Learn from HGTV Then Turn it Off (JJ 616)
Learn from HGTV Then Turn it Off
Transcript:
Jack Butala: Jack and Jill Here.
Jill DeWit: Oh, my goodness. Hi.
Jack Butala: Welcome to the Jack Jill Show. I never know what you’re going to say.
Jill DeWit: I know. That’s why I had to do that.
Jack Butala: Entertaining real estate and investment advice.
Jill DeWit: One of us anyway. Just kidding.
Jack Butala: I’m Jack Butala.
Jill DeWit: I’m Jill DeWit, and we’re broadcasting this week, again, and still from sunny California, but it’s going to change next week. It’s going to be some fun.
Jack Butala: Going on the road.
Jill DeWit: Yes, we are going on the road.
Jack Butala: Today, Jill and I talk about what we learned from HGTV and then we turn it off. And I think you should do that with all TV.
Jill DeWit: You know, it’s funny, HGTV … I don’t know how they do it, but they did it. Food Network, I’ve seen this happen. Weather Channel, I’ve seen it happen where there’s people that … It’s on 24/7. Have you noticed that?
Jack Butala: Yeah.
Jill DeWit: Yeah. And this is one of those channels. And what’s funny is with HGTV, especially, it’s not exactly who’d you expect who has it running in the background constantly.
Jack Butala: Oh, you mean like people-
Jill DeWit: Yeah.
Jack Butala: Like regular people.
Jill DeWit: Okay, like a stay at home mom or something who’s looking longingly as wanting to redo her kitchen, I expect her to have it on-
Jack Butala: Yeah.
Jill DeWit: -24/7. But I don’t know. Kickboxing guy, I don’t expect him to have it on 24/7, but some of them do.
Jack Butala: Yeah.
Jill DeWit: Because I hear them. Don’t you hear people talking about what they saw in different shows or different things on. There’s no way you’d know that unless you were watching HGTV.
Jack Butala: I had the same issue with people who drink wine. There’s all these unsuspecting wine drinkers out there that people … You’d think they’d be like a shot of Tequila person.
Jill DeWit: Yeah.
Jack Butala: But no, they know way too much about wine. It’s kind of strange.
Jill DeWit: Yeah.
Jack Butala: I think it’s California.
Jill DeWit: Funny. I love it.
Jack Butala: Before we get into it, let’s take a question posted by one of our members on the jackjill.com online community. It’s free.
Jill DeWit: Don’t make me laugh because I was just thinking about I have a friend that taught me a long, long time ago that white Zin is for cooking, not for drinking.
Jack Butala: Well, I think that might have been true a while a go, but I’m not sure that’s the case anymore.
Jill DeWit: I don’t know. A good chef might argue that, or a good wine drinker might argue that.
Jack Butala: I think a good chef would say leave your white Zin out of my food.
Jill DeWit: Well, maybe that’s its.
Jack Butala: I don’t know.
Jill DeWit: Just don’t drink it.
Jack Butala: That’s a whole different podcast.
Jill DeWit: Yeah. “Hey all, I’m Travis. I’ve been through the …” Oh, good … “I’ve been through the Cash Offer Land Online Training Program twice. I have studied real estate for over a year and recently sent out my first mailer. A business partner and I have been getting calls left and right, but no deals quite yet. It’s only been about two and a half weeks.”
Jack Butala: Yeah. It’s coming.
Jill DeWit: “Anyway. Just got of the phone with a seller who’s got a substantial amount of one-acre properties around the country held in a trust. He inherited them and doesn’t want them anymore. He’s moving to Italy and is ready to offload them in one package deal for cheap and doesn’t care if we make a large gain from them.” Cue major due diligence.
Jack Butala: Yeah.
Jill DeWit: Oh, this is so good. “So to keep this brief ie tldr.” I don’t know what that is.
Jack Butala: I don’t either.
Jill DeWit: Okay. “Have not yet completed a start-to-finish real estate deal but very familiar with the process. Have consumed, like everything, Jack and Jill put out and several real estate courses, books, [inaudible 00:03:27] etc., and two weeks in and someone calls with a very large deal, would have to get creative with the financing.” Right? “We were prepping for smaller deals but wondering if we might consider diving in deep after doing the due diligence. Want to avoid some pitfalls.” Yep. “I’m inexperienced in doing deals, but I’ve got confidence and training.” Love it, love it, love it.
Jack Butala: This is exactly how this is supposed to work.
Jill DeWit: Yeah. “Therefore, and finally, my question is …” This is really good. “Do you guys have any tips on how not to biff this on our very first go around? I would deeply appreciate a nugget of advice from your collective years and experience. Don’t want to be naïve and mess this up. Thanks so much for your invaluable time and input. Travis K.”
Jack Butala: So I would run through-
Jill DeWit: So good.
