Millionaire – Pay it Forward (CFFL 566)

Millionaire – Pay it Forward (CFFL 566)


Jack Butala:                         Jack and Jill here.

Jill DeWit:                            Hey.

Jack Butala:                         Welcome to the show today. In this episode, Jill and I talk about millionaire and paying it forward.

Jill DeWit:                            Yeah.

Jack Butala:                         Giving some of it back. This comes in so many forms. Before we get into it, lets take a question posted by one of our members on the [ 00:00:17] online community. It’s free.

Jill DeWit:                            Yeah. Richard asks, “Hey, after your purchase agreements have expired, do you try to negotiate with interested sellers for a lower purchase price, and how much less do you offer?”

Jack Butala:                         This is such a good question. I don’t think there’s anybody more qualified on the planet than Jill to answer this question. She loves being in this situation.

Jill DeWit:                            Oh, thanks. It just happens. So, I love it when they write back. But later on, years later on, sure. First, I’m just going to explain … What we’re talking about is we’ve sent out offers. When we send out our offers to who we have identified as our target sellers, we give them a timeline to act on. Maybe it’s 30 days, maybe it’s 60 days, maybe it’s 90 days, it’s kind of personal preference, basically, because we’re sending them a real cash offer. Like, “Hey, we’re interested in buying your asset, AKA property, for X. We’re pending our review, and if you are interested, sign it here and send it back. We pay cash, this is the price, and this is good for,” let’s just say, “60 days,” if you will. Because I don’t want them to come back to me after six years and things have a lot changed. So, you need to have a date in there.

Here’s what really happens, is sometimes people … A lot of people act on it right away, but there are people that file it away for a rainy day. They may not be ready right now, but they file it away. And then, next thing that happens is years go by and sometimes it’s that person, and they go, “Wait a minute, we need some cash right now. Hold on a moment. Remember that guy that sent us an offer?” And they’re going back to the file. That happens. Or maybe something happened to that person, and the kids are finding it. Because things happen. Kids are looking through the file going through Dad’s assets, and here’s a letter, somebody wanted to buy it, because they don’t want it. This is why they’re reaching out to us years later.

So what do we do? I do review the property at that point. What’s interesting is, it can go up but oftentimes, depending on when I sent the offer, the property might be worth less. So, can you renegotiate with a lower price? Yes. But I’m not trying to say, “Well, I would have given you 5,000 then, now I’m only going to give you two.” No, I’m not going to do that to the person. I really sit down and review the property, and see what it’s worth now, today. And they get that. So that’s what it is. You re-review, see if you still want it, and then offer what is a good offer at today’s market with what you can do with it.

And what’s interesting is, a lot of stuff, I found, some of the properties that I was wanting to buy five, six years ago are kind of small.

Jack Butala:                         Yeah.

Jill DeWit:                            Have you had that, Jack? And some of the deals-

Jack Butala:                         It’s [inaudible 00:03:13]. Well said.

Jill DeWit:                            Yeah. My-

Jack Butala:                         Over time your acquisition criteria changes.

Jill DeWit:                            Yeah. So some of things like, “Gosh, shucks. That’s great. It’s still worth $1,000, but I’m not doing deals like that anymore.” And I don’t really need to do a deal like that, and now doing deals of $100,000. I feel bad sometimes, but I have to tell Mr. Smith that, “I don’t want that anymore, but thank you for reaching out to me.”

Jack Butala:                         What we started doing now, and this is a very timely question, what Jill and I have started to do now because our acquisition criteria dramatically changed over the last … I mean, we started sending letters out in the early 2000s, so we get all kinds of letters that we just … deals that are profitable, but we don’t want to do. We’re passing them through to our members on [Deal Board 00:03:59]. Deal Board that’s inside of And what we’re finding is it’s ending up like a Craigslist scenario. You post it on there. You say, “You know what? I’ve got these properties I’m not going to buy them. The seller’s name is Mr. Smith. Here’s his phone number. Have at it.” And then it’s a mess. And we don’t ever know what happens.

Jill DeWit:                            It’s a mess.

Jack Butala:                         So we decided to create a website called [Land Crowdfund 00:04:22], which is under construction right now, so that you can … there’s a lot of options you can have whether you’re funding it or not funding it or whether you’re the buyer or the person who’s going to do the deal. Makes it really, really clear about, “Yeah, I do want to do this deal with you, Jack and Jill.” Or, “I want to take over the whole thing. Thanks very much. Here’s $500.” You know, that no good acquisition should ever goes to waste concept. Do we do it with office buildings? No. Do we do it with rural vacant land? All the time on a daily basis. Well said, Jill.

