Start to Finish Transaction Walk-Through (589)
Start to Finish Transaction Walk-Through
Transcript:
Jack Butala: Jack and Jill here.
Jill DeWit: Hi!
Jack Butala: Welcome to the show today. In this episode, Jill and I talk about a typical start to finish transaction walkthrough. From when you let that … Send out that blind letter, all the way to put money in the bank.
Jill DeWit: Piece of cake.
Jack Butala: Before we get into it though, let’s take a question posted by one of our members on a landinvestors.com online community is gree.
Jill DeWit: Cool. Joshua asks, “I’m doing my due diligence on a five acre property in Utah. On Google Maps and TitlePro, it looks like there is a road that runs directly through the property. There is no official name of the road shown on the maps, unlike the marked road that is south of the property. I’m not sure how I should evaluate this property and determine legal access. The road to the south of the parcel actually cuts through the neighbor’s property. So, I do not believe I could consider that legal access. How would you evaluate with this?”
Jack Butala: Go ahead Jill. Or do you want me to?
Jill DeWit: You go ahead. I love it.
Jack Butala: Now is a good time to bring up the famous four A’s.
Jill DeWit: Mm-hmm (affirmative).
Jack Butala: We evaluate every single property we purchase regardless of type, house, land, apartments, whatever. With the four A’s they are acreage, more is usually better. Access, which is what this is all about. Which, it sounds to me like it has fantastic access, like you couldn’t pray for better access. Affordability, in general cheaper is better for real estate. And-
Jill DeWit: Attribute.
Jack Butala: Attribute. I think this would follow, very good Jill. I think this would qualify as an attribute too. We’ve got a collection of 40 acre properties in Northern Arizona right now, that we’re just about liquidated. And the one that went first, was the one that had a railroad going right through it. So, anything that makes your piece of property a little bit unique in that you can see it on a map or describe it, it’s going to be an attribute.
Jill DeWit: Mm-hmm (affirmative).
Jack Butala: Imagine you’re a buyer running through land and farm, or land watch, or land pen. And looking at all the properties for sale, and you’re deciding which one. Oh, look at that one, it’s got a road right through it?
Jill DeWit: I can get to it tomorrow?
Jack Butala: I can get to it tomorrow, we can put a cabin on one side, and a garage on the other.
Jill DeWit: Right.
Jack Butala: Or meth lab in this corner.
Jill DeWit: Park a school bus over here.
Jack Butala: All kidding aside, this is in general very, very positive thing. So, to talk about legal access, that’s a whole different program. And you’re going to have to check with the assessor and look at plat maps to see if it was a platted subdivision or if their problems has been unsubdivided. It’d be way beyond the scope of this.
But, I have to say, I try to think back if we ever turn a property down because of [crosstalk 00:02:56].
Jill DeWit: Because too many roads. No.
Jack Butala: Because it had a road going through it.
Jill DeWit: No. I’ve turned down properties because there was no road.
Jack Butala: Yeah. Actually, it was recently as today.
Jill DeWit: That’s what I’ve done and I will do. But, if I have too many roads, that’s even better. This situation it sounds like, this is what really happens. You pull up a property and you’re looking at it online, and you’re seeing a road right through it. All it is, is a dirt road that somebody has been driving on over time. And they just kind of bladed a road.
So, it’s really not a real road. But, it’s the way to get there. And there’s nothing wrong with that.
Jack Butala: I don’t want to get philosophical on you Jill, but, it’s a real road.
Jill DeWit: Well, it doesn’t have a name. It isn’t a real road. Excuse me Jack, but maybe it doesn’t have a name yet. You know what, hey, here Joshua. Here’s your spin on why this property is unique, and there’s an unnamed road that you can name.
Jack Butala: I just kicked under the desk.
Jill DeWit: No!
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, a start to finish walk through on a typical real estate deal for us. This is the meat of the show.
What do you think Jill? Do you want to start this or should I? What’s so funny?
Jill DeWit: I’m waiting for you, you’re waiting for me.
Jack Butala: I’m not waiting.
Jill DeWit: You’re like one one thousand, two one thousand. Who is going to talk?
Jack Butala: All right.
Jill DeWit: I can talk. Tell me where to start, and tell me about the end.
Jack Butala: How about I do … Since I’m kind of the acquisition’s person, and you’re the sales person. I’ll do the front …
Jill DeWit: I want to be the acquisition person.