Jack Butala: I would get a list of the properties, and I would run through the due diligence on ParcelFact, and I would spot check … I would do all this in less than 10 minutes. Spot check 10 of the properties or so and see what kind of properties are there. Hopefully, there’s [inaudible 00:04:32] and they’re worth some dough. If that’s the case, go onto Deal Board, which you are a part of, and make it known that you have this deal. Chances are there’s a delay between when these questions get asked and when this actually airs, right?
Jill DeWit: Mm-hmm (affirmative).
Jack Butala: Chances are you’ve already done this, I hope. And if there’s a bunch of money involved that’s to be made off of these, there’s nothing but people in this group, right, Jill?
Jill DeWit: Mm-hmm (affirmative).
Jack Butala: That are ready to just come in, including us. I love these kinds of deals.
Jill DeWit: And fund them.
Jack Butala: Yeah. And fund it, and then partner it and all that. I mean I would personally love to see this.
Jill DeWit: Here’s a couple points that I would make since he’s new is spend the time … Let’s just say there’s 50 properties. Could I sit in one day and go through all 50? Yeah. And you will too after a few like, “Same subdivision. I know that. Same subdivision. I know that.”
Jack Butala: Yeah.
Jill DeWit: So hopefully, there are some that are like that you can really kind of go through and do it. Check the little details too. Check the back taxes. Just see where they stand. Check to make sure if there’s an HOA. So spend some time. Make sure you have a good understanding about all these properties. Figure out what you think they’re worth. You know how to do the math and work it backwards because you’re doing this right now with us, Travis. And then finally, like Jack just said, you’re going to negotiate a better deal if you take all of these off this guy’s hand in one transaction, and that sounds like what he wants. So maybe they’re all worth … Let’s just throw something out there. Maybe they’re worth $100,000.
Jack Butala: Yeah. If your margin’s north of a $100 grand-
Jill DeWit: Yeah.
Jack Butala: -I would not do this myself if you’re brand new. If this is your first deal, you really do need some help, all kidding aside.
Jill DeWit: Right. Yeah. That’s true, and whoever you partner with, they can do it with you. Go through the double tweak it, and be an extra pair of eyes for you and with their experience, go through them, but I mean you can really negotiate … I don’t really have a percentage to throw out to you, but I can just say that a lot of people are ready just to cash out, walk away.
It’s kind of like I’m walking away from … I’m trying to think, the end of a garage sale. Imagine the end of the garage sale. You know what I mean? And you’re staring at, “That’s half broken. No one wanted that. No one wanted that. Okay, great. Now, I’m going to have to pile this all into my car because I got to get it out of here. Or wait a minute, this guy just rolled up and said he’d pay this stupid price, but take it all off my hands. Heck yeah.” That’s kind of what I feel this might be for this guy. You might be at the end of the garage sale.
Jack Butala: Well, here’s the thing.
Jill DeWit: That’s a good price.
Jack Butala: I don’t want to complicate this because what you want to do is you really want to act quickly. Price it. Price it so that you know you’re going to make a bunch of money, and he’s going to be okay, the seller, and get the deal done. You don’t want to be saying, “Oh, what if we tried this. Oh, what if we tried …” No. You want to get in there.
Jill DeWit: Say you want 80% of them or whatever it is, get the price so good that you’re just going to go take them all off his hands.
Jack Butala: Yeah.
Jill DeWit: You don’t want to leave him with three because he’s not going to be that thrilled about it.
Jack Butala: Or any really.
Jill DeWit: Exactly.
Jack Butala: We do that all the time.
Jill DeWit: Take them all.
Jack Butala: We’ll take them all. We’ll have it done on Thursday, but here’s the price.
Jill DeWit: Right.
Jack Butala: And 99% of the time they say yes. Actually, probably 100%.
Jill DeWit: Don’t forget, Travis, tell him that you’re going to throw in all the closing costs, factor all that in, because that’s something that they don’t know how to do or want to do, and you can do this.
Jack Butala: They just want you to solve it for them.
Jill DeWit: Yeah. Make it so freaking easy.
Jack Butala: So price doesn’t matter. That’s a good position … That’s how you make the mail work for you. It’s perfect.
Jill DeWit: I thought you were going to say women work for you. That’s how I make the what work for me. What?
Jack Butala: That’s how you make the mail work for you.
Jill DeWit: That’s right.
Jack Butala: M-A-I-L.
Jill DeWit: Thank you.
Jack Butala: Today’s topic. What we learned from HGTV, and then we turn it off, of course. This is the meat of the show. So as Jill alluded to earlier, there are some people that it’s just an addiction. They love to watch people fail at renovating houses.
Jill DeWit: Sometimes they show … Hey, they show a lot of success in there. Or at least they try to. You think it’s a failure thing?