Jill DeWit:                            Thank you.

Jack Butala:                         [inaudible 00:05:02] one more point.

Jill DeWit:                            Yep.

Jack Butala:                         If you own any real estate, you’ve probably gotten a postcard, or you’ve gotten a little note that says, “Dear homeowner or current resident, give me a call. I’d like to buy your house.” And what do you do? You throw it in the shredder. Why do they save ours?

Here’s why. There’s a number in there. There’s a dollar amount. It says, “I would like to buy your house,” or, “I would like to buy your land for $18,532.14.” That’s memorable.

Jill DeWit:                            Well, not only that-

Jack Butala:                         You can’t forget that. It’s like, “Wait a minute.”

Jill DeWit:                            It’s not a stupid postcard. I hate postcards.

Jack Butala:                         I know, but-

Jill DeWit:                            I feel like if …

Jack Butala:                         But it’s really-

Jill DeWit:                            … you’re sending a postcard, I want to buy your property on one side and free pizza on the other side. It’s silly. That’s how I feel about postcards.

Jack Butala:                         I know. But my point is, what makes ours different? And it’s a actual letter. But not even that. We get actual letters with cute rainbows on them and all kinds of stuff, and we throw them in the shredder.

Jill DeWit:                            Right. Don’t be cute. Don’t try to be cute.

Jack Butala:                         The reason is, there’s a number on there. There’s a dollar amount. “Someone said my house is worth $182,000. Wow! Okay, that’s worth saving.”

Jill DeWit:                            Mm-hmm (affirmative).

Jack Butala:                         “I thought it was worth 160,” or, “I thought it was worth 320.” But either way, this is our experience, and I’m not … It’s truly, personally a mystery to me still, but it works. [inaudible 00:06:24] put a dollar amount and make an actual offer.

Jill DeWit:                            And then when you have … I think the way, too, Jack, the way you laid out our letter from the beginning, where you lead with a cover page talking about who you are and what you’re doing. Where you got the information, so you’re not … For me, if it were me, Jack, that puts me at ease. When you open up a letter and it’s like, “Hey, not trying to scare you, this is public knowledge, and here’s who I am. I’m not-”

Jack Butala:                         You know what the number one response that we get to letters are? Just by volume? “How the heck did you guys get this information?”

Jill DeWit:                            That’s true.

Jack Butala:                         “How do you know this much about me?” [inaudible 00:07:04].

Jill DeWit:                            It’s kind of funny.

Jack Butala:                         “How do you know my address? How do you know I own this property?”

Jill DeWit:                            “How do you know I bought it in 2003, and I paid $4,200 for it?”

Jack Butala:                         “I feel violated.”

Jill DeWit:                            Oh [geeez 00:07:17]. Has anyone said that word to you?

Jack Butala:                         Oh, no not that word.

Jill DeWit:                            I was going to say.

Jack Butala:                         “Mr. Smith, it’s all a matter of public record. I didn’t make the rules. I just went over to the county, and got all the information. It’s right there.” It’s all recorded at the county.

Jill DeWit:                            We don’t go to the county.

Jack Butala:                         Right.

Jill DeWit:                            But …

Jack Butala:                         There’s a much better way. But that’s really it.

Jill DeWit:                            Exactly. Because some people do go to the county. I don’t want them to get confused. Don’t go to the county.

Jack Butala:                         Yeah. We address that right in the letter, too. This is all a matter of public information. “We’re not trying to hurt anything. We’re just trying to [inaudible 00:07:45] make you an offer for your real estate.”

Jill DeWit:                            If you’re not interested, move on. Throw it away. I don’t care.

Jack Butala:                         Put it in the file or not.

Jill DeWit:                            Yeah. That’s-

Jack Butala:                         “The guy next door’s probably going to sell me his house. If this doesn’t interest you, that’s fine.”

Jill DeWit:                            Yeah. Exactly.

Jack Butala:                         That’s really how I feel about it.

Jill DeWit:                            Isn’t that funny? I love … It’s so hard not to say that, too, by the way. I have got to tell you.

Jack Butala:                         Why wouldn’t you say that?

Jill DeWit:                            No. Because you can’t be condescending. Because I still want to get the asset, because here’s why. You can’t say, “Well, that’s funny, because I just paid less for your neighbor’s and the guy across the street’s ready to give it to me.” You can’t say that. But you can go-

Jack Butala:                         I can.

