Real Estate Investment Rules to Live By (JJ 620)
Real Estate Investment Rules to Live By
Transcript:
Jack Butala: Jack and Jill here.
Jill DeWit: Hi.
Jack Butala: Welcome to the Jack and Jill Show. Real estate investment talk is what we do here. I’m Jack Butala.
Jill DeWit: I’m Jill DeWit and we are broadcasting from sunny Southern California.
Jack Butala: Today, Jill and I talk about real estate investment rules we both live by and surprisingly they’re not the same rules.
Jill DeWit: That’s not surprising. Why is that surprising?
Jack Butala: That’s the whole point. That’s my whole point to the whole thing.
Jill DeWit: I make up my own rules.
Jack Butala: What works, I know. You actually do.
Jill DeWit: I do. There’s not a lot of them.
Jack Butala: I pretty much just follow what’s in my calender and it seems to work out for both of us. 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: Okay. In this one it looks like we have the question and we have an answer. So, I’m going to go through the whole thing here. So, C.E., I have the initials, asks, question for all you experienced folks out there. Does the model scale up for counties where the land is worth more? I assume it would but most of the successful stories I hear are in the southwest. If others are seeing success with scaling up please share some of your experiences and then Jeff A replies, I’m not sure about everyone else here but from my experience the more expensive the parcel the longer it takes to sale but the more profitable, unless you sell on terms. I have bought and sold in the southwest, northeast, and south and they have all sold. As long as you purchase at the right price and you have a strategy before you purchase you can also do an option contract on the more expensive parcels. Just an idea. I was, he did a great job.
Jack Butala: I mean, is there anything else to add to that, really?
Jill DeWit: No. I mean it’s really …
Jack Butala: Thank you, Jeff.
Jill DeWit: Yeah, I think his, his experience is what we and most of our community have experienced. Which is, you know it’s kind of what, just think about it. I mean, not as, just think about anything in a price range. There’s going to be less people at the half million and up you know, price range then there are at the hundred thousand dollars and below price range.
Jack Butala: It’s absolutely brilliant, Jeff.
Jill DeWit: That’s kind of it. You know? So …
Jack Butala: There are less people who buy Porches and more people who buy Chevy’s because of the price point.
Jill DeWit: Yeah.
Jack Butala: I don’t know for sure but I would assume there’s a little bit more profit margin in the higher priced stuff.
Jill DeWit: Right.
Jack Butala: That goes with clothes, everything. So, the answer is heck yes. Does it work? It always works.
Jill DeWit: Uh-huh (affirmative).
Jack Butala: I personally like higher priced property.
Jill DeWit: Right.
Jack Butala: You know, we cut our teeth and built a huge business on lower priced southwest property and we talk about it a lot and that’s what, people, because it’s cheaper, like Jill just said people start out that way. It’s a great place to practice and start out, and it sells fast, but …
Jill DeWit: Low risk. When you just put you know, a thousand dollars down you’re not so worried as you’re putting a hundred thousand dollars down. So …
Jack Butala: The most, the most profitable and most successful people in our group right now, in land, not houses, are buying properties for 30 and 40 thousand dollars and then selling them for 80 or a hundred and they’re doing multiple units per week.
Jill DeWit: Here is the thing I think too …
Jack Butala: I mean per month. Excuse me.
Jill DeWit: It’s really just what, what is your business model? See, with some people that’s what they want to do and some people don’t. So, they were happy just doing a ton of volume on these smaller deals, get in get out really fast but there are some people that, you know what? I know they take a little more time and they don’t do as many but they’re bigger and there you go.
Jack Butala: The original members in Land Academy which was what, mid 2015, I think Jill?
Jill DeWit: Uh-huh (affirmative).
Jack Butala: The ones that are doing well are, have adopted, they did exactly what you said, they started small and then realized that they can replace their job at two or three hundred thousand dollars a year just by doing one or two, fifty to a hundred thousand dollar transactions a month.