Jack Butala: If you live under a rock and you don’t know what HGTV is, Home and Garden TV, it’s a collection of shows where, mostly reality shows, where people renovate properties. They buy a house. They used to show the numbers. Like, “We bought it for $400 and just cleaned it up $80 and sold it for $540.”
Jill DeWit: Why is that, Jack?
Jack Butala: Why do they never show the numbers anymore?
Jill DeWit: Yes. What happened? It made me mad.
Jack Butala: I only can guess and think that lawyers-
Jill DeWit: Attorneys got involved.
Jack Butala: Lawyers got a hold of it and said, “Do not or you shouldn’t. I know this whole thing is a big huge lie and that’s fine because it’s TV, but you might just want to leave the numbers out of it.” The blatant damn lies. Just leave it out.
Jill DeWit: Blatant damn lie clause. Oh, my gosh. I want that. “Why did you marry him?” “Because they passed the blatant damn lie test.”
Jack Butala: So some of these shows are fun-
Jill DeWit: That’s my new … We should call this show How to Smoke Out Blatant Damn Lies.
Jack Butala: There’s lies, damn lies, and statistics. We’ve talked about it on the show before.
Jill DeWit: I love it. Thank you. I did write that down.
Jack Butala: So people go on the show and make quite a name for themselves, quite honestly, and they clean up houses or they say they do. So you get to see the before. And you get to see the after. And usually, they throw a dash of who bought the house as an end user at the end. So what did I learn from this? That’s what the show is about. I learned I never want to do that.
I learned that it’s just a heck of a lot easier to buy a piece of real estate for just a lot less. Negotiate a better deal on the front end, and then just buy it. You don’t have to ever get any tools out or talk to a contractor and just resell it.
Jill DeWit: Here’s my two cents here on HGTV and all that stuff. The bottom line is, it’s not as easy as they portray it to be. Let’s all really take a step back and think about that. Come on. I mean sure, five minutes later, I own it. No. It’s sped up for TV. And you didn’t see all the fights that went on behind the scenes by the way.
Jack Butala: All the awful stuff.
Jill DeWit: That was taken out. They might allude to the roof issues. Maybe they don’t show it caving in the back or collapsing.
Jack Butala: I mean I don’t even think it’s that real. I think it’s all scripted.
Jill DeWit: You think so? I don’t know. We could have done it. Like some of our renovations … Oh, I see what you’re saying how they walk through the whole transaction?
Jack Butala: I think it’s all scripted.
Jill DeWit: No, we could have made them look good.
Jack Butala: Repairs and the whole thing. Here’s my whole point-
Jill DeWit: That could be.
Jack Butala: That’s really my point. What I’ve learned from HGTV after … We’ve renovated a few houses, Jill and I together, and it was a mess. I mean we made money, but it was a mess. It’s way, way, way easier to learn from what they’re doing. Just not do it. It’s so much easier to send a ton of letters out and buy property for 75% in the same condition the house is in, buy it for 75% of what it’s worth or 80% and just resell it for regular price, regular for sale price without ever walking in the house without ever changing carpet or paint or anything.
Jill DeWit: You know what? So to piggyback on that, I made a note that was my positive thing about HGTV, which is I hope it at least gets folks thinking about what is possible and other ways to make money in property like you’re just saying, and then hopefully, inspires the right few to take action.
Jack Butala: Yeah. Exactly, Jill. So that’s my whole point. What you learn from it is yes you learn from it. Yes, there’s money to be made, absolutely. If you control a piece of real estate, and you know that it’s going to be worth more than you’re done, then your job is to kind of make when you’re done, easier and faster.
Jill DeWit: Right.
Jack Butala: And so if you don’t have to renovate the thing at all, you just spend all your time concentrating on buying cheap property instead of renovating the ones that you do buy, you’re going to end up with way more dough. That is a business model for a typical lender. The more money they lend, the more triage they make, the more money they make. So learn from that too.
Jill DeWit: What if you’re an investor … Let me just run this by you. You would understand this. Okay. You get it. You know what you’re doing, but your wife, as a hobby, really wants to do this. I mean there’s a lot out there like that. They just have it … Even it’s really kind of a hobby, do you think that there’s a place for that?
Jack Butala: No.
Jill DeWit: Oh.
Jack Butala: I don’t. I don’t think there’s a place for that at all. In fact, that’s even worse. When you start to … If it’s your hobby, then I was start a side business as a decorator and get paid for your hobby.
Jill DeWit: All right.
Jack Butala: And not risk it yourself. Or I would do your own house where you’re actually going to enjoy it because in the end, when it’s your hobby, you’re going to say, “Well, if we just spent 20% more on this kitchen, it was knock everybody’s socks off.”
Jill DeWit: Isn’t that funny.