Jill DeWit:                            “Shucks.” You can go, “Hey, I get it. I understand you feel your asset’s worth $2 million, but gosh, I’ve been lucky. I’ve been picking up things in that neighborhood around $250,000. So, you obviously have the mansion on the block. Sorry about that.”

Jack Butala:                         Yeah. We won’t kill your [inaudible 00:08:48].

Jill DeWit:                            Because-

Jack Butala:                         Your way’s better.

Jill DeWit:                            You reel them back in. Without insulting the guy, the seller, you want to say, “Hey, alright. I know we all think that it’s worth that, and I understand that. Here’s what I’ve been paying and I’m just going to have to move on, because this isn’t what I’m doing.” And then they might go, “Well, let me [inaudible 00:09:08] think about this.”

Jack Butala:                         Yeah.

Jill DeWit:                            If they really want to sell. If they don’t want to sell, then we just send them on their merry way.

Jack Butala:                         So do we negotiate, Richard? Yeah. The truth is, we negotiate hard core when we get a letter back from 2004. Do we make it our business model, because some people, they make it their business model. Where they send out a bunch of offers with dollar amounts on them. People call back and they say, “Oh, you know, I looked at your property, and really, it’s worth $10,000 less.” If you want to be that kind of person, and that’s your business model, you’re not going to make it very far with our group. There’s no integrity in that.

Jill DeWit:                            Exactly.

Jack Butala:                         But it’s 15 years old, stuff changes and people understand that. I’ll give you an example real quick. I know we spent too much time on this. I just reviewed and approved the deal yesterday. We got five properties in in northern Arizona, and I offered, I don’t know, I don’t remember the numbers exactly, eight grand. And the woman said on the phone to our person, “But I really just want to get rid of these and check it off my list.” So I said back to our person, which is how we buy deals, our acquisition person, “Please offer her $500 and be really nice about it, and tell her we can have this whole thing done.” And she did. And she accepted it, and we’re buying the property.

Jill DeWit:                            Mm-hmm (affirmative).

Jack Butala:                         And that’s a perfect example of exactly what you’re saying.

Jill DeWit:                            Yep.

Jack Butala:                         If she said, “I need to have a blood transfusion, and I need to have 2,500,” or whatever you guys offered, I might handle it differently. But she said flat out, “I do not care. I just want to get rid of these right now.”

Jill DeWit:                            Mm-hmm (affirmative).

Jack Butala:                         If you have a question or you want to be in the show, reach out to either one of us on

You wouldn’t know it, based on what we just talked about for the last ten minutes, but today’s topic is millionaire paying it forward. This is the meat of the show.

I just read an article that said you release more endorphins in your body when you give away money than when you make it. Do you know what else you get-

Jill DeWit:                            Yeah, I’m not going to answer that. Woah. Where are you going with that?

Jack Butala:                         Do you know what else creates endorphins?

Jill DeWit:                            I can think of another thing, but I didn’t think that’s this kind of a show.

Jack Butala:                         You filth.

Jill DeWit:                            Sorry.

Jack Butala:                         My gosh.

Jill DeWit:                            What? Tell me?

Jack Butala:                         Usually that’s my role.

Jill DeWit:                            I know.

Jack Butala:                         You know what else release endorphins?

Jill DeWit:                            Please tell me, Jack.

Jack Butala:                         Hugs.

Jill DeWit:                            What?

Jack Butala:                         Hugs.

Jill DeWit:                            [Aww 00:11:35]. That’s what I was going to say.

Jack Butala:                         Walking up to somebody and hugging that person, there’s a small percentage that you’re going to get knocked on your butt, but the chances are [crosstalk 00:11:45] they’re just going to hug you right back. It’s a huge … 74% chance [inaudible 00:11:51] this study.

Jill DeWit:                            I was going to say hugs. That was my other thing.

Jack Butala:                         I don’t know if they did this study in Manhattan, but …

Jill DeWit:                            Oh my gosh. Could you imagine? If you walk up and hug someone in New York, that would be hilarious.

Jack Butala:                         I think we’d all be surprised, honestly. I think most people just want to [inaudible 00:12:07].

Jill DeWit:                            You know, that’s funny you say that, because I catch people off guard all the time when I … I’ll call places and they’re in the next mentality, they’re like, “Thank you for calling. Whatever.” And I go, “Hey, how are you?” And they’re like, “Oh. No one’s asked me that. I’m good. How are you?” It catches them off guard. And it’s-

Jack Butala:                         Sure. I noticed that with you. You always ask people, right? That’s the first thing you do, it’s, “How are you?”