Jill DeWit: Uh-huh (affirmative).
Jack Butala: So to answer your question, that’s a pretty indirect way and long winded way on my part to answer the question but the answer is heck yes.
Jill DeWit: That’s okay. You can be long winded. It’s your show.
Jack Butala: Thank you.
Jill DeWit: You’re welcome.
Jack Butala: Thank you, Jill.
Jill DeWit: Notice how Jack comes before Jill. So …
Jack Butala: We could do a Jill and Jack show. I would love …
Jill DeWit: I would like to do that.
Jack Butala: To do a Jill Jack show where …
Jill DeWit: That would be fun.
Jack Butala: You know …
Jill DeWit: We should do one.
Jack Butala: I sit in the corner and say stuff when you ask me to.
Jill DeWit: Maybe we’ll do one over the holidays where we change everything around. Seriously, like we’ll treat the holidays.
Jack Butala: I can’t wait.
Jill DeWit: Well, I get to start it in late, I mean we used to do it, we used to do it a long time ago. Like, I would jump in and we would, now and then I would lead but I want to really like, I would like to make up my own script and my own everything and then and then do that. I think this would be fun. So, all right.
Jack Butala: I would love it. It would probably do twice as well too.
Jill DeWit: Oh, thanks.
Jack Butala: Today’s topic, real estate investment rules to live by. I have a set and Jill has a set. This is the meat of the show. You go first Jill. What real estate rules, not the ones that you think people should live, you know, the, that we teach. What do you live by?
Jill DeWit: Well, that’s not what I wrote down. So, can’t answer that.
Jack Butala: Go ahead.
Jill DeWit: Although it isn’t really ours. I mean it’s the same thing. So, I wrote down four things. I sat and thought about this for a minute and I kind of came up with my four top rules for, and I, you know what’s funny? I read it like, well, I made it as investor, investment rules. So …
Jack Butala: No that’s, you can’t, there’s no wrong answer.
Jill DeWit: Okay.
Jack Butala: That’s okay.
Jill DeWit: Good, I’m like oh shoot I failed. No, I’m just kidding.
Jack Butala: You’ve been doing this for a long time.
Jill DeWit: All right.
Jack Butala: What are your rules?
Jill DeWit: So, number one don’t borrow money.
Jack Butala: Oh, I love it. That’s good and it’s not even on my list.
Jill DeWit: Yeah. I can’t stand that. I can’t stand people under the gun. Well, number one they’re maybe looking on taking on an asset that’s really not, they should have no business being involved in. They’re borrowing too much money.
Jack Butala: Uh-huh (affirmative).
Jill DeWit: They don’t know what they’re doing too and now we have, we have you know people looking for us. We’re under the gun and we’re playing by somebody else’s rules and not calling shots when you borrow money. So, one of my things is don’t borrow money. Okay?
Jack Butala: Love it.
Jill DeWit: Thank you and this goes for having a money partner. Having a money partner is not borrowing money. A mortgage is borrowing money you know, and that kind of a thing. So …
Jack Butala: Take on equity if you must but never take on debt.
Jill DeWit: Right.
Jack Butala: Love it. That’s the rule.
Jill DeWit: Thank you. So, then my number two thing is pick partners strategically. Don’t pick your wife because she’s there and available to answer the phone and I feel bad saying that but that’s not, I mean there’s a place for that but think big picture. Think bigger. You know, you really want to align yourself with the right people. Like Jack and I talk about, you know if one of you is good at data, one of you is good at handling people, one of you is good at getting to meetings, one of you is good at closing the deals, you know, one of you is, you know, whatever it is, good at all the paperwork and running the team.
Maybe one of you is good at funding the acquisitions and the other one’s the best at following them all the way through to the sale and setting up your credit card system and all that good stuff. So, that’s how you should be looking at your partners. Not, don’t want to just look around, who’s available. You know, let’s be strategic about this. So, and don’t take on someone just because they have money. Be strategic about this, because in the end it’s, you’ll win.