Jack Butala: You’re just going to price yourself out. Just, I don’t care.
Jill DeWit: That’s the reality.
Jack Butala: I don’t care how good you are with all your stuff, if it’s your hobby … I had a hobby business one time called Jack’s Classic Cars.
Jill DeWit: Yeah, you did. How’d that go?
Jack Butala: I dismally failed at that. Terrible.
Jill DeWit: Oh, really.
Jack Butala: Yeah.
Jill DeWit: How many did you have?
Jack Butala: Lots.
Jill DeWit: That’s what I’m saying. Apparently, you did well. The business did well. You didn’t.
Jack Butala: I lost money. I lost my butt is what happened.
Jill DeWit: Is that why you’re saying that?
Jack Butala: Because I’m all in love with cars. You know?
Jill DeWit: Jack’s Classic Cars. Jack’s Personal Classic Car Collection.
Jack Butala: It was a terrible business idea.
Jill DeWit: I see.
Jack Butala: And so it’s because it was my hobby.
Jill DeWit: Isn’t that funny? I have to share on that. Okay. So we were in a hotel room, I don’t know, two months ago. And you were flipping channels. And what was the channel you stopped on, the automotive, whatever they call it. What is the new car channel?
Jack Butala: I think it was the speed channel.
Jill DeWit: Maybe that was it. But that’s what they were doing was sitting there, going out, finding, and restoring classic cars and selling them for more. And you were binge watching.
Jack Butala: I was glued to that.
Jill DeWit: Yeah.
Jack Butala: And there was one after another. It was on regular TV.
Jill DeWit: I remember.
Jack Butala: It there one after another. So I wasn’t the only guy.
Jill DeWit: Yeah. That’s funny.
Jack Butala: This is Jill’s really nice way of saying on the air that I was not a lot of fun on that trip.
Jill DeWit: No. That it wasn’t it at all.
Jack Butala: I sat there and watched TV.
Jill DeWit: No, no, no. That was your version of HGTV or your version of this.
Jack Butala: We don’t have TV at home. So every time we go somewhere-
Jill DeWit: Right.
Jack Butala: Here’s what happens with Jill and I when we go out in public.
Jill DeWit: Oh, no.
Jack Butala: It’s usually for like sports games and sports bars and stuff, and we meet people and friends, and so I haven’t seen a TV commercial in a year probably.
Jill DeWit: This is true.
Jack Butala: Or if we have, it’s been in those spotty places like in a hotel.
Jill DeWit: That’s true.
Jack Butala: So Jill and I-
Jill DeWit: And we’re like glued to the TV like-
Jack Butala: -are glued to these and we’re like, “Wow.” Everybody is looking at us like we’re just idiots.
Jill DeWit: Exactly.
Jack Butala: It’s like, “What are you guys paying attention to these commercials for?”
Jill DeWit: It’s like “I’ve never seen that.” It’s so true. We probably look like we’re from another planet.
Jack Butala: Right. And it’s a tooth paste commercial or something. It’s really silly.
Jill DeWit: Mine is the smoking ones. I’m like, “What the heck are these smoking commercials that are coming up now?” It’s hilarious.
Jack Butala: Exactly.
Jill DeWit: Thank you. Well, you’ve done it again. Wasted another, I don’t know how many minutes, listening to the Jack and Jill Show, and those are minutes you’ll never get back.
Jack Butala: Join us for another episode, and the next episode, actually, tomorrow, where we talk about houseacademy.com.
Jill DeWit: Yay.
Jack Butala: It’s coming.
Jill DeWit: And we answer your questions, should you have one. Post it on our online community, and you can find it through Jackjill.com.
Jack Butala: You’re not alone in your real estate ambition.
Jill DeWit: I love when you say like, “This is what happens when we go out in public.” I’m like, “We embarrass ourselves?” I was waiting-
Jack Butala: I’m sure
Jill DeWit: I always thought that’s how you were going to follow that up. That was really, really good.
Jack Butala: Oh, you know we just-
Jill DeWit: It’s true. I’ve caught myself, and I feel like I look like a rude … I don’t mean to be rude, but I look like just a distracted, whatever person here. I’m glued to the stupid TV.
Jack Butala: You know it’s the holiday season now, too. So everybody’s Christmas shopping. So there’s a lot of commercials, like good ones, new ones.
Jill DeWit: Yeah. Like the car commercials. There’s a lot of car commercials.
Jack Butala: Yeah. Car commercials.
Jill DeWit: They’ll have a bow on them, and I’m like, “What is that?” I’ve never seen that. So funny. I love it. Hey, share the fun by subscribing on iTunes or wherever you’re listening. And while you’re at it, please rate us there.
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Jill DeWit: And inspiration-
Jack Butala: -To buy undervalued property.
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