Jill DeWit:                            Well, yeah. Because I’m like, “Hey, slow down. It’s going to be cool. Whatever it is.” Like, “Oh, I’m having a good day. How about you?” “Good, thank you. Hey, can I hit you for a question?” What’s so nice is if you do that, by the way, you’re hugging. Someone in New York would do that. You catch them off guard, they kind of go, “[inaudible 00:12:46].”

Jack Butala:                         Jill and I were in a-

Jill DeWit:                            “Okay. This is going to be good.”

Jack Butala:                         … county recorder’s office recently, and we’re waiting for them to print some maps off and stuff. And their guy walked in, and he did exactly the opposite of what Jill just [inaudible 00:12:57].

Jill DeWit:                            Oh my gosh.

Jack Butala:                         He walked in and said, “My neighbor, who owns his mobile home, his assessment is half of what mine is,” and he just started going off.

Jill DeWit:                            He plopped down a stack of papers, and launched in.

Jack Butala:                         Yeah. Slammed them down.

Jill DeWit:                            The poor person who just happened to be walking by the front desk. It’s not even the right person …

Jack Butala:                         Yeah, Exactly.

Jill DeWit:                            … and just started to launch in.

Jack Butala:                         So that’s what you don’t want to do.

Jill DeWit:                            Exactly.

Jack Butala:                         And everybody’s angry.

Jill DeWit:                            Instead if he walked in … Can you imagine how much differently that would have gone if he walked in and said, “Hey, how are you guys?” “Good.” “Oh, thanks. Aren’t we lucky to be here in Santa Barbara?” “Yeah, we sure are.” “So, hey, who do I talk to about this assessed value, because it’s not sitting right with me?” “You know what? That’s Carol. Carol’s the one that goes over that stuff. [inaudible 00:13:41].”

Jack Butala:                         Or you say, “I honestly think there might be a mistake. I don’t think anybody did anything wrong.”

Jill DeWit:                            “I just want to check this, because … ”

Jack Butala:                         “Check the math together.”

Jill DeWit:                            “Gosh, it doesn’t make sense to me based on what I’m seeing around the neighborhood.” And then it might have gone differently.

Jack Butala:                         “And by the way, I brought you guys some cookies, because I appreciate what you do.”

Jill DeWit:                            Exactly.

Jack Butala:                         Imagine how far you can get if you-

Jill DeWit:                            “Yeah, because this has got to be a sucky. I’m sure people come and just plop things down all the time. But I’m not going to do that to you today.” So, I agree.

Jack Butala:                         The point of the show is-

Jill DeWit:                            What was the point?

Jack Butala:                         When you’re starting to do well, really well, financially and you’ve got more time on your hands, or you have more control of your time is what I mean, you want to pay it forward in some way. There’s really two basic ways you can do that.

Number one, you can help other people get there, which is what Jill and I have chosen. Or you can start giving your money away. If you’re at the …

Jill DeWit:                            Bill Gates.

Jack Butala:                         Billionaire level, it’s really easy to give away money.

Jill DeWit:                            Mm-hmm (affirmative).

Jack Butala:                         Really, really rich people sit around and talk about this. Really rich people. They say, “Oh, yeah, I gave money here, I gave money here.” And then once in a while I’ll hear one of them say, “Yeah, but did you ever give your time?” And they all look around at each other going … they say, “Oh, no I didn’t. I have to donate some kind of time and help some people.”

Jill DeWit:                            That’s good.

Jack Butala:                         I think I feel qualified to say, Jill and I are spending some time helping people. Not just money.

Jill DeWit:                            Yeah. Exactly. I like that. That’s a good [inaudible 00:15:08].

Jack Butala:                         And a really important component, I think, of being well off and having control of your own time and moving through the ranks, so to speak, of being a grown up, is to give some stuff back and to pay it forward. However that makes sense to you. Might be spending more time with your kids. It might be getting a new wife. We don’t know.

Jill DeWit:                            Jack! No. No and it’s more than just donating money.

Jack Butala:                         Do you know what Nelson Mandela did …

Jill DeWit:                            What’s that?

Jack Butala:                         … right when he got out of prison? That week. Got a divorce.