Jack Butala: Yeah. As far as money partners go I totally agree with those, these rules by the way. You want to make sure that the person that you’re working with understands and is seeking out this product type. You know, I’ve seen people make mistakes. I’ve made this mistake where you take on a money partner and what they really want to be involved in is an online some type of dot com out of San Francisco and there’s nothing wrong with that, but for whatever reason real estate works for us and they need to understand that and there’s lots of real estate people out there.
Jill DeWit: Right and number three I had is know your market. Put in the time up front. Don’t just kind of wing it. Go, you know, spend, spend some time figuring out really what you want to do. You know? I mean, I talked to a guy the other day and I love it. He’s like, we do apartment buildings. Thank you. That answers a lot.
Jack Butala: Yeah.
Jill DeWit: Not just real estate. Not just this. Not just buying everything. You know, be specific and like, great, now I know exactly where you’re coming from and now we can talk about this. So, love it.
Jack Butala: So, you mean know your acquisition criteria, not so much the market but the physical market?
Jill DeWit: Actually, both.
Jack Butala: Okay. So, the differences between two zip codes that are next to each other?
Jill DeWit: Yes. Both. You know what, you’re right. So, this really is two …
Jack Butala: I do that through data. So, let’s be super clear. You don’t need …
Jill DeWit: Okay. Excuse me. Apartments and you know …
Jack Butala: Houses.
Jill DeWit: Apartments in San Jose. Let’s just say something like that and know San Jose inside and out and apartments and all that good stuff. So …
Jack Butala: That’s not on my list because I don’t think that’s important and that’s why we’re doing this.
Jill DeWit: I like that. All right. Well then, I wonder if this is on your list. One of mine is don’t get greedy.
Jack Butala: Yeah. For sure.
Jill DeWit: All right.
Jack Butala: That’s a big problem.
Jill DeWit: Okay.
Jack Butala: Trying to soak every penny out of every deal and letting it take two years. Yeah.
Jill DeWit: Yeah. That’s why I said, if volume is your deal follow through.
Jack Butala: You know that is on my list is never maximize transactional price. Never. In fact, you should minimize it. It goes against intuition.
Jill DeWit: Uh-huh (affirmative). It’s funny how we word things differently but they mean the same thing. Never, what, what, how did you word it again?
Jack Butala: Never maximize transitional value.
Jill DeWit: I and let me, and my term is don’t get greedy. It’s funny how we communicate differently.
Jack Butala: Well I mean, in the most simple terms what that means is, you have a, you buy an asset for, you know the value of the asset’s two hundred thousand dollars. You know that, because you did all the research. That’s why you sent offers out but you buy it for a hundred and fifty. Do you sit around and try to get 200 for it? I don’t.
Jill DeWit: Uh-huh (affirmative).
Jack Butala: I try to get a good solids 180 from a buyer who I know is going to buy 22 more units from me.
Jill DeWit: Right. Thank you. Well, that’s the end of my list.
Jack Butala: Oh, okay.
Jill DeWit: I mean I could keep going if you want but I think that you have a list a bunch too that you want to add in. So, please share.
Jack Butala: Only use data, not lists. I hear this all the time. I got a list.
Jill DeWit: Yeah, I love that.
Jack Butala: Remove the word …
Jill DeWit: I’ll sell you a list, hey, buddy, got a list. 50 bucks. Here you go. It’s three years old but it stills works. Have fun. No.
Jack Butala: Remove the word lead from your life. I’m so over the word, lead.
Jill DeWit: You know what’s funny? I have accidentally, or not accidentally, I have considered putting that in some of my literature, just because people, even though it’s not what I want them to do but at least it gets, they understand that word and it’s stupid. You’re right.