Jack Butala: What are you talking about?
Jill DeWit: I’m just kidding. Just joking.
Jack Butala: Draw straws or something.
Jill DeWit: Yeah, go ahead.
Jack Butala: Sometimes Jill gets 13.
Jill DeWit: Dude, I love the acquisitions.
Jack Butala: I want to be the acquisition person this year.
Jill DeWit: Look, buddy …
Jack Butala: If that happened, we’d be out of business.
Jill DeWit: Jack, I beg … Listen, that’s not true.
Jack Butala: No, we’d be out of business if we reversed roles. You would kill it as acquisitions, but I would be in the sales role.
Jill DeWit: I’m like, do we really need to talk about how many acquisitions I’ve done?
Jack Butala: And have to talk to people. No, I’m not knocking you. I’m saying, you can do both. Acquisitions and sales, I can only do one.
Jill DeWit: Here’s the truth, I want to share this. This is what happens with Jack in acquisitions, often, this is like … Well, in the early days when I was starting out, and I was like learning, he would say, “All right, I love the property for this.” I might do this, but a no at this. He’ll give me three numbers. When he says that, that’s the only number I hear. Is, I love it for this. This is run to the bank. Not only do I get that price, I’m going to try to come a little bit under that price. And he’s going to go, “What did you do?”
I’m like, “Thank you very much.”
Jack Butala: Totally attracted to you right now.
Jill DeWit: Thank you.
Jack Butala: Most women, all they know is the word no.
Jill DeWit: No.
Jack Butala: Exactly.
Jill DeWit: I … Here’s the good news and the bad news about me, I love challenges. So, it can be good, it can be bad. So, anyway. Thank you.
Jack Butala: It’s almost always good. A lot of times it’s not profitable at all, a lot of times it’s real expensive. But you don’t even think about that. That’s one of the things I like about you. I look at everything with a dollar sign attached. Every single thing, it’s a curse.
You just kind of do stuff based on how it feels. And I think it’s kind of a good match.
Jill DeWit: Okay.
Jack Butala: Let’s do this walk through.
Jill DeWit: Okay.
Jack Butala: At the very beginning, you get a spark like, “You know, maybe these guys are right. If I send a bunch of offers out, and let’s go fishing today. Let’s go real estate fishing and see what comes back.”
Well, I have all kinds of sophisticated equipment, I know this, I know this. It’s not really fishing, I can see the fish down there. I know I’m going to catch one, it’s just how to do it.
Jill DeWit: You have the radar, which is very true.
Jack Butala: Yeah.
Jill DeWit: You know where the fish are.
Jack Butala: Which I actually have.
Jill DeWit: Let’s be honest. I know that, figuratively, literally.
Jack Butala: I know. So, I decide surprise surprise that I’m going to mail out a bunch of offers to the place that I know the best, which is where I live. Or maybe two counties over, or one counties over. Maybe it’s a county that when you’re a kid, you went up there and it was a lot of fun during vacation time.
So, you send a bunch of offers out. And again, surprise surprise. They come back, you price them all out. And a couple come back, and they’re all signed. You do your due diligence, you make sure that the person that you’re talking to on the phone, the seller actually owns the property legally. That’s real easy. You can do that with these tools that we have.
Or, you can literally was into the assessor and find out to for free.
Jill DeWit: Or call the county if you need to.
Jack Butala: There’s a little of different ways to do this.
Jill DeWit: Sure.
Jack Butala: You find out that the seller owns the property. And you ask him a couple of qualifying simple questions like, why are you interested in selling it? And they give you some simple information like, “I’m never going to use the property, we bought it 40 years ago.” Or, “My dad bought it, we’re just not going to use it.” Ding, ding, ding. There’s green light, after green light, after green light. And you love the price, you’re going to buy it for $10,000. You know other properties are listed for $25,000 – $30,000 or some number like that.
Every step of the way, you’re getting the green light to go to the next step. So, fantastic, I am going to buy now a property for $10,000 that I know I can resell for $25,000 or $30,000.
Jill DeWit: Because it’s worth $40,000.
Jack Butala: I either have the $10,000 or I don’t either way, I’m still going to buy the property because we know we can make double our money on this thing. And there’s a lot more people on this planet with money than sense. So, if you had the $10,000 you’d go to the bank and you’d get a cashiers check and you close the deal. You either close it through title, title mind, which is our company. Or very frequently, what we do, is close it on our own.
