Where to go from $10,000 per Month (CFFL 551)
Where to go from $10,000 per Month (CFFL 551)
Transcript:
Jack Butala: Jack Butala with Jill DeWit.
JIll DeWit: Good Day.
Jack Butala: Welcome to the show today. In this episode Jill and I talk about where do you go from $10,000 a month? Well you go to $11,000 a month. Do we even need to do a show about that or is it more important-
JIll DeWit: You go up, you go up, you go up.
Jack Butala: Before we go into it, let’s take a question from one of our members on the landinvestors.com online community, it’s free.
JIll DeWit: Okay, Chuck asks, “Can someone share any tips and tricks for handling deposits from a buyer to hold a property for a few days or more? Of course, we wouldn’t stop marketing it, and do you tell the buyer the deposit is non-refundable if they decide not to buy, and any other stipulations regarding deposits?”
Jack Butala: What would you do here Jill? Because you deal with this end of it, way more than me.
JIll DeWit: You know, I’m not a fan.
Jack Butala: I’m not either.
JIll DeWit: I tell you Chuck, I’m really not a fan of a deposit because I don’t want to take a payment and have to send it back. I don’t want to worry about, then somebody else comes along and I have to say, “You gotta wait two days because this guy’s thinking about it.” You know I don’t want to mess with it, I really just don’t go there. For me, you know what, I appreciate that you’re excited about it and you want to go see it. I really have to be honest with you and say this is a first come, first serve cash deal, so that’s it. If you’re 90% of the way there I’d say if anything is crazy, you hate it, I would obviously stand behind and refund it, if you want to buy it, or I’d say then go check it out.
I have done this more often, this is what I do. I say, “You know what, here’s the deal. I know you want to go look at it and you can’t go until two weeks from now. So I get that. Call me before you decide your gonna go, because if it’s gone by then, I don’t want you to waste a trip.” That’s what I’d say.
Jack Butala: Here’s what I’ve done in the past, and it’s in the past because we have people doing this for us now but, what I have done in the past is I’d say, “No I’m not gonna take a deposit, and by the way, nothing’s non-refundable in this business, ever.”
JIll DeWit: Correct.
Jack Butala: That’s just not how we roll. All it does, all it is, is bad will. But what you really want to do, realistically, is what I’ve done in the past. I say, “Look, I’m gonna to give you a verbal right of first refusal, all right? So I’m gonna continue to market it. I win. You have a verbal right of first refusal. I will contact you and give you a reasonable amount of time to close the deal if you want. If and when we get an offer, another offer if somebody buys it. It’s a lot harder to do if they click on it and pay with a credit card in the middle of the night, but that’s the risk that they’re gonna have to take with this.” The net effect of this is that, and you explain it that way, the net effect of this is that, what you’re doing is smoking out how serious this person is and if they just have the down payment and they don’t have the rest of the money or they just can’t put a pen to paper, they’re just not the right buyer.
That’s really what you want to smoke out. In fact, communicating with the buyer this far, to this point actually, might be too much.
JIll DeWit: Yeah, they’re either in or they’re out.
Jack Butala: Yeah.
JIll DeWit: I don’t even want to do it the way you just said because I don’t want to have to call them back and everything.
Jack Butala: I agree.
JIll DeWit: It’s just, hey, first come, first serve. If you’re not ready I get it, do some more shopping, do some more thinking, and let me know when you are.
Jack Butala: We had Luke Smith on the weekly call last week and he said something that, you know I never had the thought process about it but he’s 100% right. He said, “When somebody responds to my mailer, this is on the acquisition side, and they call me and I’m talking to them, I do not let them off the phone until we get the deal done. And this is the first time they call, so if they call and they say, ‘Yeah, I got your offer for four grand, I’ll take five. Does that work for you?’ And this is now role-playing, yeah that works for me, 5,000 works for me.” And he doesn’t say, “I’ll call you back with the details.” He says, “I’m gonna order a notary right now or I’m gonna open an escrow right now, however you choose to close it, and then I’m gonna take all of your information now and we’re gonna close the deal on Thursday.” And he literally stays on the phone until it’s all organized and done. There’s no second call back. The same thing on the sell side.
I haven’t talked about it on the show but I have a three contact rule on everything. If we talk more than three times, or there’s more than three types of communication, it’s not working. Or I’m not talking with the right person, and that goes with vendors and everything. You know, there are people that, especially sales people, for some reason, just they’ll sit there. I guess they’re just looking for something to do during the day, they’ll sit there and they’ll call you every day.
JIll DeWit: Mm-hmm (affirmative) Exactly. Oh my Gosh, that’s …
Jack Butala: I negotiated a great deal in a loopnet, loopnet is the closest thing to a commercial property in MLS. They’re advertising for us, and this guy, this sales guy, wouldn’t … I finally canceled it. He called me three times a day.
JIll DeWit: Yeah.
Jack Butala: I mean that’s just, that’s not right.
JIll DeWit: No.
Jack Butala: You’re a sales person, Jill, what’s the deal with that?
JIll DeWit: Do you really want to know?
Jack Butala: I do.