Jack Butala: You know in healthcare, if you’ve ever saw the movie Patch Adams, you know what you, people, doctors and healthcare professionals tend to not treat the patient. They treat the disease. Like, there’s appendicitis in room three.
Jill DeWit: Right.
Jack Butala: You know? Well, actually there’s really little Sally Smith in room three and whatever her condition is, you know, diagnosis, it doesn’t matter.
Jill DeWit: I didn’t know that. That’s really how the conversation goes?
Jack Butala: Yeah. Unfortunately. Not so much anymore because I think everybody’s kind of wising up.
Jill DeWit: That’s sad.
Jack Butala: So, you want to do the same thing with real estate. You don’t say you know, I’ve, you know, one two three. I’ve got, one two three Main Street …
Jill DeWit: Could you imagine?
Jack Butala: One two three Main Street is selling, is signing a contract at one-fifty. No, Sally Smith signed a contract at one-fifty and we’re going to hold her hand and we’re going to buy her a new purse if that’s what she wants because that’s how you, this is, we’re in the people business. Dude, that’s where Jill shines.
Jill DeWit: Thank you.
Jack Butala: Jill you can, because I’m not, I’m not that way. I’m the appendicitis in C way.
Jill DeWit: That’s your advice, then?
Jack Butala: Yes.
Jill DeWit: Okay. All right. Appendicitis in C and I’m like, I got a new purse.
Jack Butala: You know the old adage that carpenters have that you measure twice and cut once?
Jill DeWit: Yes.
Jack Butala: The same thing applies to real estate investment. Go through your data and write price and scrub and reprice twice and send it out once.
Jill DeWit: Excellent.
Jack Butala: You want to use data. I mean you want to spend, if you think it’s going to take you three days to do a real solid good scrub for data for let’s say I don’t know, sending out houses in Austin Texas, then you’d better spend six days. Double it and really, really go over it. Especially if you’re new.
Jill DeWit: Yep.
Jack Butala: It still takes me days to do it. That’s what I’m actually doing today when we’re done recording and I can’t, I’m having, I’m going to have one of the best work days ever. I just, I love scrubbing the data we get through the mail.
Jill DeWit: Cool.
Jack Butala: Turn off HGTV. Just turn it off or watch it and laugh at it with, pop some popcorn and stuff.
Jill DeWit: That’s funny.
Jack Butala: With your, with your spouse because it’s all fiction. Renovating houses sucks.
Jill DeWit: Wow. They used to give, it’s so funny. Every, now too even when they gave the numbers were they really the numbers? I don’t know.
Jack Butala: No, they weren’t.
Jill DeWit: THat’s, I think that’s why they had to stop giving the numbers that were cited right, because they probably were made up numbers.
Jack Butala: You know, they never give the address.
Jill DeWit: Either give the real numbers or give no numbers and they said, okay we’ll do none. Okay, thank you.
Jack Butala: They never give the address.
Jill DeWit: Uh-huh (affirmative).
Jack Butala: I had a marketing campaign a long time where it was just a picture of the property that we sold and there was a graphic on it that, overlaid that said, purchase price, sale price.
Jill DeWit: I remember that. I loved that.
Jack Butala: It was hugely successful.
Jill DeWit: That was fun. We should do that again.
Jack Butala: I know.
Jill DeWit: Okay.
Jack Butala: People keep asking, like what deals are you guys doing? We’ve got to figure, we’ve got to communicate that.
Jill DeWit: Yep.
Jack Butala: Never finance property. Jill already covered that. Make friends with a couple of national title agents and use them for every single deal. So, what I see new people making the mistake and as always, I made this mistake. You know, you’re running around trying to find a title agent based on where the property is. So, what you need is a national title agent that’s going to do every single one of your deals. There’s a single point of contact where you can just, where you, everybody knows each other and you send an email to that person that says, got another one at one two three Main Street in Scottsdale Arizona. Here is the APN and here is the buyers and the sellers name. Can you please let me know when you think you close it? The funds are ready and you want that person to say, oh thanks Jack, thanks Jill. It’ll be closed in a week and a half, I just looked into it. Then that’s all you want to do.
