they fall over when we tell them, “Yes, you can buy it, and here’s the rules,” because they’re used to the government having all the power.

Jill DeWit:                           Exactly. By the way, all of that is on them. It’s on them as a buyer. You as a seller don’t have to manage it and make sure that they’re paying X whatever taxes and all that stuff. That responsibility is on the purchaser, so that’s a nice thing for us too.

Jack Butala:                       We really are in a fantastic situation as Americans from a real estate standpoint. This is the real estate center of the universe. Our government, which was a offshoot of … They were upset British people. That’s who started this country. Because they didn’t like the way the real estate scenario was over there, they made it to our advantage here and we’re reaping the benefits of that every day. Jill and I live in this little beach community here in Los Angeles and everybody around us is a multimillionaire because of the houses that they’ve been buying and selling since they were 25 years old. Truly.

Jill DeWit:                           That’s true. A lot of real estate.

Jack Butala:                       It’s amazing. Where else but America? Only in America. I’m going to say the cliché. Only in America.

Jill DeWit:                           You’re not picking on my people based on my 23andMe results the other day, are you?

Jack Butala:                       No. You’re all Irish, huh?

Jill DeWit:                           Mostly.

Jack Butala:                       Jill and I-

Jill DeWit:                           It’s hilarious. Are we done with this topic?

Jack Butala:                       Jill and I had … Yes, we are. Had a couple of glasses of wine one night like six months ago and decided to sign up for the 23andMe thing. If you don’t know what this is, you should check it out because we dispelled all the myths of our heritage with the stroke of a pen.

Jill DeWit:                           It’s really cool.

Jack Butala:                       I’m way more Italian than anyone thought and way less German, and Jill’s way more Irish than anyone thought. It clears up a lot of things for me.

Jill DeWit:                           What did we say last night? What did you say about, isn’t it true … Like the Irish can’t get drunk?

Jack Butala:                       Yeah.

Jill DeWit:                           Yeah. I’m like-

Jack Butala:                       That’s true. This girl can drink me under the table anytime she wants to.

Jill DeWit:                           Now I want to use that. I am Irish. Let’s have another one.

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 as drunk as you want.

Jill DeWit:                           Yeah. We do it every day. I mean we use it every day to buy property for half of what it’s worth and sell it immediately. Whoops.

Jack Butala:                       You are not alone in your drunken real estate ambition.

Jill DeWit:                           I love it.

Jack Butala:                       Oh my gosh. That really is some classic stuff.

Jill DeWit:                           Yeah.

Jack Butala:                       Hey, listener. All kidding aside, check that 23andMe thing out.

Jill DeWit:                           Yeah. We get nothing out of it. We just were sharing that it’s cool and fun.

Jack Butala:                       All the stuff your parents and grandparents said, I guarantee it, it’s not accurate.

Jill DeWit:                           You’re going to find out some stuff. It’s so interesting.

Jack Butala:                       It can trace your paternal genealogy back to, like, 75,000 years ago, back to the Stone Age. They’ll tell you if you were neanderthal. It’s amazing. I haven’t really totally gone through it yet.

Jill DeWit:                           It is really cool.

Jack Butala:        It’s worth the money. Information and inspiration to buy undervalued property in this country.

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