You close it on your own. You create a deed, you look at the vesting deed, the deed right before it. It creates a deed, you call a notary. You send them the cashiers check, notary goes out, has a seller to the sellers house. They sign the deal. Then, the notary mails it all back, they hand them the cashiers check, the seller. And then the notary mails it all back to you, and you record the document. Congratulations, you own for $10,000 and asset that’s worth $25, let’s say.
Jill DeWit: Mm-hmm (affirmative).
Jack Butala: So, that’s the great news. Is that all clear Jill?
Jill DeWit: Yeah.
Jack Butala: Now, you have to sell it. Well, I’m here to tell you, after 20 years of experience selling a piece of property that you have a basis in of half is not that hard.
Jill DeWit: Right.
Jack Butala: It actually sales itself. Go ahead sales.
Jill DeWit: Well, that’s the reality because now I’m staring at this asset. I paid $10,000 for it. And I can sell it … Well, my goal is with [inaudible 00:09:41] just double our money and get out. So, my goal is to sell it for 20. You know, I can be greedy and do 25 because I know everything else I can find out there. I’ve already done my homework ahead of time, this is part of it. I know everything else out there is 40. I’m going to come in way under all those guys. So, that’s why mine is going to sell so fast.
In a perfect world, I would have already had this set up. As the notary … This is really how I do this. As the notary is out there meeting with the seller, and getting all that done. I’m getting my ducks in a row, and I’m making sure my photos look good, my maps look good. My description is great. I have the size, all the details and everything.
So, I mean, the minute it’s signed, if I want to, I can push the button and start marketing it to sell.
Jack Butala: That’s right.
Jill DeWit: My sales job, actually, is not all that exciting. Seriously, when it comes to property, and I mean that truthfully because there’s not much to do. And we, by design, you know, have it set up where people can go and check out the property of it you know. Landpin.com, P-I-N is our land selling site. And you can see us, and all our members out there.
We worked real hard to create it where it’s real easy for everybody, you know what you need to put up there so people can go and find your property, get all their questions answered. Not need to call you with a lot of questions. So, that’s what I’m saying. There’s not a lot of selling to do.
They’re going to find it, and if they want it … You know, in a perfect world, they can just check out and pay online with a credit card. And that’s it. You would be surprised how many people do that, it is actually in this day and age not crazy. People do it all the time.
Jack Butala: You should go to landinvestors.com and look on the right side of the page. There’s a way to accept credit cards. We have a relationship with Heartland Payment Systems. And they actually allow this transaction type.
Jill DeWit: Yeah.
Jack Butala: So, that makes it a lot easier.
Jill DeWit: That’s great. For anybody who is listening, anybody who is in real estate investing or real estate transactions that probably are listening to this show. You know what we run into, it’s like, I can’t find a credit card processor who can handle my property type.
Jack Butala: PayPal kicked me. Bluepay kicked me out.
Jill DeWit: Bluepay is done.
Jack Butala: [crosstalk 00:12:03] kicked me out.
Jill DeWit: MoonClerk kicked me out. Striped stocked.
Jack Butala: Credit industry is our allergic to our business type.
Jill DeWit: Allergic, that’s perfect. Well, we found one. And go on our site and the information is there. So, it’s really, really good. Anyway. The sales … Here’s my thing too about sales with this property type. I don’t want to talk someone into anything because I don’t want them to come back to me six months from now and saying the trees are not that pretty as you described it, whatever. You don’t ever want that.
You want to really properly convey, and you have a great property at a great price. And then it’s … All you’re doing now is reaching the right people. That’s what we help with.
Jack Butala: Yeah. You want to make sure the presentation on the internet is really … Exceeds that everybody else is. And that’s not hard.
Jill DeWit: And you blast it everywhere on the planet. Don’t just put it on your website.
Jack Butala: Yeah.
Jill DeWit: It should be on every single website you can think of that sells property. And maybe Craigslist, and maybe throw it on Ebay. Put it in Zillow and Trulia, and whatever it is. And blast it in your social media. All of that stuff.