Jill DeWit: Uh-huh (affirmative).
Jack Butala: You don’t want to, some title agents will talk about their kids and stuff. It’s a mess.
Jill DeWit: Uh-huh (affirmative). Cool.
Jack Butala: Choose a dollar floor as a profit margin. So, what does that mean. After you get your, Jill’s ten deals done, you’ve got ten deals under your belt and you decide you really want to do this you need to decide what your threshold is for profit. For example, I will not and I’m just thinking out loud. I will not buy a house in this market where I can’t, I have to make 40 thousand dollars a house. 20 thousand is not worth my time any longer and even when you’re new you should be saying, that version of this for when you’re new is I just want to get my first deal done, even if I make 500 dollars.
Jill DeWit: Uh-huh (affirmative). I agree. I totally agree and don’t waiver.
Jack Butala: Don’t make exceptions early on.
Jill DeWit: Right.
Jack Butala: If you have staff set up like I, we do and it’s like, uh, we’re only going to make 25 thousand and we’re supposed to make 50 that’s a different story but in the beginning I really think matters.
Jill DeWit: Or just double your money and get out. If you just start off with that, that’s you know, what we talk about, don’t get greedy.
Jack Butala: Yeah, double your money.
Jill DeWit: Just double it. So, and you know if you make 90% you still won. Even 75, 50. What if you bought it for ten thousand you sold it for 15 thousand? Is that really a failure? No, it’s not and some people see it as it is and it’s okay. That’s excellent. Move on.
Jack Butala: Stop trolling the MLS for property. God forbid you actually successfully buy a property after trolling the MLS.
Jill DeWit: Can I, I want to ask, I want, can we just pause on this one for a minute and talk about it for a second, because I just talked to somebody the other day and I don’t, it was so funny because I’m not, not really sure they got it. Everyone has this mindset of like we talk about, they wake up in the morning and they’re looking for deals. Looking, looking, looking and think they’re, they don’t find them. They’re looking in the wrong place, instead of …
Jack Butala: Then they think they need to look harder.
Jill DeWit: Yes and they need to do more. Maybe they should’ve got up earlier. Maybe they should’ve got up at four instead of five because something hit the MLS between four and five a.m. and they missed it, you know, kind of thing.
Jack Butala: You will never get ahead if you’re doing this.
Jill DeWit: This is my whole thing.
Jack Butala: You can work 24 hours a day.
Jill DeWit: Yeah.
Jack Butala: It’s never going to work.
Jill DeWit: I was saying, this is the whole point of the way we do things. We put it out there and let them come to us. You know, we all agree on the situation part. We all, you know most of us agree that we’re looking for a situation this, you know, but then the other thing it just, oh, quit hitting your head against the wall and doing it the hard way. So, thank you and trolling the MLS is the hard way.
Jack Butala: Included with trolling on the MLS you need to stop taking calls from your, from brokers and agents. This is a very common practice in commercial, commercial real estate acquisitions where you have four or five brokers or agents or even just finders that aren’t even licensed and they’re constantly throwing deals at you for you to analyze.
Jill DeWit: Right and they’re just waisted time.
Jack Butala: Trust me, they’re deals that they’re throwing to six other people and it’s just they got there first.
Jill DeWit: Yeah.
Jack Butala: So, stop taking calls from those people and replace all of that with sending out unsolicited offers to owners.
Jill DeWit: Uh-huh (affirmative). For exactly what you want.
Jack Butala: Which leads me to my next point.
Jill DeWit: Yes.
Jack Butala: Send them to everyone. Send offers to any, everyone. Do not specialize. Don’t specialize in dead people property. Don’t specialize in divorce property. Don’t …
Jill DeWit: Absentee owners.
Jack Butala: All of that.
Jill DeWit: Back tax.