JIll DeWit: They have, a lot of companies have certain numbers that you have to make X amount of outcalls a day. Sometimes they’re just rolling through their list of phone numbers just to hit those numbers. I’m not kidding. It’s stupid.
Jack Butala: Actually, all kidding aside, that makes me mad.
JIll DeWit: It does. Hoping you’re gonna answer, and whatever, and there’s really nothing to talk about.
Jack Butala: So the conventional wisdom is, the more you talk to somebody, the more likely they are to buy something they don’t need or want.
JIll DeWit: No, I think what it is, is management wants to see them making X amount of dials, and instead of them looking for new numbers to hit, they’re just gonna hit you three times and hit their numbers.
Jack Butala: That’s ridiculous.
JIll DeWit: I know, I-
Jack Butala: That actually makes my face red.
JIll DeWit: I have been in companies and I’ve known environments where that goes on.
Jack Butala: Okay, well let’s move on because I don’t want to be angry.
JIll DeWit: It’s silly, that’s not our way of doing things, obviously.
Jack Butala: If you have a question or you want to be the show-
JIll DeWit: You want to be the show?
Jack Butala: Or you want to be as angry as I am right now.
JIll DeWit: On the show.
Jack Butala: Reach out to one of us on landinvestors.com. Today’s topic, the daily routines. Oh no, that’s typed in wrong. Today’s topic, where to go from $10,00 a month? Do you go to $8,000 a month Jill, or $22,000 a month? How do you get there? This is the meat of the show.
JIll DeWit: Let me think. Hmm 10, eight-
Jack Butala: This falls under Captain Obvious. Captain and Mrs. Obvious.
JIll DeWit: B. True. Where do you go? How do you do it? I want to know how you do it.
Jack Butala: One of the education programs we have is called, $10,000 a Month for Life, Cash Flow from Land. It’s all based on accumulating a revenue stream with payments. You know, buying a piece of property for $2,000-$3,000 and then selling it on terms, you know, $500 down, $100 a month. It doesn’t take too long to get to $10,000 a month. At $100, it’s 100 deals. You know, if you have what it takes to do 50 or 100 deals, let’s just say it’s $500 down and $200 a month, for a piece of real estate that’s extremely reasonable. That’s 50 transactions. If you have what it takes to do 50 deals, you have what it takes to do 500. That’s my opinion.
JIll DeWit: I love in the-
Jack Butala: That’s really what this show is about.
JIll DeWit: You share a spreadsheet in the beginning of that program that is really compelling for me and I think it is for our people too, and I love that you put it in the beginning. You do have a good, let’s talk about your business. I think that’s what this show is about to me. You know how big do you want this to be? How hard is it gonna be? You really say, “All right, if you want to do one deal a month. You want to …” Because you have a job, you’re just trying to supplement your income. You’re just trying to pay for college or I don’t know what-
Jack Butala: Pay your mortgage.
JIll DeWit: Yeah, so you want to do one deal a month. All right, well in 12 months, this is what it could look like. All right, now imagine you do one deal a week. Hmm, in 12 months this is what that’ll look like. You wanna do two deals a week, you know what I mean. You do you, and I love that you share that spreadsheet that we can all download, and I can plug in my own numbers and really play with it, and go, all right. It’s such a great way to set personal goals for yourself, Jack, and I’m really glad that you did that because then I know, all right I gotta do one deal each week. I know, because I know that if I do one deal each week I’m gonna hit X, because it just keeps rolling. You just keep going, “One deal a week, now I have $400 a month coming in.”
Say it’s $100 a month payments, right? Like cheap properties, $800 a month, $1,200 a month. At the end of the year, what is it?
Jack Butala: Let’s just say there’s 50 weeks in a year.
JIll DeWit: Right.
Jack Butala: If you’re buying a property, typical acreage, like 40 acres for $4,000 and you sell it for $1,000 down and $200 a month for $20,000, that’s income stream. Those are my favorite types of deals because they just go on forever. You’ll have $10,000 a month at the end of the year.
JIll DeWit: Mm-hmm (affirmative). It’s that easy.
Jack Butala: It is that easy.
JIll DeWit: It really is.
Jack Butala: Like the show yesterday, you know the painful truth about land investing. The truth is, it is that easy. You just have to get that first deal done, and to get the first deal done, you have to get stuff in the mail. To get stuff in the mail, you have to pull the data. To pull the data and pull it correctly, you have to get educated. I just deconstructed your whole business in one sentence, so you just have to do it. That’s it, Nike was right, just do it, and do it wrong but do it.
JIll DeWit: Exactly, I love it. Most people, you remember … I remember back when … How do I say this? I don’t want to be a snob but-
Jack Butala: I don’t think that’s possible. I don’t think it’s possible for you to be a snob.
JIll DeWit: I’m trying not to be a snob but it’s really funny when you-
Jack Butala: I get up a snob in the morning but not you.
JIll DeWit: It’s like I am not doing that. Do you expect me? Do you know who I am?
Jack Butala: The only thing, the only person I’ve ever said that to is the person in the mirror. Do you know who I am? Yeah, I do, you’re Jack and stop saying that.