You need to reach everyone, don’t just say it’s perfect for this area. Reach them all, and that’s how you do it right, and sell it fast. And there’s nothing to think about. And you’re going to wake up in the morning, like we do and our community does where you see, “Look, somebody bought that property last night. I guess my [inaudible 00:13:27] person is doing a [inaudible 00:13:27] getting that out today. Great. Done. Next.”
Jack Butala: The good news about doing the [inaudible 00:13:32] is that you just did one when you bought it.
Jill DeWit: It’s true.
Jack Butala: It’s just the same thing, you just change a few things around.
Jill DeWit: Yep.
Jack Butala: Or you can hire an escrow company to do it for you.
Jill DeWit: Yeah, depending on the transaction. It’s all good.
Jack Butala: For sales, the whole key, it comes down to one thing. You want a seller to have this kind of thought in their head, this goes for houses, apartments, land. Any product type.
If they find your posting, and they find your posting because they’re interested. They’re on their own finding. It’s not a Pepsi commercial. And they have this thought, at this price, what’s wrong with it? Then they find out deeper, there’s nothing wrong with it. We just bought it cheap.
After researching on the internet for less than 30 seconds. Well, at this price, I have to buy it.
Jill DeWit: Mm-hmm (affirmative).
Jack Butala: Even if it’s a house. If it’s the cheapest one in the market, and it looks like it’s really dressed up good.
Jill DeWit: Yes.
Jack Butala: That’s why you sell so much property. That’s why anyone, any real estate investor sells a ton of property. It can always come back to the fact that it’s not reaching the right people. It’s not reaching the right people, it’s not presented correctly, and it’s priced too high. Those are the reason’s property doesn’t sell, that’s the trifecta.
So, if you address those three things, even before … Like Jill said, before you even close the thing when you buy it, it’ll be sold.
Jill DeWit: Yep. Exactly. You know, you’re right. It’s like a home … Imagine you’re going to a house and you’re looking online, and looking at all these homes. We all know the photos that make you, inspire you, and want you to go see the property. And it bums me out because some of these could be really great properties, but man they’re just displayed so awful.
Jack Butala: Just lazy.
Jill DeWit: Or they only have two photos, the front yard and the backyard. Well, I need to see inside. I don’t know what’s in there.
Jack Butala: I love [crosstalk 00:15:19].
Jill DeWit: And it’s not going to inspire me to go look at the property. We need to think about this with every property type. You’ve got to make it look good. And I can’t tell you, Jack, how many times I’m scrolling through other land selling websites.
Jack Butala: Daily.
Jill DeWit: And I’m like, oh my gosh. All it says is the APM and the price. That’s it. And you really think that someone is going to do their homework and call on this? No way. You’re not reaching the right people. And you’re not telling them what you have for sale. There’s no photos at all, no map, no nothing. That’s not going to sell.
Then they’re going to scratch, this is what they scratch their head going, “Gee, I tried. I couldn’t sell it.” You did not try as far as I’m concerned.
Jack Butala: That’s right, Jill. You didn’t try.
Jill DeWit: Yeah.
Jack Butala: If you did try, you should probably do something else.
Jill DeWit: Right. Well, I talked to a lot of people too that when they’ve just learned about us and they’ve learned about land academy, and land investors. They’re like, “I’ve been trying to sell this property forever.” I’m like, okay. “Well, tell me about it.” And it’s really easy in 30 seconds, I’ll be like, “What about A, B, C, and D?” They’re like, “Oh.” And that’s usually how it goes.
So, like, I didn’t even think about it. I got it. We can help you. This really makes a difference.
Jack Butala: That conversation … A couple years ago, I had a conversation and it was in a bar with a guy about real estate. It was this exact conversation. And somebody else at the bar, these guys overheard it. He said, “What do you mean?” So, my house is not … He was all up in my grill about it.
So, my house is not selling because I’m not reaching the right people or my real estate agent is not reaching the right people who want to buy my house. Or, it’s priced to high.
Jill DeWit: Bingo.
Jack Butala: Is that what you’re trying to say? And I said, “Yeah. Do you have a problem with that?” And he said, “Anybody can do that. Anybody can list it on the MLS and sell it for the right price. Sell it for a low price.” I said, “You’re right.”
Jill DeWit: Why aren’t you doing that?
Jack Butala: “Anybody can do that. So, why the hell isn’t your property sold tough guy?” He says, “Because, I paid too much.” I said, “Well, you know what, anybody can do that.” Don’t pay too much is my point.