Jill DeWit:                            I do remember that. Yeah, I know. That’s not paying it forward. I don’t know where you’re going with this …

Jack Butala:                         He had a lot of time to think about it.

Jill DeWit:                            … but that’s not what this is. Jack. No, it makes me think … We have this good friend in Scottsdale who’s a brilliant engineer. His son owns and runs a biomedical tech company, and this is near and dear to his heart, too. And he is on a board, and he also donates his time … I can’t remember what the organization is or how he does it, but it’s basically helping younger, not necessarily entrepreneurs, but businesses people making some business decisions. The guy doesn’t need to do it at all, but he knows. It’s like, “I’ve got this wealth of knowledge.”

Jack Butala:                         He helps corporate executives. People that are way into it already.

Jill DeWit:                            That’s it. And help them with these decisions and move forward and stuff. And it’s just so good. Because this guy has … He has military background, too, and negotiated deals. International. Huge arms deals. Crazy stuff. He’s dealt with generals …

Jack Butala:                         He’s a government contractor.

Jill DeWit:                            … and presidents …

Jack Butala:                         [inaudible 00:16:56] Vietnam.

Jill DeWit:                            … and stuff with other countries. Big leaders. So he’s got this wealth of knowledge. He’s like, “I don’t want this to go to waste.” I appreciate that. He could just say, “I’m done. I’m retired. See you. I’m on my sailboat.” But he doesn’t do that.

Jack Butala:                         I asked him one time. I said, “Why do you do this?” He said, “Because I’m interested in passing on the tribal knowledge.”

Jill DeWit:                            Yes.

Jack Butala:                         That’s exactly what he said.

Jill DeWit:                            Yes. And that’s important. And I love it.

Jack Butala:                         He met [Kalishnakov 00:17:22]. The designer of the original AK-47. Russian.

Jill DeWit:                            It’s amazing.

Jack Butala:                         The original version.

Jill DeWit:                            Some of the-

Jack Butala:                         He has some amazing stories.

Jill DeWit:                            … stories, I know.

Jack Butala:                         He’s met princes and drug lords and all kinds of stuff.

Jill DeWit:                            Exactly. Yeah. We were at that hotel when these big events went down. These big, in your history book events. He’s like, “Yeah, I was there.” It’s like, “What the heck? I’ve known you for ten years, you never dropped that one on me.” [inaudible 00:17:52] like, “Well, it didn’t come up in conversation.”

Jack Butala:                         Right.

Jill DeWit:                            It’s kind of funny. “Oh my gosh.” But it’s so important to pay it forward. So I love it for a couple reasons. One is for you. For your psyche. You talked about that. Two is, yeah, we should be bettering humanity like our friend does and paying it forward and sharing the tribal knowledge and all that. What’s your three? Do you have a three.

Jack Butala:                         I don’t. I don’t really have three. Sounds like you do, though.

Jill DeWit:                            I feel like there’s a three. I was hoping you would say three. I feel like there’s three.

Jack Butala:                         Just make it up.

Jill DeWit:                            There’s always three.

Jack Butala:                         Number one is for yourself. Number two is for other people.

Jill DeWit:                            Yeah. Three’s for our country? I don’t know. There has got to be a three.

Jack Butala:                         Three’s for our country.

Jill DeWit:                            Wait, wait, wait. I know what three is. I just got it. You know what three is? Setting an example.

Jack Butala:                         Oh, you’re stretching so far. Setting an example is for other people. Here, let me help. That’s in the next episode, where we discuss millionaire. Define your next goal. How much is really enough? How much money and stuff do you need?

Jill DeWit:                            Alright. And we answer Peter’s question about high demand areas. That’s going to be good.

Jack Butala:                         You are not alone in your real estate ambition. Oh, my stomach hurts, Jill.

Jill DeWit:                            Dude. Doesn’t it feel like … [inaudible 00:19:27] can’t be only two reasons. There has got to be at least three. Sometimes there’s eight. What the heck?

Jack Butala:                         You are the queen of trying to make stuff simple, and you just want to add another step here.

Jill DeWit:                            It just felt right.

Jack Butala:                         It makes feel good about myself.

Jill DeWit:                            I felt like I was missing something. I had an emptiness on that, Jack.

Jack Butala:                         We’ll make it up in the next [inaudible 00:19:44].

Jill DeWit:                            Okay, good. Alright. If you like our show, or you come up with number three, please let us know, and subscribe and rate us on iTunes or wherever you are listening.

Jack Butala:                        Information and inspiration to buy undervalued property.


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