JIll DeWit: That’s so funny. But for some, you know it’s funny, and I know this is true for a lot of the people in our world. I know for a fact that they said, “What? You mean I could do this and this and this and this and I could sit back and watch $5,000 a month coming in that I don’t have to think about? That’s like wow, that’s a lot of money. Do you know that’s my mortgage and all these things I don’t have to think about.” And then you do it and you go, “God, that wasn’t that crazy.” And then it doesn’t seem like that much. At one time, $5,000 a month seemed like a lot of money, and even $10,000 a month seems like a lot of money. Then you’re there and you’re like, “God, I can do that again. Now I can do $20,000 a month. Why wouldn’t I?”
Jack Butala: Exactly. Why wouldn’t we do $200 then? That’s one way to do it. Another way to do it and truthfully, this is how Jill and I do it all the time, and if the number’s not $10,000 it’s add a couple zeros to it a month. We buy stuff for cash and sell it for cash. We don’t play the terms game and we have the same people who buy our property every single time. We have them trained. Jill has them trained, I swear they don’t even look at their property anymore, they don’t even look it up because they’re so … We’ve made them so much money that they just trust us. They say “Yeah, I’ll take it all. What do you have?”
And we say, “We have this, this, and this; and this is how much it is.” Could we have taken advantage of them? Yeah, but why the heck would we ever do that? So then the next month they find out the property wasn’t what we said and we weren’t truthful about it? No way man.
JIll DeWit: Then it’s done. Right.
Jack Butala: Shoot ourselves in the foot there. So, cash sales, I mean, to make $10,000 a month in cash sales, not term sales …
JIll DeWit: That’s one deal.
Jack Butala: Yeah, that’s one deal.
JIll DeWit: One deal.
Jack Butala: That’s one deal a day.
JIll DeWit: Uh-huh (affirmative).
Jack Butala: I mean, it’s really easy.
JIll DeWit: Or one deal.
Jack Butala: That’s what I mean. I mean, it’s really, really easy.
JIll DeWit: Buy it for four, sell it for 14. Done.
Jack Butala: If you stop, if you’re in this now. We have a member who does this, several members actually, but one in particular, he started just like we all do. Buying a property for $5-$600 learning, turning it, doubling their money. Now they, he will not, he refuses to make less than $10,000 on a deal, so he turns all that stuff away. He turns all the smaller deals away, from old mailers. And that’s it. He tries to do one deal a day. It’s not hard.
JIll DeWit: Exactly.
Jack Butala: That’s $300,000 a month.
JIll DeWit: Mm-hmm (affirmative). Exactly.
Jack Butala: $300,000 a month in profit and he doesn’t even have any employees and stuff. He’s just got it all set up.
JIll DeWit: So how far do you think-
Jack Butala: So where do you think …
JIll DeWit: Yeah, where do you go? How far do you go?
Jack Butala: And $300,000 is not enough for him. The ranch deals that Jill and I do, we have to make $100,000 on them, not $10. They take a little longer, but not that much longer. When you start horsing around with that kind of money, and the people who are paying cash for those deals. It’s a whole different world. It’s a hell of a lot easier to deal with people who have $22,000,000 in their checking account then people who have $20, and that’s just what we’ve chosen to do.
JIll DeWit: Exactly.
Jack Butala: Join us in the next episode where we discuss daily routines and strategies for all. Not just for investors, like developing good habits, right Jill?
JIll DeWit: Exactly.
Jack Butala: I think that was your show.
JIll DeWit: And we answer Luke’s question about running out of money. This outta be good.
Jack Butala: Well we have the solution to that. You are not alone in your real estate ambition. Good show, Jill.
JIll DeWit: That was fun. That was good. I think, I think we covered that all, I don’t think we, because really once you wrap your head around whatever you want, $5,000 a month, $10,000 a month, $15,000 a month, $20,000 in a month, and you get there, you can easily replicate that.
Jack Butala: Yeah, you know, what I didn’t mention, and I should have is that I mention this in the e-book, the free e-book. The first deal I did, you know you always remember your first deal like you always remember your first kiss, and the first deal I did was an 80 acre property in Arizona and I did it from back east. On the internet, it was sight unseen, the whole thing. I was just floored that you could buy a piece of property on the internet without really talking to anybody. The story is this, I bought an 80 acre property, I think it was for $8,000 on the internet. You know there was no pictures, there was a snapshot of a plat map, I think, and so I bought it and I cleaned it all up on the internet.
All I did was borrow some pictures. I represented the property and doubled my money. And then that was it for me. That’s all it took. I said, “If I can do one deal like this, it was either crazy lucky or I can systematically make this a career.” So we’re what, $30,000,000 later in equity or some number like that. 25 probably and it’s just, now it’s not enough.
JIll DeWit: I know, yeah, that’s the where do you go from there? Careful what you wish for.
Jack Butala: Right. It led to this silly show and everything.
JIll DeWit: I know, now it’s taken over. Hey, if you like our show, please subscribe and rate us on iTunes or wherever you’re listening.
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