Jill DeWit: I’ve heard that too. That’s exactly what happens.
Jack Butala: That’s a rookie mistake. Everybody has paid too much for a piece of real estate.
Jill DeWit: It’s okay.
Jack Butala: My recommendation is, get it out of your system. Jill and I did it.
Jill DeWit: Get off it, it’s all right.
Jack Butala: You know what, at least once a year Jill and I probably slip out of our regular mold. Remember that property we almost bought on the ocean, on Santa Barbara recently. I’m glad that didn’t happen.
Jill DeWit: Oh, yeah.
Jack Butala: We got all up and [crosstalk 00:17:44] about it.
Jill DeWit: We got emotional about it, that’s why. We’re like, it’s cliff side.
Jack Butala: It was on the ocean. It was falling into the ocean.
Jill DeWit: It was like, I’m on the cliff. There was that. We’re not sure how long the cliff was going to be there, we got all emotional about it.
Jack Butala: But somebody got there first.
Jill DeWit: It’s gorgeous.
Jack Butala: It was actually a cash sale. I mean, we would have bought it.
Jill DeWit: Yeah, thank goodness.
Jack Butala: But, now that I think about it, I’m like maybe I [crosstalk 00:18:05].
Jill DeWit: We got emotional. That’s what happens.
Jack Butala: So, everybody makes that mistake.
Jill DeWit: You’ll get emotional. It’s going to happen. So, you just got to catch yourself. Don’t get emotional, and it’s okay. You know. But, then that’s what’s goes wrong. I’ve had that too, I’ve talked to people about that. The only thing you can do at this point, is all right, since you over paid, you’re either going to sit on it or you’re going to take a hit and get rid of it and move on.
Jack Butala: Yep.
Jill DeWit: For me, personally, I’d rather just get rid of it, take a little bit of a hit and move on.
Jack Butala: Yeah. I mean …
Jill DeWit: I’m not going to hang onto it for six months to prove my point. And then still take a hit because it might happen.
Jack Butala: You know, if you went to an art fair and bought a piece of ugly art you hung it up and everyday you walk by it and say, “Jeez, what was I thinking?” You don’t just keep it up there and learn to like it.
Jill DeWit: No, because I come along and take it down.
Jack Butala: You get it out of there. Same thing with real estate.
Jill DeWit: I can [crosstalk 00:18:59] take down your art. Just kidding.
Jack Butala: If every single time you’re looking for a piece of … Looking through your inventory and you’re wondering, and there’s this one piece of property that’s staring at you, laughing at you, because you paid too much and it just hasn’t sold, just get it out of there.
Jill DeWit: Yeah.
Jack Butala: Sell it.
Jill DeWit: I agree.
Jack Butala: What is that?
Jill DeWit: That was awesome.
Jack Butala: [crosstalk 00:19:18] art.
Jill DeWit: Join us for the next episode where we discuss what to learn, and what to outsource.
Jack Butala: There’s stuff you learn, and there’s stuff that you outsource. And you cannot … If you outsource the important stuff, you’re in trouble.
Jill DeWit: Yep. And we answers Cher’s question about pricing a mailer too low.
Jack Butala: You are not alone in your real estate ambition.
Jill DeWit: Hey [crosstalk 00:19:38] nuts. I’m sorry. To me, that just sounds like there’s like derogatory stuff that could come with that too. I need to …
Jack Butala: Your mind is in the gutter.
Jill DeWit: I never heard of …
Jack Butala: Here’s some stuff about Jill, listener you don’t don’t know. Jill’s mind is in the gutter often. I mean, like the most tasteful, classy person you ever want to meet. I mean it. But, behind closed doors, it’s funny.
Jill DeWit: Jack often says, “Is that a 14 year old boy trapped in that body?” Little things happen, I’m like, that’s funny. And you’re like, “Where did that come from?”
Jack Butala: She doesn’t have a potty mouth.
Jill DeWit: No.
Jack Butala: Because I have enough of a potty mouth for both of us.
Jill DeWit: That’s true.
Jack Butala: But, she does come up with some stuff that … Some interesting concepts.
Jill DeWit: So, yeah. We can leave it on that. And if you like that, and you like our show, please subscribe and rate us on iTunes or wherever you are listening.
Jack Butala: Information and inspiration to buy undervalued property.
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