Jack Butala: All you’re doing is missing half of the, you’re missing the vast majority of the opportunity.
Jill DeWit: Think owned. I could be here all day.
Jack Butala: Me too. All that does is save you money on postage.
Jill DeWit: Does it?
Jack Butala: In the end …
Jill DeWit: I think it wastes money on postage.
Jack Butala: You’re going to lose a dramatic amount of, you’re going to lose a dramatic amount of time and money by cut, you know, I don’t know what the good analogy would be on dating.
Jill DeWit: I think you waste money because you’re going to end up sending more money, mail on the end to make up for all the bad stuff you send out.
Jack Butala: I mean, would you ever sit down and say I’m only going to date brunettes?
Jill DeWit: Sure. I would absolutely say something like that.
Jack Butala: Then cut half the market out.
Jill DeWit: Come on. We all have a type and we all know that. I’m looking to you Jack. I am throwing you under the bus.
Jack Butala: I’m speaking on behalf of all men. Men do not sit around and say oh, that girl’s hair color is just not going to work for me. I’m telling you.
Jill DeWit: Oh come on. Dude you don’t think if, every man has a built in filter about red heads are probably like, what blondes are probably like, and brunettes are probably like. That’s a fact, right?
Jack Butala: That’s a right.
Jill DeWit: Come on. Thank you.
Jack Butala: I’m agreeing so far. Keep this line of questioning up because I know where you’re going with this and I think you’re wrong. I think women might do that.
Jill DeWit: Well, you know, I don’t think it’s wrong to have a criteria.
Jack Butala: I’m not saying get married to that person.
Jill DeWit: I think dating is a bad example is what I’m trying to say.
Jack Butala: I think dating is a perfect example.
Jill DeWit: Okay.
Jack Butala: I do not sit around and say, and nobody sits around and says you know, there’s a really pretty girl over there but I’m not going to look at her because she’s just, her hair color is not right.
Jill DeWit: Okay, so, let me just imagine this then. So, you’re saying that you would go down the path of dating someone, sight unseen, really getting to know to them online all because of their hair color?
Jack Butala: Where did sigh unseen come from? Where did online come from?
Jill DeWit: Well because they’re hair color doesn’t matter. So, if it doesn’t matter what they look like …
Jack Butala: Let’s leave sight unseen and hair color out of it. I mean, and leave the internet out of it.
Jill DeWit: Come on. Let’s just say you meet someone, blind date, blind date. Let’s just say it’s a blind date. Someone set you up with a blind date.
Jack Butala: I don’t know why, why and how it got to here but okay.
Jill DeWit: Okay, well you’re the one that brought up dating.
Jack Butala: I’ll play along.
Jill DeWit: Come one. You and I both know that there, you …
Jack Butala: I think you got yourself in a little trap here.
Jill DeWit: No, I did not. I think you have to filter some stuff out.
Jack Butala: Handsome guy walks up to you and everybody’s dressed up at a party, all right, and you’re Missy Single. Or, no, let’s say you’re standing next to your single friend, because you’re super happy with me.
Jill DeWit: Thank you. Most days.
Jack Butala: A handsome guy walks up and she, your friend doesn’t sit there and say, you know, I’m sorry I’m not interested. Your hair is the wrong color or you’re not my type.
Jill DeWit: Why wouldn’t she?
Jack Butala: I mean, how could, do you judge a book by its cover?
Jill DeWit: Yes. There’s an initial attraction. How did we get into this topic?
Jack Butala: Men don’t think like that.
Jill DeWit: Yeah, well.
Jack Butala: Men don’t know what an initial attraction is.
Jill DeWit: I, yeah and I realize that.
Jack Butala: All right. So, let me rephrase my real estate law.
Jill DeWit: Yeah. Don’t use dating here.
Jack Butala: Let me rephrase my real estate law.
Jill DeWit: All right.
Jack Butala: Send an offer to everybody.
Jill DeWit: Thank you.
Jack Butala: Don’t just send it to blondes.
Jill DeWit: Thank you.
Jack Butala: If you’re a girl, just send it to people that make you have a good feeling about and miss all the opportunity.
Jill DeWit: What the heck? I don’t know what that was.
Jack Butala: On to the next rule.
Jill DeWit: Okay.
Jack Butala: Find, if you’re going to buy houses, find a buyer first. It’s as simple as that, unless you’re super experienced. You know, we do a little bit of both here, because I, in my two hundred thousand dollar example, if I buy a hundred and fifty thousand dollar house I know what to do. It’s not our first rodeo. If you’re new make sure you have a buyer all set up first, a guy that’s going to renovate the houses and that, so you want to just jam the deals to them over and over again.
Jill DeWit: You know what that is, it’s a life lesson that applies here. We should be, in everything that we do we should be working it backwards. Gee, I want to be a doctor. Okay, well let’s work it backwards. I mean, what kind of doctor? I want to get to know that kind of person and work backwards. How much education do I need and what I need to do here, here, here and then go down that path. Same thing with like you said, finding a buyer. You know, I, finding, it’s so much easier knowing that all right, all I got to do is in this zip code go find a three bedroom two bath with no pool and comps around this range and stuff, this guy is going to buy ten of them. Well, that’s easy and then go, work it backwards, get only that data, send it out, find the deals.
Jack Butala: Well said.
Jill DeWit: Thank you.
Jack Butala: I love it and we’re going to go over on time because I think these are really important.
Jill DeWit: This seems like common sense.
Jack Butala: I know but I, I, I know but ….
Jill DeWit: Sometimes people miss it.
Jack Butala: Yeah.
Jill DeWit: I know.
Jack Butala: Sometimes I you know, I break my own rules.
Jill DeWit: Well even we do, that’s true too. You know we do that. What’s next?
Jack Butala: Buy a couple types of property. Especially in the beginning. So, we all say, we are famous for saying stick to your acquisition criteria and that’s it but I do want to, once you’re at that, once you have your land business established and cash flowing I want you to throw in some houses and I want, you know I don’t want you to be cuckoo about looking at every deal but I also think you need to kind of expand your horizons and be flexible. That’s, that’s the key word.
Jill DeWit: Uh-huh (affirmative).
Jack Butala: You have to be flexible and here’s another one that I can’t impress this enough. What you’re buying is somebody’s situation. It’s not, it’s the appendicitis in room C. You’re, you are purchasing a property from somebody at, for less than it’s worth because of their situation and you’re solving a problem for them. So, treat them with respect.
Jill DeWit: Uh-huh (affirmative).
Jack Butala: Don’t, you’re not actually buying a house or a piece of land. You’re having, you’re developing and then terminating a relationship with a person.
Jill DeWit: You know how they say it’s like you’re buying a home and selling a house? It’s the opposite.
Jack Butala: So, here, let me give you, yes exactly right. It’s the opposite.
Jill DeWit: Uh-huh (affirmative).
Jack Butala: Let me give you an example. You find two equal, two properties right next to each other and there’s a, one’s got a sign in the yard and it says house for sale and it’s vacant. Everybody on Backer Packets is going to find out what’s going on there. Every single person. Right next door is Sally Smith who just decided that she just doesn’t want to live by herself any longer. She, the house has been long paid for and she has a place, a facility, you know one of those cool 55 plus places where you can play shuffleboard and cards and stay up all night and have a blast with people your own age?
Jill DeWit: Uh-huh (affirmative).
Jack Butala: She’s got that all picked out and funded and ready to go and she’s just started thinking about packing her stuff up and she gets your letter. Well, now wait. She’s going to pay, she’s going to, if she likes you, if she’s Jill specifically on the other end of the phone line she’s going to buy that, she’s going to sell that house to Jill in 35 seconds. Even if it’s for less money. Is Jill taking advantage of her or helping her? Is Jill knocking down the price to the point where everybody’s in tears? No. Is she shaving a couple, maybe 20 thousand bucks off? Then now by the way Sally Smith doesn’t have to clean the house up, doesn’t have to renovate it like she thought she did. She doesn’t have to call her son in Boston to fly out and help her do a real estate deal.
Jill DeWit: Uh-huh (affirmative).
Jack Butala: Is that worth something? I think so.
Jill DeWit: Totally.
Jack Butala: In fact, whatever her trigger points are Jill’s going to say you know what? If you just want to leave all the furniture right there, you don’t want to deal with this stuff, we’ll handle it for you and we’ll even have a garage sale if that’s what it takes.
Jill DeWit: Right.
Jack Butala: Whatever it takes that’s important to you. So, that is a real estate deal in my opinion. Especially with houses. With land, not so much.
Jill DeWit: Uh-huh (affirmative). That is very sweet. I’m going to help her move.
Jack Butala: I knew you were going to throw me under the bus.
Jill DeWit: Then I bake cookies. Go ahead.
Jack Butala: Jill and I sold a house one time to somebody and Jill asked her at the end, why did you buy, remember this?
Jill DeWit: Yeah.
Jack Butala: Why did you buy this house? She paid cash for it from Canada.
Jill DeWit: Right.
Jack Butala: She said, because it has double ovens and I want to make cookies for my neighbors. That’s silly, double oven and you won that battle. I’m like dude why would we ever put a double oven in a house?
Jill DeWit: Right. Like, I wanted to put a warming drawer in there too but I lost that one. Yeah, well, at least the double ovens. Yep. Right. That’s cool. Thank you.
Jack Butala: So, and that was a situation. She bought that house because of a silly oven.
Jill DeWit: Yeah. That was cool. I’d forgot about that. Good, good point. You have a long list.
Jack Butala: That’s about it. I mean, I do have some other stuff on here we should probably do another show because we’re way over in time.
Jill DeWit: Okay. That’s cool. This was very good and beneficial. Thank you, Jack.
Jack Butala: Usually I would say something like, we’ve done it again, wasted another 30 minutes but I don’t think that was a waste of time.
Jill DeWit: I don’t think it was either, but I would like to say …
Jack Butala: Join us in the next episode tomorrow where we discuss houses versus land, a number of parcels comparison. These are my kinds of show.
Jill DeWit: We answer your questions should you have one, posted on our online community found on Jackjill.com.
Jack Butala: You are not alone in your real estate ambition.
Jill DeWit: Yeah. I know you have more. We will have to corral those and put those into another show and we could probably put this, this is good, real estate rules to live by and we can make them as topics. Like, money, people, acquisitions.
Jack Butala: You know how this list came up is I was thinking about new, new episode titles. This is kind of like right from that file where I just keep, keep it on my phone or I think of something for whatever reason in the middle of the day and I’m like, oh, what, oh, that would work.
Jill DeWit: That’s cool.
Jack Butala: It’s usually driven by questions from people.
Jill DeWit: Exactly. That’s cool. I love it. Hey and if you love this share the fun by subscribing at iTunes or wherever you’re listening. Oh, while you’re at it, please rate us there. We are Jack and Jill.
Jack Butala: Sorry.
Jill DeWit: Oh.
Jack Butala: We say this sentence every single day. Jill reads it. She says, share the fun by subscribing on iTunes but I have to say if you haven’t done it it really, really helps the distribution of this show and help spreading the word. So, seriously I know it might take 30 seconds out of your life, if you could subscribe to wherever you’re listening, it’s super, like exponentially helpful for us.
Jill DeWit: Ah. Please, thank you Jack.
Jack Butala: Yeah.
Jill DeWit: Okay. We are Jack and Jill.
Jack Butala: Information.
Jill DeWit: Inspiration.
Jack Butala: To buy undervalued property.
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